Moldovan Investment and Export Promotion Organisation
In the post-2005 era of liberalised international trade, textiles & clothing have become a truly global industry, with the retailers and distribution firms being able to source product everywhere in the world. Apparel manufacturing as an industrial activity has been declining in the more industrialised countries for over 20 years and this process has speeded before 2008.
As manufacturing moves to lower cost countries, Moldova remains an attractive proposition for investment in a sector which already accounts for 1.5% of the general GDP and 30% of the manufacturing GDP. The textile/apparel cluster employs over 21,000 workers and has become one of the leading exporting sectors in the country, while the Moldovan government is committed to the development of this key industrial sector possessing a largely untapped export potential. The country's proximity to the EU is a key element among its strategic advantages as a supplier of textiles and apparel to consumer markets.
A wide range of products can be produced in Moldova and many of them are. The group includes all types of knitted and woven apparel, lingerie and nightwear, protective clothing and carpets. More than 250 enterprises are active in the sector, many of them already figuring among the leading exporters of the manufacturing sector. The first stage in the process of participating in the international trade, begins usually with the acceptance of outward processing work from the target markets. This type of production is also known as CMT (cut, makeup and trim), or by its German name of "Lohn Arbeit". Raw materials, trademarks and design all belong to the contractor, while the garment manufacturer's sole value added is putting together the final product. Initially, it has certain advantages, such as low capital investment; rapid access to new technologies and developing of skilled labour. Margins are low, however, and successful companies involved in this production will move towards developing their own product and offering prospective clients a full package.
Originally Published in New Cloth Market, April-2011
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