ECONOMY

Strong euro is tough on big exporters

The exchange rate between the euro and the dollar, consistently above $1.17 per euro, is hurting those listed Greek companies who are active exporters. Things are even worse for the metallurgical industry, because of the low prices of raw materials at London’s Metals Exchange. The euro had fallen, in 2000, to as low as 82.29 US cents. Its rise to about $1.17, the rate at which it was introduced on January 4, 1999, means that Greek products exported to non-EU countries are more expensive and lower the exporters’ profit margins. An exemplary case of a company affected by the exchange rate is Aluminium of Greece. According to the company’s management, the fall in the dollar and the unfavorable phase in the global aluminium market had a considerable effect on 2002 results and has continued to drag down company profits right up to the third quarter of 2003. Besides the metals sectors, Greek exporters are to be found in the foods and beverages, secondary packaging, cigarettes, plastics and trade sectors. One food company, Elbisco, is a major exporter to the Balkans, Spain and Portugal, and Africa. Company managers expect the growth rate of their exports to decline if the euro stays much longer above $1.15. The subsidiaries of the Viohalco metals group (Elval, Sidenor, Corinth Pipeworks) also export the bulk of their production. Exports to EU countries have been boosted, but those to non-EU countries are suffering. Maillis, Europe’s second-biggest firm in the secondary packaging sector, is one of the big gainers, with its subsidiaries spread across Europe. Still, a danger for the company is the continuing weak state of the German economy, which causes firms there to cut back on orders. Other companies who have yet to feel the pinch and whose exports are increasing are Hellas Can, Titan Cement, Coca Cola Hellenic Bottling, and Silver and Baryte.