Whatever the product - knitwear, luxury shirts, jeans or panty hoses - chances are, Serbian manufacturers can deliver it to you faster and better than the competition.
Serbian producers offer fast service, low minimal orders, 24-hour shipping to most European destinations and superb quality.
Find out for yourself why more than 25 investors from the textile and clothing sector decided Serbia was the right place to do business.
RELEVANCE OF THE TEXTILE INDUSTRY
Textile and apparel production in Serbia have a long standing tradition and for many years have been one of the main export industries. This sector used to employ more than 250.000 workers and exported more than 5 billion dollars. Now days, around 1.800 active companies with more than 43.000 employees operate in the Serbian textile industry which includes garment, textile, leather and footwear production.
Strong tradition of manufacturing and exports combined with proven experience in maintaining customer relations and meeting customer requirements based on the international standards, contribute to a steady increase of the export volume in this sector. Export of the textile sector has reached in 2014 the value of 1.2 billion dollars, a rise of 8% compared to the export in 2013. The textile production and garment industry generated $ 853 million or 72% of this export, which represents 7% increment when compared to the same period in 2013.
The absolute dominant position of the textile and clothing industry is also evidenced by a remarkable growth of exports from $ 228 million in 2001 to more than $ 853 million in 2014, a growth rate over 374% in 13 years.
Textile sector plays an important role in Serbia’s economy due to the fact that there are 43,159 people employed in 1767 companies. More than 1300 companies can be classified as micro companies, employing less than 10 people. Over 400 companies are considered as small to medium size companies, employing between 10 and 250 workers. There are 35 large companies with 250 or more employees.
AVAILABILITY OF HIGH QUALITY LABOR
Strong tradition of textile manufacturing and exports in Serbia yielded business minded companies with highly skilled employees. Companies have proven experience in maintaining customer relations and meeting customer requirements based on the international standards.
Highly skilled labor force in textile industry is a result both of experience gained through many years of work, and of an educational system, that includes high-schools and university levels. Tailors, technicians and designers are educated in around 30 specialized high schools evenly spread throughout the country. Higher levels of education at specialized university departments offer post-graduate education in related fields.
The new labor regulations (Labor Law, in effect as of July 2014) are in favor of employer, support new employment and labor flexibility.
Textile and clothing manufacturing industry of Serbia has significant production capacity especially in the following programs: heavy and light garments for all ages, knitted garments, sportswear, jeans, children clothing and baby equipment, work clothes and uniforms, underwear, socks, home textiles, carpets.
Manufacturers of this sector are located throughout the whole Serbia, but following areas are known for big production volumes in specific sub-product ranges:
The town Ada is situated in North Serbia (Vojvodina Province) close to the Hungarian border. The garment producers are usually small and medium-size family owned businesses, focusing on knitwear production.
Arilje is a town in Western Serbia, in the Zlatibor District. About 100 companies operate in the apparel sector, particularly in the production of underwear, T-shirts and sweat suits.
In the central part of Serbia are situated the larger producers of light and ready-made clothing. These companies enable greater flexibility in operations and quick adaptation to current fashion trends.
Novi Pazar is a city and municipality located in Southwest Serbia, in the Raska District, on the border with Bosnia and Herzegovina and Montenegro. The economy of the region is dominated by apparel industry which is specialized in full package production of denim products and offers large capacity and service sewing.
In Southern Serbia, especially in Leskovac, Vranje, Pirot, there are a lot of manufactures of work clothing, pants and jackets, but also of cotton and synthetic yarns.
Exports of textile and clothing products
According the official statistical data from 2014, “articles of apparel and clothing accessories” * are ranked in the list of the most exported products in the overall Serbian exports on position five, with a value of over $676 million (€473.1 million). Furthermore, the trade balance of all these products was positive and has reached almost $300 million in the last year. This is a good evidence of the great potential for further development that is hidden in the Serbian clothing industry.
