Tirana, April 4 (AENews)  – Albanian exports are mainly supported by the competitive cost of labor. But this cost has increased as a result of the super-Lek during 2004.

Lately several major Albanian exporting companies declared that their revenue, during 2004, had marked a decrease by eight percent, as a result of the strengthening of the Lek. This resulted also in a decreased income since most fixed expenses are paid using the Lek.

“Today our success is based in large part on the competitive labor cost, but this competitive advantage is diminishing as a result of the strengthening of the Lek”, explains a representative from a shoe exporting company.

According to data from the industry of shoes and clothes, responsible for about 70 percent of all Albanian exports, fixed expenses in Lek for wages and rent were at about 65 percent of total expenses during 2003, but increased by five percent during 2004 as a result of the Lek’s gaining against the Euro.

During 2004 the Lek gained 5.5 percent against the Euro and 9.3 percent against the American dollar.

The industry of medicinal herbs was most affected by this strengthening. This stems from the fact that the 15,000 seasonal workers that this industry employee’s are paid in lek.

During 2004 the export quantities of medicinal herbs saw a small decrease, but the industry was able to make up for it as a result of the price increase in the international market. The effect is felt more due to the fact that the product is bought in American dollars, whose fall has been comparatively greater than that of the euro against the lek.

Albanian exporters of medicinal herbs say they have lost 20 percent in revenue due to the weakening of the dollar during 2003 and 2004. The export of sage was the one most affected by this. During 2004 revenue for sage fell by 13 percent despite the increase of exports by 8.6 percent or 2720 tons and a market price growth from US$1.6 per kilo in 2003 to US$1.7 per kilo in 2004.

Other production companies like Kurum which is an iron smelter, Deka for detergents or Birra Tirana for beer, declared that export prices rose as a result of the Lek’s strengthening, while losses were diminished since the Lek’s strengthening lowered the costs for the importation of technology and raw materials.

Posted by on Apr 4 2005. Filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry