Hopes of volumes and profit of the top companies in Romania have significantly dimmed not only compared with last year but also compared with the estimates of the first few months of 2009. The hardest hit are the companies in the industrial sector. First quarter results confirm declines for all the top ten companies by turnover, which could lose more than 4 billion euros this year, as well as their position among the biggest businesses in Romania.

In Galati, 12,000 employees are expecting options to keep their jobs this year from Augustine Kochurampil, chief executive of Arcelor Mittal Galati. The manager decided after Easter to move to crisis Plan B, and took a few steps to keep things afloat. ”We do not expect things to go back to where they were last year any sooner than two or three years, but we hope for an improvement in demand in the second half of this year and for the time being, even though we did not need 11,700 people to work at 40% capacity, we are looking for options to cope,” Augustine Kochurampil says. The manager’s plan, to work exclusively to order (instead of building stocks), to close the coke and chemical plant, to request employees to take ten days of leave and five days of technical unemployment in rotation, complemented the European strategy of Arcelor Mittal, which decided to close 14 furnaces of the 25 it had in Europe, as well as to completely shut down the plants in Florange (France) and Liege (Belgium).

”I’ve been in the steel business for thirty years and I have never seen such a decline in price and demand for steel,” says Kochurampil, who, in his thirty-year career has restructured a bankrupt plant in Germany, another plant that worked based on non-performing barters in Kazakhstan, as well as a plant in Poland where he saw the most difficult strikes, thus going through several crises on the steel market. The current crisis, which reached all economy sectors, has been a hard test for metallurgy in general and for Mittal Galati in particular, with the plant now operating at 40% capacity, without too much of a chance to rebound for the rest of the year.

The decline of the plant in Galati will probably be the most serious experienced by any major company in Romania this year. The most affected top ten companies this year (which include mostly players from petroleum and telecom industries, as well as from retail, metallurgy, distribution and industry), believes Codrut Pascu, manager of the local office of strategic consultancy Roland Berger, will be ArcelorMittal, Dacia Group, Petrom and Rompetrol, and the least affected will be the retail companies. By ”affected’ the consultant means the decline of the turnover due to the overall decline of the markets, as well as the profitability that will allow them to survive.

Each company among the biggest in Romania is taking into account significant two-digit declines of its business, with the first quarter results confirming their suppositions: Petrom is talking about 33% lower business in 2009, Rompetrol Rafinare anticipates 50% full-year decline, Rompetrol Downstream could go down by 20%. Mittal has already resigned itself to a potential 60% drop, while Lukoil Romania estimates decreases of 30% (the decline for Petrotel-Lukoil refinery is estimated to be even more serious, around 40-45%). The biggest companies in industry in Romania are now talking about a halving of their business, while the telecom and retail companies are somewhat luckier, as their decline will be less serious this year.