In full process of drawing up budgets for 2010, the RON/euroexchange rate is the biggest challenge Romanian executives arefacing. A ZF survey shows any option is possible between 4.2 andeven 5 RON for Romanian managers.
RON budgets, monthly plans or an exchange rate climbing to 5 RONper euro are the main alternatives Romanian companies' managers aretaking into account for 2010.
After 2009 completely lacked predictability, and budgets in anyindustry were overturned even tens of times, outlining a budget fornext year seems to be rather a gamble. Still, managers are tryingsuch an exercise these days and the main unknown they are facing isthe RON/euro exchange rate.
"I don't know what will happen in 2010, but to be as close toreality as possible I take into account a 4.7 RON/euro averagerate. I expect the fashion market to drop further from this year,and the trend to maintain in other industries, as well (...)," saysVicentiu Zorzolan, manager of AAV Group.
In the oil industry the exchange rate generates monthly lossesof millions of dollars. "A 4.5 RON/euro rate for the yearend andthe situation of the US dollar are scaring me," states ConstantinTampiza, general manager of Lukoil Romania, a major oil marketplayer.
Companies whose budget has been seriously upset this yearinclude Centrofarm, now at its 33rd budget draft, or Rafar, thefashion unit of RTC, planning out the sixth budget. BusinessmanGeorge Copos is at the third budget version for the firms part ofAna Holding, and salaries are paid depending on the RON/euroexchange rate, frozen at below 4 RON.
Industries where estimating an accurate exchange rate is crucialinclude the pharmaceutical one, as most products are imported."We'll work with two exchange rates: 4.5 RON/euro in the first halfand 4.8 RON/euro for the second half," said Dimitris Sophocleous,CFO of A&D Pharma, the biggest player in the drug industry.
He also explained the pharmaceutical group has a budget that isbuilt on a monthly basis, but also a projection by 2012.
In the same pharmaceutical industry, Ioan Nani, general managerof Antibiotice Iasi, counts on a 4.25 RON/euro exchange rate."We're close to finalising the budget for 2010. It's morecomplicated than in previous years because of the very lowpredictability degree," Nani says.
Dragos Simion, a member of Flamingo's managing board, alsostates he is working with scenarios, having a more conservativeversion and a "mainstream" scenario. "We can see the exchange rateat 4.5 RON/euro, but not way above," states Simion.
RON budget drafts are a solution mainly taken into account byRomanian entrepreneurs such as Dan Sucu (Mobexpert) or Radu Enache(Continental).
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