Kosovo Uniforms and Sportswear Assessment - USAID EMPOWER - 2016 03 FINAL doc

March 2016

This document was produced for review by the United States Agency for International

Development. It was prepared by:

Ahmet Halilagic, Textile Sector Advisor, for

Cardno Emerging Markets USA, Ltd., implementer of

Empower Private Sector Project USAID Kosovo

KOSOVO APPAREL SUBSECTORS ASSESSMENT –

UNIFORMS & SPORTSWEAR 2016 Update – Domestic and Export Market Opportunities and Challenges

DISCLAIMER: The views expressed in this publication are those of the author(s) and do not necessarily reflect the views of the United States Agency for International Development or the U.S. government.

Kosovo Uniforms and Sportswear Assessment - USAID EMPOWER - 2016 03 FINAL doc

CONTENTS

1. EXECUTIVE SUMMARY ................................................................................................. 1

2. TASKS AND METHODOLOGY ........................................................................................ 2

3. UNIFORMS AND SPORTSWEAR SUBSECTORS OVERVIEW ............................................. 3

3.1 Uniforms and Sportswear Subsectors ................................................................................................3

3.2 Production and Operations ................................................................................................................4

3.3 Sales and Growth ...............................................................................................................................4

4. FINDINGS AND RECOMMENDATIONS .......................................................................... 6

4.1 Strengths ............................................................................................................................................6

4.2 Opportunities .....................................................................................................................................7

4.3 Challenges ..........................................................................................................................................8

4.4 Sector-Level Recommendations .........................................................................................................9

4.5 Company-Level Competitiveness Assistance Recommendations.................................................... 12

4.6 Sequencing Year-Ahead Company-Level Assistance ....................................................................... 17


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1. Executive Summary

Job creation through increasingly competitive and market-oriented SMEs is the overarching

objective of the USAID EMPOWER Private Sector project, implemented by Cardno Emerging Markets

USA, Ltd. The project produced a Sector Assessment & Selection Report in late 2014, which

identified the textile products sector as one that had the potential for substantial employment

expansion, if properly supported. EMPOWER subsequently catalyzed the formation of the Kosovo

Apparel Marketing Association (KAMA), to assist the sector’s companies in promotion and buyer

connections, especially to foreign markets. In collaboration with KAMA, EMPOWER commissioned

this report to focus on two subsectors of the Kosovo apparel industry, namely uniforms (for police,

military, construction companies, hospitals, schools, market chains), and sportswear (T-shirts, gym

suits, sweat shirts, sweat pants, knit shirts, etc.), to more deeply evaluate their market potential and

competitiveness improvement needs.

18 private companies, plus a large retail buyer and relevant government institutions, were visited for

purposes of this report. The following are the principal findings and recommendations:

1. A cadre of capable Kosovo apparel business owners has come of age in the past five to ten years,

and they are demonstrating strong entrepreneurial capabilities. They have invested in plant and

equipment, product quality, and workforce skills, and have grown their businesses to upper-

small / lower-medium size – 40 to 70 people. Several of these companies are capable of

production volumes adequate for relatively smaller orders from international contractors.

2. Uniform producers are export-ready if results-driven support packages are offered. Support can

be grouped under the categories of workforce development, organizational and production

design, technology improvement, and marketing. While these categories are distinct,

addressing each can be expected to have synergistic carryover effects from one to another.

Assistance should operate simultaneously at the company, industry, and advocacy levels,

directly and through KAMA and KIESA.

3. Specifically at the company level, the first key step of support is in establishing proper design for

the entire production process, providing additional specialization for local employees, and

improving visibility on international market, by identifying the optimal brands and producer

countries to target for cut-make-trim (CMT) and branded product (private label) contracting.

4. Sportswear companies should focus on capturing significantly more of the domestic market in

the near term, after which they can move strategically toward export marketing and sales.

5. Sales opportunities that represent “low-hanging fruit” are readily available now. These include

the needs of large domestic retail chains (ETC, VIVA, NORA) for suppliers that can be responsive

for smaller and more frequent in-season orders for apparel products. Much of this business is

now satisfied by imports, probably less than ideally for these buyers due to time lags and order

quantity requirements. Kosovo producers, like others in the Western Balkans, are also well-

located for export contracting to Western European markets, for which diaspora connections

especially in Germany and Switzerland are an additional advantage.


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With proper assistance there are a number of apparel producers who can advance to the next level

over the coming years: 200-300+ employees, able to supply the larger order volumes needed by

global CMT contractors. Major job growth in the sector is possible if Kosovo can take its place as a

significant supplier of contract apparel alongside its Western Balkan neighbors who are successful in

this business.

