Momentum in textiles wears thin

  • 2003-11-20
  • Baltic Business News
VILNIUS - A study of the current import and export statistics has revealed the gloomy prospects for Lithuania's textile industry.

The numbers show that textile exports have decreased this year and that some of the production work was transferred to neighboring countries offering cheaper labor.
During the first nine months of this year, textile exports decreased by 4 percent and imports by 2.7 percent as compared with the same period last year.
According to Valerija Rimkeviciena, director of the economics department of the Lithuanian Apparel and Textile Industry Association, textile exports have decreased as a result of smaller production volumes and the decreasing value of the dollar against the litas.
"The results were also influenced by the fact that some companies have transferred part of their production to Belarus, where they export output," Rimkeviciene said.
Many EU clients said they would move to those countries that had cheaper labor costs, according to textile specialists. Such companies include Canda International, Steilmann and Hennes & Mauritz.
The lion's share of Lithuanian textiles – a whopping 96 percent – is exported to the EU.
In 2002, textile exports amounted to 3.3 billion litas (956 million euros), or 1.1 percent more than in 2001.
October saw a record volume of production, more than 1.5 million meters of textile, against the average of 1.1 million meters over the last nine months.
During the first nine months this year, the turnover of Alytaus Tekstile, one of the largest producers in the country, amounted to 80.9 million litas, or 13.9 percent less than during the same period last year.
However, Alytaus Tekstile still ended up incurring losses of 8.25 million litas over the period.
Currently, the state is planning to repurchase 47.3 percent of Alytaus Tekstile shares from a bankrupt Hong Kong-based company, Asean Interests. If the deal goes ahead, the State Property Fund would have 59.12 percent of the company, and the rescue plan will be put into motion.