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Bulgaria snapshot : textile and apparel industry in brief

Bulgaria, with its population of 7.6m, joined the EU on 1 January 2007, together with Romania. From 2000-2007 it looked as if Bulgaria would take over Romania's role as the biggest eastern European apparel supplier to markets in Western Europe. But exports have fallen since the last quarter of 2008.

Sector exports peaked at EUR1.9bn in 2007 (of which EUR1.7bn was apparel). Textile and apparel fell 16.4% in 2009.

Accounting for 12.6% of total Bulgarian exports, textiles and apparel is still a pillar of the Bulgarian economy. In July 2010, it employed 113,260 people (19.3% of total industrial employment) down from 162,789 in 2007.

There are about 5,400 companies in the sector, of which more than 4,700 produce apparel. More than 90% are SMEs (small and medium sized enterprises).

• Low labour cost
  Although an EU member state, Bulgaria's labour cost is still very low. According to Werner International's labour cost comparison 2008, the average cost per labour hour in Bulgarian textile mills was US$1.85 (or 11% of the US cost) - making it cheaper than Lithuania (US$4.28) and Slovakia (US$4.58).
  
  Bulgaria is also very price-competitive as a CM/CMT producer of garments. According to KSA's Global Sourcing Reference 2009, the total cost of producing clothing in Bulgaria is lower than Belarus, Albania, Slovakia and Ukraine.
  
  And according to German consultant Weis Associates, in June 2010 the Bulgarian standard minute cost (EUR0.08-0.09) was lower than other East European countries like Poland (EUR0.10-0.12), Czech Republic (EUR0.12-0.14) or Croatia (EUR0.15).

• Main apparel products: Bulgarian apparel producers enjoy a good reputation for trousers, suits, overcoats and shirts.

• Main textile and apparel export markets by market share (in the first half of 2009):
  Italy: 25%
  Germany: 20%
  Greece: 16%
  France: 9%
  Spain: 4%
  United Kingdom: 4%

• Main countries of origin of textile and apparel imports (in the first half of 2009):
  Italy: 23%
  Greece: 18%
  Germany: 15%
  Turkey: 11%
  France: 8%
  Austria: 3%
  China: 3%
  Spain: 3%
  
  According to the Bulgarian textile and apparel association (BAATPE) and other sources, many imports from China are imported below their real value to avoid custom duties and VAT, so China's import share is underestimated.

• Role of foreign investors: Over the last decade many Europeans have invested in Bulgaria to take advantage of low labour costs and proximity to European markets. Important foreign investors in the textile sector are the Italian groups Miroglio, Safil and Salvadori. Other investors include Dewavrin (France), Maser Holding (Turkey), Alt Group (Germany), Coats (UK), Marland International (Ireland) and Stambouli (Cyprus).
  
  In the apparel sector, the biggest foreign investor is German company Rollmann & Partner Fashion Management Ltd, which in 1998 took over Pirin Tex, a men's wear supplier to companies like Hugo Boss and Strellson with 2,200 employees.
  
  Other foreign investors include:
  Germany: Canda International OHG, Loger Fashion, Hainer & Peter Roesler
  Greece: Kosmos Textile, Unitex, Blue Point
  Italy: Kalcedonia,
  Denmark: Brandex

• Brands produced in Bulgaria: Hugo Boss, Strellson, Betty Barclay, Escada, Vivienne Westwood, Sonia Rykiel, Jean-Paul Gaultier, IKKS, Chloe, Iceberg, Guess, Mexx, Joop, Kenzo, Lacoste, Cerruti, Armani Jeans.

• Sector strengths:
  Flexibility, producers accept very small orders;
  Very good and comparatively new technology in the factories;
  Proximity to markets (mainly EU countries) and suppliers of material (EU and Turkey);
  Experience in working with Western customers;
  Still very competitive labour cost.

• Sector weaknesses:
  The sector is undervalued by the Bulgarian government;
  Its negative image makes it difficult to attract new workers;
  Limited local market;
  Strong competition in international markets;
  Unsatisfactory vocational education and training;
  Important grey economy;
  Difficult access to financing, especially from the EU.

Sources: BAATPE, National Institute for Statistics, InvestBulgaria.

By Jozef De Coster.