The Arad-based Rosko Textil company, the biggest player on the Romanian textile market, last year registered turnover worth 139 million euros (501 million RON), down 17% from 2004.
"The main factors that triggered the result were decreasing sales on the European market and the shrinking production in Romania because of China's entrance on the market of textile producers," stated Ioana Ciulica, the company's financial officer.
According to her, demand for the company's lingerie and stockings products fell at a European level.
The company derived net income standing at 2.6 million euros (9.4 million RON), more than three times smaller than the value posted in 2004.
As regards this year's budget, Ciulica says she expects the company to register a result similar to that of 2005.
Rosko Textil exports 100% of its products on EU markets.
"The company does not have any outlets in Romania, with Rosko being considered by the group as a production centre. We have our own plant in Curtici Free Zone of Arad and work with 11 subcontractors," says Rosko Textil representative.
Globally, 2005 was one of the toughest years for textile industry players.
Firstly, the market was seriously hurt by the flood of Chinese products, which created unfair competition for the firms that were trying to go by certain quality standards. Domestic products could not compete against the petty prices imposed by the Chinese market.
The European Union tried to impose a ceiling as regards imports of products from Asia. On the one hand, European producers benefited from the move since the ceiling was reached as early as the summer. On the other hand, those importing only materials from the Chinese market and manufacturing clothes in Europe, under very well known brands, are faced with losses at the moment they are forced to resort to EU firms that charge higher prices.
Another problem textile manufacturers were faced with was the lack of skilled labour, which migrated to EU countries, where salaries are superior to domestic ones.
Thus, the company had to transfer half of its personnel to one of its subcontractors, with a view to spinning off some processes and relocating others from certain parts of Europe to Romania.
The firm had 590 employees at the end of 2004 and now has around 300. "The strategy we are applying to cope with this phenomenon is to spin off the sewing production to our subcontractors of Romania and to transfer to our own plant of Romania the tailoring activities and high sewing technologies the group we are part of still has in EU countries," explains Rosko Textil representative.
Rosko Textil's sole stakeholder is Branded Apparel Dutch firm, controlled by the US Sun Capital Partners.
Rosko Textil
Romania's biggest textile manufacturer
Last year posted turnover worth 139m euros (501m RON), down 17% from 2004 amid dropping sales on the European market and shrinking production domestically
In 2005 registered net income worth 2.6m euros (9.4m RON), more than three times lower than the value seen in 2004
Exports its products to EU countries
Does not have any outlets in Romania.
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