A number of Brazilian textile companies are looking to move to or expand their presence in Argentina.

As Argentina’s main international trade partner, Brazil is currently the largest investor in Argentina’s textile sector and over the last four years numerous textile and apparel factories have been either bought or built by Brazilian producers in the country. A recent study revealed that Brazil exports 47.8% of its goods to Argentina and imports 29% of Argentina’s total exports.

Brazilian textile and garment manufacturer Vicunha Têxtil established its first international branch, Brastex, in Buenos Aires in 1992 and is now looking to buy an existing factory, or set up a new unit in the country. Managing director Marcel Imaizumi said, “The overvaluation of the real has had a devastating effect on the industry, increasing Brazilian prices by 7%-8% and the loss of competitiveness has generated a product surplus in the Brazilian market.”

Director of the Brazilian Association of the Textile Industry (Abit) Fernando Pimentel said that the overvalued real is not the only motive behind the move to Argentina. “The other reasons are more attractive fiscal incentives, lower tax loads and electricity rates, better infrastructure and cheaper labour compared with Brazil,” he said. The incentives offered by Argentina include land, credit lines, and fixed and annual interest rates in pesos.

Fabric producer Camargo Corrêa’s recent purchase of Alpargatas Argentina has resulted in 60% of the company’s Argentinean textile production and 70% of its jeans production being under Brazilian control.

Meanwhile, Ceara-based Santana Têxtil, which specialises in natural fibre fabrics and denim, is in the process of setting up a factory in Puerto Tirol, in the Chaco province. The factory’s capacity is expected to be 18 million tons of denim in the first year and 36 million tons in the second year. Depending on market conditions, 20-50% of production will be exported.