2. Tasks and Methodology

The assessment methodology relied on direct visits and face-to-face interviews with company

managers and/or owners to evaluate a firm’s competitiveness in five key areas: 1) product design;

2) market opportunity and connection to buyers; 3) technical capacity/productivity; 4) availability

of skilled labor; and 5) access to finance.

A questionnaire was designed to guide the interviews with company owners to insure all data were

uniformly collected.

Secondary research of available business and industry information along with local knowledge and

conversations with business leaders guided the development of a list of viable companies from each

subsector. From this preliminary research, the list was narrowed to the “most-likely to succeed”--

those companies identified as being strong enough to benefit from results-driven support. The

research and list development was a collaboration between the consultant and EMPOWER

professional staff, which accompanied the consultant on all site visits.

There are few government-collected business statistics in Kosovo. Direct company visits and face-to-

face interviews gathered sales and employment data, as well as business plans and long-term goals

to gauge export readiness and need for support. The conversations proved an excellent opportunity

to establish a relationship and gauge management’s knowledge and understanding of what it would

take to leverage new domestic market opportunities and expand into foreign markets. A total of 18

companies were visited and top management interviewed between December 8-24, 2015 (listed in

an annex table).1 The sample of interviewed firms is representative based on the following factors:

production capacity, products range and experience in domestic market. Company owners

presented a high level of willingness to cooperate with the Project.

The consultant also conducted formal meetings with representatives of the Ministry of Trade and

Industry (MTI) and the Kosovo Investment and Enterprise Support Agency (KIESA) to determine their

perceptions of the potential for official government support of apparel producers ready to export.

Finally, since this effort is to find new market opportunities for domestic companies, the consultant

also met with Kosovo’s largest domestic buyer – ETC – a company with a total of 25 retail chains in

Kosovo, Macedonia and Montenegro, to gather knowledge of its experience with Kosovo apparel

companies, especially from these two subsectors.

1 Many of the companies visited produced both uniforms and sportswear but a minimum of five and a

maximum of 10 companies in each specialty were interviewed and toured in accordance with contract.


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3. Uniforms and Sportswear Subsectors Overview

In ex-Yu Kosovo, textile products were the second largest industry, employing more than 10,000

workers. Today, this industry officially employs about 1,500 workers, though taking into

consideration the non-formal economy, the true number is at least 3,000, and could be significantly

higher. In addition to the long tradition of this industry, today’s Kosovo textile industry is promising

for several additional factors: low cost of production, low-cost labor force, free trade agreements,

tax-friendly policies, and the country’s geographic location, convenient to distribution both to the

east and west. In combination, these factors qualify Kosovo’s textile industry as one that should be

targeted as a national priority for growth. The untapped potential for domestic sales can add

millions of Euros in new revenues, while the opportunity for export is both available within the

region and in the European market, with the right guidance and support, as recent assessments have

indicated. 2

The textile industry seems to be one of the most promising for job creation in Kosovo, and it appears

to be experiencing a resurgence, with registered employment growth of 12% in 2014.

3.1 Uniforms and Sportswear Subsectors

The revitalization of the textile industry can be seen in the growth in employment opportunity and in

companies’ management decisions that are funneling profits back into production upgrades. Ten

years ago, the majority of the companies were family-owned, starting as micro and small companies

employing 5-15 people. But today some textile companies, especially in the uniform and sportswear

sector, have made impressive growth with most of them employing from 20 to 150 employees. The

largest apparel producer in Kosovo, a jeans manufacturer, has grown to over 300 employees. 3

The following table presents the leading companies in these two subsectors

Uniforms Sportswear

Artatex – Peja S//Sprint – Podujevo

Eurotex – Mitrovica Artatex – Peja

Intertex – Gjakova Wear & Go – Gjakova

Unikat – Peja Invers One – Dragash

Fashion Network – Prizren Fashion Network – Prizren

The companies visited are stable. Most have their own production facilities or hold long-term leases

for space. The companies demonstrated sound business practices: continuously investing in

upgrading and expansion of production capacity, modernizing equipment and workforce

development. A few have already adopted international standards (ISO 9001) - a sign of their

2 Promoting Private Sector Employment Project – Swiss Cooperation Office in Kosovo, March 2015

3 Kosovatex, a jeans company located in Pristina, mainly a cut-make-trim (CMT) contractor for major European

labels. The visits revealed that the jeans sector also has made good strides, and could be recommended as the next sector for focused Project support.


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willingness to invest in the right elements for expansion into international markets. In earning ISO

certification, these companies dedicated the necessary resources to improve and modernize their

organizational structures and product quality. All are essential in making these two sectors of the

Kosovo textile industry export-ready.

