Albanian textile and clothing firms are making export progress

Albanian textile and clothing firms are making export progress

With its location adjacent to Europe's key fashion centre Italy, a highly skilled labour force and low wages, Albania's textile and clothing industry is repositioning itself amid the unrelenting economic crisis that is gripping Europe.

A well-educated workforce and widely spoken Italian, English and Greek add to the appeal, according to Diana Cekhodima Sokolaj, president of the Albanian Fashion Designers Association.

The minimum workforce wage is at ALL20,000 (US$178.94) or EUR143 per month. "Investors benefit from labour rates that are more competitive than in Bulgaria and Romania," says Ms Cekhodima Sokalaj, "and Albania benefits from a range of free trade agreements that allow unhindered access to markets in the Balkan region."

According to data supplied by the USAID 'Rritje Albania' programme that provides expertise and training to Albanian entrepreneurs, textile products accounted for 17.1% of total Albanian exports in 2011, while exports grew by 11.6% compared to 2010.

Albanian garment exports have shown an average annual rise of 8%-10% between 2000 and 2010. A USAID Competitive Enterprise Development (CED) survey in 2010 of 105 garment companies showed that the top export destinations were Italy (78%), Greece (16%) and Germany (6%) - together representing 99.7% of all Albanian garment exports.

However, the Greek crisis is affecting production.

"The economic recession that hit mostly Greece and Italy has affected the Albanian garment industry a lot," Sokalaj adds. "Many factories are closed and hundreds of employees are being laid off. The Greek companies' supply of orders and raw materials to Albanian factories has been interrupted.

In contrast, exports to Germany doubled between 2005 and 2010, while exports to France, the fourth and last market for exports, doubled in 2010 alone, according to Andi Stefanllari of the Rritje Albania programme.

Retail sector consolidation
However, despite this export progress, the domestic market is still dominated by major international brands such as Mango and Benetton, which have retail outlets in Tirana.

"There is a process of consolidation of the retail sector taking place, with several shopping malls opened in the last five years, though leading large Albanian companies have started exploring the domestic market," Stefanllari says.

In the past two years, at least five Albanian companies have opened new chains of their own shops, including Madison Avenue (women's wear) and Bella Confex, which has two brands: Plaetor for men's underwear, and La Blanche for women underwear. "Albanian companies are competing with and gradually substituting imports."

Traditionally, the industry has received raw materials from customers, but in the last few years, according to Stefanllari, more Albanian companies have switched from 'cut make and trim' operations to offering full package service to foreign customers, while sourcing raw materials principally from Turkey and Italy.

Textiles take a long-term view
The textile industry also appears to be taking a strategic long-term view, training up a critical mass of expertise in sectors such as accountancy, sales, engineering and management.

"Cheap labour will not be a long-term advantage; it runs out," says Dr Gent Guxho, deputy dean at Tirana's Textile Engineering College, in an interview with USAID earlier this year.

To further raise skill levels, Dr Guxho supported a European Union (EU)-funded project that trained Albanian teaching staff and researchers.

Under the rather long-winded title, 'Reinforcement of human and material capacities of the Textile Technology Research Centre in Albania' (RETEXRESALB), the project helped organise visits and shared best practice at other colleges across Europe, such as Belgium's Ghent University.