Although the conflict is not something that changes the growth expectations for these companies, the rise in the prices of raw materials can affect the companies in terms of the cost of their products in those countries, and therefore the volume of sales. . For example, Mendoza explains, in the case of Gruma, in the third quarter of 2021 “what was seen in the case of Gruma is that when it wanted to raise prices in Europe, there was a sharp drop in sales volumes because the demand for flour of corn is very sensitive to strong increases in prices, so people stop consuming corn because it is more expensive”.
However, for Benjamín Álvarez Juárez, Manager of Stock Market Analysis at CI Casa de Bolsa, the operations of Mexican companies in Ukraine do not represent a large part of their income and, in some way, the effect of the conflict would be limited, so it is It is highly unlikely that any of these companies will decide to exit that market. In addition, “it would be a difficult time to leave Ukraine, despite the fact that the conflict could break out, because the decisions of the companies are much more oriented to the long term than to a period of conflict,” says Mendoza.
At the end of 2014, Antonio Carrillo, CEO at that time of Mexichem, now Orbia, in a conference with analysts, on the financial report of its third quarter, stated that the company had problems in the Nordic countries and was planning its exit, specifically Russia, Ukraine and Turkey. However, the company continues to operate in those countries.
Leaving a country is not an easy decision. Despite internal conflicts and risks, some companies decide to remain in certain markets mainly for two reasons: 1) the companies find better market conditions that allow them to operate and 2) they do not find any buyer interested and sometimes it is much cheaper and more profitable to continue operations, before trying to undo that position and result in losses by receiving less money than your business has been valued, explains Álvarez.
In any case, if the situation in Ukraine worsens, Mendoza points out that not only would these firms be affected, but that “it would already be a general concern for all companies, sectors, countries and the world.”