Market and Competitiveness of the Croatian Textile and Garment Manufacturing Industry

Abstract

The textile and garment manufacturing industry of Croatia has been in crisis for quite a long time. The markets, where Croatian textile and garment manufacturing enterprises do business, belong to the markets of European Union, and they are becoming more and more complex and complicated. The key problem facing the Croatian textile and garment manufacturing companies is export structure, which is mostly based on handwork exports, i.e. on production exports, and not on exports of products. Since work is only one of the elements of a garment, it is easy to imitate or to substitute. That has just happened to Croatian textile workers because their former customers found cheaper labor on the markets of East Europe and Southwest Asia. Such high pressure to costs of labor on one hand, and rising real costs of production caused by the growth of standard in the Republic of Croatia on the other hand led to the point where it is extraordinarily difficult to do business profitably, since it is more and more difficult to find high-quality human resources, either production workers or managers. Orientation to costs most frequently leads to a faster ruin because it results in lack of investments brought about by a low or no profitability of the company. Simultaneously, the Croatian textile and garment manufacturing industry has to face the fact that there are no identifiable Croatian textile and garment products distinguished by brand name or added quality. It has the effect of a decline of sales on domestic market, and the development of own brands and the own distribution is sometimes too much to bite off for most textile and garment manufacturing enterprises.