* According the Harmonized System Codes (HS Code), these articles include following products: HS 61 Articles of apparel, accessories, knit or crochet; HS 62 Articles of apparel, accessories, knit or crochet; HS 63 Other made textile articles, sets, worn clothing.
Highest export values are gained through export of following products:
Panty hose, tights, stockings & other hosiery, knitted or crocheted (HS 6115) - Exported value in 2014: $262 mil, trade balance: +204 mil dollars. Export of this product represent 1.85% of world exports and its ranking in world exports is 9 (out of 220 countries);
Men's suits, jackets, trousers & shorts (HS 6203) - Exported value in 2014: $61.5 mil; trade balance: +28 mil dollars; its ranking in world export is 57.
Jerseys, pullovers, cardigans, knitted or crocheted (HS 6110) - Exported value in 2014: $57 mil; trade balance: +21 mil dollars; its ranking in world export is 50.
Women's suits, jackets, dresses skirts &shorts (HS 6204) - Exported value in 2014: $41.7 mil; trade balance: +5.6 mil dollars; its ranking in world export is 63.
Brassieres, girdles, corsets, braces, suspenders &parts (HS 6212) - Exported value in 2014: $41.5 mil; trade balance: +24 mil dollars; its ranking in world export is 34.
Because of the insufficient production of raw materials, the Serbian textile and clothing industry is highly dependent from import of these products. Consequently the trade balance for almost all textile products from the HS 50 to HS 60 is negative. One exception is however given by carpets and other textile floor coverings (HS 57). The export growth in value of this group of products was 10% p.a. between 2010 and 2014. Only in 2014 the export value reached $31 million, and had a surplus in trade balance of almost $15 million. 44.7% of these products were exported to the Russian Federation.
Major export markets for textile products (socks/hosiery, yarns and other fabrics) are Italy, Russian Federation and Germany, which absorb 45% of the exported value.
For garment products, Italy and Germany are the biggest export markets (almost 20% of the exported value). The export in Italy increased by 24% in 2014 compared to the same period in 2013. Other key export markets for the textile and clothing industry are Bosnia and Herzegovina, Montenegro, France, Romania and other countries from the region.
Imports of textile and clothing products
Although there is certain capacity in production of yarns, fiber and fabrics in Serbia, it is not enough to meet the demands of the manufacturers and consumers. Such situation contributed to the fact that 72.5% of the overall imports of this sector ($ 1 billion in 2014), are generated by purchasing foreign textile products. These imports originated mostly from Italy (19.5%), Turkey (12.3%), China (8.3%) and Germany (7.7%).
The most imported products are:
Manmade filaments (HS 54) – Imported value in 2014: $ 105 mil; Country of origin: Italy (43.7%), Germany (12.6%), China (10.2%), Turkey (8.1%)
Knitted or crocheted fabric (HS 60) - Imported value in 2014: $ 82 mil; Country of origin: Turkey (55.8%), Italy (24.8%), China (7.1%), Germany (6.6%)
Impregnated, coated or laminated textile fabric (HS 59) - Imported value in 2014: $ 75 mil; Country of origin: Germany (25.2%), Turkey (23.7%), Italy (9.2%), China (8.6%)
Cotton (HS 52) - Imported value in 2014: $ 68 mil; Country of origin: Turkey (34.7%); Italy (15%), China (10.4%), India (7.2%)
Wadding, felt, nonwovens, yarns, twine, cordage (HS 56) - Imported value in 2014: $ 66 mil; Country of origin: Italy (46%), Germany (19.2%), Poland (6.4%), Turkey (6%)
The major import countries for garment products in 2014 were China (8.6%), Italy (3.9%), Turkey (3.6%), Bangladesh (3.5%). Other imports are distributed among higher number of importing countries with percentage under 1.3%.
