Manufacture of wearing apparel, including leather apparel ... · leather apparel, tanning of...

REPUBLIC OF BULGARIA

Bulgarian Small and Medium

Enterprises Promotion Agency

PROJECT BG161РО003 – 4.2.01-0001, “PROMOTION OF THE

INTERNATIONALIZATION OF THE BULGARIAN ENTERPRISES”

Проект № BG161РО003 – 4.2.01-0001, „НАСЪРЧАВАНЕ НА

ИНТЕРНАЦИОНАЛИЗАЦИЯТА НА БЪЛГАРСКИТЕ ПРЕДПРИЯТИЯ”

This project is financed by the European fund for regional development through

an Operational programme “Development of the competitiveness of the

Bulgarian economy” 2007 – 2013

Този проект е получил финансиране от Европейския фонд за регионално

развитие чрез Оперативна програма „Развитие на конкурентоспособността

на българската икономика” 2007 – 2013

EXPORT STRATEGY

Manufacture of wearing apparel, including leather apparel, tanning of

leather

June 2012

2

LIST OF ABBREVIATIONS

EU European Union

BSMEPA Bulgarian Small and Medium Enterprises Promotion Agency

MAF Ministry of Agriculture and Food

MEET Ministry of Economy, Energy and Tourism

MRDPW Ministry of Regional Development and Public Works

SME Small and Medium Enterprises

ITC International Trade Centre

NCEA National Classification of Economic Activities

NSI National Statistical Institute

OP Operational Programme

OTEA Office of Trade and Economic Affairs

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CONTENTS

INTRODUCTION .................................................................................................................... 4

1. APPROACH FOR DEVELOPING THE EXPORT STRATEGY .............................. 5

2. MAIN CONCLUSIONS OF THE ANALYSIS OF THE CURRENT SITUATION 11

3. SWOT AND LOED ANALYSIS OF SECTOR "MANUFACTURE OF WEARING

APPAREL, INCLUDING LEATHER APPAREL, TANNING OF LEATHER” ........... 33

4. VISION AND OBJECTIVES ........................................................................................ 37

5. STRATEGY FOR PROMOTING THE EXPORT OF SMES IN THE SECTOR .. 39

6. ACTION PLAN .............................................................................................................. 41

7. MONITORING AND CONTROL SYSTEM .............................................................. 51

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INTRODUCTION

The export strategy for sector “Manufacture of wearing apparel, including leather apparel,

tanning of leather” has been developed under Project No BG161РО003 – 4.2.01-0001

“Promotion of the internationalization of the Bulgarian enterprises” under Priority Axis 4

“Strengthening the international market positions of Bulgarian economy” under Operative

programme “Competitiveness of the Bulgarian economy”, in the frame of Contract BG-

161PO003-4.2.01-001-C00001 for providing direct grants, in which the Bulgarian Small and

Medium Enterprises Promotion Agency (BSMEPA) is the institutional beneficiary.

The objective of the export strategy for sector “Manufacture of wearing apparel, including

leather apparel, tanning of leather” is to support the Bulgarian micro, small and medium-sized

enterprises in the sector, in order to enhance their competitiveness, internationalization level

and initial entering or expansion of the market share of Bulgarian products, in particular of

those with higher added value.

The Bulgarian state, represented by BSMEPA, MEET and other government bodies, has

recognized the SME sector to be extremely sensible and at the same time as having decisive

importance in the economic field, deserving special attention. The diversity in the

development of various industrial sectors, where the SME development has its place, as well

as national priorities, related to promoting the country’s export, require drafting of export

strategies for certain sectors, one of which is “Manufacture of wearing apparel, including

leather apparel, tanning of leather”. Focusing the support and defining of precise reference

points for State intervention through its institutions, as well as offering development options

for the rest of the participants in the process will strengthen in positive aspect the plan-based

principle in State activities and as a result will improve the sector functioning. The successful

realization of the Export strategy is expected to lead to the improvement of the process of

entering international markets and the active expansion and strengthening of the market

positions of Bulgarian small and medium enterprises, manufacturing wearing apparel.

At the strategy development, general consideration has been made of the findings and

conclusions of the carried out studies of existing strategic and legal acts. The “Methodology

of strategic planning”, drafted by the Council of Administrative Reform at the Council of

Ministers of the R. of Bulgaria has also been taken into account.

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1. APPROACH FOR DEVELOPING THE EXPORT STRATEGY

The export strategy is a strategic document, setting the mid-term objectives and priorities for

the export development of SMEs from sector “Manufacture of wearing apparel, including

leather apparel, tanning of leather”. It has been drafted on the basis of the strategic planning

approach, which adroit use has the following advantages:

Ensures good comprehension among stakeholders for the trends and what could bring

the future;

Creates general vision and consensus among stakeholders, by coordinating various

initiatives under the selected objectives;

Identifies the projects and actions undertaken or planned;

Strengthens the partnership among the government bodies, the business and other

parties for solving complex problems.

When developing such a strategic document it is extremely important to precisely formulate

the “owner” of the strategy, i.e. the institution or institutions responsible for the overall

implementation of the strategic documents, as well as the concrete phases of the strategic

planning.

Most commonly the phases of elaboration of the strategic document are:

Assignment

Preparation

Development

Coordination

Adoption

Implementation

Evaluation

Update

Each of these phases contains different activities, some of which, as assignment, preparation,

elaboration, coordination, adoption and update at a later stage, will be part of the project,

implemented under the contract, mentioned at the beginning. Consequently, the main “owner”

of the export strategy is the Bulgarian Small and Medium Enterprises Promotion Agency

(BSMEPA). For this reason, objectives, measures and various actions set in the strategic

document should first help BSMEPA to improve planning and implementation of activities,

related to export support of SMEs in sector “Manufacture of wearing apparel, including

leather apparel, tanning of leather”. This formal logic does not contradict to the fact that a

significant number of institutions, businesses and even the population are involved as

stakeholders and they might be influenced by means of different mechanisms, for example,

the state institutions – through the forms of coordination of strategic documents of such rank,

and the branch associations and the business – by providing incentives to increase their export

potential. It is of extreme importance for SMEs in sector “Manufacture of wearing apparel,

including leather apparel, tanning of leather” to be able to see a clear and predictable export

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supporting state policy, which, though in the medium run, will allow them to decide whether

to benefit or not from the created opportunities.

Technology of strategic planning

The strategic planning process includes the following steps:

Identification of the stakeholders

Analysis of the environment

SWOT analysis

Vision

Definition of targets

Selection of alternative – development strategy

Action plan

Monitoring system

Each of these steps has certain peculiarities, namely:

Identification of the stakeholders. A stakeholder is any person or group, that requires

attention, that can influence certain decision, may contribute with resources or may be

affected by given decision. Involving stakeholders at an earlier stage of the strategic

document development may lead to better expressed consensus on the targets and greater

readiness to support the decision. The stakeholders of the Export strategy may include

different people and organizations: companies, government bodies, manufacturers’

associations, businesses, consumers of the products, NGOs and experts.

