TEXTILE & GARMENTS INDUSTRY PROFILE A. Definition of Industry 1. Description The history of the Albanian textile and garment industry lies in an almost 40 year’s period of state owned enterprises, which operated under the centralized socialist economy. The previous industry production was derived through a large domestic valuedadded chain that used to produce from fiber until final product. Industry mainly supplied the domestic market, while exports were managed by a single government agency. After 1990, most of the enterprises went through a privatization process. A significant part of these enterprises didn’t change their destination, they kept producing textiles and garments but their activity was now concentrated on production under outward processing regime of clothes which comprise the majority of the Albania’s exports. The industry inputs are mainly supplied by imports, using the cheap labor advantage. The garment firms have no special technological processes, no marketing strategies and poor vertical integration, consequently leaving abroad most of the value added in this sector. This industry plays an important role in the country’s economy as shown in Table 1. Table 1: Key Indicators for Textile/Garment Industry General data Production (in mln Leke) 1999 Share in manufac t. industry 8% 2000 Share in manufac t. Industry 10% 25% 10% 7.6% 2001 Share in manufac t. Industry 2002 Share in manufact . industry 11% 30% 11% 7%
4,24 5 9,12 9 347 616
4,93 5 8,86 5 298 477
9% 6673 27% 8% 4% 1212 9 407 558
No. of 8,626 24% employees No. of 327 9% firms Investment 19% rate (in 690 mln Leke) Source: INSTAT , 1999-2002
Garment industry production has been increased progressively, as a result of attractiveness of cheap labor found by foreign investors for their Outward Processing Productions. This is reflected also in the increasing number of employees (almost all
women), number of firms (often joint-ventures) and an investment level confirming once again the labor-intensive nature of this sector. Foreign trade of the sector also reflects the structure of domestic production under OPT (Outward Processing Trade) regime. Exports and imports are interconnected as a result of re-exportation. Imports mainly consist of semi-final products, which are re-exported after a few assembling operations. Garment export and import levels have been characterized by an increasing trend. Export growth rate for 2003 was 25% towards 2002 and with an absolute value of US$ thousand 155,219. While imports reached US$ thousand 203,043 in 2003. Main trade partners are Italy, Greece and Germany. 2. Standard Industrial Classification (SIC code) 182 Manufacture of other wearing apparel and accessories 1821 Manufacture of work wear 1822 Manufacture of other outerwear 1823 Manufacture of underwear 1824 Manufacture of other wearing apparel and accessories n.e.c B. Main Products Existing The industry range of products output is very well mirrored in the exports, due to reexporting production as explained above. The main products of this industry are suits, trousers, jackets, shirts and t-shirts, cotton intimate clothes, which are only assembled in Albania. Annex 1 shows figures on main exports (production) in this sector. C. Current Industry Structure According to INSTAT data, the number of firms in 2002 in the garment sector reached about 407. They represent outward processing companies, Albanian or joint-ventures with Italian, Greek or other western countries companies. The industry is highly competitive with many companies operating in labor-based assembling processes of clothing. 1. Raw materials used in textile/garment industry Albania produces 3,000 tons annually of natural wool fiber and no cotton. Processing of these fibers almost does not place (a few of wool washing and spinning in Tirana factory), therefore this natural resource remains unexploited. On the other hand, it is partly used for traditional productions such as...
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