ECONOMY

Textile industry looks up

A series of positive messages are providing a boost to the troubled sector of Greek textiles, inspiring those who want to remain optimistic and companies taking measures to rationalize their production. The rise in demand for textiles in Europe and for staff from some domestic industries in the second quarter of 2005 (according to a Kantor Consultancy survey) are bucking the trend of pessimism and negative forecasts, the president of the Association of Greek Textile Manufacturers (SEVK), Eleftherios Kourtalis told Kathimerini. He attributes the rise in textile demand to two factors: The low price of cotton and European industry hopes that EU quota initiatives will limit Chinese imports. «There is indeed a slight increase in demand for textiles from European countries, which combined with the Greek state’s and the EU authorities’ will for resolving the sector’s many problems, could lead to better conditions for the Greek textile industry,» Kourtalis says, warning however that «we still have a long way to go until we become competitive.» He further stresses that the obstacles emerging at the moment, at least in the case of Greek companies, go beyond labor costs and are more related to the state’s indifference as expressed through the multitude of bureaucratic procedures on which the business world depends. «The sector will not go down because of its inherent problems. We have been through worse crises and survived even without the state’s support,» Kourtalis says. «The problems have more to do with the general economic situation in Greece.» Tax exemption He does note, however, that though the state’s wish to assist is expressed, brave decisions with direct effects are required for immediate results. He also says we need to become competitive by looking at international initiatives. «In this context we only have to see what is happening in Eastern European countries as well as in Cyprus, where the state imposes little or no taxation on corporate profits used for investments, thus encouraging entrepreneurs,» Kourtalis says. «This is an initiative which SEVK has recommended and could be applied in Greece, too.» «Of course the issue of labor costs remains a trouble spot, considering that a US giant with many years in the production of brand garments in Mauritius has closed its plant there, where labor costs translated to 3 euros [per item], and transferred it to Madagascar, where the costs are just 1 euro,» says the head of SEVK. Yet the latest quarterly report by Kantor, which records staff demand in the domestic market, offers fresh reasons for optimism. Its Q2 survey found a rebound in demand for staff by 1,200 percent on a quarterly basis in the textiles sector, which according to Kantor had a minimal presence in previous quarters. Now, in the April to June 2005 period, the sector took the third spot in the number of vacancy ads published, representing 11 percent of the total. This figure, according to Kourtalis, indicates that companies are proceeding to sanitization moves in order to respond to the ever-intensifying competition, and therefore are seeking qualified managerial staff who can help immediately with their knowledge and experience. As for the recent rise of the yuan, the Chinese currency, by 2.1 percent, Kourtalis believes this development will have no bearing on the level of prices of textile products that have stormed the Greek market, and brands it a tactical move by China after the successive waves of pressure by the international community. «The rise of the yuan has no practical impact in essence, as Chinese textile producers and exporters have the ability to maneuver and suppress production costs, and be subsidized by their government, so that they maintain their positions in the foreign markets with products that are immensely competitive and at very low prices,» explains Kourtalis. China’s presence has been particularly felt in the European Union in the first half of 2005 when there was a 130 percent rise recorded in imports of textile products from China, with their value reaching 7 billion euros. According to China’s Ministry of Commerce, the country’s share in the European textile product market will reach 31.4 percent in 2007 against just 12.4 percent in 2004. In light of that data, Kourtalis, representing SEVK, is calling for more activity from the EU, not just in forbidding measures and quota agreements for Chinese imports, but also in the effective support of the European textile industry. A website in fashion The Internet site dedicated to clothing and textile, www.greekfashion.gr, has just celebrated its seventh birthday with visits rising by 40 percent in the last couple of years, hitting 242,209 in 2004. The web page, created and run by the Hellenic Fashion Industries Association (SEPEE), intends to promote the sector in Greece and abroad. (It’s also available in English.) Hits come from more than 45 countries in the world, while Greek visitors increase constantly. Its web design team is experienced in corporate site designing, with a share of over 50 percent in textile company site designs in Greece. It also undertakes e-commerce projects and specialized business-to-business and business-to-consumer applications.