Relevant sectors in SlovakiaMária ŠÁŠIKOVÁ, BIC Bratislava, EEN Slovakia

Textile industry – general overview• Tradition• Significant development in industrial production of textiles – 1860s• Rapid development started at the end of 19th and beginning of

20th century – drapery plants in Trenčín (town of fashion) , Čadca, Rajec, cotton spinning mill and thread production in Bratislava

• Crutial development after 1948 within the framework of industrialization of Slovakia (reconstruction, new factories, modern technology)

• In 1985 – more than 74 000 employees • After 1989 – decline in the rate of production and employment

• Extremely high export involvement• More than 85 % of the number employed in industry are

women in higher age groups • The textile and garment industry in Slovakia is

characterized by relatively low labor productivity, which is partly reflected in low levels of wages

• Low wages - the average monthly wage in the large textile enterprises is not at two-thirds of the average of the slovak industry, in the sector of the apparel it is just over half

• Crucial part of the industry capacity is allocated in the less developed regions of Slovakia

Textile Industry

Subsectors: • Manufacture of textiles • Manufacture of wearing apparel

Number of enterprises

Source: Statistical Office of the Slovak republic, 2012

2008 2009 2010 2011

Manufacture of textiles 53 47 42 51

Manufacture of wearing apparel

149 137 108 96

Textile industryLargest companies of the Slovak Textile industry 2011Company Products Sales 2011 (EUR

´000)Export/Sales 2011 (%)

After-tax profit 2011 (EUR ´000)

Average number of employees

1. Trim Leader, a.s. textile and leather car seats

73 781 N.A. 3 811 N.A.

2. Belfein Slovakia, a.s., Čadca

production of stockings

37 384 N.A. 109 N.A.

3. Tytex Slovakia, s.r.o. Humenné

pantie-stockings 21 458 99,4 % 179 433

4. Muller Textiles Slovkia, Myslina

textiles 19 592 100 % N.A. 94

5. Sperian Protection s.r.o. Slovakia, Partizánske

Production of textile goods, textile and leather parts of protective clothing

16 732 100 % 543 326

6. Dipex, s.r.o., Sereď technical textiles 12 811 N.A. 446 N.A.

7. Texiplast, a.s., Ivanka pri Nitre

manufacture of woven geotextiles for civil engineering

11 636 N.A. 1 463 N.A.

Average number of employees• Sept. 2012 – 35 143 (Manufacture of textiles, apparel, leather

and related products) – 30 % decline in comparison with 1990

Source: : Statistical Office of the Slovak republic, http://portal.statistics.sk/files/Sekcie/sek_500/Priemysel/publikacia/2011/el.publ.01_2012h.pdf

Trends in development• Stagnation, the declining share of this sector on GDP• Poor labour productivity• Decreasing employment• Only a few top producers remained (Makyta Púchov, Odeva

Lipany, Ozeta Neo, Trenčín).• Number of businesses are in crisis, respectively on the verge

of bankruptcy • Chinese expansion, strong import growth and the pressure of

cheaper, especially Asian garments and textiles (China, Thailand, India)

Success story – MAKYTA Púchov• Has overcome the transition from socialism to a market-

driven economy• Makyta has started it´s production in 1944• Pre-war times times – production of uniforms• Largest manufacturer of women´s outwear in Slovakia• 620 employees (in 2001 company had 3 200 employees)• Main customers: Armani, Prada, Versace, Valentino, Max

Mara, Lacoste - high quality in small batches

Structure of Makyta production

2009 2010 2011

Clothing confection 85,4 % 96,5 % 97,5 %

Production of individual protection

0,9 % 2 % 2,1 %

Production of car-seat covers 13,4 % 2,2 % 0 %

Other manufactoring 0,3 % 0,4 % 0,4 %

Suggestions for futher actions• Non-price (quality) competition • Producing high quality innovative or luxury products • Production of technical textiles • Exports products to the markets of the EU and third

country markets

Leather industry• Subsectors:

– leather– leather products– shoe industry

• Long time tradion - Liptovský Mikuláš (Northern Slovakia) – tan dissapered, Bošany (Bošianska Koželužňa, s.r.o.)

