Ioan Marginean, financial manager with Bucharest-based Silvarom furniture manufacturer, one of the main players in the industry, says no investments will be made this year in order to boost the production capacity.
"As a result of the uncertainty related to the trend of furniture sales abroad and on the home market, there will be no investments made in production capacities," specified Ioan Marginean. In the first quarter of this year, Silvarom registered turnover worth 15.5 million RON (4.4 million euros), 6% below the value reported for the similar period of last year. For this year, Silvarom has budgeted turnover standing at 54.8 million RON (15.4m euros), 3% higher than last year's figure.
"Gross income in absolute value amounted to 2.1 million RON, the lowest income Silvarom has posted since privatisation," Marginean also said.
As regards estimates for this year, Silvarom's representative specified the spending and revenue budget included an income forecast of 5.4 million RON (1.51 million euros), but that the end of the year might bring only 3.3 million RON (0.92 million euros).
"Inconsistency in projecting income is related to the difficulty of foreseeing the trend of the RON/EUR exchange rate for the remainder of the year and despite the growing demand for furniture from abroad, the current exchange rate of 3.6 RON/EUR places the efficiency of exports at a zero profitability threshold. Then there's also the flat demand for furniture on the domestic market during summer months, with demand estimated to pick up toward yearend or even during next year, as house constructions will be finalised," said Marginean.
The best selling products in Silvarom portfolio are bedrooms, office and school furniture.
"Silvarom furniture products are grouped in around 28 programmes, each programme including about 15-20 items, which in their turn are sold in minimum 3-4 colours," specified Silvarom representative.
In the first three months of this year, the company's export revenues stood at around 5.5 million RON (1.5 million euros), from 6.6 million RON (1.7 million euros) last year. The main export markets for Silvarom were Germany, Austria, England, France and Russia.
"The export volume of 8-10 million euros, Silvarom's export capacity, does not secure enough mobility for the company to be able to easily penetrate new markets. The company's strategy is to maintain its position on current markets by changing the existing models with novel ones and to enter new markets with the possibility of expanding exports," added the Silvarom representative.
At present, Silvarom operates three furniture plants, mainly producing for the export, and a plant manufacturing office furniture. Silvarom operates on the Romanian market through a distribution network made up of 34 trading companies headquartered in the main cities of the country.
Silvarom
One of the main players in the Romanian furniture sector
In this year's Q1 posted turnover worth 15.5m RON (4.4m euros), 6% lower than the figure reported in the same period of 2005
For this year has budgeted turnover worth 54.8m RON (15.4m euros), 3% higher than last year's figure
Has included a 5.4m RON (1.51m euros) income estimate in the budget, but the yearend might bring just 3.3m RON
Operates three furniture plants mainly producing for the export and a plant manufacturing office furniture.
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