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Greek textile firms struggling to remain profitable
May '12
Grappling to retain its foothold amidst domestic and international economic crisis, which has badly hit the business, Greek textile entrepreneurs are trying various measures, including cost cutting, diversification in new markets and boosting exports.

For over the past few months, the management of Hellenic Fabrics SA is in talks with representatives of a group of American investors to secure some financial support for its development plan.

With short-term obligations totalling €64.7 million at close of 2011, the listed firm secured two new long-term loans worth €23.15 million.

Meanwhile, the company is also planning to enhance its presence in North Africa this year through its subsidiary Blu Cotoni.

The firm hopes that it would be able to grow its exports this year, and also expects the Government would soon refund the sum of seven million euros collected by way of value-added tax on exports. However, till the Government releases the said sum, the firm would have to endure liquidity crisis.

Epilektos - Selected Textiles SA is also optimistic about an improvement in its performance during first half of the current year, as it has built up a good stock of raw materials, which is expected to help it keep its average weighted costs steady during remaining part of the current quarter. The firm expects the demand to rise during the first half of current year, as compared to last year.

The firm is also continuing with its cost-cutting efforts and has inked a deal with its workers for reduced pay for one year, and is also trying to cut expenses. The company has a loan debt of €73.4 million with its exports equalling to 78 percent of its turnover.

Nafpaktos Textile Industry SA witnessed a 52.4 percent fall in its turnover during 2011, mainly as its sales plummeted due to a depletion of stock. However, the company has been able to retain its strong hold on cash flow.

According to the firm's management, the soaring of cotton prices to unprecedented highs due to shortage of the natural commodity during first half of 2011 badly hit the entire industry.

However, the firm is looking at enhancing its revenues from its diversifications and acquisitions in other sectors.

Meanwhile, Varvaressos SA European Spinning Mills is awaiting the Ministry of Development and Competitiveness approval for a bail out and restructuring plan that the European Commission approved in December 2010.

However, in spite of all adversities, the firm has succeeded in retaining its export profit margin by shipping over 70 percent of its turnover to foreign countries during last year, which reaped it €12.72 million. This helped it to cut its losses after tax from 2010's €4.12 million to €3.55 million last year.

Fibre2fashion News Desk - India

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