TEXTILES AND APPAREL SECTOR: SLOVAKIA

UNCLAS BRATISLAVA 000804 SIPDIS SIPDIS STATE FOR EB/TPP/ABT THOMAS LERSTEN COMMERCE FOR ITA/OTEXA MARIA D'ANDREA USTR ABIOLA HEILINGER E.O. 12958: N/A TAGS: ECON ETRD KTEX LO SUBJECT: TEXTILES AND APPAREL SECTOR: SLOVAKIA REFTEL: STATE 138090 ¶1. Based on data released by the Slovak Statistical Office, Slovakia's total industrial production reached Slovak Koruna (SKK) 1,345 billion (USD 45.6 billion) in 2005 (this applies to enterprises with more than 19 employees). Total textile production accounted for SKK 11,101 million (USD 376 million) in 2005. Apparel production totaled SKK 9,807 million (USD 332 million). ¶2. Textile and apparel imports made up 4.02 percent of Slovakia's aggregate imports in 2005, and 3.65 percent in the first half of ¶2006. Textile and apparel exports constituted 4.23 percent and 3.72 percent of Slovakia's total sales abroad in 2005 and in the first half 2006, respectively. ¶3. Exports of textiles and apparel to the United States reached SKK 122,917,600 (USD 4.166 million) in 2005 and SKK 70,771,611 (USD 2.399 million) during the first six months of 2006. ¶4. Average employment in the Slovak industry was 416,789 in 2005, up 0.37 percent from to 2004. Average number of employees in textile and apparel sector stood at 38,317, down 5.3 percent on the year. ¶5. According to the Slovak Association of Textile and Apparel industries (ATOP),total sales of their member companies dropped by 1.9 percent in 2005 from the previous year, to SKK 19,007 million (USD 645 million). The association also said that the number of textile and apparel enterprises increased to 252 in 2005, from 226 in 2004 (NOTE: enterprises with above 19 employees). The sector produced an aggregate loss of SKK 223 million (USD 7.6 million) last year. ¶6. Slovak textile producers consider strengthened competition from cheap imports from China as a serious problem. A few examples: Levitex, country's traditional cotton yarn producer, claimed imports from China to have caused a 20 percent decrease in its sales during the first half of 2005. Merina, woolen fabric producer founded in 1907, has been losing money since 2001 and cited imports from Asia as the main reason. On the contrary, Tatrasvit Svit-Socks, a producer of socks and pantyhose, restructured its operations, has returned to profitability, and is now able to export about 80 percent of its production. ¶7. The average nominal monthly wage in textile and apparel sector accounted only for 58 percent of the average wage in manufacturing industries in 2005. Total investments in the sector declined by 12.5 percent during the last year compared to 2004. ¶8. Slovakia was among 13 EU members requesting the European Commission to impose protective measures for textile/apparel industry. ¶9. Comment: In some regions of Slovakia, especially central Slovakia, the textiles/apparel industry has traditionally been a major employer, but the numbers continue to decline each year. According to local experts, it is "just question of time when Far East knocks out most of the Slovak enterprises". Only the most flexible companies with innovative production techniques, high quality products and new technologies have been able to remain competitive. Technical textile producers and exclusive high quality and luxury apparel producers have so far fared best under the pressure of low-cost competition from China. End Comment. VALLEE