The specifics of developing business supporting strategies are that prepared documents shall

not favour some and/or discriminate other businesses. This is the reason why there was a

pursuit for equality when involving business organizations and different branch associations,

as well as a search for an opportunity that the majority of businesses could benefit from the

analysis made.

Analysis of the environment. The analysis of the environment (the conclusions of which

serve as a basis for the SWOT analysis) allows the formulation of goals and priorities which

shall align the efforts and shall not be dissociated from time and environment.

The analysis is focused at:

The current state of sector “Manufacture of wearing apparel, including leather apparel,

tanning of leather” in Bulgaria, trends, dynamics, growth;

Characteristics of export-orientated SMEs, including regional distribution;

Condition of the export of goods and services;

Analysis of the goods and services in sector “Manufacture of wearing apparel,

including leather apparel; tanning of leather”, having export advantages and export

potential;

Estimation of productions with the highest value added growth potential in the export

of goods and services, where Bulgaria has global market share;

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Size of the international market;

Competitiveness of the export of goods and services for the existing and potential

foreign markets;

Share of the products made in Bulgaria;

Share of the Bulgarian export of analyzed product groups in the total volume of

imports on the global markets;

Leading importer-countries in sector “Manufacture of wearing apparel, including

leather apparel; tanning of leather”;

Values and volumes of the import on concrete external markets for certain product

group;

Main suppliers on the corresponding markets;

Identification of barriers to the internationalization of the companies in the sector and

measures for overcoming them.

Based on the prepared analyses, the current problems and achievements of the sector should

be identified, and prognoses, opportunities and prospects for development shall also be

motivated, such as:

Achieving significant growth of Bulgarian goods in general, as well as of goods with

higher added value;

Determination and priority setting of target markets by product groups;

Prognosis for the development of export and import of goods and trade balance for the

next five and more years.

The analyses are based on available analytical and programme documents, accessible

statistical information, as well as information from carried out surveys – interviews and focus

groups.

The analysis of the environment traces out the current condition of SMEs in sector

“Manufacture of wearing apparel, including leather apparel; tanning of leather” and the export

process; establishes the reasons, provoking problems in the development and sets the

guidelines for future development.

SWOT analysis. The SWOT analysis gives the opportunity to identify the main internal

factors, differentiated as “strengths and weaknesses” and the external factors – “opportunities

and threats”, helps formulating the strategic objectives, priorities and measures. The use of

SWOT protects from setting unreachable objectives and priorities for the export development

of SMEs in sector “Manufacture of wearing apparel, including leather apparel; tanning of

leather” within the Strategy period.

The use of SWOT analysis in developing the Export strategy has certain specifics, as the

“owner” of the strategy is the BSMEPA, but the analysis is focused on the export process of

SMEs in this particular sector and not on the institution itself.

LOED analysis. The LOED analysis is a tool, showing how to build on strengths and to

overcomes the weakness, how to use the opportunities and to protect against threats,

identified by means of the SWOT analysis.

Setting the targets. The strategic planning is focused on issues of critical importance,

opportunities and problems, faced by the export of SMEs in sector “Manufacture of wearing

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apparel, including leather apparel; tanning of leather”. It helps to outline the really important

decisions from those decisions with temporary impact.

Setting the targets by making a hierarchical tree of goals is a working instrument that gives

the opportunity to work out in detail from the most common general objectives to the specific

ones.

The definition of the general strategic objective is extremely important for the future

development of exports of SMEs in sector “Manufacture of wearing apparel, including leather

apparel; tanning of leather”. The general strategic objective is seeking to find answer to one

basic question: How do the main institutions and stakeholders in the process want the export

of SMEs in the sector look like in the long-term period?

Reaching the level of specific targets permits finding the answer of the questions about

“who”, “what” and “when”, so as to guarantee the achievement of the goals set higher in the

hierarchy.

Selection of alternative – development strategy. After objectives’ setting, the paths for their

achievement are sought. Practice shows that this may be done through different ways,

representing different alternatives for development and achievement of the objectives. At this

stage of the strategic planning, various alternatives are evaluated from different points of view

and criteria and as a result an alternative is chosen, which then becomes a development

strategy.

Action plan. The chosen strategy is to be supplied with certain activities and measures, bound

to deadlines, people in charge, performers and funding. The Action plan and the measures

provided therein transform this strategic instrument into everyday work and implementation

of the policy of supporting the export of SMEs in sector ‘Manufacture of wearing apparel,

including leather apparel; tanning of leather’.

Monitoring system. The last stage of the strategic planning process is monitoring and

evaluation of the progress of implementing the general and specific objectives, laid down in

the export strategy and in the action plan. Monitoring is important as it gives the possibility to

undertake corrective actions, if the progress is unsatisfactory or if the conditions are changed.

Reporting the progress in achieving the general objectives to the public and the business is

also important, as to grant them the opportunity to estimate the work of relevant institutions

and stakeholders in the implementation of the strategy. It should be noted that very often

impacts may not be visible or obvious which makes their measurability difficult. Moreover,

impact may often result in cumulative effect and it may additionally complicate the analysis.

This gives particular importance of the monitoring, which is closely related to all stages of

implementation of the Export strategy – preliminary (ex ante), current (parallel to

realization) or posterior (ex post) evaluation.

In order to monitor the implementation of the export strategy and to evaluate the results

achieved in terms of defined goals, it is necessary to use a set of indicators related to the

implementation of the strategic document, that are to be determined preliminary or early

enough, as to use the data obtained thereof. In most of the cases, these will be target values,

which in aggregate will correspond to the objectives of the strategic document.

Monitoring provides the feedback, helping to assess the success or failure of the planning

document.

In order to perform the monitoring process is it necessary to define:

Monitoring indicators (what is to be monitored);

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Periodicity of monitoring and evaluation (when the corresponding reports will be

prepared);

Responsibilities related to monitoring and evaluation (who does what), and

competences for decision-making on changes (update of the strategic document).

INFORMATION SOURCES

In developing the export strategy the following main information sources have been used:

National Statistical Institute

Information, provided by the BSMEPA

Information from the Ministry of Economy, Energy and Tourism

Eurostat

International Trade Centre

Information, published in relation to international forums and meetings

Official electronic information sources

Information, published by branch associations in the sector

Information by the Bulgarian Industrial Association and the Bulgarian Chamber

of Commerce and Industry, and their regional divisions

Information from a survey, carried out in the period October 31 – November 28,

2011 with the senior management of 5 (five) small and 22 (twenty-two) medium

enterprises (total of 27), operating in the sector, and from a focus group.

Information is processed with the will for maximum objectivity of the findings. In many

cases, the analyzed information applies to sector “Manufacture of wearing apparel, including

leather apparel; tanning of leather” as a whole, i.e. the information covers both SMEs and

large enterprises, based on the assumption that if a Bulgarian company has been successful on

certain markets, the same could be expected for another company as well, incl. from the group

of SMEs. These specifics are explicitly underlined during the analysis.