3.2 Production and Operations

The visited companies in both the uniform and sportswear sectors had production capacities to

meet the core requirements for organization and flexibility to accommodate internal and external

challenges. Most fabrics and raw materials are imported from Turkey (90%) and other countries, but

no issues were uncovered to suggest that any production processes were adversely affected or

jeopardized by this supply arrangement. Companies are experienced in logistics and demonstrate

strong relationships and service cooperation with their international suppliers.

Raw material imports tariffs are 10% plus 18% VAT. Those costs can be mitigated if the company is

an authorized user of a customs warehouse. This legal arrangement allows companies to avoid VAT

taxes on raw materials until turned into finished products ready for sale and/or delivery. This

arrangement helps the companies manage cash flow, allowing them to pay VAT as they are to

receive payment for finished goods rather than making the tax payment in advance of production. A

further tax benefit available to exporters is that imported raw materials turned into product for re-

export are not subject to VAT tax. This will become even easier when the government of Turkey

ratifies the pending bilateral trade agreement between the two countries. Kosovo textile producers

will be able to import fabrics and raw material without any tariff (as in Serbia), giving Kosovo’s textile

companies yet another export advantage.

The companies interviewed each organized their operations of modeling, cutting, processing

(sewing), finishing and packaging in accordance with their conditions. Therefore, the level of

productivity and efficiency is different among companies. The questionnaire asked each company

owner/manager to grade the relationship between their current production output and their full

production capacity. The average response for this ratio was 60%, in other words, on average the 18

companies felt they had an average of 40% excess production capacity.

The managers based their assessment on their company’s equipment, number of employees,

employee skills and work ethic, and their own ability to manage time, money and resources. Of

course, the companies with the most modern equipment and facilities also had the most efficient

production lines and more skilled technicians. These are encouraging numbers because, despite the

fact that the majority of the companies visited are operationally below international standards4 and

are in need of new business and production knowledge, the potential for production expansion at

least partially exits.

3.3 Sales and Growth

According to the Kosovo Statistics Agency, in November 2014, the import of textile products was

valued at €22MM, while exports were just €1.3MM. Though there is no question that the true

4 For example, production capacity of shirts/day in Artatex will be 300 shirts/day with 30 employees. A similar

company in Albania, Mediterranean, produces 400 shirts/day with same number of employees. (PPSE Project – Swiss Cooperation Office in Kosovo, March 2015)


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numbers in both cases are much higher, this trade gap indicates substantial potential for import

substitution in the domestic market; it also demonstrates the impact growth of textile exports can

have on the nation’s efforts for a more sustainable economy.

At present, uniforms producers only sell domestically. Sales to private companies and government

institutions represent 80% of the revenues; the remaining 20% comes from company-owned retail

outlets. There are several reasons to be optimistic about the potential to expose the uniform

manufacturers to new markets. The requirement that workers wear specific uniforms is an

opportunity for the domestic companies to land these major contracts.

A niche market opportunity exists in military uniforms. Although foreign presence will diminish over

time, these troops do contract with Kosovo companies for uniform needs. At the same time, the

national military is growing. National authorities believe the need for uniforms and related

accessories offers new revenue streams for the uniform companies.

The uniform companies are among the largest companies interviewed and with their more modern

equipment and facilities are the most prepared of the two subsectors for export opportunities.

Sportswear producers sell nearly 100% of their finished products to the domestic market. Most sell

through the large retail outlets – ETC, VIVA, EMONA – that have stores throughout Kosovo. Some of

the chains have stores in the region (Macedonia, Montenegro). Domestic producers earn their share

of the market with low price and through fast and flexible delivery strategies, but they are under

constant threat that these products could be replaced by imports from Turkey, China, or Bangladesh.

In each of the past two years, the companies have experienced revenue sales increases of 5% to 10%

according to the ETC general manager. The trend for the sportswear companies is upward, but

according to the ETC manager interviewed, the sector loses far too much in domestic sales to

importers. In 2015 alone, ETC posted €17MM in apparel sales in Kosovo, less than one-third of which

came from domestic suppliers.5

Timing is important to these sportswear companies as they attempt to figure out how to capture

more of their fair share of the domestic market. As stated, the competition is stiff as international

brands use less expensive labor and poor materials to challenge local companies’ price and

distribution advantages. However, additional production expansion and better branding and know-

how are required for these companies to claim the domestic market for themselves.

The costs to domestic producers of marketing and expanding sales in the local market are probably

lowest right now. As more international brands and retailers move into Kosovo, it will become more

costly and challenging for Kosovo companies to grow their market share.

