SanCor

From Wikipedia, the free encyclopedia

SanCor is one of the leading dairy producers in Argentina (along with competitor La Serenísima). It holds one fifth of the total production in the country, and 90% of the Argentine exports of dairy products. It is a large cooperative made up many smaller ones, based on the Argentine "central milk basin" around the border between the provinces of Santa Fe and Córdoba.

SanCor produces milk, milk powder, cream, cheese, butter, yoghurt, dulce de leche (milk caramel) and desserts, which are sold under various brand names: SanCor, San Regim, Las Tres Niñas, Tholem, Santa Brígida, Angelita, Granja Blanca and Chelita.

The cooperative was founded on 17 September 1938 as an association of many cooperative producers in the central area of the country, and grew as its success attracted more members. an Its first industrial plant (a butter factory) was opened in 1940 in Sunchales, Santa Fe, where SanCor's administrative headquarters are located today. New plants, producing butter, cheese and dulce de leche, followed during the 1940s. In 1953, SanCor opened a branch office in New York City, United States, in order to boost its international trade operations; and in 1956, new branch offices were opened in Buenos Aires and other Argentine cities. In 1986 a daughter company, SanCor do Brasil Produtos Alimentícios Limitada, was founded in São Paulo, Brazil.

In 1994 SanCor became the first Argentine cooperative to issue its own negotiable instruments.

[edit] 2006 financial rescue

During the 1990s, SanCor incurred a large debt to finance capital investment. In 1998 the crisis of the dairy market started causing difficulties for the cooperative, which became overwhelming after the collapse of the Argentine economy in 2001. Near the end of 2006, the company was faced with the impossibility of paying up about $167 million. A letter of intent was signed by the firm Adecoagro, partly owned by American financist George Soros. Adecoagro had agreed to provide SanCor with $50 million as work capital plus $70 million to refinance its debt, receiving in exchange the control of 62.5% of the company. ^[1] Upon concerns from the national government and others, SanCor initially denied it had received any other offers from national investors, but the Petersen Group, led by Argentine entrepreneurs Enrique Eskenazi, Hugo Sigman and Eduardo Eurnekián, claimed it had presented a better offer which had been rejected. ^[2]

Soon afterwards, Venezuelan president Hugo Chávez visited Argentina and proposed a salvage loan to SanCor, partly in order to pay its debt and partly to finance needed investment, in exchange for milk powder and technical advice. The formal agreement was signed on 11 December 2006 between SanCor and the Bank of Social Economic Development (BANDES), an autonomous financial agent of the Venezuelan government. SanCor will not have to cease being a cooperative, as it would have happened with the alternative offers. The total loan will amount to $135 million, of which $80 million will be repaid with exports of milk powder, while the other $55 million will be employed as work capital. ^[3] ^[4] ^[5] ^[6]