Outsourcing manufacturing (Lohn manufacturing) was beneficial for the textile industry on short and medium-term, as long as it provided technology transfer, increased workforce skill levels, competitiveness and managerial capacity. But outsourcing (lohn) can also take us out of the map of low-cost areas for the workforce. Read a radiography-interview of the Romanian textile industry with Mihai Pasculescu, president of the FEPAIUS (Romanian Federation of Textile, Clothing and Leather Industry), who answered Textile Technology Show questions. Textile Technology Show is the exhibition dedicated to the textile industry in Southeastern Europe that takes place between September 13th-15th, at Romexpo Exhibition Center, in Bucharest, Romania.
TEXTILE TECHNOLOGY SHOW: If you were to make a radiography of Romanian textile industry, which would be the consolidated area of this sector and where are the problems?
MIHAI PASCULESCU: The textile and clothing industry has a long tradition, with companies that have been operating for more than 80 years, being represented in all the counties of the country, with a significant share in our county’s economy. At present, the textile industry sector has made the following shares in macroeconomic indicators:
- 9.81% of the country’s exports;
- 5% of the number of employees in Romania;
- over 250,000 people are active in this field;
- over 9,710 companies active in the sector.
Between 2008 and 2013, under the influence of the economic and financial crisis, textile industry companies in Romania experienced a period of decline, losing some of the orders and contracts in favor of the Asian market. Although at European level the innovation allowed the textile sector to remain competitive by investing in niche textiles, in Romania, the lack of capital and restrictive lending conditions limited these opportunities.If we were to identify a problem area, it would be the primary sector (spinning, fabrics, textile finishing), and as a consolidated area – the rectilinear knitting sector, the garment and footwear industry, the leather goods market.
TTS: What percentage of Romanian textile production is currently being exported?
MP: The textile and clothing industry is among the sectors that make an important contribution to Romania’s exports. In 2017, the sum of exports amounted over 6 billion euro. Although exports of textiles and garments have increased in absolute terms, the share has decreased in recent years – about 80% of total output is exported.
TTS: Latest statistics show that there are 9,700 companies in the textile industry in Romania. What are the representative sectors?
MP: The structure of the companies is as follows:
- 1883 companies active in manufacturing of textile products;
- 5825 companies active in manufacturing of clothing;
- 2002 companies active in leather-shoes sector.
TTS: How well does the relationship between designer / textile manufacturer / confectioner work in Romania?
MP: We believe that such a partnership would be beneficial to both parties, but in Romania it works rather hard. At European level, there is a project called “WORTH” that reached its 2nd edition and aims to promote partnerships between designers and companies from different European countries (manufacturers, retailers, technology companies) in the fields of fashion, textiles, jewelry, furniture, fur and leather product from to create innovative products.In Romania, we can remember INAIS – a joint venture between a Romanian designer (Ina Isbasescu) and one of the biggest domestic textile manufacturers (Simiz Fashion).
TTS: How do you see problem solving in this partnership?
MP: Through the close collaboration of companies with universities, research institutes, in order to conclude partnerships between designers and interested companies to create collections with the support of designers, offering manufacturing companies the opportunity to learn how to work with highly creative designers, to create new products and models, to secure existing markets or to open new ones and so on. It is also necessary to develop education, to harmonize the educational offer with labor market demand, to create design centers in the four regions of the country, with the role of design workshops.
TTS: Is there any interest in the textile industry among the younger generation, small entrepreneurs?
MP: There is interest from the entrepreneurs – the young designers, but not from the employees. One of the main problems the sector is currently facing is the lack of workforce.
TTS: For a long time, Romanian textile industry has been appreciated only from the perspective of outsourcing (lohn). What should we do to produce more and get rid of this label?
MP: In the context of globalization, the analysis has to go from materializing the scope of outsourcing operations, generally referring to the procurement of material inputs or services from outside the country of residence of the company conducting the operation.
From the analysis of the value chain in the outsourcing (lohn) system it is found that the highest added values are in the links that are not part of the national chain (raw materials, accessories, marketing/ advertising/ branding/ wholesale seller/ distributor) belonging to external beneficiary. The smallest influences in the value chain belong to internal links: storage of raw materials/ finished products, assembly, packaging, finishing.In this context, outsourcing (lohn) in textile industry has been a beneficial factor in the short and medium term, ensuring technology transfer, increasing skill level of manpower and managerial capacity, competitiveness, connecting to international quality standards and control. The jobs created by implementing outsourcing system (lohn) are particularly precarious, however, being subject at any time to the risk of being transferred to another country where labor costs are lower.In the long run, it is opportune to gradually reorient production, making it more cost-effective to export directly from its own production through:
- restoring the added value chain by resuming textile plants, developing the wool and silk industry, producing yarns and synthetic fibers;
- manufacturing high quality products;
- making short and very short production series, with a medium to high and very high quality level;
- developing brands and the image of products and processes;
- developing new concepts and marketing strategies;
- development of managerial capacities;
- manufacturing complete range of products;
- refurbishment of the production flows for clothing products by purchasing performing machines and computerized systems;
- continuous training and improvement of the clothing industry personnel, in order to increase labor productivity.
TTS: For more than the years, there has not been a specialized trade fair for textile industry technologies in Romania. How do you appreciate the idea of organizing TEXTILE TECHNOLOGY SHOW and what impact do you think it will have on the industry?
MP: We beliebe it’s an important initiative, and organizing an exhibition of machinery for the textile and garment industry can be a powerful catalyst, but also a competitive factor for this industry.