Tomas Tumynas at the VIP plant in Kazlu Ruda.
Klaipeda - No, Cristiano Ronaldo, the soccer mega-star, has not yet signed a contract with the poverty-ridden Lithuanian football A league’s team. But if you happened to buy the star’s label-bearing underwear you would never perhaps guess that it may be stitched up in Lithuania.
Globalization reaches a Lithuanian province
What perhaps could be seen as a vivid sign of the expanding globalization, a 160-employee sewing plant in Kazlu Ruda, a provincial town in southwest Lithuania, is eyeing tailoring Cristiano Ronaldo underwear.
No doubt, a big success for the Danish entrepreneur-owned but Lithuanian-run business.
After the Danish JBS Textile Group has signed contracts giving it rights to launch a serial production of the soccer star and tennis celebrity Caroline Wozniacki name-bearing underwear and socks in Kazlu Ruda, the plant’s management is mulling opening a night shift to meet the expected high demand.
“We already have the first samples of the items, but we haven’t yet started the production. Cristiano himself has been very eager in making up his mind for the final design of the underwear. I believe that the serial production will take off soon,” Tomas Tumynas, head of joint stock company VIP that runs the sewing plant, said to TBT.
He expects that major Lithuanian retailers will show interest in buying the VIP-made celeb’s name-bearing underwear.
Just a few years ago, Tumynas says, the entire production went for export, largely to Denmark, but over the last couple of years part of the goods, like “Marathon” and “Olympia,” has also been sold in the Baltics.
New business plans ahead
Having taken on the big name underwear production lines, the VIP director ponders opening underwear production lines of Lithuanian celebrities.
“Perhaps it is too early to say, but we are planning to negotiate with a famous local basketball player and fashion show representative a possibility of opening their name-bearing underwear production lines,” the director said.
The plant, opened in 2007, makes some 3-4 million pieces of garments for men, women and children.
Importantly, in a town of 12,000 people and high emigration plaguing the country, high turnover of tailors is not an issue in the plant.
“We really are not short of tailors, though part of them opts for seeking a better fortune abroad. Earlier some of the workers used to come from Marijampole, the biggest town in the region, but now we fully rely on the local workforce,” noted Tumynas.
Though JBC Textile Group runs sewing plants in India and Turkey, the Danes are mostly satisfied with the Lithuanian affiliate’s production.
“We are producing goods of a better quality than tailors in Turkey and India. Maybe because of better technologies and machinery, more effective management, low turnover of workers and their skillfulness. The Danes also praise the easy communication with us and a lot faster logistics than elsewhere,” the company head emphasized.
The start was wild
But unlike the Danes in Kazlu Ruda ready to take on Cristiano Ronaldo underwear production, 46-year-old Olde Garsdal, a Dane who 17 years ago came to Lithuania to take over a Danish wood reprocessing company‘s reigns in Lithuania, says running the business in Lithuania has been quite “challenging.”
“When in 1995 I was called to our company‘s headquarters and asked to go to Lithuania to put some order in the daughter company there, I started shaking my head: “No, no way I will go to an unfamiliar country.”
He remembers that not only the lack of usual Danish foods and comfort he enjoyed back in Denmark irked him.
“The main thing was the business environment. You could hardly trust anyone‘s word back then, and there was a big shortage of necessary material as we all used to look for it in Gariunai, a trendy Lithuanian mega-market on the outskirts of Vilnius,” the entrepreneur remembered.
But the Lithuanian mentality, he says, was the worst. “I‘d perhaps wouldn‘t want to single it out from the rest of the Eastern Europe, but then not keeping the word and promise was a common thing,” the Dane noted.
When the company started struggling, Garsdal was able to resuscitate it, changing its activity.
“Instead of processing wood, I decided to make and import wood processing tools and machinery,” says the entrepreneur. In its peak, the sales comprised a whopping 70 percent of turnover.
But the 2008 economic slump made him overhaul the business strategy.
Changed business strategy
“With the crisis deepening, I noticed that customers were a lot more likely to buy wood processing tools than the sophisticated machinery. Therefore, I focused on the sales of the former and also mechanical maintenance of the sold machinery. The human resources factor also mattered a lot, as my goal was to find workers capable of performing multiple tasks,” the entrepreneur said.
Garsdal says the decisions have helped the business to withstand the economic crunch and even propped up growth. Last year, the company’s turnover, for instance, exceeded three million EUR.
“Most of the revenue came from our main activity- production of wood processing tools and their maintenance. It is hard to tell what part of the market we take up, but when it comes to the latter, we are its obvious leaders,” said the businessman.
To keep up the productivity, the company has already invested nearly two million Euros and is intending to invest another 300 thousand EUR this year. Some of the machinery, like the 800-thousand EUR automated sharpening equipment, is unique in the Baltics.
The strategy, Garsdal says, has paid off, and it attracts mostly Scandinavian companies as clients.
“They appreciate the extremely high quality and price which we are offering,” said Garsdal.
He is convinced that networking matters most in the business.
“Sure, I can find new clients on the Internet, but I am a staunch supporter of live communication. Therefore our company constantly participates in international exhibitions and, most of the time, the new acquaintances turn into our new business partners or go-betweens,” said the businessman.