COVID-19: The Voice of Latin American CPGs

Mundo PMMI’s Lilian Robayo Paez weighs in with reader contributions from 12 Latin American countries on impact of Covid-19.

“Our main challenge is maintaining jobs and salaries for our employees to avoid their suffering at this time”, one of the Brazilian businessmen pointed out in his response.
“Our main challenge is maintaining jobs and salaries for our employees to avoid their suffering at this time”, one of the Brazilian businessmen pointed out in his response.

Participants of a survey conducted by MUNDO PMMI about Covid-19 have expressed their opinions, fears, and expectations facing this crisis, as well as the effects it could have on their companies and operations. However, though the effects of the pandemic are felt all through the region, some of the opinions of businessmen from different countries reflect special domestic conditions.

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In our recent survey of over 950 Latin American entrepreneurs in twelve countries, among CPGs, the gathered responses largely reflect perceptions that go beyond the usual and general conclusions that may be drawn from mere aggregate data analysis.

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More survey results: Latin American CPGs and Covid-19 | Packaging World

In our three previous posts, we have submitted some of our findings within a regional projection perspective, based upon the survey’s results and our analysis of the answers. However, though the effects of the pandemic are felt all through the region, some of the opinions of businessmen from different countries reflect special domestic conditions.

The measures being undertaken by governments are not equal in every country and their effects may impact companies differently, as well as the entrepreneur’s perceptions. Thus, at this post, we set forth the opinions of participants from those countries which provided more answers, to outline a general landscape of the situation and to show the perceptions, concerns and strategies of some respondents.

Argentina

Since the original announcement of the fist Argentinian death due to coronavirus on March 7th, the government took strict measures to isolate its country’s inhabitants, with results that seem to indicate positive advancements towards the goal of flattening the curve of infected people.

The economic uncertainty feels like a main source of concern in Argentina, as proposed by one of the respondents who, on the question of the main difficulties he faces, emphatically proposed that “the financial aspect prevails over all the other challenges we face ahead”.

A subject that stands out, in coincidence with this preoccupation for the economy’s performance, is the manifest decision to “put a hold on new personnel recruiting and hiring processes”. The supply chain doesn’t seem to be suffering major disruptions so far in Argentina, and intensified safety and hygiene regulations stand out among the possible strategies facing an extension of the isolation demanded by the government.

This crisis has brought an abrupt decline of its currency value to Colombia, directly affecting the acquisition of imported raw materials as well as processing and packaging machinery.This crisis has brought an abrupt decline of its currency value to Colombia, directly affecting the acquisition of imported raw materials as well as processing and packaging machinery.

Brazil

With its close to 210 million population, Brazil holds the highest number of confirmed coronavirus cases. The controversial positions of President Jair Bolsonaro on managing this crisis, as well as his ideas of the pandemic’s reach, have been criticized by several of the region’s leaders and even some of his ministers.

Covid-19 Effects on Modernization of Latin American Food and Beverage Plants.

The worries expressed by Brazilian entrepreneurs who participated in this survey are mainly associated with the stability of companies and jobs, impacted by isolation and mobility restrictions. “Our main challenge is maintaining jobs and salaries for our employees to avoid their suffering at this time”, one of the Brazilian businessmen pointed out in his response.

For some companies, strongly dependent on imported raw materials and supplies, holding abundant inventories at this moment gives them a chance to overcome the crisis with relative peace of mind. “According to our company’s philosophy, we carry a stock of raw materials and finished goods with a 120-day reach, giving us tranquility for the next four months”, answered a consumer goods producer from Brazil.

Chile

The Chilean President decreed the Covid-19 national crisis as a State of Emergency due to “catastrophe”, ordering border closures and applying a strict social isolation plan with elevated penalty fees for those who violate established norms. In a recent interview, President Sebastian Piñera answered to the concerns of the media over the crisis’ impact on the Chilean economy, signaling that the government’s priority will be warranting “employment, workers and SMEs”. This stance resembles the opinion of one of the entrepreneurs consulted through our survey, who pointed out the imperative need to “maintain our products’ sales to stay in operation”.

Colombia

Resorting to the extraordinary powers given by the State of Emergency, Colombian President Iván Duque decreed strong isolation measures, mobilization restrictions, and border closures. This crisis has brought an abrupt decline of its currency value to Colombia, directly affecting the acquisition of imported raw materials as well as processing and packaging machinery. “I believe our main challenges are the devaluation of our currency and the uncertain activity restart times”, stated a Colombian entrepreneur.

Voices are beginning to be heard about the need to open spaces for companies’ activities while, counter wise, others support prolonging isolation measures for health purposes. Meanwhile, many companies have not ceased operations: “suppliers and clients keep working, trying not to break the supply chain”, one of our respondents replied to the question of his strategy in case of a quarantine extension, which already occurred through the government’s decision to uphold it until April 27th.

