BULGARIA KNITS

With Bulgaria poised to join the EU on January 1 2007, Niki Tait takes a look at the Bulgarian knitwear industry.

With overall textile and apparel exports reaching Ђ1.669 billion (more than US$2 billion) in 2005 and growing at 4% per annum, 86% of all textile and apparel production is designed for export to the EU 25. Clothing production in Bulgaria has more than doubled in the past five years at a time when production of clothing in the EU25 has declined by nearly 30%. Indeed, at the moment Bulgaria is Europe's most resilient market for the production of apparel and even at the most difficult time post quota, for the first six months of 2005, when compared to the same period one year earlier, only Bulgaria's manufacturing industry work within textiles and clothing. Overseas sales represent nearly 25% of Bulgaria's total foreign exports. Unlike other garment and textile categories the export of knitwear dropped emporarily post quota in 2005 by 12%, but this situation has changed and an 8% growth is expected by the end of 2006. With the advantages offered by becoming a member of the EU in January 2007, further increases in knitwear exports are predicted for 2007 and onwards. Hold ups at customs and customs tax will be eliminated resulting

in quicker deliveries combined with lower logistics costs. Corporate profit taxes are reducing as are the employers' social security responsibilities. Average gross monthly wage costs throughout Bulgaria in 2005 equated to 165, one of the lowest levels in all of Europe and its surrounding countries, and in clothing and textiles this averaged 115. In an International Comparison of Garment Subcontracting Costs, March 1 2006, the labour cost per minute Bulgaria ranks lower than all current EU countries and lower than Albania, Romania, Sri Lanka, Indonesia and Russia, on a par with Bosnia, Egypt, Mexico, Eastern China and the Ukraine, only marginally ahead of Belarus, Serbia and Montenegro.

Although Bulgaria is not normally thought of as a major knitwear manufacturing country there are several very large fully fashioned companies employing between 1000-1500 employees using relatively new technology. During a recent trip to the country, we discovered that over the last five years, Shima Seiki, for example, have sold around 300 fully computerised compact machines into the country.

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