Conindustria estimates that about 700 of the 3,200 companies have ceased to operate

6 November 2018 01:15 am

"Venezuela has ceased to be an industrialized country," said Juan Pablo Olalquiaga, president of the Venezuelan Confederation of Industries, in the presentation of the results of the second quarter survey. Of all the active companies that reached 3,200 at the end of last year, today 22% are inactive, indicating that around 700 have stopped activities

"It is dramatic to note that 22% of the companies have ceased to exist, which is a reflection and demonstration of the process of mortality and destruction that unfortunately Venezuela is living in," said the head of Conindustria.

Regarding 78% of the companies that continue to produce, 97% of their owners think the situation in the country is "worse" or "much worse".

The study also shows that for 87% of industries the raw material decreased compared to the same quarter of last year. "The raw material that companies had to keep their activities will disappear," said the manager. He added that 72% said they had less than 3 months of insured work. while 83% of small businesses reported "less than a month".

Olalquiaga recalled that the traditional thing in Venezuela was that about 90% of companies expected to have applications for their products three or four months earlier. Figures in the most recent survey reflect shrinking demand, he said.

During the period under review, it was also noticed that about 50% of the enterprises were operating at less than 20% of their installed capacity. "There are areas such as graphic arts operating at 16% and car parts at 8%." Only 10% of the respondents replied that they are between 61% and 80%. None from 81% to 100%.

91% of the companies said their production was "drastically" reduced to natural units, which boosted projections for losses of more than 20% of gross domestic product for 2018, which accrues a 50.61% reduction Nicolás Maduro took office in 2013, according to figures from the National Finance Committee.

In addition, during the quarter, the average increase in production costs was over 4,900%. However, 32% said it was over 5,000%. "Consumers can not pay in hyperinflation what the products cost, so companies have stopped selling."

Olalquiaga said in his presentation that, due to consumer poverty, 82% of companies predicted that their sales would fall, the factor that most affected the production of products in the second quarter. These include the lack of currency availability, access to raw material suppliers, uncertainty in the political and institutional scenario and lack of funding.

"Expectations are discouraging." 77% of industries consider closure in less than two years, indicating a decline in investment, which declined to 71% of respondents.

He warned that the closure of companies would be extended until there was a political change that would bring with him the creation of a different economic environment, with freedoms and respect for property rights. "It is terrible that businesses can not maintain themselves, that consumers can not buy products and that workers are losing their jobs."