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STRUCTURE OF THE EXPORT STRATEGY FOR SECTOR “MANUFACTURE OF

WEARING APPAREL, INCLUDING LEATHER APPAREL; TANNING OF

LEATHER”

In determining the structure of the Export strategy for sector “Manufacture of wearing

apparel, including leather apparel; tanning of leather” the use of the strategic planning

approach is considered, which sets the general parameters of the strategic document. At the

same time, a study was made of the structure of other institutional strategic documents, using

the following estimation criteria:

- providing opportunity for relatively easy access to the document through

comprehensive and logical structuring of different parts;

- presenting the content in an attractive and easy-to-understand manner accessible to

non-professionals as well;

- providing information thematically, i.e. structuring the material in a way that allows

in-depth penetration into problems and analyzes only if desired by the reader.

The above mentioned criteria were met by several of the studied strategies and they contained

two clearly distinguished separate parts, namely:

1. A main document, in which the separate chapters are defined according to the above

described technology of strategic planning.

2. Appendices that contain the complete text of the analysis, including conclusions,

transferred to the main document.

This approach was preferred in structuring the Export Strategy for sector “Manufacture of

wearing apparel, including leather apparel; tanning of leather”. Following consultations with

the Assignor, the findings and conclusions in the main document were supplemented with

specific data and visualized by graphs and diagrams, thus increasing the information content

of the document.

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2. MAIN CONCLUSIONS OF THE ANALYSIS OF THE CURRENT

SITUATION

This part contains the summarized conclusions of different analyses, included in “Analysis of

the environment”, being one of the main steps in the strategic planning technology. In

appendix to this strategic document, the complete text of facts and analyses is presented, on

the basis of which conclusions are drawn. The conclusions and the analyses themselves are

structured in 6 parts, as follows:

STATE AND DEVELOPMENT OF THE SECTOR IN BULGARIA

EXPORT ORIENTATION OF THE SECTOR

GOODS WITH EXPORT ADVANTAGES AND POTENTIAL

COMPETITIVENESS OF THE EXPORT OF GOODS ON FOREIGN MARKETS

EXPORT PRIORITY PRODUCT GROUPS IN THE SECTOR AND MAIN MARKETS

BARRIERS TO THE INTERNATIONALIZATION OF SMES AND MEASURES FOR THEIR

OVERCOMING

STATE AND DEVELOPMENT OF THE SECTOR IN BULGARIA

Generally for sector “Manufacture of wearing apparel, including leather apparel, tanning

of leather”

The ownership in the sector is entirely private and most of the companies are

micro, small and medium enterprises. This is a precondition for higher flexibility

of production and better adaptation to market trends.

The dynamics of production and turnover of companies in the sector, measured by

the indexes of industrial production and turnover, show similar trends to those in

industry total and in manufacturing in the period 2001 – 2010. The stable growth

is crushed after 2007 and in 2010 the pre-crisis levels are recovered in terms of

turnover on international markets, while the drop on the domestic market remains

unchanged.

The regional distribution of companies in the sector is uneven, as the biggest

concentration is observed in the South-Western region and South-Central region,

which is related to traditions in production.

SMEs in sector “Manufacture of wearing apparel, including leather apparel, tanning of

leather”

The sector is a leader in manufacturing in terms of number of SMEs and number

of employed. The sector is one of the largest employers in the country and in 2010

it provided employment to nearly 24% of the employed in SMEs in manufacturing

and over 6% of the employed in SMEs in industry total.

The percentage of decrease in the number of companies and employed in 2010

compared to 2009 is higher than the average in manufacturing and one of the

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highest among the 18 analysed sectors, implying a significant impact of the global

economic crisis on the sector.

In inner-sector aspect, “Manufacture of outerwear, without working apparel”,

“Manufacture of other wearing apparel and clothing accessories” and

“Manufacture of footwear” account for the biggest number of companies in the

sector.

SMEs in the sector generate 9% of the turnover and over 14% of the value added

in manufacturing. The change in 2010 compared to 2009 in both indicators is

insignificant, and by these indicators the sector ranks second after sector

“Manufacture of food products”.

Notwithstanding the upward trend in labour productivity of SMEs in sector

“Manufacture of wearing apparel, including leather apparel, tanning of leather”, it

remains relatively low, making about 60% of average labour productivity of SMEs

in manufacturing and 49% of average labour productivity of SMEs in industry

total. Labour productivity of the sector is 4 times lower than that of the leading

sector in manufacturing, “Manufacture of pharmaceuticals products and

preparations”.

Estimations of workforce quality and the relatively low priority of measures for

raising the qualification of personnel allow concluding that the sector disposes of

qualified workforce able to apply traditionally good practices in manufacturing.

EXPORT ORIENTATION OF THE SECTOR


of leather”

The sector ranks first among the 18 sectors with export potential. In the period

2001 – 2010, the total Bulgarian export of wearing apparel amounts to nearly 29,6

billion BGN and accounts for 14,54% of total national exports in this period and

for 23,9% of the export, realized by the 18 analyzed sectors.

The position of the Bulgarian products on the international market both in the

manufacture of wearing apparel and in the tanning of leather and footwear

manufacture is stable and records progress until 2007. The levels of 2007 are

restored by end-2010, before the world economic crisis, implying a recovery of

consumption on the foreign markets and increase in orders.


leather”

In 2010, the sector ranks first in terms of “share of SMEs in total exports of the

sector” (more than 57%) and in 2009 it ranked second. This ranking is indicative

of the great importance of SMEs for the development and export capacities of the

sector.

The generally observed trend in export volumes in 2010 compared to 2009 is a

decrease in the export of SMEs, with an increase in the total export of the sector,

13

showing that small and medium enterprises are more significantly affected by the

global financial economic crisis, in comparison with large companies.

The largest export shares in 2010 are held by the companies in “Manufacture of

wearing apparel, excl. leather apparel” accounting for 93,36% of the export of

companies in „Manufacture of wearing apparel” and the companies in

„Manufacture of footwear”, accounting for 80% of the export of companies in

“Tanning of leather, manufacture of footwear and related leather products”.

In terms of the indicator “volume of exports per 1 employed” sector “Manufacture

of wearing apparel, without leather apparel” ranks third among the examined

sectors which is indicative for its strong orientation to foreign markets.

SMEs which participated in the company survey work mainly for export – for the

whole analyzed period the number of companies, exporting more than 60% of

their production is prevailing, and in 2011 their share reached 80%.

Companies in the sample export directly without the mediation of trade

companies, creation of joint trade activity with other companies, etc.

GOODS WITH EXPORT ADVANTAGES AND POTENTIAL


of leather”

The product groups, manufactured and exported in sector “Manufacture of wearing apparel,

including leather apparel, tanning of leather” are extremely numerous. Therefore the selection

of product groups with export advantages and potential was done on the basis of several

criteria, namely highest relative share in the export of the corresponding product group,

increase during the studied period or realized big export volumes before the beginning of the

global economic crisis. The analysis includes also the product groups with relatively stable

exports during the studied period. These criteria were applied for the sector in total, as official

statistical information on SMEs is not available. The application of the selected criteria to

data of the International Trade Centre allows determining the following 13 product groups,

which have export advantages and potential:

„Articles of apparel and clothing accessories, knitted or crocheted”

1. Women's or girls' suits, ensembles, jackets, blazers, dresses, skirts, divided

skirts, trousers, knitted or crocheted

2. Women’s or girls’ blouses, shirts and shirt-blouses, knitted or crocheted

3. T-shirts, singlets and other vests, knitted or crocheted

4. Jerseys, pullovers, cardigans, waistcoats and similar articles, knitted or

crocheted.

