From manufacturing 300 pairs per day to a production volume of 20 pairs now due to “hyper-inflation”. This is Cordivani’s parable in Caracas (Venezuela), footwear manufacturer with 55 years of history and controlled by Giuseppe Cordivani, son of the founder. According to the Wall Street Journal, the company is facing difficulties, like many others, due to the inflation level, which has reached and gone over 2.000%. The inflation boom that hasn’t stopped growing is, according to various estimates: going to reach 6.000% analysts say. Moreover, the IMF (International Monetary Fund) has estimated that the inflation rate will reach 10 million percent by the end of the current year. The country’s troubles began in 2013 as a consequence to the global financial crisis of 2008 and the decrease in the price of oil, on which many Venezuelan activities are based. Thus, a quick industrial de-growth started hitting the country and caused unemployment and hyper-inflation, due to which the country’s Central Bank sold its currency reserves and the Bolivar fuerte, the local currency, quickly lost value with consequent larger bills being introduced. The entire manufacturing sector of the country is in grave crisis, internal demand is at a record-low, and plants work at 20% of their potential. “Nobody can beat hyper-inflation, nobody.”, says Mr. Cordivani, disappointed for the situation, to the US-based newspaper: “We only work to try covering our costs”, he adds. The same paralysis has hit the automobile segment, where workers complain there isn’t enough work and foreign investors run away, while imports have been cut. A situation that is pushing Cordivani towards the ledge: capital is running out: soon the company will no longer be able to pay stipends and raw material will be finished, at which point the shop will be closed forever.
Venezuala is devastated by the crisis. Cordivani manufactures 93.3% less shoes: “We barely cover our costs”
