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| Albanian women working in a textile factory in Shkodra |
Since 1996, Shkodra has been the primary production and logistics hub for intimate apparel outside Italy for the company "Cotonella," a leader in the neighboring market, now an internationally recognized brand. However, rising production costs in Albania, attributed to the depreciation of the Euro and minimum wage constraints, have prompted the Italian company to relocate a portion of its production to Uzbekistan, local media say.
Shift in Production Dynamics:
Gjergj Leqejza, the owner of "Albania Tricot," which produces for "Cotonella," stated that to remain competitive and cope with the increasing manufacturing costs due to rising labor expenses, "Cotonella" has decided to initiate production in Uzbekistan.
While production in Albania will continue, it will be more limited, announced Leqejza, who also indicated a reduction in activity and a decrease in the number of employees during this new year.
History of "Cotonella" in Albania:
In 1996, "Cotonella" chose Albania to establish its first production factory outside Italy. Subsequently, in 2008, the production facility in Shkodra inaugurated a modern fabric cutting laboratory, becoming an international logistics center for all things "Cotonella."
Reasons for Relocation:
As production costs in Albania fluctuated due to the increase in the minimum wage and the Euro's decline, coupled with reduced demand for intimate apparel in the Italian market amid an inflation crisis, "Cotonella" executives opted to move production away from Albania.
Uzbekistan: The New Production Hub:
Media in Uzbekistan reported that around mid-year, the Italian textile brand "Cotonella" selected Uzbekistan for localizing its products. The company plans to gradually relocate production to the Kashkadarya region, with the first phase expected to produce up to 2 million finished knitwear items annually, providing permanent employment for up to 80 people.
Future Plans and Investments:
"Cotonella" aims to invest approximately $5 million to increase product production to 8 million units per year, intending to create up to 500 new permanent jobs. Established in 1972, the Italian clothing company is a leading brand for women, men, and children, producing over 20 million products annually and selling them in 24 European countries.
Challenges in the Textile Sector:
The textile and footwear sector in Albania is facing a challenging situation due to the rising costs of production and wages, along with the depreciation of the Euro. Textile and footwear exports fell by 5.8% for the 11-month period in 2023. Notably, November marked the deepest contraction since the pandemic, with a 19% decline. These challenges underscore the need for strategic adjustments and resilience in Albania's textile industry amidst evolving economic conditions.