Textile investors offered public facilities for ‘1 Euro’

TIRANA, Dec. 19 – Free of charge state-owned premises and public land in return for investments in the garment and footwear industry, producing Albania’s top exports is the newest initiative which the government has launched. The project is part of the ‘Albania 1 Euro’ initiative, launched in 2006 soon after the ruling Democratic Party came to power, to attract more foreign direct investment and create more jobs in this times of global crisis.
The announcement was made by Prime Minister Sali Berisha in the first national conference on the future of the Facon industry in Albania held last weekend by the Albanian Chamber of Garment and Footwear Producers, locally known as the Fa谮 producers.
“We will give a priority to your proposals to offer spaces under the most facilitating conditions at 1 Euro. I suggest local and central government officials to implement this initiative as often as possible, and do everything to put at the disposal of the Fa谮 industry the biggest possible premises spaces under state-ownership, public construction sites which they may need to set up their factories,” said Berisha.
Praising the industry for overcoming global crisis impacts, Berisha added “We remain willing to examine opportunities for other measures easing your burden and increasing compactness to help you complete the stages of manufacturing and guarantee market access” said Berisha.
The Prime Minister believes the safest way to reduce global crisis impacts for the Albanian textile industry is boosting economic freedom and eliminating red-tape by launching a digital system.
While domestic consumption and investments remain sluggish, exports remain one of the main pillars keeping the Albanian economy moderately growing during this year. Latest Bank of Albania data published in Euro show Albanian exports during the first ten months of this year rose to 1.165 billion euros, up from 969 million euros during the same period last year, retaining their 20 percent growth.
Latest INSTAT data show “textile and footwear products” remain on top of the export list with 54.4 billion lek for the first ten months of this year, registering an increase of 17.3 percent year-on-year. Second come “minerals, fuel and electricity” whose exports rose by 28 percent to 48.3 billion lek. Exports of “construction materials and metals” rank third with 35.7 billion lek compared to only 26 billion lek in the first ten months of 2010, registering a considerable 37 percent increase. Data show exports to Italy, which are dominated by footwear and garment products, rose by 25 percent y-o-y to around 85 billion lek in Jan-Oct. 2011. Italy is the prime destination for almost 84 percent of total Albanian garment and footwear products. Albania’s second biggest trade partner for textile and footwear products is Germany with a 6 percent share followed by neighbouring Greece with a 5 percent share.
The Arab Spring turmoil this year proved positive for Albania’s Fa谮 industry with a considerable number of Italian companies which used to operate in these countries moving to Albania following the escalation of political crisis and turmoil.
Another measure attracting foreign investors of this industry to Albania includes the recent legal changes removing customs tariffs on raw materials for the apparel and clothing industry. These changes have been in force since early Sept 2011.
Government says the duty free industry will help bring foreign investors previously working in Arab countries, currently in a wave of political turmoil, to Albania which they consider the country with the best business climate in the South East Europe.
Albania’s manufacturing industry, mainly textile and footwear companies whose products are mainly exported to Italy and Greece, overcame the 2009 crisis since the first quarter of 2010, registering significant growth. More than half of manufacturing businesses operating in Albania declared lower sales and profits in 2009, according to a study conducted by Albanian Center for International Trade (ACIT).
Falling demand in foreign markets, the increase in manufacturing costs and breach of contracts by foreign partners were the main factors contributing to the poor performance of these manufacturing businesses in 2009.
The garment and footwear industry employs more than 50,000 workers.
Government officials say Albania is first in Europe for the lowest tax burden on foreign direct investment, and the lowest minimum wage at 20,000 lek (200 dollars per month) as well as the youngest population in Europe with an average age of 31 years.