The weakness of the euro and the increase in prices for raw materials such as steel will reduce profitability for Romanian refrigerating equipment manufacturer Arctic Gaesti this year.
“Raw material prices went up 8-9% on average. In addition, half our turnover this year has come from exports, so we were affected by the depreciation of the European currency.
“But fortunately we were able to offset these effects somewhat by implementing production systems that gave us increased efficiency,” says Ugur Kayali, Arctic”s general manager. Last year Arctic, turned over more than 130 million euros and made net profits in excess of 9.4 million euros, Finance Ministry data show.
“Profit this year will be higher than last year, of course, because turnover will also rise, however the profit rate will fall by three percent,” Kayali says. He estimates turnover of 150 million euros this year, with the annual production capacity of the factory in Gaesti set to exceed 750,000 units.
“Production capacity will increase even further next year, to reach one million units. This increase will be largely down to the sustained growth of exports, since we already have a strong position on the local market and this market is not growing at an extraordinary rate,” he added.
Arctic is not the only production facility belonging to Turkish Company Arcelik.
Arcelik also has a factory in Turkey with a capacity of approximately 3 million units a year.
Increasing production capacity at the plant entailed significant investment by the Turkish group after it took over the Romanian manufacturer in 2002.
ionut.bonoiu@zf.ro