Ikos Conf, a textiles manufacturer based in Odorheiu Secuiesc, has forecast a slight decrease in turnover this year from last year''s 16.6 million euros, amid employee migration to the West and the depreciation of the single European currency against the RON. "The drop in the euro took away our entire profit," says Judita Gyongyossy, general manager of the company.
She gave the example that employee wages were negotiated against a value of 43,000 ROL to the euro, meaning that for each euro in pay there is a loss of 8,000 ROL. She said also that most young employees prefer to go abroad for higher wages. This year saw 100 people leave, some 3% of the work force.
Another serious problem facing textile producers in Romania this year are the imports of very cheap products from the Asian market. However, the Ikos manager says the company was not hit too hard by this situation.
"Of course, we have been watching the China phenomenon, especially after 1st January of this year, when after the liberalisation of textile exports this country became a bigger threat for all manufacturers and exporters of textiles, including clothes," says Gyongyossy.
Despite this, Chinese products are limited to textiles that are easy to make, she says, and avoid complex products, such as suits and evening gowns, for which reason the effect of the problem on Ikos was limited.
Ikos was set up 12 years ago with initial investments in the region of 30 million euros. "Each year, around 1.5-2 million euros are invested in the acquisition of special equipment for tailoring, manufacturing and finishing," explained Gyongyossy. "We have to make these investments, depending on the market trend. If you don''t meet your customers'' demands, you risk losing them to others."
She says the investments will continue over the following years as well, but sees this year''s lower profits as a hurdle to investment. "Profit was the main source for the investments," she said.
Ikos currently has around 3,000 employees and exports through an outsourcing and semi-outsourcing system to markets in Germany, the Netherlands, France and England.
According to the company''s representatives, Ikos has mixed capital: 57.69% foreign capital and 42.3% Romanian capital. Ikos Conf is part of the J&R Enterprises group, the biggest textiles company on the Romanian market and the producer of the Seroussi brand.
Romania exports clothing and other textiles worth about 4 billion euros a year, but their share in the total exports of the country is dwindling.
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