In the post-war years, Moldova’s textile and apparel sectors emerged as a leading producer of light goods in the Soviet Union and one of the most important branches of the national economy, accounting for around 60 percent of GDP. Following the collapse of the Soviet Union and Moldova’s independence, the sector fell into decline but today it is at the forefront of the country’s private sector development and is thriving.
The challenge: transformation
For much of its history, Moldova’s light goods industry has been built around low-value “cut and make” services (Lohnarbeit), with companies working under contract for large fashion houses, often with modest returns. While this model remains widespread, the landscape for light goods in Moldova is rapidly evolving.
In recent years, faced with the need to create jobs, stimulate economic growth and boost exports, the Moldovan Government has identified the light goods industry as an important area for development. Indeed, the sector was a key element of the Government’s Industrial Strategy (2008-2014). A highly skilled workforce, a moderate need for investment, proximity to the European market and the existence of a professional training system made it an ideal candidate to help drive the country’s social and economic development program. The aim has been to rebrand Moldova’s light goods industry and transform it into an internationally recognized producer of high-quality fashion. The challenge has been to encourage the country’s textile and apparel companies to start adding value to their work by developing their own original-label products and thereby to expand their market share and increase profitability.
This was not without its difficulties. Helping companies to move away from “cut and make” services is a complex and risky process. Moving into the production of own-label goods raises a range of new challenges. Companies need to secure raw materials at competitive prices, strengthen their design and production capacities and invest in new technologies as well as strengthening their sales and marketing skills and building effective distribution and marketing networks. And of course they need to develop an effective branding strategy.
Driving the shift to high-value outputs
In line with Government policy, a public-private partnership “From the Heart – Brands of Moldova” was launched in 2012 to transform the sector into a high-value producer of competitively priced, quality fashion goods. The...