Italy's Geox footwear producer sold its only plant in Romania, which produced one million pairs of shoes annually and generated sales of above 35m euros.
Technic Development Timisoara plant had almost 900 employees and generated 5% of the company's total production. The firm was acquired by another Italian entrepreneur through VT Manufacturing firm.
The new owner, Vicenzo Tagliaboschi, 64, who has operated in this sector in Eastern Europe, including Romania, before, will rehire the 880 people who still worked for Geox and will become one of the suppliers of "breathing shoes".
In mid-2008, the plant of Timisoara had 1,800 employees, with the company's representatives announcing at that time that the average wage stood at 300 euros, but some employees' incomes could go as high as 700 or even 1,500 euros.
Geox, which chose not to disclose the value of the deal, last year sold more than 20 million pairs of shoes in 68 countries, with 95% of production being operated through partnerships with plants of the Far East and South Africa".
"As a result of Geox production reorganisation strategy, Geox Group decided to sell its factory to a partner that is also manufacturing for us, with this move having nothing to do with the rising labour costs in Romania. The only factor that prompted this decision was the small production volume that does not justify our owning a factory in Timisoara. For Geox it's still interesting to produce in Romania," said Romina Zanchetta, communications officer for Spain and Eastern Europe with Geox.
Geox products are distributed in Romania through Otter Distribution company, which said the Italian brand accounted for 23% of its total sales for 2008, worth above 19m euros. Mario Moretti Polegato, the company's chairman, at that time gave assurances the firm would not relocate or give up its Romanian production.
"Foreign investors are rushing to leave the market at the moment they are not profitable any longer (...)," says Maria Grapini, president of the Federation of Textiles, Apparel and Leather Goods Business Owners (FEPAIUS), who believes that should domestic producers also decide to close their plants and destroy the industry, there will be nobody left to take over the workforce at the moment foreign investors withdraw.
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