SEWS: Wages go up faster than productivity

Sumitomo Electric Wiring System (SEWS), a producer of electrical wiring systems, in the first nine months of this year posted turnover worth 77.5 million euros, up 12.3% compared with the similar period of last year.
“We witnessed this trend despite some unfavourable conditions, such as the difficult situation the European car market is coping with, the surge in raw material costs and the continuous artificial appreciation of the domestic currency. At the same time, there have also been pressures for an accelerated growth of salary costs this year, way above the limits imposed by the level of inflation and of labour productivity,” Florin Ionut, chief administrative and financial officer with SEWS Romania, told ZF Transilvania. According to him, another factor that negatively impacted the financial indicators growth was the labour force unavailability, due to the migration phenomenon witnessed in Hunedoara and Alba counties.
SEWS management puts this year’s turnover at more than 100 million euros, after the indicator reached a value of 94.5 million euros last year. The company this year started working with Citro?n-Peugeot international group. SEWS also produces in Romania electric wiring for Honda, Renault-Nissan, Toyota or Ford-Mazda. “We haven’t committed ourselves to major investment projects this year because after the rapid growth seen over the past five years, we wanted 2006 to be a year of consolidation,” Florin Ionut also stated.
The company last year invested over 5 million euros, particularly in the technological development of its plant of Alba-Iulia, with the level of investments poured by SEWS in Romania last year going beyond 45 million euros.
Sumitomo Electric Wiring Systems Ltd. Europe owns three plants in Romania, in Deva, Orastie and Alba-Iulia, with the biggest of them located in Deva with double production capacity compared with the other two.
The construction of the plant in Alba-Iulia was finalised in 2004, with investments in buildings, land and equipment exceeding 10 million pounds. To finalise all the 3 plants, SEWS operated a 4.2 million euros capital increase in 2004.
In Romania, Sumitomo Electric Wiring Systems Europe started investing in 2000, while developing the wiring plant in Deva, Hunedoara county. Subsequently, another plant was developed in Orastie and then another one in Alba-Iulia, Alba county.