A 2012 report6 estimated that Kosovo industry satisfies less than 10% of domestic demand for textile

products. The remaining 90+% is open to exploitation, if Kosovo textile companies can improve

production quality and quantity. Focusing on import substitution alone would have a significant

impact on key economic indicators. More importantly, leveraging import substitution will allow

5 The fact that ETC alone, based on this data, imports €12MM worth of apparel annually shows how

understated the €22MM customs data must be for total apparel imports. 6 USAID KPEP Program: Report on the Textile Industry in Kosovo – Findings Survey 2012


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many of these companies to develop the staff, equipment, certifications, and branding for export

capacity.

4. Findings and Recommendations

This assessment was contracted to help EMPOWER: (1) determine if companies from the two

targeted subsectors possessed the capacity to benefit from support packages, and (2) begin the

process of identifying what support would be the best investment to help them expand into contract

export markets. Both objectives focused toward the goal of creating jobs and sustainable growth for

the participating companies.

As direct as the objectives are, the consultant offers a note of caution based on experience: the best

support package USAID offers a company may not always be what the company thinks is most

beneficial. Packages of support that help them first maximize their best strength should be what

comes first. From there, the company experiences new growth and begins to recognize the business

elements that need more strengthening before they can reach the next levels.

4.1 Strengths

The leading companies from both subsectors have in common the following strengths:

Uniforms subsector companies are definitely market-driven companies. Their marketing and design

approach reflects their research and knowledge of customer wants and needs. Most sportswear

subsector companies plan and design their final products based on market demands. Some

companies are developing their own brands and becoming more recognizable in the domestic

market.

The quality of raw material/fabrics and accessories used in production is of good quality. Despite the

fact that all inputs mostly come from Turkey (90%), companies experience no obstacle to their

production. They have established strong, direct contacts with suppliers, and import processes are

understood and stable.

Companies from both subsectors are highly motivated manufacturers. They are focused on

improving the quality of production to achieve high standards. Most of these companies are well-

established, operating 10 or more years; some of them are younger, but all of them are dedicated

to improving their productivity and efficiency. They are ready to invest moving into new modern

facilities with new technology, able to adopt international quality standards and increase production

capacities.

The Kosovo market is well-covered. The uniform companies have good connections and contacts

with key buyers in the national sector, as well as with public institutions. Companies from the

sportswear subsectors are increasing their presence in the Kosovo market; they are very flexible and

could respond fast even with small orders, and they record steady growth.

The low cost of the labor force makes them extremely competitive in the international markets

especially for companies from the uniforms subsector, because huge buyers in the work wear


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industry in Europe are demanding lower prices from their uniform suppliers due to reduction and

cutting their spending budgets.7

All leading companies from both subsectors see exports as an opportunity for growth and want to

develop in that direction. It is a very important fact, otherwise all further assistance and supportive

actions could have only short term impact.

Conclusions regarding strengths:

1. The companies selected have the capacity to begin achieving results in the near term if

provided support packages to help them expand into new markets, domestic and/or

international.

2. Uniform companies are export-ready, if results-driven support packages are offered.

3. Sportswear companies should focus on capturing significantly more of the domestic market

in the near term; as they do so with support, they can move strategically toward export

marketing and sales.

4. Timing is important. Sales opportunities that represent “low-hanging fruit” are readily

available now. If successful in capitalizing on these near-term opportunities, the time line

and investment required to achieve the long-term goals will be much less.

4.2 Opportunities

Over the past six or seven years, China has been the garment factory to the world, producing the

largest percentage of the world’s clothes. However, dramatically increasing manufacturing costs,

reduced government subsidies, and a burgeoning domestic demand for wearing apparel in China

have prompted many international brands and retailers to begin moving a portion of their

production out of China. With limited available production capacity in other low wage countries of

Asia such as Bangladesh, Cambodia, Thailand, and Vietnam, the migration has opened new

opportunities for apparel producers in other countries outside of Asia.

Kosovo is favorably located geographically for Western European markets. It has particularly close

traditional and diaspora ties to Italy, Germany, and Switzerland. Logistically Kosovo has easy access

to EU markets via modern roads and airport.

Kosovo tax rates are also favorable: a general flat rate of 10% for imports and 0% for exports. No

custom duties are levied on imports of technology or on intermediate products that are re-exported

(after processing). Kosovo is a member of CEFTA, and it enjoys duty-free access to the EU under the

Autonomous Trade Preferences and to the US under the Generalized System of Preferences (GSP).