Costa Rica

Gradually, Costa Rica has been increasing its restrictive isolation measures to prevent coronavirus propagation by closing public establishments and non-essential commercial sites, as well as its beaches and borders. Its government has emphasized slowing down the spread of the virus to avoid the collapse of its health system while tending to its citizens’ affectation on their income and fully guaranteeing food supplies.

The business sector is contributing to these efforts by trying not to cease factories’ operations. “Our main goal, and greater challenge, is upholding operations while the market normalizes”, stated one of the participant Costa Rican entrepreneurs. Hence, the battle is about persistence, aiming at the lesser degree of affectation possible: “we need to find a way to survive over time, now that sales have been largely diminished”, said another business owner.

Ecuador

Ecuadorian President Lenin Moreno decreed a State of Emergency including strict mobility restrictions, the suspension of all activities other than agricultural, livestock farming, health services, banking, and food sales, and at the same time banning all exports of essential products or elements required by the fight against the pandemic. The increase in fatalities due to coronavirus lead to the Ecuadorian Foreign Minister’s demand for international aid, particularly from some European countries.

Despite the difficulties facing the country, the supply chain continues to function and a return to full operation has been scheduled for mid-April, through the implementation of measures such as those suggested by one of the entrepreneurs who participated in our survey pointing towards the need to “suspend non-essential production, which is impacting shortages of raw materials”.

El Salvador

In addition to the timely measures taken by President Nayib Bukele decreeing a national quarantine and borders closures as well as banning mass gatherings, he ordered a furlough on all public utility charges and financial institution credit fees. The Salvadorian government announced the upgrade of a large hospital to provide care to coronavirus patients and called for the business sector to aid in the efforts towards mitigating the pandemic’s effects.

Many of the country’s entrepreneurs have heard this call and expressed their commitment through declarations such as those made at our Survey by a couple of them when asked about what measures they would take in case the quarantine is expanded: “to implement strategies that allow continued operations and to plan for the future while allowing our companies to satisfy customers’ demands”. In the same sense, another Salvadorian respondent said he considers it essential “to supply basic food products through supermarket chains and convenience stores nationwide while boosting our delivery fleet to widen our range as well as our home delivery services”.

Guatemala

President Alejandro Giammattei has set aside a 30-million-dollar fund to counter the effects of the pandemic in Guatemala, along with measures such as banning foreigners from entering the country and home isolation for all its population. The current conditions have impacted business operations and some entrepreneurs resent the restrictions imposed on them. “A major challenge we face is having to work only for four hours a day, due to curfew”, said one of them.

The extension of these government impositions and isolation would strongly affect producers of consumer goods. “We could not work and would be forced to close until things get back to normal”, said one of our surveyed entrepreneurs. Meanwhile, others who are better stocked, have been able to maintain operations under relative normality. “We have implemented more expensive work systems, but they at least allow us to remain at an 85% constant production rate, while we wait for authorities to loosen their restrictions”.

México

Among the main decisions made by the Mexican government of Manuel Andrés López Obrador, was the assignment of a 125-million-dollar fund to face the pandemic, along with other measures such as allowing crossing along the border with the United States only for essential reasons. According to analysts of the Mexican reality, the country will require additional measures like food distribution and finding ways to compensate its populations’ loss of income, highlighting the need as well to face the pandemic and the quarantine with realism.

Consumer packaged goods manufacturers are facing these dangers with the necessary realism, undertaking decisive actions to remain in operation. “Our company is currently making a gigantic effort to keep costs down while partnering with supplier companies so that they don’t reach the point of operations closure”, said one of the survey’s respondents. Persistence and commitment came up in most answers we obtained. “We are trying to resist, financially and economically, now that our clients are declaring debt moratorium”, said one of the Mexican businessmen, while explaining the components of their general against the pandemic, which includes initiatives like “making contact with our customers while finding new business opportunities”,  as put by another food producer.

Perú

President Martín Vizcarra led Latin America’s adoption of obligatory isolation measures and early on implemented border closures. The Peruvian government has been making the appropriate contacts to request aid from international agencies to fight the pandemic and has announced its determination to deliver financial aid to families in the informal economy so they can ride out the crisis.

The participation of companies in the measures set to overcome this crisis includes decisive actions around employment and workers’ safety, “completely avoiding the spread, so no one becomes a carrier or a transmitter for the virus”, said one of the survey’s respondents. Also, holding out tenaciously in face of the difficulties imposed by prolonged isolation conditions is being encouraged: “we are trying to resist with our resources; then, if necessary, we may need to access a government rescue plan”, said a CPG producer from Perú.

 

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