The low purchasing power and the EUR/USD exchange rate differences were the main problems detergent producer Henkel Romania was faced with in the first nine months of this year.
“We see an outstanding development if calculated in the local currency, yet things are hardly the same when it comes to euro,” Friedrich Stara, Henkel’s president for Central and Eastern Europe (CEE) told Ziarul Financiar.
The average ROL/EUR exchange rate has gone up by more than 20% in the first nine months compared with the same time last year.
“Let’s hope this will not hurt us too much in 2004,” Stara added.
Henkel Romania logged approximately 30.4 million euro sales in the first nine months of this year, i.e. 4% of Henkel CEE’s total sales, which reached 768.2 million euros. The highest contribution to the sales of Henkel CEE was that of Poland – 18%, Austria- 17%, Russia – 14% and Hungary – 12%.
Sales in the region rose 5.1% from the first nine months of 2002.
Detergents and house cleaning products accounted for most of Henkel CEE’s sales – 45%, followed by cosmetics – 22% and adhesives – 17%.
Henkel has only one adhesive production facility in Romania, and does not produce detergents or cosmetics here. Its plans rule out this possibility for the time being. “We already have 18 factories in Eastern Europe, which is a little more than we need,” Stara said. “We want to consolidate the already existing ones for the time being; moreover, Romania does not need a factory,” Henkel CEE’s head added. Beyond the foreign exchange rate and the low purchasing power, competition was yet another problem Henkel was faced with. One of the top players on the liquid dishwashing detergent segment with its Pur brand (50% of the market) until recently, Henkel had to deal with a new competitor, Procter & Gamble, which entered this market in Romania for the first time at the end of last year.
Surveys show that only months from its launch, P&G’s Fairy had already grabbed a 20% slice of the market due to aggressive promotion policies.
“We will maintain our position on the market by powerful brands and by a powerful marketing policy,” Stara said.