Prague - Total losses of Czech industrial companies over sanctions between Russia and the EU may reach tens of billions of crowns in the short-term horizon, said a poll conducted among businesses by the Confederation of Industry.
The firms may be facing even hundreds of billions in losses in the long run, the poll has revealed.
Data of the government´s working group monitoring impacts of sanctions show that Czech exports of sanctioned commodities in the area of engineering reached Kc2.1bn last year.
Tomas Prouza, the head of the group, said that the figure represents the impact of sanctions in a situation that engineering firms would not find alternative markets for their products. "The real impact will be lower," he said.
"It is very difficult to calculate total losses," said the Confederation.
Based on an estimate of around 100 firms of whom around one quarter was unable to assess the impacts, direct effects of sanctions would reach around Kc10bn, SP said.
If firms lost their projects on the Russian market and would have to leave the market, the losses would be much higher. Some of the firms said they would have to wind up their business, the poll showed.
Around 70 percent of firms said they do not know what would be the indirect impacts of lost exports to Russia via firms in Western Europe or they said they cannot see any negative consequences. Thirty percent said indirect effects would reach some Kc5.5bn.
A number of Czech firms are acting as general contractors on the Russian market, while on other markets they are less successful in this respect. They have obligations towards their suppliers that will have to be fulfilled, said the Confederation.
"Our supplies can be definitively substituted by products from Asian and other countries in the future," SP said.
The branches to be hit the hardest include engineering, energy, chemical and petrochemical industries and technologies for agriculture and food industry, according to exporters.
State-run enterprises in Russia start contacting domestic and Asian producers (Chinese, Turkish), SP said.
Measures to mitigate impacts of sanctions include eliminating visa barriers for Russian companies. The Czech Export Bank (CEB) and the Export Guarantee and Insurance Corporation (EGAP) should provide soft loans and guarantees for countries that will be selected as alternative destinations for trade and investment opportunities, SP said.
The poll showed that one third of firms agree with the sanctions and two thirds criticise the EU´s sanctions against Russia. A major part of enterprises in favour of the sanctions are hit or will be directly hit by the sanctions, according to the poll.