The Elvila Group, owned by businessman Viorel Catarama, is banking on a 7.5% surge in turnover and a 10% rise in operating profit this year.
The operating profit margin amounted to some 5.1% in 2006. "The group closes the year (2006 i.e) in the black, as the 5% decline in exports was offset by growth on the domestic market. Elvila could have reported even better results in 2006, had exports not been significantly affected by the exchange rate and by increases in domestic prices. However, we closed 2006 with revenues worth 175 million euros, an 11.65% rise against the previous year," Viorel Catarama, the chairman of Elvila told ZF.
He then went on to state that results have been above initial estimates, "because the sales on the domestic market have exceed all of our expectations."
However, an increase in the price of raw materials has harmed Elvila's business.
"Prices are rising continuously and constantly in the furniture industry. For instance, the price of particleboard increased by 40% last year. The prices of the other raw materials such as polyurethane, wood and timber have also increased," states Viorel Catarama. He says the company cannot consider importing raw materials because the cost of transportation is very high. "These raw materials are very large, even if we find them at lower prices the transportation costs make imports unprofitable. As a result, exports have become increasingly more complicated and unprofitable due to price hikes and the depreciation of the euro," the Elvila chairman explains.
Exports accounted for 45% of Elvila's turnover last year, but the group intends to reduce them to 40% this year.
For 2007, Elvila has budgeted investments worth 6.5million euros, which will be used to expand its store network and to develop its production units. Elvila owns five production units that employ 2,200 people. The entire group numbers 3,400 employees.
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