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ECONOMY | 27-03-2024 20:19

Buyer of Clorox’s Argentine assets bets on consumer spending rebound

Executives at Apex Capital, the buyer of Clorox Co assets in Argentina, expects consumption to recover in coming months.

The buyer of Clorox Co assets in Argentina expects consumption in the South American country to recover in coming months from a steep decline early in the year due to President Javier Milei’s austerity measures.

“In the general consumer sector there has been stabilization and growth in some categories. We are expecting the second half of the year to be substantially better than the first,” said Pedro Palma, a managing partner at private equity fund Apex Capital.

Clorox’s former Argentine assets are profitable and will increase sales by volume and in US dollars this year, he said in a telephone interview.

Apex Capital and an investment group led by Diego Barral, a former Clorox vice-president, purchased two plants in Argentina and rights to some of the company’s brands in that market, Uruguay and Paraguay earlier this month for an undisclosed sum.

Argentina is suffering its worst economic crisis in more than two decades with consumer prices accelerating to 276 percent in February and the economy expected to contract for a second straight year in 2024. Since taking office in December, Milei devalued the peso by more than 50 percent and slashed government spending to narrow the fiscal deficit and cool inflation.

The private equity deal for Clorox’s Argentina assets is a bet that South America’s number two economy will eventually get inflation under control, lift capital controls and return to growth.

“This is basically a high-growth potential business with strong resiliency in a market that is on its path to recovery,” Palma said.

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by Ken Parks, Bloomberg

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