Kosovo also has an agreement of free trade with Turkey, which will come into power once it is

ratified by the Turkish Parliament. Additionally, Kosovo benefits from trade preferences with Japan

and Norway that include only a few limitations.

This is perhaps the best time Kosovo and its uniforms and sportswear subsectors to expand their

markets internationally and even domestically (though the window of opportunity is closing on the

7 Global Market Review of Work Wear - Forecasts to 2019, April 2015


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domestic market as international brands and retailers move aggressively into Kosovo). With

targeted assistance in a few key areas, the Kosovo uniforms and sportswear companies have an

excellent opportunity to expand their markets and in turn create more jobs.

4.3 Challenges

While the companies visited have enjoyed important successes, to date mostly on the domestic

market, and have growth potential for export in both CMT and branded sales, they face several

challenges related to:

Scale, lead time

Branding

Productivity, quality, lack of standards

Human resources

Marketing & lack of knowledge about international buyers

Safety & market scrutiny

Scale: Production capacity of individual factories is small compared to garment factories in Asia and

Latin America or Albania. Owners of the firms interviewed expressed a general willingness to

collaborate on large orders, but there is some difference in quality levels across the factories visited,

and a few company owners are rightfully concerned that sharing an order with a factory that

produces at a lower level of quality would be detrimental to the better factory and perhaps the

sector as a whole. It should be noted that any external efforts (by KAMA and/or the donor

community) to encourage factories to share orders should be undertaken with care as only those

factories producing at the same quality level should combine production capacity to accept large

orders.

Although their relatively small production capacity limits the firms’ individual and collective ability to

attract orders from the large international brands and retailers, international brands and retailers of

all sizes have been moving toward smaller but more frequent orders to keep stock “fresh” for

consumers and to minimize retail risk. In addition, retailers in emerging markets place smaller orders

and in fact often have difficulty finding export quality factories that can accommodate such orders.

While the largest international brands and retailers remain out of reach of the Kosovo factories for

reasons of scale, smaller brands and retailers (diaspora) and developing markets (Albania) offer

excellent opportunities for the factories in Kosovo.

Garment factories in developing countries and emerging markets generally operate as contract

sewers for large international brands and retailers. Though competition is strong and profit margins

low, CMT, private label, and “full package”/”brand offers” work8 also offers the greatest potential for

larger-scale business and employment. In order to minimize risk and obtain larger orders, factories

need efficient production processes and high quality standards.

Branding: Branding diversifies risk and enhances profit potential, especially for the local market.

Some companies in Kosovo are doing a good job of building local and to some extent regional

branding for exports. In this way they can reduce dependency on the sourcing decisions of

8 “Brand offers” or “full package” means that the contracting buyer provides design, and the contractor /

supplier obtains the raw materials and produces the final product.


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international brands and retailers, and to participate in higher profit segments of the value chain.

The companies visited in this consultancy (S//SPRINT, ARTATEX) have been successful, with some

assistance of EMPOWER, in taking the initial steps to create brand names with logos and initial

promotional materials of international quality. Brand building, however, is more than just a name, a

logo, and a promotional brochure; it is a never-ending series of tasks that requires deliberate,

strategic marketing to identify needs of a desirable but reasonably accessible group of consumers, to

grow brand awareness among those target consumers (and retailers that serve their market

segment), to create initial (trial) and repeat purchase, and ultimately build brand loyalty. Brand-

building is important to the longevity and profitability of some Kosovo textile companies but it

requires further work.

Production: The companies visited during this rapid assessment are producing a long list of uniforms

and sportswear with quality from moderate to quite good. Efficiency appears average to good as

compared to international standards. Quality varies enough between factories to make sharing

orders across more than two or three factories problematic. Based on market success to date, it is

believed pricing is at least reasonably competitive. Though many of them have departments for

design, modeling, cutting, sewing, finishing/control and packaging, the organizational design is

sometimes weak or not well established and as a result of that lead times are long, a disadvantage

for CMT business. A few companies that we visited so far adopted international quality standard

(ISO 9001) but most of them do not have it yet.

Human resources: When it comes to production process, there is permanent lack of qualitative labor

force for each processing part, mostly in design and modeling, but also in organizing and controlling

the entire sewing process. Lack of skilled machinery technicians also represents a bottleneck for the

majority of visited companies. Administrative middle management skills are also weak for a majority

of the visited companies.

Marketing: Companies’ perception of the domestic market is decent, but lack of knowledge about

the international market and potential buyers for most of the visited companies was evident.

Safety & market scrutiny: Most of the factories visited for this rapid assessment operate in new (or

relatively new), spacious, purpose-built buildings, with multiple emergency exits, and multiple fire

extinguishers placed throughout most of the building/s. Housekeeping is generally good, minimizing

fire hazards. While some upgrades are needed, safety practices are generally quite good. Pursuing

factory certification for safety and environmental compliance will eventually be essential for

international buyers.

