Loading ...Furniture producers in Romania urge state to do something to diminish the major difficulties generated by the international financial crisis in this sector, head of the Association of Furniture Producers in Romania Aurel Rizea, affiliated to COMPIROM, told Agerpres.
Furniture producers are currently found in the situation to deal with a significant drop in the sales compared with the same interval a year before, with orders at export having dropped significantly too, which has already resulted in the closing of several production facilities and laysoff of personnel and also in an incertitude in terms of necessary orders for 2009.
“Orders at export were ensured for the entire year 2008 in the same period in 2007,” the head of the employers’ union said.
“Orders at export were ensured for the entire year 2008 in the same period in 2007,” the head of the employers’ union said.
Another cause of the problems in the industry was the lack of strategies in the case such companies partner with the furniture producers in provisioning their turnovers, as well as increases in the the costs for raw materials, materials, energy and banking interests, which led to an increase in their necessary working capital. “These problems were usually solved with an increase in the crediting lines for the working capital, which thing is currently impossible, and with new credits cannot be contracted either because of the high interests.
The access to European funds was blocked too, in the case of numerous companies, because of their recent loss and also because of theri impossibility to guarantee co-financing of the projects, with the crediting costs in the case of the investments projects having gone up by more than 50%. The payment modalities for the deliveries are also in the disadvantage of the exporters, with no guaranteed payments being tolerated anymore (advance upon delivery, banking guarantee, letters of credit),” Aurel Rizea said.
The Board of Directors of the Romanian National Association of Furniture Producers (APMR) has come with a series of measures meant to attenuate the effects of the global financial crisis and to have the activity in the field continue with only minimum negative consequences to follow.
The main measures which to be solved by the Government and by the Romanian National Bank (BNR) and also by other central institutions were postponement of the payment of the VAT on the invoices to the beneficiaries in the budget system, until the invoices are actually paid, or the exemption from payment of the penalties for the abovementioned interval, that is between release of invoice and payment of it, compensation of such debts to the state from the VAT that stayed unpaid for an interval of 45 days since the invoice was issued, payment to such dues as the CAS, pensions etc. to be made only from the central headquarter of the company that will centralize the data from the territory, payment of profit tax to be operated only once a year, the state budget to pay the 75% of the wage value to those employees currently in technical unemployment and also an adaptation of the allotment criteria in the case of the structural funds to the current context.
Moreover, the employers’ unions asked for negotiations to be carried with the Russian Federation and with such states members of the CSI, so that exports to these markets to be relaunched and also asked the state to discourage import of furniture by introducing customs duties in such cases of import of furniture from outside the EU, with producers benefiting from subsidies in their origin country (for instance China), to make the public institution buy only Romanian made furniture, to grant loans to producers of furniture for the domestic market in the same conditions for those exporting, to ensure co-financing of the projects in the case of the SMEs using non-reimbursable European funds via the Guarantee Fund.
The leadership of the employers’ union recommended economic operators too, to take the necessary measures of internal reorganization. Among such measures recommended there were the efficient use of raw materials, materials and energy, the renegotiation of agreements with suppliers of raw materials, gradually disposing their employee, keeping the qualified human resource and using this interval when the production is low for re-qualifying.
Other measures referred to the identification of complementary activities for such low production intervals, analyzing in detail the crediting offers and, if the case, transferring of the existing credits to a bank offering more advantageous conditions, cut in the sale price of such products stationing for a long time in the stores, so as to grow liquidities, advertising for such products less known by the customers and renewing of the assortments every two years.
The Association of Furniture producers in Romania sent a letter to the Prime Minister Calin Popescu-Tariceanu on December 8 containing the problems and possible solution for the crisis in the sector.
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