Банкеръ Weekly

Briefs

TEXTILE INDUSTRY CHANGES DIRECTION

The period when domestic producers' chief aim was just to survive is already coming to an end, Bulgarian and foreign entrepreneurs engaged in the manufacture of textiles and clothes believe. In a year or two production by materials supplied the customer will be no more the main way for using the capacity of the Bulgarian tailoring industry and will be gradually replaced by own production, intended for end consumers. All prerequisites for that are at hand. What remains to be done is to face the risks, connected with the independent comining onto the market and the use of accumulated funds. In the early 90s when Bulgaria lost its traditional markets, the borders opened for the import of cheaper products, and the big enterprises did not have sufficient money to buy new equipment and accept the challenge. By 1999 production by materials supplied by the customer helped to a large extent to overcome the crisis: the operating enterprises survived, new production capacities were established, and the employees got the necessary professional qualification and imporved the quality of their work. The last three years proved to be particularly important for the domestic textile industry. Strong investors and leading firms from Greece, Italy and Germany came into Bulgaria. The investments of one of them - Miroglio Group, reached EUR150MN in the 2000-2003 period. With the new investments the export for 2003 will reach USD1.6BN, Robert Alexandrijsky, Chairman of the Association of Exporters of Clothes and Textiles, claims. We have good positions on the European market which is the most important for us. Recent data show that our products will be well-accepted in the US, too. The volume of Bulgarian exports to the US in 2002 is the greatest as compared to all other Central and East European countries - worth USD146MN. For the same year Romania exported textiles worth USD119MN, Poland - USD61MN and the Czech Republic - US47MN. Stepping onto the US market is also a recognition of the products' quality and prices as well, Mr. Alexandrijsky commented. About EUR2MN is necessary for a serious producer of textiles and clothes in order to finance by itself a progarmme for stepping onto the European market. That is the stance of representatives of the German Industrial Chamber, who paid a visit to Sofia last week to attend the exhibition of exporters of textiles and clothes. The money will cover the expenses for market research of European markets, for the purchase of fabrics and other necessary materials and for production of own fashionable developments, German experts point out. In Bulgaria there are already companies which could venture to make such expenses. All they have to do is to accept a somewhat different market philosophy. Production by materials supplied by the customer is not risky, but does not bring so good profits. Moreover, the relative share of the work force in the price of the end product in the branch is gradually going down. For 2002 it was only 5 per cent. The chains of distributors, transportation and deliveries account for the bulk of expenses - about 85 per cent.

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