Growth rates boost interest in Argentina

Messe Frankfurt has sat out the economic crisis in Argentina and made good use of it. The South Americans appreciate that. The result: The company is one of the leading organisers there.

Argentina has recovered from the serious economic crisis more quickly than expected. With its high growth rates, the country could again become more interesting for German companies. But one German company has been taking an interest for a while: Messe Frankfurt. Its events are among the largest and most international with the quality to match. The commitment of the organiser in this, the second largest country in South America is impressive. The Frankfurt company was active long before it organised the World Climate Summit with 5000 participants in Buenos Aires in 2004 - and it is the only German trade fair organiser that operates in the second-largest country in Latin America. "During the serious economic crisis of 1998 to 2002, other organisers left the country. We did exactly the opposite: We stepped up our commitment", says Stephan Kurzawski, head of Business Development at Messe Frankfurt. The Argentineans very much appreciate that they never lost faith throughout the difficult years and increased their activities during this time: In 2002, Messe Frankfurt became the market leader in Argentina. During the economic crisis, the event market collapsed. According to data published by the Argentinean trade fair association AOCA, in the period 1998 to 2002 the number of trade fairs declined by 46.4 %.
In 2000, Messe Frankfurt launched its Automechanika in Argentina. In 2003 the German organiser bought 60 % of the established Argentinean company Indexport S.A, which has been organising trade fairs since 1990. It has since increased that share to 85 % of the stock. Indexport is headed by Fernando Gobarán. Stephan Kurzawski describes him as a "laid-back, vivacious South American with German virtues. That is what makes the success." Indexport employs a staff of about 24 in Buenos Aires. Their task is to develop new trade fairs in Argentina and South America in general, to organise and support existing events, to canvas for business and to provide a service to Argentinean exhibitors and trade visitors to Messe Frankfurt events. The subsidiary Indexport is one of Argentina's leading trade fair organisers and contributes about 7 % to the foreign turnover of the parent company. Many sectors have harnessed the momentum of the reconstruction period. This applies to the agricultural sector, the building industry, tourism and the automotive industry. The trade fair market has largely recovered with the Argentinean economy. Since the crisis was overcome in 2002, the gross domestic product has been growing at a rate of 9 %. Experts talk of "Chinese growth rates". Imports are increasing, the series-produced products business is soaring and direct investments are on the up. Not everything is going perfectly (increasing government intervention in the economy and inflationary tendencies are worrying), but the economy is heading in the right direction. Growth has not slowed so far in 2006 either. Argentinean demand for imports is growing rapidly. For this year, estimates quote a volume increase of 20 %. "That has aroused the interest of German companies, too", Kurzawski reports.
The Gorbarán team has its work cut out. The schedule could not be more advantageous: Six of the eight trade fairs that Indexport or Messe Frankfurt organise in Argentina take place in 2006: Punto y Seguido, Bisec (exhibition and convention on security equipment), Seguriexpo (yearly since 2004), Tecno Fidta, the largest food technology trade fair in South America (every two years since 1992), Cosmesur Beauty (yearly since 2004) and Automechanika (every two years since 2000). Expo Ferretera, international trade fair for ironmongery and tools (every two years since 1991) and Biel Light+Building (every two years since 1989) are due next year.
Although the South American trade fair sector is considered "regionally orientated" according to a report on the activities of NürnbergMesse in Latin America, the growth potential in some states is estimated to be enormous. After Brazil, Argentina, Chile and Ecuador are the main markets on the continent. The sectors expected to grow are ITC, machine manufacturing, chemicals, tourism, automotive and food stuffs production and processing. That is why Tecno Fidta and Automechanika are especially important to Frankfurt. The latter is not only one of the largest trade fairs in Argentina, it is also considered to be its best. Even if South America's component market is attractive according to Kurzawski: Many see South America is an "ailing continent", not just because of its high crime rate. "There was a great fear the market would not remain stable", Kurzawski recalls his efforts to interest exhibitors in Automechanika during the crisis period. Apparently it was difficult to convince German companies to exhibit in Argentina: But all big players did exhibit at the supplier tradeshow through their South American subsidiaries. Now confidence in the market is gradually returning. "The 15,000m2 of Automechanika 2006 are fully booked, with many German companies among the exhibitors." A grant from the Federal Ministry of Economics is on the cards again for the 2008 event as part of the foreign trade fair programme. It will take place at Argentina's largest venue, La Rural. According to Kurzawski, it is also the only trade fair venue in Buenos Aires to meet international standards.
Stephan Kurzawski vehemently contradicts any suggestion that food technology or security are not core competences of Messe Frankfurt: "Just because we do not have these topics in Frankfurt, doesn't mean we don't have any contact with the customers. For example, we organise trade fairs on security in Dubai, too. At Messe Frankfurt these trade fairs are classed as ‘Independent Brands." A look at the world map is evidence enough that Messe Frankfurt will be making more out of this.

m+a report Nr.6 / 2006 vom 22.09.2006
m+a report vom 22. September 2006