Ex­porters shift pro­duc­tion to states with lower en­ergy costs

Kathimerini English - - Front Page - BY DIM­I­TRA MANIFAVA

A num­ber of Greek in­dus­trial firms are be­ing forced to shift the pro­duc­tion of or­ders from for­eign mar­kets to units out­side of Greece, to coun­tries with con­sid­er­ably lower en­ergy costs than at home.

On the other hand, in the last few months, en­ter­prises with­out pro­duc­tion units abroad have been forced to a great ex­tent to turn or­ders down as they can­not meet the en­ergy and raw ma­te­rial costs in­volved. Ac­cord­ing to the busi­ness world, this is the main rea­son be­hind the re­cent slide in Greek ex­ports. It also can­cels out ef­forts made over the last cou­ple of years to in­crease the com­pet­i­tive­ness and the ex­port-ori­ented char­ac­ter of the Greek econ­omy – ef­forts which have also in­cluded dras­tic salary cuts.

“We are cut­ting down on ex­ports from Greece due to the en­ergy costs. In Bul­garia, my pro­duc­tion costs are just a third of the nat­u­ral gas costs I pay in Greece,” Spy­ros Theodor­opou­los, CEO of lead­ing food group Chipita, tells Kathimerini.

“There should have been a pro­vi­sion for free en­ergy to in­dus­tries. We have pre­sented stud­ies to the gov­ern­ment which show that the money lost would be re­turned to the state and then some through the in­crease in sales and ex­ports, but they haven’t done any­thing,” adds Theodor­opou­los. Chipita re­cently com­pleted one more unit in another neigh­bor­ing coun­try, Tur­key, that will start pro­duc­tion on March 1.

Greece’s pub­lic ad­min­is­tra­tion may have taken some im­por­tant steps to­ward com­bat­ing bu­reau­cracy in the ex­port­ing process (through elec­tronic cus­toms and the ex­ten­sion of work­ing hours at some key cus­toms of­fices), but en­ter­prises now ap­pear to be run­ning out of fuel. The high en­ergy costs com­bined with the lack of cash flow are mak­ing it dif­fi­cult both to buy raw ma­te­ri­als and to pay for par­tic­i­pa­tion in ex­hi­bi­tions or promotional ac­tiv­i­ties and the place­ment of Greek prod­ucts in in­ter­na­tional mar­kets. As a re­sult, Greek ex­ports have been on a steady de­cline in re­cent months, with Hel­lenic Sta­tis­ti­cal Au­thor­ity data show­ing a 22.6 per­cent drop in Novem­ber, and there are no prospects for im­prove­ment in the near fu­ture.

where the Greek food group has moved more of its pro­duc­tion due to the dif­fer­ence in en­ergy costs.

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