Strong euro means trouble for medium-sized businesses

Munich. The strong euro is hurting the sales performances of many medium-sized German suppliers.

Edscha AG said the weakening of the dollar during the business year 2002/2003 caused its sales to decline by 2.6 percent. The losses would have been worse if the company didn't manufacture its roofs in the USA.

Sealing supplier ElringKlinger, which derives 61 percent of it turnover abroad, is considering moving production capacities to regions where the dollar is the business currency, according to CEO Helmut Lerchner. He said a 1 percent revaluation of the euro in respect to the dollar costs the company 1 percent of its annual turnover.

Battery manufacturer Moll is also under pressure. Company boss Gertrud Moll-Moehrstedt said that, due to the current exchange rate, customers are demanding discounts. If they don't get a cheaper price, they reduce the volume of their orders.

In the future medium-sized businesses will need hedging against currency fluctuations, according to automobile expert Anna-Maria Schoefer from Landesbank Baden-Wuerttemberg.

Tags: Suppliers

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