ECONOMY

Textile firms branch out into energy, boost exports

The Greek textile sector is trying to find its bearings in the storm of the domestic and foreign economic crisis, which has dealt a serious blow to business, by diversifying into other sectors or forging export deals.

The management of Hellenic Fabrics SA has been in talks for some months now with representatives of a consortium of American investors in an effort to drum up financial support for its development strategy. With short-term obligations totaling 64.7 million euros at the end of 2011, Hellenic Fabrics has procured two new long-term loans amounting to 23.15 million euros. The listed firm?s management believes that it will be able to boost exports this year, while it is also hoping that 7 million euros in value-added tax from exports will soon be returned by the state. However, until this money materializes, says the management, the company will face liquidity problems.

Hellenic Fabrics SA is looking at strengthening its presence in North Africa this year through its subsidiary Blu Cotoni, while one of its other subsidiaries, Hellenic Energy SA, has received a license to produce 1.7 megawatts of photovoltaic energy and has already applied for two additional licenses.

Varvaressos SA European Spinning Mills is still awaiting a decision from the Ministry of Development and Competitiveness approving a rescue and restructuring plan for the firm that was approved by the European Commission in December 2010. The company however continues to maintain its profile as an exporter despite the difficulties it faces, sending more than 70 percent of its turnover abroad, which translated into 12.72 million euros in 2011. That same year, the listed company managed to reduce its losses after taxes to 3.55 million euros from 4.12 million in 2010.

Epilektos – Selected Textiles SA expects to see an improvement in its performance in the second half of 2011 and first half of 2012 as it has managed to build up a good stock of primary materials, keeping its average weighted costs at a steady level for the rest of the current quarter. The company?s management also expects demand to increase in the first six months of 2012 compared to the previous year.

Epilektos has also proceeded with cost-cutting measures such as signing a company contract with its workers for reduced wages for a period of 12 months, while it is looking at ways to further cut back on expenses. The company has loan debts of 73.4 million euros, while its exports correspond to 78 percent of turnover.

Finally, Nafpaktos Textile Industry SA has found itself in free fall since 2011, with turnover declining by 52.4 percent in that year due to a drop in sales that resulted from a depletion of stock. Nevertheless, the company continues to hold strong in terms of cash flow.

The firm?s management notes that the price of cotton skyrocketed to unprecedented highs in the first half of 2011 due to a shortage of the natural product, a development that dealt a hefty blow to the entire industry. However, it is banking on boosting its revenues from the production and sale of electricity following the acquisition of subsidiary Energiaki Pineias.