4.4 Sector-Level Recommendations

The leading companies from the uniforms subsector have good potential to expand their markets

both within and outside of Kosovo, if certain steps are undertaken in a timely manner. The best way

for export is through services (full package and CMT). Companies from the sportswear subsector

have space to increase their share of the domestic market through import substitution.

Support can be grouped under the categories of workforce development, organizational and

production design, technology improvement and marketing. While these categories are distinct,

addressing each can be expected to have synergistic carryover effects from one to another.


10

Assistance should operate simultaneously at the company, industry, and advocacy levels, directly

and through KAMA and KIESA.

Workforce development:

Summary of findings: Majority of interviewed companies emphasized their urgent needs for skilled

workforce. This issue already becoming as a problem especially for companies who havs ambitions

and potential for growth. The structure of qualitative and skilled workers needed for companies,

could be grouped in two main groups: a) technical (hard) skills – specialists for design and modeling

and stitching, machinery technicians, textile technologists, quality controllers, and b) managerial

(soft) skills, especially middle management, for marketing, promotion, and communication.

Recommendations:

Design and begin implementation of a program and schedule for “triangle” (Industry,

Education and National Employment Service) to engage industry with key educational

institutions, in particular the Kosovo’s High School for Design in Textiles and National

Employment Service

Undertake study tours for key school faculty and staff, and to identify practical ways to

incorporate new learning into and around the existing curriculum

Formalize the cooperation between companies and schools plus vocational education

centers

Create a summer internship program for youth

Support training programs at company premises in cooperation with National Employment

Service

Organizational and production design:

Summary of findings: So far companies are mostly competitive with low price which is good starting

point, but for long run battle on the market, besides low price, buyers want quality, compliance with

required standards, service reliability, and all these elements Kosovo companies should carefully

create. With proper approach toward better and more efficient synchronization between all existing

processing parts (design, modeling, cutting, sewing, finishing/control and packaging) companies

would be able to have lower lead time – which is crucial for CMT business, and also quality of the

final product will be more identical among different companies which will be easy to accept large

orders and easiest for division among the companies within a sector.

Recommendations:

Provide consultants and experts helping leading companies to properly design the entire

production process

Provide additional specialization for local employees at best performing companies in region

Support adoption of international quality standards.


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Technology improvement:

Summary of findings: Visited companies have mostly adequate technology mostly for sewing. For

the purpose of increasing productivity it is necessary to modernize departments for design, modeling

and cutting as well as final control and packaging. It will definitely create better condition for

companies to respond toward large orders as well as specialization of final products.

Recommendations:

Support companies purchasing modern equipment for design, modeling and automatic

cutting

Organize study tours for local technical staff visiting companies abroad that have modern

technology

Marketing:

Summary of findings: The current owners of the both subsectors have risen through the production

side of the business; hence while they have impressive knowledge about production, but limited

knowledge and experience with applying modern concepts of marketing in a market-driven

economy. Most of these companies are focused on production, thinking they can sell everything

they can produce, not focusing on product specialization for precise buyer targeting. Good

connection with buyers is the key point because companies will recognize and follow their needs.

Properly convey the right and concise message to buyers at international and domestic market

about companies’ potentials, is extremely important at this stage of Kosovo textile industry. Leading

companies from both subsectors could play initial role and use that momentum.

Recommendations:

Create business profiles at the company level as well as industry/subsector level

Increase the presence and promotion via social media network and improve the companies’

websites

Engage international agents to do international market research (mapping) and proper

segmentation, targeting and positioning strategy

Undertake on-the-ground marketing research and analysis to ground truth and prioritize

new expansion target markets, and to identify the optimal brands and producer countries to

target for CMT and branded product, respectively; recommended short-list countries

Schedule individual technical assistance to train and guide the leading companies in the

development and writing of updated marketing strategies and annual Marketing Plans for

both their CMT and branded business. This should ideally follow the marketing research and

analysis recommended above, so research results can be incorporated in both the training

and Marketing Plan development.

Establish formal cooperation with diaspora business community in targeted countries

Organize international visits, promotions and B2B events and revisits

Support international media representatives to visit Kosova companies for the purpose of

additional promotion of Kosovo textile industry/subsectors potentials in targeted

countries/markets


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Promote the textile industry at the national level and create a sense of urgency in order to

provide powerful coalition

Use the momentum and create a database (official key statistic data) for Kosova textile

industry with main purpose to bring the textile industry into the official National

Development Strategy

Additional recommendation:

Encourage factories to implement safety upgrades and website security steps outlined in this

report and facilitate safety certification of factories

4.5 Company-Level Competitiveness Assistance Recommendations

The challenges and needs of the visited companies are broadly similar, covering efficient production

design, specialized and high qualified work force, specific machinery and equipment, quality &

control standards, and contact with international market.

