Alprom Pitesti, one of the leading players in the domestic furniture industry, last year made approximately 100,000 euros from its hedging operations, which involved sales and purchases of foreign currency.
This is an operation that helps exporters offset the negative effects of exchange rate fluctuations. Hedging is hardly used in Romania, however, despite the significant losses furniture companies incurred as a result of the drop of the euro against the RON over the last two years.
"We began hedging operations last year, which we carried out through ABN Amro. The production of the Alprom factories is 90% exported, which is why we felt it was a good time to begin this process. We will continue hedging," Violeta Anton, Alprom's manager told ZIARUL FINANCIAR.
She explained that the operation had yielded gains in the range of "several billion ROL."
Another strategy the group used to offset the effects of the exchange rate trend was to take out loans in foreign currency from banks abroad, at a 5-6% interest rate, while interests on RON loans in Romania stood at 20% last year.
The appreciation of the RON against the main currencies dealt a blow to the profit margins of every company doing business on foreign markets. Most companies chose to make staff redundant in an attempt to boost labour productivity, as well as to change focus to high-end products.
"The only chance is to change the product to be able to renegotiate the price," Alprom's representative explained.
The group aims to remain present on the foreign markets, despite the lower sales generated by exports.
"Alprom is a large company, with over 3,000 employees. We won't be able to survive without exports," Anton added.
The company continued its policy to reorganise the factories in the group, more precisely to separate the sections that had other core business than furniture manufacturing.
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