Page 44 - bne magazine September 2021_20210901

44 I Southeast Europe bne September 2021
insiders told the newswire that most companies failed to secure bank loans despite the guarantee.
By June 2020, 50,000 people from across the Albanian economy had been removed from the payroll and declared unemployed. While some were later taken back as factories reopened, Arqimandriti says that there is little information about the current situation. Some companies entered bankruptcy, while others struggled to access support from the government channeled through local banks.
Even before the pandemic, conditions weren’t very good, Arqimandriti and Eneida both say that while Albania has a good labour code, based on EU law, it is poorly enforced and officials have insufficient resources to monitor the industry effectively. On top of the low wages and long hours in the sector – workers are rarely compensated for overtime – there are also reports of other abuses such as poorly enforced health and safety standards and sexual harassment.
A 2016 report from the NGOs Clean Clothes Campaign, Change Your
Shoes, Berne Declaration and ENS shows the situation is similar in garment factories across several Central and Southeast European countries.
“Labour on a Shoestring: The Realities of Working in Europe’s Shoe Manufacturing Peripheries in Albania, Bosnia-Herzegovina, Macedonia, Poland, Romania and Slovakia” says that "problematic working conditions and very low wages in particular, are occurring endemically across global supply chains worldwide”, with being based in Europe not a guarantee of ood working conditions. On the contrary, “In Europe’s low-wage countries, the clothing and shoe industry is notorious for poor pay and bad conditions."
From fashion to PPE
One way that companies have managed to survive the criss is by switching from fashion apparel to production of face masks and other personal protective equipment (PPE), though this was not
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in sufficient volume to come close to making up for the shortfall in fashion orders for the industry as a whole.
German international development agency Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH supported the tailoring industry in Albania during the pandemic. "The shutdown of the fashion industry in Italy and other European countries reduced the demand for textiles “made in Albania” immensely. According to
our own studies, in 2020 alone, the potential loss of the sector summed up to €180mn,” a GIZ spokesperson told bne IntelliNews. “In April 2020 GIZ started to support local garment companies
by giving advise on how to certify their production lines for personal protective equipment. Given the high demand in Germany, starting the production of PPE kept these companies running.”
GIZ advised the producing companies on ensuring the quality standards for protective wear, and also initiated cooperation between Albanian and German companies through its networks with chambers of commerce in the
two countries. Among the Albanian companies it has supported are EfaSolutions, which produced hundreds of thousands of gowns since June 2020, that were sold to customers in Germany. “EfaSolutions even subcontracted four other local textile companies to satisfy the high demand for PPE. This helped secure nearly 600 jobs and create 400 new jobs in the textile sector, which has still not yet recovered from the crisis. Alongside their clothing, Efa Solutions still manufactures protective gear despite the decreasing demand for PPE, as they have built a productive system which ensures quality of high international standards,” the spokesperson said.
Back to the shops
In the last few months restrictions have been fully or almost fully lifted in many parts of Europe and North America, allowing people to return to workplaces, start socialising and attending events again, go on holiday and get back to
the shops. Data from the British Retail Consortium, for example, showed the fastest quarterly growth in retail sales
on record in the second quarter of 2021. Germany’s retail sales saw a faster-than- expected rise in June as restrictions were lifted, while Italy’s retail sales returned to growth in the month.
It’s a little early to tell whether the pandemic will have had a lasting impact on shopping habits. Under lockdown people abandoned such constricting garments as tailored trousers, jackets
and bras (another popular made in Albania item) in favour of joggers and sweatshirts, if they bothered to change out of their pyjamas at all. Some analysts and industry insiders believe the enforced saving during the lockdowns in 2020
and 2021 will have led people to reassess their relationship with fast fashion in particular and move away from over- consumption towards more measured and environmentally conscious purchasing. Consultancy McKinsey expects in its report “The State of Fashion 2021: In search of promise in perilous times” retail sales in Europe and the US to remain a few percent below the 2019 level this year, and for only a modest recovery in 2022.
Others have forecast that after months shut up at home people are already embarking on a frenzy of “revenge consumption” that will fuel the post- COVID recovery, with some even comparing the 2020s to come with the “roaring” 1920s that followed WW1 and the 1918 flu pandemic. On a call with analysts, L’Oréal CEO Jean-Paul Agon forecast: “When the COVID [is] gone, people will be happy to go out again, to celebrate, to socialise and this will be like in the famous Roaring ‘20s ... This will be the fiesta of makeup and fragrances.”
Another consequence of the pandemic
– potentially a positive one for Albania
– is that supply chain disruptions, such as those between East and South Asian suppliers and European markets, have caused companies to rethink their supply chains to make them more resilient
to such disruptions in future. One of
the ways to do this is by ‘nearshoring’ production and Albania, along with the other Western Balkans countries, and other relatively low-income European countries like Moldova and Ukraine, are well placed to do this.