Garment producers seek new cooperation opportunities

TIRANA, July 11 – Lower sales during the first five months of this year due to falling demand from EU partners and pessimistic prospects ahead have worried Albanian garment and footwear producers who are seeking new cooperation opportunities to preserve their competitiveness.
Gjergji Gjika, the head of the garment and footwear producers, known as the fa谮 industry, says it’s high time Albanian producers joined in a consortium, a practice also known in regional countries, in order to offer a full package of products to foreign partners.
“When grouped, Albanian companies can lobby big firms even expensive brands because they become more competitive not only in quality, speed, but also offer a full package of garments. Albanian companies must produce an autonomous product with a full cycle for European markets but even for the pan-Albanian market and beyond, competing with the advantages of operational cost, quick transportation to EU and the efficiency of integrated production,” Gjika tells local media. Today, Albanian companies find it almost impossible to sign contracts with multinational quality enterprises which demand a full cycle of products from hats to shoes.
The creation of the Albanian brand and an aggressive marketing campaign are two of the solutions Gjika suggests to increase the competitiveness of Albanian products in EU markets.
The association executive says he has already started negotiations with fa谮 representatives to create a cluster which would benefit all companies. Something similar has also been done in neighbouring Macedonia where a logistics center has been established dealing with orders coming from foreign partners.
The garment and footwear industry accounts for 32 percent of total exports and employs around 70,000 people. What producers mostly fear is a deterioration of situation in Italy which is the destination for the overwhelming majority for 88 percent of Albanian garment and footwear exports. The poor demand could mostly hit small enterprises with little investments specialized in only one cycle of work. Only 10 percent of the companies are reported to be able to carry a full cycle of works.
Diversification of markets, considering that the majority 80 percent of these products go to Italy and the remaining share mainly to Germany and Greece is another concern for textile producers.
“We request the assistance of specialized institutions such as the Investment Promotion Agency (AIDA) or the Economy Ministry to influence on diversifying our market. We should target German and French markets more,” textile producers have earlier said.
Albania’s garment and footwear producers have warned 2012 will be a tough year for the country’s biggest exporting industry following lower demand from crisis-hit Italy and Greece, Albania’s top trade partners. The Chamber of Garment Producers says textile companies have already started cutting jobs after the drop in exports in early 2012.
Garment and footwear products continue registering negative growth rates and now rank the second most important exports overtaken by “minerals, fuel and electricity.” INSTAT data show textile and footwear exports shrank by 3.7 percent to 26 billion lek in the first five months of this year while “minerals fuel and electricity” exports rose by 16 percent to 28.5 billion lek.
INSTAT data show the fa谮 industry, producing garment and footwear products with imported raw material, continued remaining the top export performer in 2011 also thanks to Arab spring turmoil and the removal of customs fees. The garment and footwear exports rose by 15 percent to around 64 billion lek (Euro 450 million) in 2011. Starting from next January garment and footwear producers will face extra labour costs as minimum monthly wages increase by 5 percent to 21,000 lek.