Dromeas is rapidly returning to profitability

A return to profitability by the end of the current year is foreseen by the president and CEO of Dromeas, Mr. Athanasios Papapanagiotou, speaking to “K” about the progress of his company. He bases this optimism on the new EU project worth a total of €30.4 million, which Dromeas undertook and began in July, while by September 30, the value of deliveries will reach €2.5 million.

By the end of the current year, another portion of the signed agreement worth €6 million will be delivered. These amounts, he emphasizes, more than cover the losses from the crisis and the €1.023 million in damages reported in the first half of 2009. He adds that this particular project was scheduled to be completed in July 2011 but has been extended for another two years. Mr. Papapanagiotou notes that despite the -41.2% drop in sales in the first half of 2009, he estimates that by the end of the year Dromeas will approach the 2008 sales level, with a variation of plus/minus 5 to 10%, which will result in overall improved results, due to the 20% reduction in general expenses compared to 2008. He points out that the third quarter of the current year is already better than the second quarter.

EXPORT REDUCTION

Mr. Papapanagiotou admits that exports decreased by 20%-30% from abroad, with the percentage varying depending on the project and the country. He notes that the largest decline comes from EU countries. Nevertheless, order reductions are occurring both in the furniture sector and in the production of automotive components. Dromeas collaborates with Mercedes for the production of parts for trucks of the global automotive industry, as well as with other automakers.

Despite the crisis and its impact on Dromeas, Mr. Papapanagiotou states that in October the company will complete an investment with a total budget of €5 million, concerning the modernization of mechanical equipment across all operations in wood, aluminum, and metal components.

Additionally, it plans to create an exhibition center in Sofia, Bulgaria, with a total budget of €2.5 million, aiming to further enhance the company’s activities through its commercial subsidiary in the neighboring country. Dromeas is already in the process of purchasing a 3-stremma plot on Sofia’s ring road, where the new commercial exhibition center will be built, he emphasizes. Construction work will begin in mid-2010 and the exhibition center will be completed in 2011.

Mr. Papapanagiotou foresees that the crisis in Greece will be slow to overcome and hopes that recovery in other EU countries, expected to come sooner, will positively influence Greece. He supports this view because the national economy is not only suffering from the global economic crisis but also “from a multitude of chronic structural issues, which due to political cost are not addressed and worsen year by year.” He believes the ever-increasing public sector debt is one of the most serious problems of the Greek economy. In his opinion, the country must follow what the late Konstantinos Karamanlis and his successors supported: “not to consume more than we produce as a country.”

He stresses the need to bring order by limiting public spending, while advising his fellow entrepreneurs to have courage and remain calm. Regarding workers, he emphasizes that layoffs are not the solution, as this choice worsens the market situation. For his own company, he said there were no layoffs, although approximately 30 employees left voluntarily.

Dromeas S.A. was founded in 1979 and is based in the Industrial Area of Serres, with production and building facilities totaling 55,000 sq.m. on a 115,000 sq.m. plot. It operates in the production and marketing of office furniture, partition walls, and filing systems, as well as complete kitchen and home furniture systems.

Dromeas is today the largest company in the sector in Greece and one of the largest in Europe in terms of infrastructure, technology, facilities, productivity, and product quality, Mr. Papapanagiotou emphasizes.

Dromeas has an international presence in both Europe and the rest of the world. In 2007, the export share of its total turnover was 27.5% (equivalent to €19.75 million). It has a subsidiary company in Sofia and maintains partnerships in Albania, Romania, Egypt, the United Arab Emirates, Cyprus, France, Germany, Italy, and the United Kingdom. The undertaking of various aluminum component manufacturing projects over the past two years, in collaboration with European automotive industry companies (Daimler AG and MTU), is expected to significantly boost Dromeas’ export activity in the coming years.

According to Mr. Papapanagiotou, securing the latest project for furnishing EU offices is further validation and recognition of the quality and competitiveness of its products and a continuation of the major projects it has implemented over its long history. It represents:

A top-level recognition of the efforts made since its founding thirty years ago for the development of innovative products, technologies, and production units, as well as

A validation of the strategic choices for the vertical integration of the production process across the entire manufacturing spectrum with high-tech equipment.

International promotion of the country for office furniture production.