Opportunities for Textile, Apparel, Footwear and Leather Industry

Textile, Apparel, Footwear & Leather Industry

Goods that can be produced competitively in Moldova

Moldovan manufacturers have been working formany years with renowned foreign brands –both fashionable and mass market brands.Companies from Italy, Germany, Netherlands,France, Austria, Belgium, and Great Britainsource and produce here.And with a good reason: Moldova delivers fast, flexible and with highest quality levels !

• Relocation of production capacity to Moldova• Sourcing and placement of orders• Forming Joint Ventures

Textile Apparel

Leather Accessories

Footwear Carpets

Textile, Apparel, Footwear and Leather Industry – SWOT Analysis

Strengths• a diversified segments that provide a wide variety of

products.• production capacities in all geographic zones of the country

that attract local work force• availability of Stable, Low Cost and Skilled Labor force

provides competitive advantage to the industry.• well-organized and equipped education system that assures

skilled labor force for the industry.• quick deliveries of the products for EU states• favorable investment/tax law• high potential of growing for work productivity, workloads

based on using modern technologies;

Opportunities:• unlimited and duty free access to the EU market for all

products • geographical advantages (proximity to the EU)• unexploited potential to regain the former position of the

industry in the Russian and other ex-USSR countries’ markets

• investment projects in infrastructure, environmental protection and rural & regional development are underway

• growing awareness in the industry about the need to improve competencies in fields like quality management, research, design, export marketing, and branding

• increased use of CAD/CAM systems to develop designing capabilities and workflow.

Weaknesses:• most of the Moldovan companies work under the CM or

CMT systems, which limit the access to finance, technology and value retention.

• lack of own products, product sales networks on foreign markets

• limited access to investment funds and working capital• small financial resources on local markets

Threats:• growing requests for eco-labels and other conformity

certifications or customer demands, will imply de facto export barriers unless Moldovan companies can rapidly comply to these demands.

TAFL competences in Moldova

TAFL industry work force/ Education

• Moldova has a long tradition in apparel and textile industry since the ex USSR and continued development in the early 90’s.

• The apparel companies do not need to start from Greenfield, but rather Brownfield using existing skills and tradition.

• Many local companied started to invest in modern equipment e.g. sewing machines, automats, cutters, spreading machines, plotters, CAD/CAM, etc.

• Apparel companies are mainly located in Chisinau, Balti, Soroca, and Cahul. • Some companies are located in Ungheni (carpet manufacturing, car seat covers, uniforms, footwear,

etc), Comrat, Orhei, Basarabeasca, Causeni and other cities.

The Education system continues the specialization in apparel and textile industry i.e. :• Technical University, faculty of light industry, • Pedagogical State University in apparel design, • Academy of Arts in apparel design, • Light Industry College from Chisinau • Light industry College from Balti, • Vocational schools from Chisinau, Balti, Soroca, Orhei, Cahul, Ungheni, etc.

Light industry education/ UniversitiesTechnical University from Chisinau (UTM) www.utm.md ; • Faculty of Light Industry; focused on training in Engineering and Garments construction profile.

- Department of “Technology and engineering of garments”; - Department of “Technology of leather and leather articles processing”; - “Construction of garments”- “Garments design”, etc.

State University “Alecu Russo” from Balti • Specialization of “Engineering and management in automobile construction”, since 01 September

2012 in Cooperation with Draexlmaier Automotive and University of Applied Sciences Landshut, Germany;

• The students are trained in both theory and practice for the demands of the automotive and supply industry;

• Many courses are held in German and English.

Pedagogical State University of Moldova from Chisinau• Faculty of Garments design; Academy of Arts of Moldova• Faculty of Garments design

Overview of Cahul light industry

Main manufacturers in Cahul are companies with foreign capital in apparel industry.

The majority of companies are specialized in knitwear and textile garments. • Austrian Joint Venture Tricon SA, cca 680 employees; • Italian capital company ICS “Laboratorio Tessile Mol” SRL, cca 400 employees in 2 shifts; • ICS “Tricou Fantasy” SRL, cca 80 employees. • ICS „Franco Sossi” SRL, located in suburb of Cahul, village Colibaş – 25 km

The average gross salary of sewers in Cahul as of March 2014, cca 3000 MDL (cca EUR 170).

TRICON SA production:

Overview of Soroca light industry

Main manufacturers in Soroca garments industry are companies with foreign capital.

• ICS Sotex Grup SRL (US capital, garments, winter mantel), cca 265 employees;

• ICS Maritansor SRL (Italian capital, footwear), cca 200 employees;

• ICS Ermogrup SRL (Italian capital, garments), cca 400 employees;

a. There are few shoes producers between 5 to 100 employees;

b. Soroca has good tradition in production of leather shoes and textile garments;

c. The main employer in Soroca was the knitted factory, with over 2000 employees;

d. Average gross salary for sewers in Soroca as of March 2014, are cca 2800 MDL (cca EUR 160).

Potential business in apparel sector

• Long tradition of Moldova in apparel sector; • Complex education system, i.e. Technical University, State University, Light industry colleges,

Vocational Schools, etc.• Dynamic developing of automotive components sector;

Rossovivo – car protection covers (transportation). Announced the extension to Moldova with a brownfield plant.

• Grow in 2-3 years to 1,000+ employees; Car Seats trim covers. Example: Lear Corporation- successful plant in FEZ Ungheni Business.

• Few Global companies are analyzing Moldova as potential location for relocation in different regions of Moldova;

Traditional TAFL industry: • Local companies successfully growing with own brands. Some of them are promoting own brand

goods for export; • Foreign companies especially Italian, Romanian companies developing in Moldova; • Exploring the tradition in footwear manufacturing; • Targeting CIS market (especially Russia, through Moldova Free trade agreement) and EU market

(through the existing Autonomous preferences and upcoming DCFTA agreement), and local market;