Company: ARTATEX

Location: Mishiste

Production: Uniforms

Recommendations:

Provide consultants and experts helping to establish proper design for entire production

process


Support purchasing modern equipment for design, modeling and automatic cutting in

accordance with organizational design adopted

Provide marketing expert for international market research and mapping (agent)

Create a company business profile and prioritize new expansion target markets, and to

identify the optimal brands and producer countries to target for CMT and branded product,

respectively; recommended short-list countries

Support adoption of international quality standards

Encourage factory to implement safety upgrades and website security


Service and/or Textile High School

Location: Peja

Production: Shirts

Recommendations:


process





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ARTATEX has potential to export in both (uniforms and shirts). In order to create sustainable

presence at international market some improvements in area of the quality of the workforce and

current production capacities are necessary. EMPOWER should immediately take in consideration to

engage external technical expert to assist ARTATEX to establish proper design for entire production

process.

The technical consultant should deliver:

1. The exact profile and needs of qualitative workforce

2. The list of necessary/unnecessary equipment

3. Adequate processing design (modeling, cutting, processing, packaging and control)

4. Production capacities projected

Expected outcomes:

1. Increase the quality of workforce

2. Increase the productivity and efficiency

3. Increase the quality of the final product

4. Increase the quality control (processing and product)

EMPOWER should take in consideration to assist ARTATEX upon international quality, management

and control standards adoption (especially ISO 9001)

For the purpose of international market penetration ARTATEX needs to define company business

profile and engage professional sales / manufacturers agent in order to target and identify potential

producers for CMT and branded product collaboration. EMPOWER’s assistance in this area is highly

recommended. Such an agent can support multiple companies’ buyer connections.

Company: INTERTEX

Location: Gjakova



process




Create a summer internship programs for youth

Create a company business profile


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INTERTEX is recently established (2015) modern company as a member of MABETEX GROUP and

formed initially to respond toward the needs of MABETEX employees (uniforms). From that

perspective they are completely export oriented and current production capacities are in accordance

with market needs. So currently there are no urgent needs for assistance upon this issue except to

clarify the quantity that INTERTEX is capable to produce additionally for export (out of MABATEX

GROUP needs). EMPOWER should assist INTERTEX in order to define marketing strategy and annual

marketing plan with focus on CMT and branded product for new buyers.

The company plans to employ additional 150 employees, and may need EMPOWER’s support for

vocational training, possibly a center in their premises. It should be permanent resource for new

workforce not only for INTERTEX but also for other companies in textile industry.

INTERTEX should attend B2B and trade fair events as significant member of Kosovo uniforms

subsector potentials supported by EMPOWER.

Company: WEAR & GO

Location: Gjakova

Production: Sportswear


process









Encourage factory to implement safety upgrades and website security



WEAR & GO is company with long experience and good local market presence. They are currently

not ready for export due to limited production capacities, quality of the final product and lack of

knowledge related with international market. In order to create conditions for export, WEAR & GO

needs to do substantial improvement in area of entire production process and EMPOWER’s

assistance in this area should be taken as initial step.

Company: S//SPRINT

Location: Podujeve


Recommendations:


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process


Support purchasing modern equipment for new production line (underwear)







Service and/or Textile High School.

S//SPRINT is well-established with good growth potential. They are indirectly (trough ECT in

Montenegro and Macedonia) already exporting but for direct presence at the international market

they need to do small adjustments and improvements in area of productivity, product design

(modeling) and market research. EMPOWER should assist.

Company: EUROTEX

Location: Mitrovica


Recommendations:


process




Support purchasing modern equipment for new production line (underwear)

Engage international agents to do international market research (mapping) and proper

segmentation, targeting and positioning strategy






Encourage factory to implement safety upgrades as well as protocols and procedures



Create a summer internship programs for youth.

EUROTEX has good growth potential. Beside the uniforms they are planning to extend production

lines in area of underwear and provide additional 25 employees. They have strong presence on local

market and they are ready for export as well. As a first step EMPOWER should engage technical


16

expert in order to assist and support EUROTEX with existing production process and help to establish

the new production line for underwear on time. As a result of that action EUROTEX will be able to

increase productivity and quality of the final products and company will be able to compete at the

international market in long term. For the rest following recommendations EMPOWER should assist

to this company on the same order like it is given/recommended above.