„Articles of apparel and clothing accessories, not knitted or crocheted”

5. Women’s or girls’ overcoats, capes cloaks and anoraks other than those of

heading 6204

6. Men’s or boys’ suits

7. Women's or girls' suits

http://www.eximguru.com/hs-codes/6104-Women-s-or-girls-suits.aspx


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„Articles of leather; saddlery and harness; travel goods, handbags and similar

containers; articles of animal gut”

8. Trunks, suit-cases, vanity-cases, executive-cases, brief-cases, school

satchels, spectacle cases, binocular cases, camera cases, musical instrument

cases, gun cases, holsters and similar containers; travelling bags, insulated

food bags

9. Articles of apparel and clothing accessories, of leather or of composition

leather

„Footwear, gaiters and the like; parts of such articles”

10. Footwear with outer soles of rubber, plastics, leather or composition leather

and uppers of leather

11. Footwear with outer soles of rubber, plastics, leather or composition leather

and uppers of textile materials

12. Other footwear

13. Parts of footwear (including uppers, whether or not attached to soles other

than outer soles); removable in-soles, heel cushions and similar articles,

gaiters, leggings and similar articles and parts thereof

The main findings of the analysis of the ranking of Bulgaria in the world export, the export

dynamics, and the position of the country in terms of export of the selected product groups in

the sector are summarized in the table below:

Product groups Rank in

the world

export in

2009

Rank in

the world

export in

2010

Share in

the world

export in

2010

Share in

the export

of the

leading

world

exporter in

2010 to

2001

Share in

the export

of the

leading

world

exporter in

20101

Women's or girls' suits, ensembles, jackets, blazers,

dresses, skirts, divided skirts, trousers, bib and

brace overalls, breeches and shorts (other than

swimwear)

27 25 0.57% 4.21% 1.81%

Men’s or boys’ suits, ensembles, jackets, blazers,

trousers, bib and brace overalls, breeches and shorts

(other than swimwear)

32 29 0.67% 3.49% 2.61%

Women’s or girls’ overcoats, car-coats, capes

cloaks, anoraks (including ski-jackets), wind-

cheaters, wind-jackets and similar articles other

than those of heading 6204

25 17 0.74% 2.97% 1.52%

Women’s or girls’ blouses, shirts and shirt-blouses 14 18 2.19% 83.28% 21.24%

Jerseys, pullovers, cardigans, waistcoats and similar

articles, knitted or crocheted

37 34 0.28% 1.50% 0.74%

T-shirts, singlets and other vests, knitted or

crocheted

30 39 0.33% 3.76% 1.55%

1 Leading exporters by product groups are presented in Appendix, item 3 – Analysis of goods and services with

export potential.

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Product groups Rank in

the world

export in

2009

Rank in

the world

export in

2010

Share in

the world

export in

2010

Share in

the export

of the

leading

world

exporter in

2010 to

2001

Share in

the export

of the

leading

world

exporter in

20101

Women's or girls' suits, ensembles, jackets, blazers,

dresses, skirts, divided skirts, trousers, bib and

brace overalls, breeches and shorts (other than

swimwear), knitted or crocheted

32 28 0.36% 1.48% 0.67%

Trunks, suit-cases, vanity-cases, executive-cases,

brief-cases, school satchels, spectacle cases,

binocular cases, camera cases, musical instrument

cases, gun cases, holsters and similar containers;

travelling bags, insulated food bags

32 32 0.10% 0.58% 0.22%

Articles of apparel and clothing accessories, of

leather or of composition leather

48 48 0.06% 0.08% 0.20%

Footwear with outer soles of rubber, plastics,

leather or composition leather and uppers of

leather;

33 36 0.21% 1.05% 0.95%

Parts of footwear (including uppers, whether or not

attached to soles other than outer soles); removable

in-soles, heel cushions and similar articles, gaiters,

leggings and similar articles and parts thereof

16 18 1.29% 17.51% 4.78%

Other footwear 9 22 0.56% 8.13% 0.97%

Footwear with outer soles of rubber, plastics,

leather or composition leather and uppers of textile

materials.

33 34 0.13% 0.57% 0.31%

Presented data show that in 2010 the best ranking among world exporters has the product

group “Women’s or girls’ overcoats, car-coats, capes cloaks, anoraks (including ski-

jackets), wind-cheaters, wind-jackets and similar articles other than those of heading

6204”, Women’s or girls’ blouses, shirts and shirt-blouses, knitted or crocheted” and

“Parts of footwear (including uppers, whether or not attached to soles other than outer

soles); removable in-soles, heel cushions and similar articles, gaiters, leggings and similar

articles and parts thereof”. The latter two product groups hold leading positions in the

share of Bulgaria in world exports (respectively 2,19% and 1,29%). Among the most

successful product groups on international markets are goods with both high and low

added value.

The product groups women's or girls' suits and men’s or boys’, ensembles, jackets,

blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and

shorts (other than swimwear) are among the product groups with the largest export

volume. Huge demand and respective supply of this type of commodities determine their

more unfavourable ranking among the analysed products, regardless of their higher added

value.

Changes in the export volume of analyzed commodities over the studied ten-year period

are not unidirectional. The most significant growth in exports in 2010 compared to 2001

is observed in product groups “Women’s or girls’ suits, ensembles, jackets, blazers,

dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and shorts (other

than swimwear), knitted or crocheted” and “Women’s or girls’ overcoats, car-coats, capes

cloaks, anoraks (including ski-jackets), wind-cheaters, wind-jackets and similar articles





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other than those of heading 6204”, while the group “Other footwear” records the most

significant decrease in export volumes (respectively, the greatest loss of positions in the

ranking of world exporters).

Both at the beginning and at the end of the examined ten-year period the smallest share in

world exports is registered by product group “Articles of apparel and clothing

accessories, of leather or of composition leather” (also accounting for the worst ranking

of Bulgaria among world exporters). It should be concluded therefore that products from

the analyzed group do not answer the demand and preferences of consumers from

different foreign trade partner-countries of Bulgaria.


leather”

The above presented data on the analyzed product groups relate to all companies in the

sector and not only to SMEs. The lack of sufficient statistical information prevents

determining the share of the export of SMEs in the export of analysed product groups.

Certain orientation is provided by the results obtained from the company survey carried

out in the period 31 October – 28 November 2011. Companies in the sample declare that

their main exports in 2010 include swimwear, underwear, overcoats, women’s and men’s

ready-to-wear clothing, footwear.

