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Viewing cable 06ZAGREB1187, TEXTILES AND APPAREL SECTOR: CROATIA

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Reference ID Created Released Classification Origin
06ZAGREB1187 2006-09-29 10:46 2011-08-25 00:00 UNCLASSIFIED Embassy Zagreb
VZCZCXRO4704
RR RUEHAST
DE RUEHVB #1187 2721046
ZNR UUUUU ZZH
R 291046Z SEP 06
FM AMEMBASSY ZAGREB
TO RUEHC/SECSTATE WASHDC 6722
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
UNCLAS ZAGREB 001187 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON ETRD KTEX HR
 
SUBJECT: TEXTILES AND APPAREL SECTOR: CROATIA 
 
REF: STATE 138090 
 
1. In response to reftel, the following are the main 
sector data for the Croatian textiles and apparel 
industry and a description of the Croatian stance on 
imports from China. All data are for 2005, unless 
otherwise noted. 
 
-- Total industrial production: $7.66 billion 
-- Total textile production: n/a for 2005; $940 million 
for 2004 
-- Textile/apparel share of Croatian imports: 4.6 
percent 
-- Textile/apparel share of Croatian exports: 7.6 
percent 
-- Exports in textiles and apparel to the US: $3.24 
million 
-- Total manufacturing employment: 239,276 
-- Total textiles and total apparel employment: 31,417 
 
2. According to the Croatian Chamber of Commerce, 
Croatian manufacturers had to reduce prices up to 50 
percent due to international competition. On average, 
manufacturers have had the same number of orders in 
recent years, with seasonal fluctuations and 
fluctuations according to design and fabric. There are 
no Asian investors among foreign investors in the 
Croatian textile sector. The following are the three 
largest investors: Benetton (Italy), Calzedonia 
(Italy), and Boxmark (Austria). There have been 
incidents of company closures and investors pulling out 
of local production and, due to increasing competition, 
more are expected. 
 
3. EU measures restricting imports of textiles and 
apparel from China have helped Croatian manufacturers. 
But Croatia itself has not implemented any restrictions 
on imports from China. 
 
4. Croatia's textile industry has been under severe 
pressure because of dislocations resulting from 
transition to market economy as well as growing role of 
Chinese production. Employment in the textile sector 
has been decreasing for several years. 
 
5. In an effort to improve the situation, the GoC 
offers incentives through the Ministry of Economy, non- 
repayable financial support for worker training and for 
environmental protection. While the volume of textile 
manufacturing is decreasing overall, some Croatian 
companies are attempting to find a niche in design by 
producing goods with higher added value. 
 
6. Free trade agreements between Croatia and other 
countries have helped Croatia, but have not been enough 
to create new export opportunities for the textile 
industry. 
 
7. Like with many sectors of the Croatian economy, the 
textile industry is lagging behind foreign competition. 
Companies need to make substantial investments in 
manufacturing technology and equipment to survive in the 
near-term. However, the industry's long-term prospects are 
uncertain. 
 
Bradtke