The textile industry will reach a level of 7.5 billion euros in 2010, two billion euros lower than this year.
Over the next four years, the number of players will almost halve, as domestic companies will reposition themselves so as not to directly compete with products coming from Asia. Wages in the industry will triple, getting to 300-400 euros per month.
In Romania, companies such as Zara, Christian Lacroix, Escada, Lacoste, Sonya Rykiel, Dolce & Gabbana or H&M have contracted out production. Romania, which used to be highly appealing for European fashion houses owing to its cheap labour force and low-price raw materials, might soon find itself deserted for Asia. As a result, plants working under contract will be the hardest hit.
Gheorghe Caescu, general manager of Iasitex company, one of the top ten players in the domain, considers EU integration will have a negative impact on the Romanian textile industry. He says domestic firms stand no chance in front of Chinese products.
Therefore, Romanian players will only share the medium and the luxury segments of the market. The market segment made up of low-quality products is clearly dominated by Asia, he considers.
"The outsourcing segment is highly unpredictable at the moment. Every market estimation depends on it," says Caescu. According to him, the Romanian market will see the contracting out system vanish by 2010.
The year 2007 will be the first "threshold" the domestic textile industry will have to cross, considers Maria Grapini, chairperson of the Light Industry Employers Federation and chairperson of Pasmatex textile company.
Grapini estimates many plants could close down in 2007, influenced by the negative factors of the domestic market.
"There will be a negative impact on the industry. Only those investing and holding high-productivity machinery will survive," specified Caescu.
In 2010, the textile industry will shrink by 25% compared to this year, considers Maria Grapini.
She also anticipates the market will reorganise depending on the features of the players to remain active.
As regards exports, Grapini's forecast for this year is even more pessimistic than authorities' estimate.
"The National Strategy included a prognosis of 7.8bn euros by 2007, therefore an advance against 2005. My projection, however, is of 6.8 billion at the highest. In 2010, growth will be out of the question," she says.
At the same time, Grapini considers the total value of the market will stand at 7.5 billion euros in 2010, with the current value revolving around 9.5 billion euros.
In this context, textiles account for 10% in this year's GDP. Grapini's estimate points to a decline by 25% in the total value of the Romanian textile industry.
Pentru alte știri, analize, articole și informații din business în timp real urmărește Ziarul Financiar pe WhatsApp Channels