Nearly 93% of the interviewed managers of SMEs consider that the companies have

sufficient production capacity for the manufacture of export goods. Even part of the

companies, still not exporting, but willing to, declare such capacity.

In 96% of surveyed companies the management teams have the will to export the

manufactured products.

Due to the profile of surveyed companies, they export finished products with more

specific qualities (according the offered classifications – raw materials, semi-

manufactured goods and finished products) with high level of processing and respectively

high added value. It can be assumed that this is the niche, where SMEs might have

greater success in exports.

The above conclusion is further confirmed by the fact that managers of interviewed

SMEs consider high technology level and qualification of personnel of small and medium

enterprises factors of crucial (decisive) importance for the export success, which are the

main prerequisites for the creation of high value added products.

COMPETITIVENESS OF THE EXPORT OF GOODS ON FOREIGN MARKETS

The main markets of the analysed product groups in sector “Manufacture of wearing apparel,

including leather apparel, tanning of leather” are presented hereinafter and they are

determined on the basis of data on the Bulgarian export of each product group. All quantity

data are contained in Annex 4 “Competitiveness of exports of goods on foreign markets” to

the present strategy.

17

Women's or girls' suits, ensembles, jackets, blazers, dresses, skirts, divided skirts,

trousers, bib and brace overalls, breeches and shorts (other than swimwear)

o Main markets are Germany, France and Italy.

o The main product in this group with the largest export to the leading market

Germany is “Women's or girls' trousers, breeches, of cotton (not of cut

corduroy, of denim or knitted or crocheted and excl. industrial and

occupational clothing, bib and brace overalls, briefs and tracksuit bottoms)”,

i.e. product with higher added value.

o Main competitors on the leading market are China and Turkey, being among

the leading manufacturers worldwide, with established traditions in the

manufacture of this product.

o The significant trade balance deficit of Germany shows dependence on

imports, a factor enhancing additionally the importance of the German market

for the Bulgarian manufacturers.

Men’s and boys’ suits, ensembles, jackets, blazers, dresses, skirts, divided skirts,


o Main markets are Germany, Italy and Greece.


Germany is „Men's or boys' suits of textile materials, knitted or crocheted, of

wool or fine animal hair (excl. tracksuits, ski suits and swimwear)”.

o Main competitors on the leading market are again China and Turkey.

o The growing trade balance deficit of Germany (by end of examined period)

contributes to increasing the attractiveness of this export destination for the

Bulgarian manufacturers.

Overcoats, car-coats, capes cloaks, anoraks (including ski-jackets), wind-cheaters,

wind-jackets and similar articles other than those of heading 6204

o Main markets are Italy and Germany.


Italy is „Women's or girls' anoraks, jackets and similar articles, of synthetic

fibres (not knitted or crocheted and excl. suits, ensembles, jacket, blazers,

trousers and ski ensembles and swimwear)” – a product with high level of

manufacturing in Bulgaria.

o Main competitors on the leading market are China (one of the biggest and

established manufacturers worldwide) and Romania.

o The increasing trade balance deficit along with the growing share of Bulgarian

imports on the Italian market determine it as important and perspective

destination for the Bulgarian manufacturers.

Women’s or girls’ blouses, shirts and shirt-blouses, knitted or crocheted

o The main market of Bulgaria is Greece.


Greece is „Women's or girls’ blouses, shirts and shirt-blouses, knitted or

crocheted (excl. singlets and jackets)”.

o Main competitors on the leading market are Macedonia and Italy.

18

o Although the Greek market is not characterised by high level of dependence on

imports of the examined product group, Bulgaria is the main importer there,

suggesting that the efforts of the Bulgarian manufacturers should be aimed at

strengthening the strong market positions of Bulgaria.

Jerseys, pullovers, cardigans, waistcoats and similar articles, knitted or crocheted

o Main markets are again Germany and Italy, followed by Spain.

o The main product in this group with the largest export to the leading market of

Italy is “Men’s or boy’s jerseys, pullovers, cardigans, waistcoats and similar

articles, of wool, knitted or crocheted (excl. jerseys and pullovers, containing

>=50% with article weight >=600 g, and quilted jackets”, a product with high

level of processing in Bulgaria.

o Main competitors on the leading market are China (one of the biggest and

established manufacturers worldwide) and Tunisia.

o The increasing total imports of the examined product group in Italy, along with

declining exports over the analysed period, make the Italian market perspective

for the Bulgarian manufacturers.

T-shirts and singlets and other vests, knitted or crocheted

o Main markets are Germany, Greece and Italy.

o Our main competitors on the leading market are Turkey, Bangladesh and

China, which are among the leading manufacturers worldwide, with

established traditions in the production of this type of products.

o Bulgaria ranks 10th

among the main suppliers of T-shirts and singlets, knitted

and crocheted on the German market and in 2010 the Bulgarian import

accounts for 1,52% of total imports of Germany. The increasing trade balance

of Germany shows strong dependence on imports of the examined product

group. From this perspective, the German market is perspective for the

Bulgarian manufacturers and more efforts should be invested in promoting

national production with view to increasing our market share.


trousers, bib and brace overalls, breeches and shorts (other than swimwear), knitted

or crocheted

o Main markets are again Germany, Greece and Italy.

o The main product in this group with the largest export to the leading market of

Greece is “Women's or girls' skirts of synthetic fibres, knitted or crocheted

(excl. divided skirts) – a product with high level of processing in Bulgaria.

o Our main competitors on the leading market are Italy and Spain.

o The increasing trade balance deficit of Greece, along with Bulgaria’s ranking

among the leading suppliers of the analysed product group on the Greek

market, determines its primary importance and good perspectives for the


Trunks, suit-cases, vanity-cases, executive-cases, brief-cases, school satchels, spectacle

cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters

and similar containers; travelling bags, insulated food bags



19

o The main market of Bulgaria is Italy. It is only on this market that we maintain

our market share in 2009 and 2010, while shares on the French, German,

Belgium and Romanian market decreased in 2010 compared to 2009.

o The main product in this product group with highest export of the leading

market Italy is “Handbags, whether or not with shoulder straps, incl. those

without handle, with outer surface of plastic sheeting”.

o Main competitors on the leading market are China and France.

o Both imports and exports of Italy of “Trunks, suit-cases, vanity-cases,

executive-cases, brief-cases, school satchels, spectacle cases, binocular cases,

camera cases, musical instrument cases, gun cases, holsters and similar

containers; travelling bags, insulated food bags” register growth in 2010

compared to 2006. The growth of imports (24.73%) exceeds export (19,58%)

which makes the Italian market promising for the Bulgarian producers.

Articles of apparel and clothing accessories, of leather or of composition leather

o The main market of Bulgaria is again Italy.

o The main product in this product groups with the largest export on the leading

market Italy is “Belts and bandoliers with or without buckles, of leather or of

composition leather”.

o Main competitors on the leading market are China and India.

