Ljubljana stock indices rise, NLB leads gainers
Koncar boosts Croatian share indices
Most Romanian stock indices rise further, Digi shines
Bosnia's Serb Republic trade gap widens in Jan
Bosnia's Serb Republic building permits up 40% y/y in Jan
Sep 03, 2009 13:19 EEST
SOFIA (Bulgaria), September 3 (SeeNews) – Bulgarian yarn and fabrics producer Maritsatex expects orders for its output to fall by 30% this year, hit by the global economic downturn, and therefore plans to cut capacity by one-fifth, the company’s executive director Hristo Enkin said.
To make use of its idled assets, however, Maritsatex will seek ways to diversify its business operations, Enkin told SeeNews in an interview.
The company launched a restructuring programme late last year, aiming to optimise production by concentrating its yarn and fabrics manufacturing facilities on a smaller area.
The company owns an area of 10 hectares, most of which it can not use for producing textiles given the expected drop in orders. That is why it plans to spread its textiles production on 1.5 hectares and develop warehousing or logistics facilities, or other type of production on the remainder.
“Such investments in textiles production are worth millions of euro and currently it would be inappropriate, if owners decide to invest in sectors which are not given priority. That is why we are trying to move to assemble what is left and make the wheel turn round with the current machines,” Enkin said.
“Therefore, it will be a proper option if the bigger part of Maritsatex' assets is turned into a more profitable business – logistics centres, warehouses, other kinds of production.”
Since last year Maritsatex has been operating at lower capacity following the start of restructuring and the closure of its yarn and ready-made garments production in 2008. For the time being, the company will keep its core production of fabrics for shirts and multi-coloured yarns used in the production of bed linen and handkerchiefs, and of working outfits. Maritsatex is the sole Bulgarian producer of yarns for bed linen.
Maritsatex has an installed capacity for some 250,000 square metres of fabrics a month and finishing of some 500,000 square metres of fabrics a month.
“Out of these, we'll fulfil 80% this year, I hope,” Enkin said.
While restructuring its operations, the company plans to focus on expanding its production of textiles by new products and searching for new markets. Maritsatex main export markets are Italy, Greece, Germany, Belgium and Sweden. It exports some 80% of its annual output.
“We are also developing new kind of textiles from natural materials,” Enkin said without elaborating.
Maritsatex (www.maritsatex.com), built in stages between 1952 and 1970 in the city of Plovdiv, in southern Bulgaria, is part of Bulgarian group Industrial Holding Doverie, majority-owned by local industrial group Doverie Obedinen Holding which has around 50 subsidiaries operating in the textile, food, construction, health care, pharmaceutical and tourism sectors.
Martisatex closed 2008 with a net loss of 4.9 million levs ($3.6 million/2.5 million euro), compared to a net loss of 301,000 levs the previous year. Its sales revenue fell 6.6% to 4.8 million levs last year, while costs almost doubled to 9.7 million levs.
The textile industry is among the sectors of Bulgaria's economy worst hit by the global economic downturn. Industry officials have said that 30% to 50% of the employees in the sector could lose their jobs because of the crisis.
According to Enkin, it will be impossible for local producers, especially those in the sectors severely hit by the crisis, to bottom out without help from the state for protection of Bulgarian manufacturers.
“In this context Bulgaria is not competitive as the country keeps importing textiles from China, Pakistan and Taiwan, particularly in public procurement orders for clothing for schools and other state institutions, without requiring quality certificates, for example,” Enkin said.
“A crisis is a crisis but if the state [...] imposes excise duties as Turkey did, levying anti-dumping excise duties on imports of Chinese viscose and polyester, our products will become more competitive,” he added.
(1 euro = 1.95583 Bulgarian levs)
You have run out of free articles this month.
Sign up in for
and get ten (10) free articles per month or sign up for
and get unlimited access.
Browse our free newsletter options