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Romania becoming East Europe’s garment maker for the continent

Romania’s star appears to be rising as an exporter of competitively priced and reliably delivered garment consignments to the EU. Currently, Eastern Europe’s most go-go garment producer is recording exports there worth US$ 3.4 billion a year, with plenty of potential for further growth over the next few years, according to experts. This development comes as no surprise to Dietmar Stiel, a German economist and management consultant with Seco Sector Consulting in Frankfurt. Steil, who since 1994 has run a consulting operation in Romania, explains, “Poland has become too expensive. At this moment, the Romanian garment industry cluster is the most competitive CMT-force in the Euro-Mediterranean area. It probably will remain so for a further five-to-six years. Then Ukraine or Belarus could take over the regional top position.”

Almost the entire Romanian garment industry, represented by 4,600 companies and 285,000 workers, has been privatised. In contrast to the rather gloomy outlook of the country’s state-controlled textile industry, which is struggling to hold up production and investment, the garment industry is flourishing. Privatisation has spurred sales. Dozens of big garment manufacturers - of which some, like Braiconf and Ikos Confederation, employ more than 3,000 people each - are making swift progress to develop Romania into the most dynamic production centre in Eastern Europe.

Hundreds of flexible, small- and medium-sized companies, and some 450 major suppliers of accessories and services, make up an increasingly strong cluster to challenge most of the world’s dominant suppliers. According to Wolfgang Limbert, programme coordinator of the German organisation IBD/GTZ, there’s no doubt that Romania in the near future will strengthen its position as the main garment maker for Europe. IBD/GTZ recently published a catalogue, providing details of nearly 800 Romanian textile and clothing firms.

In the early 1990s, the German manufacturer/retailer Steilmann, which has 16,000 employees in Romania, was among the first to understand the potential of the country. Now there’s a steady flow of would be-investors and contractors, who look for a better alternative since countries such as Poland, the Czech Republic and Hungary have begun to lose their competitive edge in the industry.

Seco Sector Consulting has just published the results of a market survey on average subcontracting prices per minute (on a CMT basis) in 31 major garment producing countries.