Footwear with outer soles of rubber, plastics, leather or composition leather and

uppers of leather

o The main market of Bulgaria is Italy, followed by Hungary.

o The main product of this product group with the largest export to the leading

market Italy is “Women’s and girl’s footwear with outer soles of rubber,

plastics, leather or composition leather and uppers of leather, with insole of

length 24 cm or more (excl. those covering the ankle, with a

protective metal toecap; or a base platform of wood)”.

o Our main competitors on the leading market are China and Romania.

o The increasing total volume of imports of the analysed product group in Italy

over the studied period, along with the small share of the Bulgarian import in

the total Italian import in 2010, determines the high level of perspective of this

market for the Bulgarian manufacturers.

Parts of footwear (including uppers, whether or not attached to soles other than outer

soles); removable in-soles, heel cushions and similar articles, gaiters, leggings and

similar articles and parts thereof

o Main markets of Bulgaria are Italy, Romania and Greece.


market Italy is “Footwear uppers and parts thereof (other than stiffeners)” –

product with low level of manufacturing in Bulgaria.

o Our main competitors on the leading market are Tunisia and Romania.

o The increasing total volume of imports of the analysed product group in Italy

over the studied period, along with the small share of the Bulgarian import in

20

the total Italian import in 2010, determines the high level of perspective of this

market for the Bulgarian manufacturers.

Other footwear

o The main market of Bulgaria is again Italy, followed by Hungary.


market Italy is “Footwear with uppers of leather or composition leather (excl.

those with outer soles of rubber, plastics, leather or composition leather, and

orthopaedic shoes)” – product with high level of processing in Bulgaria.

o Our main competitors on the leading market are China and Romania.

o The increasing total volume of imports of the analysed product group in Italy,

along with the increasing share of the Bulgarian import over the examined

period, determining the high level of perspective of this market for the


Footwear with outer soles of rubber, plastics, leather or composition leather and

uppers of textile materials

o The main market of Bulgaria is again Italy.


market Italy is “Slippers and other house shoe with outer soles of rubber and

uppers of textile materials (excl. sports footwear, tennis shoes, basketball

shoes, training shoes and the like)”.

o Main competitors on the leading market are China and Vietnam, leading

manufacturers worldwide, with established traditions in production.

o The increased share of the Bulgarian import in Italy in 2010 compared to 2009,

along with the registered growth of total imports of the examined product

group on the Italian market, show that this market is perspective for the

Bulgarian export.

Traditional markets for sector “Manufacture of wearing apparel, including leather

apparel; tanning of leather”:

Traditional markets for the goods produced by sector “Manufacture of wearing apparel,

including leather apparel; tanning of leather” are the EU countries, mainly Greece, Germany,

Italy, Spain, and France.

Germany, Italy, France and Greece are traditional markets for the products of the sector.

Germany, Italy, Spain and France are in top 10 of the biggest consumers worldwide, an

argument in favour of their selection for priority target markets of the main product groups in

sector “Manufacture of wearing apparel, including leather apparel; tanning of leather”.

Markets with development potential for sector “Manufacture of wearing apparel,

including leather apparel; tanning of leather”:

The markets of the EU countries rank first among the potential markets where the Bulgarian

products are traded at present and will be traded in future as well. Other markets with big

potential are the East Asian markets and the markets of USA and Canada.

21

CONCLUSIONS:

Data on our main markets in the EU show that the export of analyzed product groups is

focused mainly on the markets of Italy and Germany – both markets are characterized by

huge number of consumers, substantiating their perspective from the point of view of the


Regarding the predominating part of the analyzed product groups, the main competitors

of Bulgaria are China and Turkey, i.e. among our main competitors are big world

manufacturers with established traditions, with possibility to use a number of advantages

from viewpoints of export, for example cheap workforce (respectively, lower cost end

products) and economies of scale. Another important competitor is Romania, due to

similar production characteristics and development possibilities with this country.

Bulgaria usually ranks among the top importers on the Greek market, which is due

mainly to the relatively smaller scale of the market, its geographic proximity to Bulgaria,

and the established relationships between the two countries.

As a whole, the volume of Bulgaria’s export to non-EU countries is quite smaller

compared to that of our EU competitors, ranking usually Bulgaria to rear position among

the main suppliers.

The main reason for working CMT and not developing own collections (trademarks) is

the lack of state policy and support for the participation in fairs and shows in order to

demonstrate own collections and impose Bulgarian trademarks. The development of own

trademark is costly process, time-, funds and human resource consuming. A number of

years are necessary in order to establish a trademark on the market and to conquer stable

market positions, resulting in profits for the manufacturer. Imposing a particular

trademark on the international market means not only to develop a collection, but also

serious advertising, including: the organisation of fashion-shows on world platforms,

attraction of celebrities for the product advertising, aggressive advertising via all channels

(leading world fashion magazines, TVs, etc.). The Bulgarian manufacturers do not

dispose of free financial resources to be entirely designed for the development and

imposing of own collections. Moreover, they have small production capacity and are not

able to meet big orders. Therefore, at present it is more profitable for the Bulgarian

manufacturers to work as sub-contractors for leading world manufacturers. The

predominating micro, small and medium-size enterprises in the sector would difficultly

compete with already imposed world trademarks on foreign markets.

Estimates of development by 2015 are prepared for each of the analyzed product groups.

Simulations of the trend lay on establishing the analytical form of the function through

which regularities in the development of exports of each product group in 2001 - 2010 are

expressed, and estimating the values of the parameters of the function used. In modeling

exports, linear or logarithmic regression is used depending on the regularities manifested

in the output period. Regressions are calculated by using the values for each year, not just

in the first and last year of the period. The obtained results are presented on the following

figure.

22

Prognosis for the development of exports by product groups until 2015

0

50000

100000

150000

200000

250000

300000

350000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Women's or girls' suits

Men’s or boys’ suits

Women’s or girls’ overcoats

Women’s or girls’ blouses

Jerseys, pullovers, cardigans

T-shirts, singlets and other vests

Women's or girls' suits, knitted or crocheted

Trunks, suit-cases

Wear apparel and clothing accessories of leather

Footwear with uppers of leather

Parts of footwear

Other footwear

Footwear with uppers of textile materials.

Source: International Trade Centre and own calculations

23

SMEs in sector “Manufacture of wearing apparel, including leather apparel; tanning of

leather”

The available information for making informed management decisions for supporting

SMEs on perspective markets is extremely low. All analysis made for different product

groups and markets will remain just an intellectual exercise if no way is found in the

future, including through clearly formulated requirements to the NSI, for providing the

necessary information.

However, data from the survey of SMEs do not contradict to the analysed priority export

destinations – the main markets of the companies included in the survey are in EU

countries.

Main competitors of the interviewed SMEs are companies from China, Romania, Turkey,

Italy and France.

The main advantages of the EU competitors are related to two principle aspects:

first, the production process itself - low prices of competitors’ products (according to

88% of the respondents) and higher productivity of the competitors;

second, the support by the state for export orientated policy - in the range from more

general answers to concrete examples.

All listed advantages of the competitors should be considered as deficits for the Bulgarian

exporters.

