Rifil says it will grow on a shrinking market

Rifil, a producer of textile threads, has budgeted turnover worth approximately 37 million euros this year, up 6% from last year”s results.

In 2005, Rifil posted turnover worth 35 million euros and income standing at 1.5 million euros, ranking as the top textile thread producer in Romania.

“The textile market is going down, following the same trend of recent years,” stated Ioan Stratila, general manager of Rifil. According to him, the main problems facing the market are competition created by imports from Asia, the appreciation of the domestic currency against the euro and the dollar, as well as a labour force shortage.

The company”s strategy for this year is related to the opening of new markets (former Soviet states), portfolio diversification and investments in methods to make costs efficient.

The textile industry was hit on several fronts, and 2005 proved to be a difficult year. First came the flood of Chinese products, which generated unfair competition for firms that were trying to abide by quality standards, followed by the appreciation of the domestic currency.

Domestic products could no longer compete with the very low prices of the Chinese market. Consequently, the European Union tried to impose a ceiling on imports of Asian products. However, this measure was too late for some producers, which were already on the verge of bankruptcy and found it impossible to continue to export their products.

Romania has long been a target of European firms looking for a cheap labour but soon these companies may contemplate a move to Asia. As a result, plants doing under contract work will be the hardest hit. To offset the negative effects, producers have partly changed their strategy and decided to produce for the domestic market.

“Investment over recent years was not necessarily designed to boost production, but targeted an improvement in quality, a more efficient use of materials and energy resources and product diversification. The same strategy can be seen in 2006, as well,” Stratila also said. According to him, most products manufactured by Rifil are for export.

“Around 74% of production goes to export. The main customers are from the EU, the US, ex-Soviet states and some Middle Eastern countries,” the official added.

andreea.groenendijk@zf.ro