October 27 (SeeNews) - Croatian electrical wiring and cables maker Eurocable Group plans to nearly triple its net profit to over 20 million kuna ($3.7 million/2.7 million euro) next year as the company eyes new export destinations, its CEO said.
For this year the company has projected net earnings of around 7.5 million kuna, Drazen Matiegka told SeeNews in an emailed interview.
2012 will mark the first full 12-month cycle of operation of Eurocable Group's new production site commissioned in late June this year near Zagreb. The 200 million kuna greenfield investment in the new production site in Jakovlje has created 100 new jobs while doubling the company's output capacity.
Almost simultaneously with the output capacity boost, Eurocable launched in-house production of copper wires from copper cathodes and with that raised further the level of the vertical integration of the company which already manufactures PVC granules for its own needs. Those two projects ensure Eurocable’s relative self-sufficiency when it comes to the supply of the two main input materials for its production operations.
Matiegka said the company’s five-year development plan also envisages the consolidation of the current two sites - the other one is in Jankomir, Zagreb - at the Jakovlje location where a second production unit identical to the existing one will be added. “The plan is to purchase new production equipment, build office premises and thus concentrate all business functions in one location - in Jakovlje.”
The official expects 2012 to be a challenging year. “The recession is still present, especially when it comes to the Croatian and the regional markets, where in some cases it is even making a comeback. While the rest of the markets are recovering – some faster than others, there is still investment inertia there. Therefore focusing on exports and on expansion to new markets is the best way forward.”
Matiegka believes bolstering exports is the best way to spur economic growth and that is why – in order to raise public awareness about the importance of exports and of government support for export-oriented companies, efforts are needed to improve the export environment and to constantly draw attention to the problems faced by the exporters.
The company executive is confident the raised production capacity will allow Eurocable Group's revenues to cross the 1.0 billion kuna mark in 2012, up from around 750 million kuna planned for this year.
Eurocable (www.eurocable-group.com) has operated at 99.2% of its production capacity so far in 2011 – a rate that is expected to remain unchanged on a full-year basis, setting the company on track to raise output to 26,000 tonnes of finished goods from 18,000 tonnes in 2010. Output is forecast to rise further to 38,000 tonnes in 2012.
Matiegka noted that although the company has always been export-oriented and expects to generate as much as 900 million kuna of its sales abroad in 2012, up from the 670 million kuna provisionally forecast for this year, it would be a very good sign for the recovery of the Adriatic country’s economy if revenues from the currently underinvested domestic market increase.
Eurocable's biggest export markets are Austria, Germany, Switzerland and Greece as well as the countries bordering Croatia. The company targets markets with brisk investment activity and potential for the growth of all economic sectors from construction to infrastructure.
After raising sharply its output capacity, Matiegka said the company now plans to expand the reach of its exports to the UK, Ireland, the Czech Republic, Slovakia, Romania and Bulgaria as well as to destinations further afield like Russia, Ukraine and Israel.
Installation cords and low-voltage power cables are the company's key export products alongside solutions for the construction sector, industrial manufacture and power distribution.
(1 euro=7.4914 Croatian kuna)