Whirlpool touts bet on troubled Argentina as others steer clear

Whirlpool Corp is betting on demand for front-load washing machines in Latin America with a new state-of-the-art plant in Argentina, even as other foreign companies shy away from the turbulent country. 

Built in the outskirts of Buenos Aires, the factory required a US$52-million investment and will export 70 percent of its output, said its president for Latin America, João Carlos Brega. Previously, front-load washing machines had to be imported into the region. 

The plant, which has the ability to produce a washing machine every 40 seconds, is expected to export US$50 million worth of products a year. It will target a growing market of front-load machines in Brazil, but will also export to neighbouring countries including Uruguay, Paraguay, Bolivia and Chile, he added. 

“This plant will allow us to produce a new category of products in South America,” he said in an interview from the plant in Pilar, Buenos Aires Province, at its inauguration on Thursday. “We weren’t competitive before.”

The facility is also a rare investment by a multinational company in Argentina, where capital controls and inflation near 100 percent annually have led many firms to close or curb their operations. Brega said the company is “used to volatility,” and pointed to its 30 years in the country. 

The decision to supply the South American markets with washing machines also comes at a time where a growing number of companies are looking to near-shoring practices, or the idea that multinationals are bringing factories so that the output is closer to the final destination. 

Also on Thursday, Whirlpool said it cut its earnings and sales forecast for 2022 as it grapples with softening demand. Sales fell in the third quarter from a year ago in every geography the company operates in, including a 10.8 percent slide in Latin America. Chief Executive Marc Bitzer said Friday in a call with analysts that the company was optimistic about global demand in the middle and long term.

Brega declined to name the locations for future plants in the region, adding the decision “is not taken lightly.” 

Other points from the interview:

– The plant was built in record time, with the purchase of the land made in May 2021, Brega said

– The plant will employ 400 people when it’s operating at maximum capacity

– 50 percent of the factory’s inputs come from Argentina and the company is in talks with the government to help raise that number to 70 percent in as little as 18 months, which will lower costs, said operations manager Federico Sampedro

– 30 to 40 percent of employees in the plant are women, Sampedro added.