ECONOMY

Textiles sector tries to cope with falling exports, losses

The Greek clothing and textile sector, accounting for roughly 20 percent of all Greek exports, is in dire straits; the promotion of partnerships and alliances among firms may the only way out, some 150 participants in a conference concluded last week. The global recession in the sector, the rise in the value of the euro and the average price of raw materials were blamed as the major factors affecting 2002 results. Already in 2001, Greek clothing exports had fallen 16.4 percent, the highest rate in the eurozone. This was also down 5.8 percent from 1997. By contrast, global clothing exports rose, with China, Bangladesh, Turkey and Eastern European nations leading the way. Many big names listed on the Greek bourse, like Klonatex, Naoussa Spinning Mills, Fanco and Varvaressos are trying to deal with serious difficulties in competitiveness, capital adequacy and liquidity. Klonatex reported pretax profits of 5.3 million euros, down from 34.1 million in 2001. Naoussa Spinning Mills registered pretax losses, blaming falling sale prices and large stocks; Fanco attributed its higher losses to the global recession and to a major restructuring program. Varvaressos also reported losses, of 1.38 million euros, citing similar problems. Hellenic Fabrics was the only exception among listed firms, achieving 20.2 percent net profit growth despite a 3.7 percent fall in turnover. The negative developments came as no surprise and the future looks particularly uncertain. The European Cotton Industries’ Association (Eurocotton) gave a forewarning in June last year, noting falling sales, demand and employment and identifying clothing and linen as keys to future growth, both in production and retailing. Clothing retail firms on the whole fared rather better, for instance the newly listed Fashion Box, whose turnover rose 15.06 percent to 11.4 million euros and profits 11.34 percent to 1.9 million. Vardas reported a 39 percent profit fall despite higher sales, while Ridenco’s net profit rose 23 percent on sales growth of 10.6 percent. Such positive results, however, were not enough to change the overall picture.