Exporters shift production to countries with lower energy costs

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.