08-12-2014 Sofia (Gtai)

TEXTINATION NEWSLINE 08-12-2014 B ULGARIA' S T EXTILE AND C LOTHING I NDUSTRY IS OPTIMISTIC SEWING LOCATION FOR INTERNATIONAL BRANDS / GERMANY IMPORTANT SUPPLIER OF MACHINES

Sofia (gtai) - Bulgaria's textile and clothing industry is optimistic about the future. The industry is export orientated with connections to foreign clients. There is hardly a tenth of the production which remains within the country. Short delivery times with good product quality, competitive wages and low

transport costs are among the assets. Demography and migration lead to a shortage of skilled workers. The industry uses the opportunity to modernize, of which the machinery suppliers benefit. Since 2012 Bulgaria is in the focus of medium- sized commercial brands again. They leave the Far East and return to the Balkan region. The strength of the country lies in the production of higher quality products such as suits, blazers, coats and ladies' wear. The general conditions are considered to be good. The sector is moder- nizing. The companies are reliably, price and delivery agreements are kept. The large and medium-sized enterprises are well supplied with orders, the cushion is normally about three months. The sector relies less on foreign investment ra- ther than manufacturing platforms in cooperation with Bulgarian companies are sought. The

customers demand from their Bulgarian partners © Stephanie Hofschlaeger / pixelio.de a broader spectrum of tasks, like cut development, material purchasing, labeling and storage. There is a trend to full business. Companies with financial strength and administrative capacity have a good chance. Important sector Larger companies (over 100 employees) currently are doing well, so in the large-quantity sewing business, for example with coats, pants and suits. Bulgaria applies to "fast fashion" as a strong partner. Large orders can be processed quickly. "Corporate Fashion" (employee clothing) became a good segment because European public con- tracts aiming at a production in Europe. Subcon- tracting to small sewing companies is common. These are never a direct contractor. For companies on the 3rd or 4th stage is not much merit left.

Most of the better German, French, British and Italian brands are also sewn in Bulgaria. Examples of well-known international brands are Hugo Boss, s'Oliver, Esprit, Hallhuber, Roy Robson, Barbour, Boldessar, C&A, NEXT, OTTO, Camel, Gekas, Tommy Hilfiger, Armani, Montclair, Bur- berry, Max Mara. Image brands are now also focused on labor-ethical and social issues. The Italian textile and clothing company E. Mi- roglio is about to invest Lev 55 million (EUR 28.1 million, at a fixed exchange rate: 1 EUR = 1.9558 Lev) in its factories in Sliven, Yambol and Svish- tov. The plan is to modernize the facilities, ex- panding the product range and the construction of a new factory building. In this the production of clothing fabrics in an new innovative process, made for the first time in Bulgaria, is planned. Bulgaria's textile and especially the more important clothing industry are an important industry sector and employer. In 2012 the production of © La-Liana / pixelio.de textiles and clothing rose by 1.3% over the previous year to Lev 2,885.9 million. Accounted for textiles were Lev 707.7 million, on clothing Lev 2,178.2 million. There were 595 textile manufacturers with 11,367 employees and 4,393 of clothing with 104,103 employees. The foreign direct investment in the textile industry reached EUR 74.7 million in 2012, (-84% over the previous year), in the clothing industry at EUR 161.4 million (-1%).

Regional distribution The largest number of clothing companies is located in the South West regions (1,404), South Central (1380) and North Central (536). The textile companies are mainly located in the regions of South-Central (193) South West (156) and North Central (71). In the clothing industry most companies for women's clothing are situated in the city of Ruse, for men's clothing in Pleven and for women's and men clothing in Plovdiv. Sale strong Bulgarian companies in the clothing sector in 2012 were Balkantex (Sofia), Brilliant In- vest (Plovdiv), BTB Bulgaria (Ruse) AD, Delta Textile Bulgaria (Ruse), Dzalli (Gabrovo), Duwetika Bulgaria (Dimitrovgrad), Pririn Tex Production (Gotse Delchev) and Pirin Tex Processing (Gotse Delchev). In the textile industry there were Belotex 95 (Zlatograd) Bulsafil (Plovdiv), Bulgaria-K (Ka- zanlak), E. Miroglio (Sliven), Embul Investment (Stara Zagora), Ka-linel (Troyan), Kolhida (Sliven), Miroglio Bulgaria (Sliven), Roger Vanden Berghe BG (Sliven), Sinterama Bulgaria (Nova Zagora).

