PepsiCo, which has been in the country for 58 years, reaffirmed its commitment to Argentina and said it decided to close the factory due to increasing costs of the branch, which led to financial losses.
Pep and Pehuamar
Of the 691 workers, 155 will be reemployed in other plants in the province and the company will expand operations in Mar del Plata and Munro.
Some of the best known products in PepsiCo Argentina's portfolio include: Lay's, Doritos, Twistos, Cheetos, Pep and Pehuamar.
In a statement the company said: "The objective of these plans is to ensure the growth and sustainable development of PepsiCo in Argentina in the long term.
"This change will allow the company to move forward in its process of transformation, adapting to the requirements of consumers.
"This industrial model entails many benefits, including greater efficiency and closer proximity to the relationship with farmers and potato suppliers, as well as the implementation of an advanced technology that will allow us to meet national demand and exports."
The announcement has caused unrest in the province with some employees calling on the Union of Workers of the Food Industry (STIA) led by Rodolfo Daer and the Federation of Food Industry Workers (FTIA) to take action against the closure.
Union leaders claim the company’s decision was approved by Labor Minister Jorge Triaca.
In response, PepsiCo said: "these decisions are unfortunate and difficult for all the people involved," and added it would be offering support to employees.
PepsiCo cited “obstacles inherent to the location of the plant in a mostly residential area, its complex structure of costs, and extensive logistical requirements,” as reasons for the decision.