JEANS IN ROMANIA

Romania is a country of around 22 million people. Per capita income is around 8000 USD. The local currency is the leu.Romania is a jeans production hub for many germany and italian brands. The production areas are located surrounding Bucarest and Bacau. The country has quickly migrated from being a producer of lowest end jeans to that of higher quality jeans in a very short period. This is perhaps the case in most of the EU countries as the wage structure there does not allow to produce low cost jeans which can be easily sourced from the less developed countries. In case of Romania, it is specially so since a large number of Italian jeans manufacturers have set up base there and having their designing base in Italy, they produce in Romania. The geographical proximity to the EU makes it an important incentive to produce in the country. Cotton production is very limited and denim fabric is imported. The challenges for the country in the jeans business are hard to overcome but certainly we must be optimistic due to its strategic location in the EU. Romania is a EU member but it does not have the euro yet as its own currency. If we check the graph below, we will realize that the leu has depreciated these last years, making it attractive for Romania´s export business.








 Inflation has been reduced through the years helping to boost the economy. One of the local issues to consider is that the banking system in Romania has been very restrictive to investment. Most of the capital investments are based on capital coming from EU countries. Monetary policy must be more loose in order for the locals to get credit lines. In Romania factories used to 'finish' jeans for Armani, Boss, Diesel, Dolce und Gabbana, D-Squared, Energie, Evisu, Fiorucci, Fornarina, Gas, Gaultier, Gucci, Joop, Martin Margiela, Mustang, Paul Smith, Pierre Cardin, Prada, Replay, Tommy Hilfiger and Yves Saint Laurent. These days some of them have also moved production to Turkey or further in Asia. One of the most important firms dedicated to Jeans finishing in Romania, is Italian group Martelli. This is a top notch laundry and finishing firm. see Martelli side>