• Shoe industry: Partizánske, Bardejov, Bánovce n. B., Komárno• SlovTan Contract Tannery - manufacturing programme

covering the entire process from entry of raw hides up to the dispatch of finished leathers

• Just manufacturing of leather products (K CERO)

Number of enterprises

Source: Statistical Office of the Slovak republic, 2012

2008 2009 2010 2011

Manufacture of leather and related products

61 53 45 40

Largest companies of leather, boot-and-shoe industry producing leather products in Slovakia

Company Sales 2011 (EUR ´000)

Export/Sales 2011 (%)

After-tax profit 2011 (EUR ´000)

Average number of employees

1. Rieker obuv, s.r.o., Komárno 138 125 99 % 1 721 128

2. Ecco Slovakia 97 255 99,9 % 3 702 1 008

3. Gabor, s.r.o. Bánovce nad Bebravou

80 518 92,5 % 3 933 1 393

4. Trim Leader, a.s. Košťany nad Turcom

73 781 N.A. 3 811 N.A.

5. SlovTan Contract Tannery, s.r.o. Liptovský Mikuláš

13 772 N.A. 1 678 N.A.

6. Euroobuv, s.r.o. Komárno 11 635 N.A. 230 1 078

7. Obuv – Špeciál, s.r.o. Bardejov 11 298 45,7 % 98 226

8. Sperian Protection Slovakia, s.r.o., Partizánske

9 046 97,4 % 411 149

9. Howe Slovensko s.r.o. 7 077 N.A. 255 N.A.

Trends in development• Production increased because of the automotive industry

(Eissmann Automotive Slovensko - automotive interior components made of leather and artificial leather for VW, Volvo, Jaguar, Audi), Adtool (Považská Bystrica) – driving wheel, interior components

• 2010 – post crisis growth – most businesses have not received the level before the crisis

• Under the pressure of global competition• Footwear and leather industry covers the current domestic

consumption only slightly- saturated market (imported footwear)

Suggestions for further actions• Prospective area is custom-made leather, fur and

shoe manufacturing, which will focus on the individual approach to customers and create products according to their specific needs and wishes.

Paper industry• Cellulose is produced by the largest firm in this sector in SR -

Mondi SCP, a.s., Ružomberok and Bukóza Holding, a.s., Hencovce. The largest processors of waste paper are Metsä Tissue, a.s. Žilina and SHP Harmanec, Convetis, s.r.o. (Štúrovo)

2008 2009 2010 2011

Manufacture of paper and paper products

45 45 44 42

Paper industry – brief overview• The consumption of paper in Slovakia is very high (85 kg p.c.)• Yet domestic production is higher than consumption • Growing consumption also significantly helps wrapping-paper

producers.• Paper producers active in Slovakia are mostly export oriented• Problem: lack of wood - Slovakia is not using any fast growing

plants (import of wood mass from Ukraine, Hungary and Belarus) and growing prices of energies, coniferous wood

Major companies in paper industryCompany Sales 2011 (EUR

´000)Average number of employees

About

1. Mondi SCP, a.s. Ružomberok 502 614 1 466 The largest pulp and paper producer in Slovakia.

2. Bukocel, a.s. Hencovce 192 025 799 The only Slovak pulp mill.

3. SCA Hygiene Products Slovakia, s.r.o. Gemerská Hôrka

165 021 1 133 Increasing production in order to overcome a drop in revenues.

4. SHPHarmanec, a.s., Harmanec 118 116 1 090 Products of Harmony brand - handkerchiefs, toilet paper, paper napkins, paper towels

5. Metsa Tissue Slovakia, s.r.o. Žilina

110 250 N.A. Previously Tento Žilina, the company invested large amounts into modernization.

6. Grafobal a.s., Skalica 57 750 759 Solid cardboard packages

7. Mondi Packaging Ružomberok 47 927 N.A. kraft paper

8. Duropack Turpak Obaly, a.s. Martin

28 924 218 production of corrugated board, packaging

9. Harmanec Kuvert, s.r.o. Brezno 15 609 123 Production of envelopes

10. Convertis, s.r.o. Štúrovo 10 498 N.A. tissues

Average number of employees

Source: Statistical Office of the Slovak republic, http://portal.statistics.sk/files/Sekcie/sek_500/Priemysel/publikacia/2011/el.publ.01_2012h.pdf

Trends in paper industry• Total earnings of the paper industry in 2010 decreased as a result of

termination of production in Smurfit Kappa Štúrovo. • Export revenues decreased also in other companies operating in the

Union of pulp and paper industry of SR.• Current economic crisis: decline of revenues – decrease of prices but with

stable volume of orders• Situation reflected also by international companies – e.g. Mondi Business

Paper decreased their manufacturing capacities by 14 % and sold certain plants abroad. Smurfit Kappa located in Štúrovo faced significant difficulties and ceased production and dismissed all 350 employees as the result of demand decrease in 2010.

