Albania’s textile and footwear industry is increasingly facing a series of challenges including energy costs and inflation combined with competition from Asia which could jeopardise some 150,000 jobs.
The country’s textile industry employs over 150,000 people, with the vast majority of workers being female, across 1,034 companies. But industry representatives who gathered at the International Textile Fair in Tirana at the weekend said the situation is deteriorating due to energy prices, the devaluation of the euro in the local market, labour shortages, and increased competition from Asia.
Edvin Prençe, the chairman of the ProExport Albania association, says that the situation is unclear and that concrete measures must be taken to improve the state of the sector
“The clothing and footwear manufacturing sector is already facing many problems, such as electricity, since the price has already been fixed at 18.8 lek and we still don’t know what the situation will be like after January 1, 2023.” Prices could increase after the end of the year, depending on how much the government has to subsidise businesses and the current market rate.
He asserted that another problem is related to significant fluctuations in the exchange rate, where the Euro is falling and the Lek is constantly strengthening.
“For businesses that are exporters, such as our sector, which accounts for more than 40% of ‘Made in Albania’ products, it brings a decrease in profits and liquidity in the sector’s businesses. Thousands of euros are lost because of the exchange rate alone,” he told Monitor.
In terms of competition from abroad, Asian companies have lower labour costs which mean they can undercut Albanian prices.
“One of the main challenges is facing tough and unfair competition from Asian countries, making local producers unequal. In many countries, labour is cheaper, and support and fiscal policies are fairer and cheaper. And Albanian consumers often choose to buy products from third countries and not those produced in our countries,” said another stakeholder, Agim Shahini, the president of the Kosovar Alliance of Businesses.
Prence added that in Albania, there are 25,000 vacancies in the sector that they cannot fill with qualified or even trainee workers. This is due to migration but also a lack of people willing to work in factories or for minimum wages.
