Tradition in the field, salaries of just EUR250 and the favorable geographical position put Romania on the global map of footwear production.
Nonetheless, the bulk of production going abroad is operated in a lohn system, so that local added value is very low. Thus, shoes manufactured locally for the biggest brands in the industry have an export price of $25, but are sold for over $100 in stores, while local plants are left with just $10.
“Romania manufactures and sends abroad leather shoes whose sale price goes above $100, but only $10 stay in Romania. From this sum, producers need to pay for utilities, retooling and employees’ salaries. This is why local salaries in the industry are so low,” says Eugeniu Cicoare, general manager of Guban, one of the best-known local footwear brands.
Guban sends around 10% of output abroad. All the products sent abroad are under own brand, the company does not work in a lohn system.
Cicoare says that 80% of local footwear production is operated in a lohn system. There are few brands that operated direct investments, including ara and Rieker. As a matter of fact, Rieker is the biggest Romanian exporter in the field in 2014, followed by companies working in a lohn system such as Raffaello Shoes Factory or Bihore, and own investments by ara.
According with market research company World Footwear, the export price of a pair of shoes manufactured in Romania stands at $24.75, the fourth highest globally. Thus, the local market is specialized in production of expensive footwear, with an average export price three times higher than the global average.
Almost 70% of exports are leather products, while in terms of imports rubber and textile products hold a similar weight.
The average value of an imported pair of shoes is just $5, and the local footwear sector is one of the few industries with a surplus in foreign trade.
“The market is set to grow in the coming years, but not owing to new investments, but to the already present investors,” says Victor Tighinean, who initially brought Ecco Shoes brand in Romania in a franchise system and subsequently took over management once the parent company entered directly.
Over 50% of Romania’s footwear exports go to Italy, followed by Austria, Germany, France and Slovakia.
(English version by Catalina Apostoiu)