Could you give us an overview of the evolution of Petrolera Copsa?

GC: Our company started in 1992 with the distribution of fuels and lubricants. We were focused on fuels, with bulk trades for the marine and agricultural markets, and also on our own network of gas stations. After that initial period, we started our solvents division as a complementary business. Over the years the division evolved to incorporate the distribution of chemical products, including the preparation of blends for the industry. Eventually we expanded our distribution of chemical products so that what was once a side business today represents an important part of our total revenues.

What is your footprint in Argentina?

GC: We have three plants: one in Neuquén, run by a sister company, which is dedicated mainly to chemicals, petrochemicals and blending for the oil and gas industry; and two in the Buenos Aires Province – one dedicated to fuels and lubricants and the other to chemicals. We are a wide supplier as we are not only a chemicals distributor, but have our own formulating capacity and logistics capabilities, with different types of facilities and trucks. This gives us a competitive edge, because in Argentina there are specialized chemical distributors on one side, or specialized fuels distributors on the other, but not a distributor that operates in both areas.

MC: Logistics in a country like Argentina are essential. If you do not understand logistics well, costs go up and make many businesses unviable. Having the capability to source products from different plants and handle it through our three locations is an advantage for us.

Where do you see more opportunity for growth?

MC: In terms of chemicals, Petrolera Copsa started as a distributor focused on the paints and adhesives business, but now we are dedicating a lot of effort to the oil and gas industry, which offers enormous potential. The oil and gas industry has seen significant growth in the Neuquén area, where Vaca Muerta still requires a lot of investment and infrastructure to reach the potential a formation like this should have. Recently, we also entered the food and animal feed segment, and these are the areas where we see great opportunity for us.

GC: We are also starting to do our first exports with blends, paints and coatings for the general industry. We are looking at the markets in our neighboring countries that in general import certain blends and lots of chemical products for their industries.

How competitive are Argentinean products in the region nowadays?

MC: Although we are talking about products with international prices, the devaluation of the peso has made our products and blends more competitive for export (even though the export tax has to be taken into consideration). Perhaps two years ago exporting was not viable – now, this is a market we are opening and it remains to be seen if the low peso allows for exportation in a sustainable way. A lot will depend on how internal costs go up in Argentina due to inflation.

What is your strategy to lay the foundations for future growth?

GC: Today, our first priority is the oil and gas industry. We mentioned our intent to continue serving the general industry and to introduce ourselves to the food and feed industry, with a vision of providing added value as much as we can. Our goal is to provide solutions to our clients.

MC: As a family company, we have experienced disorderly growth, and have now entered a period of professionalization, with the idea of having long-term growth plans in each of our business segments. Of course, planning five years ahead in Argentina is a challenge because of the volatility of the market and the economy, but it is necessary for us to have a more solid vision of our logistics, our financials and other aspects.

GC: This year we had a significant increase of about 30% in our chemical division. For 2019 we expect to experience further growth of 40%. We have had an aggressive commercial attitude when other distributors have taken a conservative strategy. We believe we have to aim for growth, opening new segments both in Argentina and abroad.