Blog: Leonie BarrieMore about Macedonia

Leonie Barrie | 25 March 2010

For an industry that's setting itself up as a fast fashion supplier to European retailers and brands - especially those in the UK - Macedonia (more accurately called 'the former Yugoslav Republic of Macedonia' due to an ongoing dispute with Greece over its name) is surprisingly hard to get to.

As I found out when arranging a visit earlier this month, there are no direct flights from the UK, which means journey times range anywhere from five to twelve hours depending on connections. In fact, it seems just three national carriers have Macedonia's Alexander the Great airport in their sights - Austrian Airlines, Czech Airlines and Malev (Hungary).

Of course in the scheme of things this shouldn't really matter. Even with connections, the dawn departure of most flights means industry executives could travel to the country for a face-to-face meeting or factory visit and still get home the same day - albeit pretty exhausted!

And some of the seasoned buyers accompanying me on my visit even rejoiced in the fact that the journey is nowhere near as arduous as the 12-hour flight to Hong Kong followed by another three-hour flight into China that many of their factory visits entail.

And once you arrive in Macedonia the infrastructure is surprisingly efficient, with an almost empty road network making journey times fast and stress-free - and minus the horses and carts that are apparently still commonplace in Romania. For garments, this means transport times of just 2-3 days by road into Europe, compared with the 4-5 weeks it takes to bring goods in from China.

The factories too are a breath of fresh air after the huge hanger-like high volume operations many buyers are used to. Most of the country's garment makers operate small facilities (more than 95% of the countries garment factories have less than 250 workers), which gives Macedonia an edge when it comes to flexibility for short runs, quick response, and product variety.

The industry boasts a track record in apparel too, as a legacy of its days as part of the former Yugoslavia, when labour-intensive industries like textiles saw huge investment. Today many Macedonian garment firms are owned and run by former managers who have seen them through the transition from state to private ownership that followed Macedonia's independence in 1991.

But there are challenges too, of course, with the downturn in business due to the recession just the latest in a long line of hurdles Macedonia's makers have had to overcome.

To list just a few, at the beginning of its independence from Yugoslavia the industry was also hit by an embargo from Greece; most US customers disappeared when the North American Free Trade Agreement (NAFTA) came into force in 1994; the country was seriously destabilised by the Kosovo War in 1999; and the lifting of quotas between WTO members in 2005 saw another huge migration of business to China.

The country has also had to stand back and watch while neighbouring Romania and Bulgaria have joined the EU, whereas its own succession has been held back by the row with Greece over its name. That said, Macedonia still benefits from duty-free access to the EU, including garments that use Turkish fabrics.

Current pressures come from the need to move towards full-package production, which is still out of the financial reach of most companies - while local firms have a long history and skills in apparel production, most still make on a CMT basis - and a shortage of workers.

Nevertheless, buyers I spoke with were excited at the opportunities, with many seeing the country filling a much-need gap in their sourcing strategy for small quantities, high quality and lower prices. Whether this will be enough to entice them away from the working relationships they've forged in Turkey, Romania and Bulgaria remains to be seen. But some have already started sampling with factories, and I suspect many more will be going back for a second look.

The 15th century Stone Bridge is one of the most prominent landmarks in the Macedonian capital Skopje


Much of Skopje was destroyed by a massive earthquake in 1963


The view from Stone Bridge towards Skopje's central square

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