Current situation in the Slovak Footwear Industry
Association of Leather and Shoe Industries of the Slovak Republic (AL & SI) associates at present time 23 most important producers of leather and shoe products. They are about 60 footwear producers in the Slovak Republic with more than 20 employees, but most of them are not competitive enough and produce only small quantity of shoes.
After the collapse of former regime the Slovak footwear sector was seriously hit due to the disintegration of the CMEA market and especially the Soviet Union. Footwear production fell from 44 million’s pairs in 1989 to about 8 million’s in 1999. During this period of time the privatisation of the Slovak footwear industry has been completed and now 100 % of the industry is in private ownership. Privatisation of former state owned large enterprises has not brought about the expected results, capital and financial sources were missing, the efficiency of these companies was low. They disintegrated and do not exist anymore. This is the second reason for declining of footwear production in our country in the decade 1989-1999. On the other hand several small and medium enterprises were established during this time and some of them are doing quite well. The entrance of foreign companies in the second half of nineties was the definite advantage, as it brought new technologies, know how, different managerial and marketing thinking, with setting the priority on the development and efficiency of the company. Footwear production has being stabilised during the last three years as you can see in the Table below.
Table : Evolution of production, import and export of footwear in the Slovak Republic
|
1999 |
2000 |
2001 |
2002 |
2003 |
|
|
Production (Mil. pairs) |
8,2 |
8,7 |
8,8 |
9,7 |
12,7 |
|
Import (Mil. pairs) |
6,9 |
5,6 |
11,9 |
18,2 |
17,6 |
|
Export (Mil. pairs) |
13,6 |
16,8 |
17,0 |
20,2 |
20,8 |
|
Apparent consumption (Mil. pairs) |
1,5 |
- 2,5 |
3,7 |
7,7 |
9,5 |
At present time is the Slovak footwear industry concentrated in three regions : Bardejov ( eastern Slovakia, about 450 km from Bratislava), Partizánske and Bánovce nad Bebravou (about 140 km north-east from Bratislava) and Komárno ( southern Slovakia, about 100 km from Bratislava).The major producers are Euroobuv (Rieker obuv), s. r. o. in Komárno, Gabor, s. r. o. Bánovce nad Bebravou, Rialto, s. r. o. Partizánske, Vulkan , a. s. Partizánske, Elefanten Slowakei, s. r. o. Partizánske a HITOP Partizánske. Four of these companies are those with foreign capital. They are the most competitive companies and their competitiveness is comparable to those in foreign countries. Their strengths include a cheaper and more qualified labour force, the possibility to place their output at the Slovak and mainly at the EU markets as their exports are permanently growing. These companies have perspective of development of new technologies based on concentration of resources for technological development.
The most promising products seem to be high quality men and women outdoor shoes and occasional footwear such as rain , work and safety footwear, sport shoes and children footwear. An overall assessment of the industry see in the table below :
|
Strengths |
Long term tradition Production of goods with a short period of turnover Cheaper workforce compared to EU countries Qualified work force Presence of the competitive companies with foreign capital Stability of footwear production with identification of successive increase |
|
Weaknesses |
Deficiency of investments for the modernisation of technology and machinery in the domestic companies Lower labour productivity compared to the EU Low competitiveness to imports of cheap footwear from China Low purchasing power of Slovakian citizens |
|
Opportunities |
Foreign direct investment inflow Working opportunities for women EU membership could contribute positively to the development of the footwear branch, considering the decrease of this industry in the EU and the shift of footwear production to low-wage countries |
|
Threats |
Cheap imports from countries of south-east Asia still persists Requirements of employees for rapid wage increasing |
Footwear production capacities in the Slovak Republic will be also in the future concentrated mainly in the companies with foreign capital share. Therefore full EU membership should not cause another decrease or dampening of the Slovak footwear industry. On the contrary we expect moderate growth in footwear production as compared to the present situation.