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March 21, 2023

Romania’s chemical industry – a strong economic recovery driver

Yet, 22 pc of the 4,598 companies were not operating in April 2013, finds a survey by Coface.

The chemical industry confirms its role as a main driver of economic recovery, by being one of the biggest and most dynamic industrial sectors worldwide, with a global sales volume of EUR 2,744 bln in 2011 (up 11.6 pc from the previous year), finds a Coface survey.

At national scale, the chemical industry indicates an ascending trend, while also drawing an alarm signal about potential risks.According to the latest financial figures released by the Ministry of Finance, a total number of 4,598 companies considered as active were operating in the chemical industry at the end of 2011, which generated a total turnover of RON 47.4 bln and 89,696 jobs. However, by analysing the situation and financial indicators calculated for these companies, we notice that the chemical industry is faced by issues that can endanger the relative stability (number of economic agents and jobs) and the economic recovery trend (a turnover that increased by 24 pc) registered at the end of 2011. In April 2013, 22 pc of the 4,598 companies were out of business, their number and size being bigger than that of newly founded firms during 2008 – 2011, a decline which could cause the industry turnover losses of nearly RON 2 bln and the disappearance of more than 1,900 jobs.

The worsening of solvency problems for the companies in this sector, compared to the previous year, can occur because the net losses remained present, while the indebtedness rate advanced (+7.5 pc) and the capitalisation diminished (-20 pc). Unfortunately, the companies of the chemical industry are rather uninterested by the efficient management of the commercial credit risk, so only 2 in 10 companies have a low risk of insolvency; 3.5 – an average risk and the remaining 4.5 have a high or very high risk.Moreover, 26 pc of the companies working in the chemical industry registered debts to the state budgets on December 31, 2012, with the average value of the debt being 86 pc higher than at the end of the previous year.

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