The competitiveness of the Bulgarian wearing apparel is determined also by the fact that

most of the companies in the sector, according to the interviewed representatives of

companies with export potential, have clear and well grounded export strategy.

Unfavourable factors, leading to lower competitiveness and more limited possibilities for

export realization is the low developed research and development activity, the lack of local

raw materials, international certificates and own trademark.

The findings and conclusions give grounds to expect that in the next five years the

Bulgarian export of wearing apparel, including leather apparel; tanning of leather,

manufactured by SMEs will grow, although slowly, and at the beginning of the period it

will reach the 2009 level, while at the end of the five-year period exports of Bulgarian

SMEs in the sector are expected to exceed 1,6 billion BGN.

24

34.65%

12.43%

50.37%

2.55%

Bulgaria

Others

Turkey

China

EXPORT PRIORITY PRODUCT GROUPS IN THE SECTOR AND MAIN

MARKETS

The analysis of product groups in sector “Manufacture of wearing apparel, including leather

apparel; tanning of leather” allows determining the leading product groups with export

priority and the concrete markets. The selection is made on the basis of the following criteria:

share in the export of the sector, increasing export in the period 2001 – 2010, share on the

global market and concentration of SMEs in the sub-sector.

The graphs interpret the data for the Bulgarian export in 2010, presented in detail in the

Appendix to the Export Strategy. Data used are taken from the International Trade Centre

(www.intracen.org).

For each of the selected product groups, the main market in 2010 in the EU and out of the EU,

the main suppliers and their market share are shown below.



Main EU market

GERMANY

Main non-EU market

CANADA

http://www.intracen.org/

25

26.05%

10.90%

10.26%

49.82%

2.97%

Bulgaria

Other

Bangladesh

Turkey

China

29.86%

12.38%

10.03%

45.04%

2.69%

Bulgaria

Others

Sri Lanka

China

Bangladesh

55.80%

11.33%

4.41%3.98%

20.85% Others

France

Bulgaria

Romania

China

Men’s and boys’ suits, ensembles, jackets, blazers, dresses, skirts,

divided skirts, trousers, bib and brace overalls, breeches and shorts

(other than swimwear)

Main EU market

GERMANY

Main non-EU market

TURKEY

Overcoats, car-coats, capes cloaks, anoraks (including ski-jackets),

wind-cheaters, wind-jackets and similar articles other than those of

heading 6204

–

Main EU market

ITALY

Main non-EU market

SERBIA

26

24.55%

18.19%

13.98% 9.03%

34.22%

0.03%

Bulgaria

Others

Cambodia

Indonesia

Vietnam

China

Women’s or girls’ blouses, shirts and shirt-blouses, knitted or

crocheted

Main EU market

GREECE

Main non-EU market

USA

Women's or girls' suits, ensembles, jackets, blazers, dresses, skirts, divided

skirts, trousers, bib and brace overalls, breeches and shorts (other than

swimwear), knitted or crocheted

– плетени, за жени или момичета

Main EU market

GREECE

Main non-EU market

USA

21.25%

13.91%

11.38%

8.67%6.97%

37.82% Others

Germany

China

Spain

Bulgaria

Italy



27

It is obvious from the graphs above, that the Bulgarian export of sector “Manufacture of

wearing apparel, including leather apparel, tanning of leather” is almost entirely designed for

the European Union, as our main markets are Germany, Italy and Greece. This puts us in a

strong dependence on the dynamics of markets in a small number of importer-countries and

any more serious shock and shrinkage in consumption in these markets affects extremely

negatively the national manufacturers. We have slightly bigger market shares in these

countries, which for various product groups vary from 2,5% to 39%, as our best positions are

in the groups of knitted and crocheted clothing.

The Bulgarian presence on non-EU markets is almost negligible.

Possible measures for promoting the export to existing and entering new markets would

include:

Preparing reports on the condition of respective markets and studies of the

consumption of certain products;

Support for the participation of foreign visitors (manufacturers and consumers) to

Bulgarian exhibitions and fairs;

Support for the participation of SMEs in the sector in international and national fairs

and exhibitions where the leading manufacturers and importers take part, such as:

Footwear fair, Riva del Garda, Italy, The fairs in Düsseldorf and Munich, Germany,

PREMIERE VISION, Paris, MICAM – footwear and leather articles, Milan; the fairs

in Guangzhou and Shanghai (leather and footwear), China;

Development and implementation of annual programme of fairs and exhibitions,

which are important for manufacturers in the sector;

Parts of footwear (including uppers, whether or not attached to soles other

than outer soles); removable in-soles, heel cushions and similar articles,

gaiters, leggings and similar articles and parts thereof

–

Main EU market

ITALY

Main non-EU market

Belarus

28

Development of a programme for presenting the manufacturers in sector “Manufacture

of wearing apparel, including leather apparel; tanning of leather” in specialized

exhibitions, organized in countries with perspective markets, such as the International

leather goods fair „Le Show”, Moscow; the International fashion fair CPM, Moscow;

International Fashion fair Kyiv Fashion, Kiev, Ukraine; Specialized leather goods fair,

Istanbul, Turkey; Istanbul fashion and prêt-a-porter fair, Istanbul, Turkey;

Creation of networks or clusters of Bulgarian manufacturers for easier entry and

establishment on new markets;

Creation and dissemination of information and advertising materials, analyses and

catalogues for promotion of sector “Manufacture of wearing apparel, including leather

apparel; tanning of leather” abroad.

Organizing „Days of Bulgaria” in the embassies by countries and advertising of the

Bulgarian manufacturers in the sector.

BARRIERS TO THE INTERNATIONALIZATION OF SMALL AND MEDIUM

ENTERPRISES AND MEASURES FOR THEIR OVERCOMING

The barriers to internationalization of SMEs in sector “Manufacture of wearing apparel,

including leather apparel, tanning of leather” and the measures preferred by companies for

their overcoming and export promotion are identified and analysed on the basis of the

company survey.

Estimation of the severity of barriers to the export of enterprises and the sector in

general in 2007 – 2011

For the company

Barriers (obstacles) Very

serious

obstacles

Serious

obstacle

Not a

serious

obstacle

Not an

obstacle

Number of

companies

Number of

companies

Number of

companies

Number of

companies

1. High production costs of goods and

services

2 10 11 3

2. High costs for exporting 0 12 8 6

3. Insufficient quality of goods and services 1 2 9 15

4. Lack of qualified personnel to ensure

quality in a longer period

3 5 9 9

5. Lack of experience in foreign trade 3 4 5 14

6. Language barriers 3 3 10 10

7. Unfavourable business environment in

Bulgaria

7 11 4 5

29

For the company

Barriers (obstacles) Very

serious

obstacles

Serious

obstacle

Not a

serious

obstacle

Not an

obstacle

Number of

companies

Number of

companies

Number of

companies

Number of

companies

8. High risk on different foreign markets 5 8 10 3

9. Customs and non-tariff restrictions from

other countries

2 5 8 11

10. Lack of support by the Bulgarian state

for exports

14 5 3 5

Source: Survey carried out with representatives of SMEs from the sector, 2011

It is obvious from the table that the most serious barriers to the export of SMEs in the

sector are the lack of support by the Bulgarian state for the export and the unfavourable

business environment in Bulgaria. Results do not differ significantly regarding the answers

of surveyed companies for the barriers to the sector in general.

