Footwear producer halts investment in outsourcing

The Italian company Bonis, the owner of footwear producers Bontimes (Timisoara) and CD Bons (Cluj), has dropped plans for an investment in their Cluj factory due to uncertainties with outsourcing.

Company officials, who chose not to specify the value of the planned investment, said the plans involved the building and equipping of a new production space of around 2,400 sqm that would have helped double production capacity to 4,000 pairs of shoes a day.

“Our production is seriously threatened by that of Asian countries. The entry of Asian countries with products made at prices one quarter of Romania’s costs would call into question the fate of the producers in the country. Production costs here have increased and will continue to do so, with the Asian countries at work,” Aldo Zavarise, CD Bon’s chief executive, told ZF Transilvania. Zavarise added that, in the circumstances, investments needed to be thought over extremely carefully.

The company in Cluj makes footwear under licence exclusively for the European and the American market, with its biggest clients including Levi’s, Gas, Tommy Hilfiger, Hugo Boss, Armani and Dainese.

Company officials anticipate 80bn ROL in turnover for this year (around 2 million euros), 8% higher than for 2003. “The growth is due to our manufacturing of a series of more complex models in order to counteract Asian competition,” Zavarise explained. Though turnover will increase, profits at the end of September reached around two billion ROL, which is lower than for the same period last year.

As to the company in Timisoara: Bontimes, which makes BIT branded footwear, generated more than 6 million euros in turnover last year.

The chairman of the Organisation of Employers of the Footwear and Leather Processing Industry (OP-PINC), Doru Mladin, said the halt in investment in this sector had already begun for a number of reasons.

“The business climate is still regarded as unfavourable, with neighbouring countries being chosen instead, such as Bulgaria. Labour costs, though still low, shows clear signs of “heating up” without any support from productivity. Order volumes are dwindling, and the lack of a horizontal raw material supply platform makes it necessary to import almost every single component, at higher and higher costs,” explained Mladin.
miruna.lebedencu@zf.ro ; transilvania@zf.ro