Company: UNIKAT

Location: Peja

Production: Uniforms and shirts

Recommendations:


process








Encourage factory to implement safety upgrades and website security (protocols and

procedures)




UNIKAT is stable company with long tradition and experience on local market. Innovative, ISO 9001

standard adopted, and with 70 full time employees has very good potentials for growth and export

in both (uniforms and shirts). On first place EMPOWER should immediately take in consideration to

engage external technical expert to assist UNIKAT to establish proper design for entire production

process.

For the purpose of international market penetration UNICAT need to define company business

profile and engage professional agent in order to target and identify potential producers for CMT

and branded product collaboration. EMPOWER’s assistance in this area is highly recommended.

UNICAT also should define marketing strategies and annual marketing plan (FY 2016/17) focused on

international market research/needs.

Company: INVERS ONE

Location: Dragash



17

Recommendations:


process


Renew the second hand equipment and machinery








Encourage factory to implement safety upgrades and website security (protocols and

procedures)




INVERS ONE is young company (2014) logistically very well constructed and in accordance with

technical standards. At the moment they have no capacity for export due to inexperienced

workforce, lack of production capacities, lack of quality control and lack of market knowledge. In

order to create conditions for export, INVERS ONE need to do substantial improvement in area of

entire production process and EMPOWER’s assistance in this area should be taken as initial step.

Company: FASHION NETWORK

Location: Prizren

Production: Uniforms and sportswear

This company has a good potentials and experience on the market and could play a vital role in

domestic and international market but current production facilities are humble and not adequate for

any further support until they not move at new own premises. Base on owner’s statement during an

interview related with his plan to construct new production facilities during this year it is worth to

take this company in consideration seriously as soon as they finish with construction.

At mean time FASHION NETWORK should attend at B2B and trade fair events as significant member

of Kosovo uniforms subsector potentials supported by EMPOWER.

4.6 Sequencing Year-Ahead Company-Level Assistance

1. Provide technical experts to consult as to production process, equipment, and workforce skills.

(Spring 2016)

2. Establish international trade fairs visitation and exhibition strategy. (Spring 2016)


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3. Support purchasing modern equipment in accordance with technical recommendations and

growth potential. (Summer 2016)

4. Support international standards adoption. (Summer 2016)

5. Identify marketing agents for international market research and mapping. Prioritize new

expansion target markets; identify brands and buyers for CMT and branded production.

(Summer/ Fall 2016)


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ANNEX:

1. Key Interviews

Company Location Contact Product / Role

Intertex Gjakove Ardita Rizvanolli, Operations Manager

Uniforms

Activa jeans Gjakove Reshad Rama - Owner Sportswear

Wear & Go Gjakove Ruzhdi Bokshi - CEO Sportswear

Artatex Mishishte Agim Mustafa – Owner Uniforms & sportswear

Fashion Network Prizren Furkan Rada - Owner Uniforms & sportswear

Puntex Prizren Shpend Beqiri - Director Uniforms

S//Sprint Podujeve Sami Sopa – Owner Sportswear

Eurotex Mitrovice Arian Syla – General manager Uniforms

Unikat Peja Xhavit Collaku - Director Uniforms

Zero 5 Gjakove Kushtrim Shehu – Sales manager Uniforms & sportswear

In Design Prishtina Veronika Bajcinovci - Manager Printing service company

Mustafa Brothers Ferizaj Agim Mustafa – Co owner Uniforms

Invers one Dragash Isemidin Emini - Owner Sportswear

KAMA Pristina Adrijana Hiseni, Executive Director Business association

ETC Peja Enes Nallbani – Manager of textile department

Retail chain

MTI Pristina Valbona Dushi – Director of industry department

Government

KIESA Pristina Remzi Ahmeti – Head of Export Promotion Sector

Government

2. References

Reference Author

Assessment of the Textile Sector in Kosovo; Key Elements of Phase I -Fact Finding (March 2015)

SDC Kosovo Promoting Private Sector Employment Project

Company Lifecycle Management (1999) Ichak Adizes

Global Market Review of Workwear - Forecasts to 2019 (April 2015)

Malcolm Newbery

Report on the Textile Industry in Kosovo – Findings Survey 2012

USAID KPEP Project

Kosovo Sector Assessment & Selection Report (November 2014)

USAID EMPOWER Private Sector Project

Sector Profile of the Textile Industry (March 2014) Ministry of Trade & Industry; UNDP Aid for Trade Project

Documents

Kosovo Uniforms and Sportswear Assessment - USAID EMPOWER - 2016 03 FINAL doc