Taking the next step up the value chain into full package production is seen as key to helping Macedonia’s apparel industry offset a fall in export orders over the last two years as retailers and importers slashed their buying during the recession.

Many firms have managed to survive by shortening lead times and reducing minimum orders to meet the demands of changing apparel markets, although most production is still carried out on a cut-make (CM) or cut-make-trim (CMT) basis.

But as demand starts to pick up again, manufacturers are being hampered in the move upmarket by a lack of experience and financing.

With bank interest rates currently running at more than 10%, full package production – which requires them to invest upfront in all inputs required to make the garment – is largely out of reach.

“We think the future is in full package,” explains Nikola Marinovski, manager at women’s wear maker Kuli Confection, which employs 350 workers making blazers, coats, and trousers for customers like Mexx, Mango, Steilmann and Escada.

“To work for the foreign market we need to offer as many services as possible, including pattern making, sampling and grading,” she explains.

That said, Marinovski calculates an investment of around EUR1m is required for any firm embarking on the full package route to cover orders, production, payment and delays, and points out that this level of financing “is the main barrier” to any such move.

Vlado Netkov, manager at ladies’ wear maker Milano, also laments the fact that Macedonia lacks a basic textile industry, with most fabrics and trims having to be imported from Turkey and Italy.

Even so, Milano has used its experience in designing its own Modena collection to extend its reach to full package, from buying fabric through to production.

While most manufacturing is still on a CM/CMT basis for customers including Pinko, Mariella Burani and Armani, Netkov points out that: “As buyers see we’re capable of sourcing fabrics they’re more confident in asking us to do it. And this opens up new opportunities.”

Another company that has risen to the challenge of full package production is INT, a manufacturer of men’s and women’s woven garments with a production capacity of 100,000 units a month.

The firm offers everything from designs through to pattern making and grading to samples, production and a range of finishes and treatments including washing, dyeing, pleating and embroidery.

INT’s general manager Ilijev Nikolco says the company’s vision “was to offer something different from other apparel companies,” with full package available on most of its lines, which range from men’s and ladies’ shirts to denim.

Women’s wear firm Okitex, which has its headquarters in Frankfurt, Germany, works with around 20 factories in Macedonia to supply a complete range of women’s coats, blazers, raincoats, blouses and shirts, including some full package production.

“The appeal for buyers and retailers is that they can deal with one factory that has a network to put garments out to individual suppliers – a one-stop-shop,” explains Gabriela Pavloska, export manager.

“We can show them the best options in Macedonia to build a range.”

Ironically, however, the country’s biggest textile firm Teteks, which is also one of its few fabric producers, exports around 70% of fabric production after claiming local markets are too small.

The firm has 1,100 workers and is vertically integrated from raw materials to yarn to fabric to garments – a set-up that means prices are cheaper and production can be quicker.

But it says fashions are moving away from the company's core market of wool and wool/polyester fabrics, preferring cotton, linen and cashmere instead.