Bulgarian companies in the textile and clothing sector (sales in Lev millions)

Companies (Internet addresse) 2011 2012 2013 Sector E. Miroglio, http://www.emiroglio.com 188.2 193.6 210.7 Textil Bulsafil, http://www.bulsafil.it 151.2 132.4 140.8 Textil Kalinel Ltd, http://www.kalinel.com 65.6 79.3 84.6 Textil Balconf, http://www.balconf.free.bg 26.2 22.9 33.2 Bekleidung Embul Investment, http://www.emboy.com 33.6 26.7 28.7 Textil Feldhüs BG, http://www.feldhues.de 18.3 17.5 21.7 Bekleidung Creation, http://www.creationsbg.com 18.8 14.9 16.2 Bekleidung Coats Bulgaria, http://www.coats.bg 15.6 15.3 15.5 Textil Aglika Trade, http://aglika.bg/default.aspx 8.7 10.8 13.6 Textil Moda Sport, http://www.sportalm.at 10.2 9.7 11.6 Bekleidung Source: Capital Top 100 of July 2014 Export of Bulgarian textile products by country (in Lev million), shares and % change)

Country 2012 2013 Share of Change total export 2013 2013/2012 Italy 220.3 235.2 30.7 6.8 United Kingdom 39.2 50.0 6.5 27.6 Germany 67.8 46.6 6.1 -31.3 Turkey 30.4 41.0 5.4 34.9 Greece 31.4 40.4 5.3 28.7 France 35.4 39.2 5.1 10.7 Rumania 26.6 35.2 4.6 32.3 Poland 23.2 29.6 3.9 27.6 Belgium 22.5 24.0 3.1 6.7 Spain 23.1 23.6 3.1 2.2 Russia 15.1 18.0 2.3 19.2 Austria 19.0 16.8 2.2 -11.6 Sweden 15.1 14.3 1.9 -5.3 Total 701.6 766.2 100.0 9.2 Source: National Statistical Institute (NSI) Export of Bulgarian clothing products by country (in Lev million), (shares and change in %)

Country 2012 2013 Share of Change total export 2013 2013/2012 Germany 771.3 745.6 27.0 -3.3 Italy 551.1 557.2 20.2 1.1 Greece 293.4 339.5 12.3 15.7

Country 2012 2013 Share of Change total export 2013 2013/2012 France 274.4 287.6 10.4 4.8 United Kingsom 130.8 137.8 5.0 5.4 Spain 85.1 104.2 3.8 22.4 Austria 70.2 81.3 2.9 15.8 Belgium 69.0 68.1 2.5 -1.3 Turkey 44.2 65.4 2.4 48.0 Netherlands 59.5 65.3 2.4 9.7 Rumania 59.0 45.9 1.7 -22.2 Total 2.589.0 2.765.0 100.0 6.8 Source: NSI The monthly payment is at least EUR 300 for seamstresses. In practice EUR 500 are being paid, which comes close to the payment level of Greece and Portugal. The tendency is towards keeping the workers. In addition to money good working conditions and career opportunities are coming increasingly to the fore. About a third of companies are operating in the shadow economy.

According to expert assessments Bulgaria’s sewing industry is likely to have a look to a good future decade. A weak Turkish lira has a positive effect for the location of Turkey. Serbia and Macedonia are the more closer competitive surrounding. As long-term regional competitors Ukraine, Belarus and Moldova apply. The fixed binding to the Euro creates competition problems for Bulgaria. De- mography and migration are among other challenges.

© Beckmann Agency Maschinery imports rise A modernization of the industry took place in recent years through various EU programs. In cooperation with EU partners know-how has been built. Al- so in the new EU funding period the sector is likely to take advantage of the available opportunities. Facing the machinery imports the year 2013 was a good year. Of this primarily German and Japanese vendors have benefi- ted. © Dieter Schütz / pixelio.de

Import of textile and garment machinery in Bulgaria (Lev)

HS-Position 2012 2013 From Germany German share in % 8444 Jet-spinning machines 1,652,230 1,896,457 799,993 42.2 8445 Spinning machines 3,004,959 9,224,603 1,858,253 20.1 8446 Weaving looms 3,777,225 7,401,397 147,018 2.0 8447 Knitting machines 11,696,670 14,757,945 1,965,461 13.3 8448 Auxiliary machines 8,866,240 12,707,891 1,911,738 15.0 8449 Felting and fleece machines 161,948 1,289,719 12,796 1.0 8451 Cleaning, Dying and Pressing 19,470,216 20,419,761 3,968,866 19.4 machines 8452 Sewing machines 15,640,076 17,908,049 6,859,255 38.3 8453 Leather processing machines 6,145,118 6,507,978 211,499 3.3 Source: NSI Internet addresses: AHK Bulgaria E-Mail: [email protected] ; Internet-Addresse: http://bulgarien.ahk.de BAPIOT (Bulgarian Association of producers and exporters of clothing and textile) E-Mail: [email protected]; Internet-Addresse: http://www.bgtextiles.org Specialized Cluster Institute for Apparel and Textile E-Mail: [email protected]; Internet-Addresse: http://www.sciat.eu/?cid=3

Source: Michael Marks, Germany Trade & Invest www.gtai.de Translation: Textination-Team