Pasmatex estimates 80% decline due to tightening competition

Timisoara-based textile company Pasmatex estimates an 80% decline in profit in 2007 compared with 2006. The estimate follows a rise in production expenditures and increased competition in the textile field. Pasmatex posted a net profit worth 1.5 million euros, according to data provided by the company, but predictions for 2007 do not exceed 300,000 euros. “Profit will fall because of the increasingly higher production expenditures, and of wage raises. Also, tightening competition on the market will not allow us to increase the prices of our products, although many of the costs that go into making our products are increasing,” explains Maria Grapini, general manager and chairperson of the company’s Board of Directors. The profit seen by the Timisoara-based company has fluctuated a great deal over last few years, being strongly influenced by the changes on the local textile products market. Pasmatex has also had to cope with the shortage of a skilled workforce, entry into the European Union and the decline of the euro exchange rate, as well as the entry onto the market of extremely low priced Asian products.