PRODUCTION CAPACITIES AND BUSINESS OPPORTUNITIES
Traditionally, Serbian companies provide quality CM and CMT (Cut-Make-Trim) services, mainly for well-known brands like Dolce & Gabbana, Patricia Pepe, Schiesser, Gucci, Hugo Boss, Valentino, Tommy Hilfiger and many more. This type of cooperation, that dates from Yugoslavian time is the simplest one – the manufacturer cuts and sews fabrics following the customer specifications. Because of the great cost-benefit ratio of Serbian manufacturers, given by reasonable subcontracting costs, CM/CMT continues in the present time and represents one of the most common forms of cooperation.
However, there is an increasingly growing interest by a great number of Serbian companies to extend their services toward OEM (Original Equipment Manufacturing) and ODM (Original Design Manufacturing), which would include not only the purchasing of raw materials for the customers, but also the design of the collections for their target groups.
During the late 80s of the last century, when Serbian textile industry was on the rise, a considerable number of SMEs were established in the garment sector. Some of them started very soon with the launch of own brands, which proved to be a very good development strategy. Now days, the majority of Serbian marques are perceived as brands of good quality at competitive prices, and are exported not only to the regional markets, but show a strong presence in the international markets, as well. These producers are especially interested in finding new business partners for further sales promotion and joint ventures for increasing production capacities.
There are significant capacities in production of certain raw materials and other integral parts for textile production
- cotton fabrics, different types of yarns, fiber and fabrics
- integral parts of the textile products (labels, shoulder pads, other)
On the other hand, insufficient capacity in production of yarns, fiber and different types of fabrics is compensated with imports from China, India, Italy, Spain, Turkey, Slovenia. Due to the complexity and variety of materials and parts integrated into textile products, a number of products that belong under category of integral parts of textile products are also imported from Italy, China, Germany and Romania.
FOREIGN DIRECT INVESTMENTS
The attraction of export oriented FDI has been one of the main economic goals for Serbia and for that reason supported by various types of attractive incentives.
In terms of the number of investment projects and jobs created, the textile industry ranks quite high on the list of sector attractiveness. The largest foreign direct investments, when it comes to textile industry, were recorded in hosiery production, with the appearance of several multinational investors, particularly from Italy. Companies such as Benetton, Calzedonia, Golden Lady, Pompea, and many more are extensively using their production facilities as secondary manufacturing sites for production of high-quality apparel, proving that link between FDI and exports is emerging strongly.
Because of insufficient capacities in the production of yarns, fibers and different types of fabrics, the textile industry is highly dependent on imported materials, creating numerous opportunities
Competitively-priced labor, as well as the strong textile tradition in Serbia, ensures manufacturing of high-quality products at very affordable prices.
With more than 25 investment projects whose value exceeds more than 250 million euros, the textile industry ranks quite high on the list of sector attractiveness.
Serbia has comparably high social and labor standards. This partnership and the support from the government as well as our professional collaborations are key success factors.
Mr. Martin Nyland, former CEO at Falke Serbia d.o.o.
Despite the global economic crisis and problems with liquidity of the domestic economy, the company Pompea is still investing in Serbia. Pompea decided to invest in the Republic of Serbia and to strategically position itself in this part of Europe, using all the benefits the country offers to domestic and foreign investors. It was the right choice.
Claudio Berardi Deputy Managing Director, Modital d.o.o. part of Pompea Group
Benefits for foreign partners and investors:
High quality goods at competitive prices
Short delivery time and reasonable transportation costs
Flexible, reliable and quick delivery tailored to customer needs
Long tradition in providing services to global industry leaders
Flexibility in minimum order quantities
Favorable trade agreements with EU, Russia, USA, CEFTA, EFTA, Turkey, Belarus and Kazakhstan, enabling efficient access to various markets
One of the most price-competitive locations in Europe with a respectable tradition and skilled workforce
Developed educational system that includes both secondary schools and university levels
Highly export-oriented sector, with more than 1 billion euros of total export in 2014, out of which 70% was absorbed by EU market
Available Brownfield and Greenfield locations