The entrepreneurs of the lumber industry are worried about the slowdown that the economic recovery is experiencing. Something that directly impacts the profitability of the sector, they explain.
They warned in a recent congress that took place in Cordoba, where 28 cameras from across the country that make up the Argentine Federation of Timber and Allied Industries (FAIMA) met.
“Due to the pressure on our costs and profitability already exerted by the increases in the rates of services, the component linked to transport and competition with imported products, it is expected that the second half of the year will show a greater slowdown in the economic recovery than It was taking place in 2017, “said Pedro Reyna, president of FAIMA.
According to Reyna, sales of the sector depend on the income of consumers directly. Therefore, the cooling to the recovery of the real salary that supposes a higher inflation than originally planned for this year, impacts on the forecast of our sales “. And noted that “the wood and furniture sector presents low levels of profitability three years ago, which in this context is expected to continue downward according to the surveys of our FAIMA Observatory and the contribution of the cameras in our network.”
“We can achieve competitive credit lines and a reduction in logistics costs through the Competitiveness Table headed by President Macri; but in order for these advances to shine, it must accompany the macro. We can count on modern financial instruments such as the formed invoice that forms part of the Law of Productive Financing, but they become inaccessible with rates of 40%, “the executive explained.
“We can take advantage of the benefits of deferred VAT payment that the SME Law brings, but we must sell so that there is VAT to raise,” the President of FAIMA continued.
Among the critical points of concern to the sector are the growing level of imports and informality. Also the need to encourage financing to demand, within the framework of a consumer market that tends to cool down.
In 2017, the block of wood and furniture showed a recovery of 6.6% year-on-year, but still remains 3.5% below the level of production in 2015. For this year, growth expectations moderated drastically, due to the low level of profitability, the increase in tariff costs and the damage that a high interest rate implies on productive financing and working capital, listed the entrepreneurs.