Chemical industry

Chemical industry• Traditionally held and still holds a strong position (strategic

sector)• 1990 – process of transformation (strong production base, a

well-developed research capacity, very good level of human potential): – Orientation of exports changed – Negative impact - production units did not survive the competition

(costs, ecological requirements, quality parameters)– Problems: were related to the lack of financial resources,

expensive bank loans and a rise in the price of raw materials which could hardly be reflected in the prices of the final products due to the competition.

Number of enterprises (4 subsectors)

2008 2009 2010 2011

Manufacture of coke and refined petroleum products

6 6 5 5

Manufacture of chemicals 51 61 50 48

Manufacture of basic pharmaceutical products

14 14 11 11

Manufacture of rubber products 157 171 166 177

Average number of emploeeys

• Source:

Important localities of chemical industry• Most important producers: Slovnaft (Bratislava), Duslo (Šala)• Pharmaceutical products: Slovenská Ľupča (Biotika a.s.) ,

Hlohovec (Zentiva a.s.), Nitra (Mevak SK), Šarišské Michaľany (Imuna Pharm a.s.)

• Manufacture of rubber: Púchov (Continental Matador Rubber, Continental Matador Truck Tires),

• Manufacture of plastics products: Trnava , Nitra (Plastika, HTP Slovakia, Bourbon Automotive Plastics, Sehwa SK), Žilina (Quinn Plastics Slovakia)

Largest companies in chemical industry 2011Company Sales 2011 (EUR

´000)Export/Sales 2011 (%)

After-tax profit 2011 (EUR ´000)

Average number of employees

1. Slovnaft, a.s. Bratislava 4 729 687 69,5 % -18 643 3 624

2. Continental Matador Rubber, s.r.o., Púchov

595 971 67,1 % 39 085 2 175

3. Continental Matador Truck Tires, s.r.o., Púchov

554 142 89 % 56 149 1 142

4. Duslo, a.s. Šaľa 459 774 81,7 % 33 997 2 233892

5. Zentiva, a.s. Hlohovec 223 156 N.A. 7 550 N.A.

6. Novácke chemické závody (v konkurze)

174 080 N.A. N.A. 2 132

7. Chemosvit, a.s., Svit 157 738 N.A. 2 011 N.A.

8. Meroco, a.s. Leopoldov 157 438 N.A. 7 450 N.A.

9. Nexis Fibers, a.s. Humenné 99 443 96,2 % N.A. 318

10. Inergy Automotive Systems Slovakia, s.r.o. Lozorno

94 522 34,6 % 5 300 172

New trends at the beginning of millenium• the strengthening position of Asian competitors,• the growth of the Slovak economy, driven by FDI - employment in the

chemical industry has been growing since 2004, mainly thanks to the development and large investments in plastic production

• the strengthening of the Slovak currency – a negative impact on Slovak exporters

• globalization tendencies• Slovakia's accession to the European Union (TNK in chemical industry)

• 2007 – new legislation REACH - control and registration for most of the chemical substances used in industry in a volume higher than 1 ton per year.

• the costs of REACH at cca. 32 million EUR per year• 2008-2009: fully influenced by the global economic crisis. refinery

production – 30 % sales reductions, limited access to credit bank loans as a direct result of the financial crisis, collapse of many companies as a result of crisis, ineffectiveness of anti-crisis measures.

• Sales of traditional chemical producers fell by a fifth • Sales of plastic products manufacturers in 2009 decreased by 12 % and

sales of manufacturers of rubber decreased even by 25 % • first half of year 2009 - entry of Slovakia into the euro area

Conslusion• Strongest – Chemical industry• Asian competition?• Support of SMEs - high health and social insurance

payments (from 1.1.2013 – very high)

Contactt: 02/ 5441 7515t: 02/ 5441 7606e: info@bic.sk

Mária ŠÁŠIKOVÁBIC BratislavaEnterprise Europe Network Zochova 5811 03 Bratislavawww.BIC.skwww.Enterprise-Europe-Network.sk

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