Export-focused textiles industry benefits from weakened crown
Czech textiles firms have benefited significantly from the Czech National Bank’s intervention to weaken the country’s currency the crown last November. According to a report in Thursday’s edition of the financial daily Hospodářské noviny, manufacturers in the sector saw 12-percent year-on-year growth in the first half of 2014.
According to a half-yearly report just issued by the Asociace textilního-oděvního-kožedělného průmyslu (ATOK, Association of the Textile, Clothing and Leather Industry), the sector – which is primarily focused on exports – has just enjoyed its most successful period since the economic crisis hit in 2008.
The association’s director Jiří Česal told Hospodářské noviny that the industry had already enjoyed three years of stable growth prior to the central bank’s intervention in the currency markets. However, he said, the move markedly increased the competitiveness of his organisation’s members on foreign markets.
Between the start of January and the end of June, Czech textiles makers saw their revenues jump by 12.0 percent to CZK 23.4 billion. The first half of the year is usually stronger for the producers, but Mr. Česal said ATOK did not fear a marked fall-off in the period between last month and the end of the year.
The Czech Republic has a long history of textiles manufacturing for the garments industry. Today, however, the largest firms in the field are chiefly involved in the production of materials not used in clothing but rather in a number of other industries.
The largest of them, Juta, which had revenues of close to CZK 6 billion last year, makes a range of products for the construction and agriculture sectors, as well as technical materials. It exports a full 80 percent of its output.
The number two in the field, Pegas Nonwovens, produces polypropylene and polyethylene nonwoven textiles for agriculture, construction and for use in the manufacture of hygiene products.
Another of the industry’s “big five” Kordárna makes technical fabrics for the rubber industry. A representative told Hospodářské noviny that it had seen its revenues climb by 13 percent in the first half of the year and had plenty of orders for the near future.
However, while Czech textiles firms are enjoying relatively good times, things are not quite so great for the country’s clothing firms, with the segment growing by a relatively low 2 percent to CZK 3.2 billion in the first half of 2014 according to the ATOK report.
The clothing industry has managed to survive some very lean years when local manufacturers tried and failed to compete with cheap imports from Asia. The sector has achieved this by going in for increased specialisation, Hospodářské noviny said.