The textile industry in Eastern Europe provides a perfect platform for future companies due to its close proximity to Western Europe, supportive trade policies, and lower production costs compared to Asia. There are opportunities for designer labels, garment manufacturers, and brand subsidiaries. The industry is moving toward localized designs, fast fashion, and green technologies. A textile company of 2022 in Eastern Europe would focus on R&D, technology, and favorable trade policies to interact with markets in Europe and Asia while providing unique value through innovation and compliance with labor laws and sustainability standards.

1. Tex$le
Industry:
The
future
industry
of
Eastern
Europe
Team:
EEFuture
Utkarsh
Kawatra
Final
year,
IIT
Delhi
India

2. Executive Summary
1
Eastern Europe • Many of EE industries is dependent on trade with Western Europe.
(EE)- The
• With a trade of 3 trillion USD per year, closeness to other states in Europe, EE is
industries & the
the perfect platform for any company to set up base and target full Europe.
importance
2 • Textile Industry of Europe has changed recently. The focus being on:
- Localized and customized designs
Textile Industry- - Fast availability
Perfect platform - Green technologies
for a future
company of 2022 • The supportive Euro policies have further helped EE
• New EE states which are a part of Euro, have their own markets to expand as
well
3
• There can be 3 types of future textile companies:
- Designer labels & fashion brands of EE
Future company - Garment manufacturing firms
of 2022 in textile - Subsidiaries of top brands
industry
• The value focus would be on technology and trade. R&D will play a major role with
biomedical clothing

3. Eastern Europe- Introduction
Eastern Europe has a huge variety of industries
A major chunk of the industries are dependent on Western Europe-
Trade partners
Sector
Industries
Some major factors on which the industries depends-
Primary
Secondary
Ter$ary
ü Resources- Specific to country, ex: Bulgaria- Coal,
Russia- oil, gas, gold
ü Technology, R&D- Influences cost, quantity, quality
Agriculture
Tex$le
Government
ü Labor- The cost involved and the skills required
Oil
&
Gas,
ü Policies- Feasibility to enter the industry and work in it
Energy
Telecom
Mining
ü Geographical presence- Availability of apt market
Electronics/
Total EE export in 2011: 1,52 trillion USD
Forestry
Retail
Machines
Total EE Import in 2011: 1,49 trillion USD
Animal
EE
GDP
by
sector-­‐
2011
Steel
IT
Husbandry
34%
Industry
Others
Finance
Agriculture
Services
60%
Others
6%

4. Eastern Europe is the best way to target full
Europe
Manufacturing
labor
cost
per
hour
in
USD
ü Cheap well educated Labor- Cost of production 36.1
36.2
37.8
is low. The labor cost in Asia though is cheaper 40
East-­‐
Asia
than EE, but it is growing at a faster rate (not very
30
cheap anymore) EE
ü Close to West- As compared to Asia, EE is closer 20
option (Faster delivery of goods to west and easy to
West
10
4.9
5.4
5.9
check quality) 1.4
1.6
1.8
ü Growing investment from Asian countries- EE 0
is seen as a shortcut to Europe and an opportunity 2009
2010
2011
to develop better R&D using (ex: China investment
in Russia grew by 120% from 2011 to 2012)
ü Growing market of its own- Countries like
Bulgaria, Hungary offer new openings and more
growth opportunities for consumption markets.
ü Supportive policies-
o EU- trade legislations- Give exemptions to exports
from one EU state to other EU member states.
o Supportive EE govts. Policies to investors (ex:
Hungary govt. to ease immigration rules to those
who buy Hungarian govt bonds à Incentive to
foreign entrepreneurs.
Source, Supportive policies- Hungary report- China Daily Hong Kong, Feb 19 2013

5. Textile Industry- Local, Customized, Fast and Green!
Strong future for 2022
Even though some of the
Eastern Europe (EE) markets
have matured, there is major
scope for 2022. Apparel
Industry moving towards:
ü Localized/Personalized
designs- Specific to region
ü Fast changing market-
Fashion changes fast- need
quick delivery
ü Innovative designs- Need
for new things
Source:
AT
Kearney
Analysis
TexBle
Industry
–
Why
Eastern
Europe?
ü Cut, make, trim- Ability to react quickly and reliably to orders (CMT business)
ü Specific Policies- EU & China agreement in 2005 limiting rate of imports on 10 produce
categories of Chinese textiles
ü New technology- Products tailored for individuals while manufactured in mass production
system- “Intelligent textiles”, “biomedical clothing”- Gives more importance to R&D in Europe
ü Respect for Labor laws and Proper monitoring- No workplace problems and allows
monitoring of full value chain to ensure usage of “green technology”
ü Demand for products manufactured in Europe- People do not trust non-Europe manufactured
clothes/brands.

6. Textile Industry- Company of 2022
TexBle
Industry
Company-­‐
2022
ü Designer Labels & Fashion Brands of EE- Copying the model of Western Europe, EE can see a
potential increase in in-house designer labels, fashion brands (designs specific to EE/Europe) (ex:
LLP brand is expanding)
ü Garment manufacturing firms- Many top, second tier brands (Zara, etc.) are preferring to
produce in EE. Companies with garment assembly/manufacturing options play a major role in this
field. (ex: Utenos Trikotažas AB, Fafbolux Bilinski)
ü Subsidiaries of top brands- Firms which sell the brand’s clothes in the area
World
TexBle
&
Apparel
Trade
Price break-up for jeans produced in EE
1000
• 50%- Shop profit, overheads & other
BN
US$
expenses (Including VAT)
800
• 25%- Brand profit, promotion
600
• 11%- Transportation
400
• 14%- Material, wages, factory profit
Source:
Document:
Made
in
Eastern
Europe,
Data
from
World
200
Trade
Analyzer,
based
on
United
Na$ons
data
for
SITC
84
0
Source:
Tex$le
Online-­‐
h`p://www.teonline.com/industry-­‐overview.html

7. TextileIndustry- Company of 2022 and its values and
role in the world
TexBle
Industry
Company-­‐
2020
ü Designer Labels & Fashion Brands of EE
ü Interaction with Rest of Worldà Would look to set-up base in EE and expand to other parts of Europe and then
Asia
ü Unique Valueà Innovative design (special for EE regions), Use of green technologies
ü Garment manufacturing firms
ü Interaction with Rest of Worldà Major manufacturing role for companies looking to sell in Europe
ü Unique Valueà Use of latest technologies, Obeying labor laws, Updated with latest textile developments
ü Subsidiaries of top brands- Firms which sell the brand’s clothes in the area
ü Interaction with Rest of Worldà Representatives of the brand for the specific area
ü Unique Valueà Trust associated with the brands they are joint to.
R&D: will play a
major role in the
future
Trade Policies: The
more they favor
Europe, the better it
will be for EE
Source:
DG
Research
and
Innova$on
-­‐
Economic
Analysis
Unit
;
Data:
Eurostat,
Member
States

8. EE textile industry can be at the top by 2022
Eastern Europe has a major role to play in the
future because of
• Closeness to West Europe
• Supportive policies
• It acts as a cheap entry to Europe
Textile Industry can be a future industry of 2022
with the
• Growing importance to green technology,
labor laws
• Increasing costs in Asia
• Faster delivering mechanisms for Europe
Textile company of Eastern Europe will grow as
long as
• It is updated with latest technologies
• Trade policies remain supportive in the future