Romanian Garments Industry Crushed Between Chinese Imports and High Costs

While waiting for its accession into the European Union, Romanian garments and textile industry is facing tough competition from Chinese imports and domestic production costs on the rise.

While waiting for its accession into the European Union, Romanian garments and textile industry is facing tough competition from Chinese imports and domestic production costs on the rise.

This competition will be even tougher when Romania will enter the free competitive market of the EU, once it will become a full member state in January 2007.

"The national currency appreciated with 15% against the hard currencies and the price of utilities went up 35% - this is a disaster and not only for our industry," said Maria Grapini, president of the federation of owners in the garments’ industry.
She hopes the Executive will stop hiking prices for the utilities.

"During the first months of 2005 the balance of trade with China on garments was 537 million dollars, of which only 100 million dollars worth were Romanian exports; the rest was made of Chinese imports," said Mihai Burghel, director with the Ministry of Economy and Commerce.
While EU does all it can to keep at bay Chinese products, the Romanian authorities welcome them with open arms, as "developing economic relations with China is one of the key points of the development strategy of the Executive, said Burghel.
"Romania must diversify its trade with China and balance it, have the Chinese open banks in Romania and invest in the energy sector," added Burghel.

This is not at all music to the years of Romanian producers in the textile industry.
The garments industry needs fabrics, of wool, cotton and linings, and these are not available domestically.

The Chinese, however, are testing the Romanian market for locating their production facilities here, with a view to enter easier on the EU market.
"We will locate our production unit here in two years, when Romania will enter the EU. Until then we will enter the Romanian market only with our exports, which are still a fraction of our whole production capacity," said Heng Charoen Ying, sales director with Came!, a Chinese garments factory.

Romanian textile industry will be promoted in Europe during the "Romanian Fashion Days" organized in Amsterdam, The Netherlands, and Bologna, Italy, in mid July. The promotion will cost some 80,000 euros, of which the Romanian Government pays a part.