Therefore, most of the proposed measures for overcoming the barriers to exports are

expected to be taken by the State. In general, the expectations of the companies are that the

state, in the face of its institutions, shall develop a purposeful and adequate policy for

promotion and support of the export of wearing apparel.

Most of the internal (to the enterprise) barriers to exports, related to technology level and

qualification of available human resources, are estimated to represent not a serious barrier

or not a barrier at all for the export of SMEs.

The analysis of proposed measures shows that companies address mainly external factors

which have to result in improvement of the situation. Proposals for technology

modernisation can be interpreted as internal for the companies.

The comparison of responses to questions related to the forms of support preferred by

companies in the current programming period 2007-2013 and in the next programming

period 2014-2020, however, suggests that technological level is also assumed as a factor

for which the state should take care of.

Prioritization of measures for promotion of small and medium enterprises 2007 – 2013 2014 – 2020

Priority Extremely high priority (very

large amounts of

funds must be

allocated)

High priority (large amounts

of funds must

be allocated)

Extremely high priority (very

large amounts of

funds must be

allocated)

High priority (large amounts of

funds must be

allocated)

Number of

companies

Number of

companies

Number of

companies

Number of

companies

1. Promoting exports of companies 8 15 12 11

2. Support for the technological

modernization of production

13 11 15 10

30

2007 – 2013 2014 – 2020

Priority Extremely high priority (very

large amounts of

funds must be

allocated)

High priority (large amounts

of funds must

be allocated)

Extremely high priority (very

large amounts of

funds must be

allocated)

High priority (large amounts of

funds must be

allocated)

Number of

companies

Number of

companies

Number of

companies

Number of

companies

3. Support for meeting standards of

the EU

7 11 10 10

4. Financing of innovative projects 6 10 9 8

5. Training and qualification of

employees in SMEs

6 12 7 9

6. Attracting direct foreign investment 11 5 11 9

7. Business cooperation and

participation in clusters

2 8 3 8

8. Consultancy and information

services

2 8 3 10

9. Improving access to funding 9 9 9 10

Source: Survey, carried out with representatives of SMEs from the sector, 2011.

Estimations of the importance of almost all priority measures for supporting SMEs in the

sector in the current programme period 2007-2013, identified by the survey, increase their

importance in the next programming period 2014-2020. This means that greater funds

should be allocated to implement these measures for the development of enterprises in the

sector.

Companies in the sector are entirely aware of the necessity in production modernisation in

order to be competitive, incl. on international markets, as well as of the lack of own

financial resources. This is further confirmed by the fact that measures with highest

priority in the next programming period 2014-2020 include the support for technological

modernization of production and, attracting direct foreign investments and improvement of

the access to funding.

Measures related to support for meeting the EU standards and funding of projects for the

development of new products and technologies are also considered high priority. This is

related both to the main markets where companies export their production (the EU) and the

necessity to answer their requirements, as well as to realizing the importance of

innovations for the presence of companies on international markets in future.

Companies in the survey gave the following answers regarding the information sources

these use and the additional information they need:

- Answers show that own investigations and Internet rank first as main and permanent

sources of information. Next come colleagues from the sector in Bulgaria and the

branch association. The information from state institutions is ranked last, as two-thirds

of the respondents answer that they do not use this information at all;

- The additional information needed by the surveyed companies is mainly in the field of

logistics and mechanisms for international trade payments.

31

Regarding estimations of the work of BSMEPA and answers to questions related to the

level of efficiency of various measures on exports, it is obvious that companies are

appreciating most the services of the Agency related to the organisation of participations in

international fairs and exhibitions, and the provision of information on international and

regional markets. In addition, different recommendations were made during the focus

group for improving the work of relevant the state institutions. More active involvement of

the branch associations in the process, better planning and timely organisation of the events

of interest to companies in the sector, were emphasized among the key factors of success.

On this basis, the following measures for overcoming the barriers to exports of SMEs can be

proposed, which are presented in detail in the Action plan:

Study of the non-exporting SMEs in the sector and analysis of their needs.

Development of a profile of export-orientated SMEs in sector “Manufacture of

wearing apparel, including leather apparel; tanning of leather”.

Development of annual programme for work with the non-exporting SMEs.

Supporting the participation in business delegations and business forums with

international participation with view to establishing contacts and attracting clients.

Providing access of SMEs to updated and useful information (market analyses,

distribution channels, custom and tariff regimes, etc.) in order to promote and support

the export.

Organization of specialized trainings, addressed at competitive enterprises, willing to

expand their export activity.

Support for introduction of the EU standards for quality management, working

conditions and environment management.

Support for the realization of products with own trademark.

Update of the strategy for development of sector “Manufacture of wearing apparel,

including leather apparel; tanning of leather”.

Development of working procedures of the Bulgarian trade representatives to assist

export-orientated SMEs in the sector.

Support for participation of SMEs in the sector in international and national

exhibitions and fairs, such as: the Shoe fair, Riva del Garda, Italy; the exhibitions in

Düsseldorf and Munich, Germany; PREMIERE VISION, Paris; MICAM – shoes and

leather articles, Milan; the exhibitions in Guangzhou and Shanghai (leather and

shoes), China.

Update of already established bilateral trade agreements.

Development of special programme for presenting manufacturers in sector

“Manufacture of wearing apparel, including leather apparel; tanning of leather” in

specialized exhibitions, organized in countries with perspective markets, such as: the

International leather goods fair „Le Show”, Moscow; the International fashion fair

CPM, Moscow; International Fashion fair Kyiv Fashion, Kiev, Ukraine; Specialized

leather goods fair, Istanbul, Turkey; Istanbul fashion and prêt-a-porter fair, Istanbul,

Turkey.

Development of models for entering new markets by SMEs in the sector.

32

Creation of networks or clusters for easier establishment of new markets.

Creation and dissemination of information and advertising materials, analyses and

catalogues for promotion and advertising of sector “Manufacture of wearing apparel,

including leather apparel; tanning of leather” abroad.

Organizing „Days of Bulgaria” in the embassies by countries and advertising of the

Bulgarian manufacturers in the sector.

33

3. SWOT AND LOED ANALYSIS OF SECTOR "MANUFACTURE OF

WEARING APPAREL, INCLUDING LEATHER APPAREL, TANNING

OF LEATHER”

SWOT ANALYSIS

The SWOT analysis is based on the idea of separating the object of strategic analysis from the

environment in which it operates. The object of strategic analysis is viewed in its "strengths”

and “weaknesses”. The environment in which the object of the strategic analysis functions is

differentiated into "opportunities” and “threats”.

Strengths. The strengths are resources, skills or some other advantage, which SMEs in the

sector possess from the viewpoint of exports. The strength is a distinctive competence that

gives a comparative advantage.

Weaknesses. The weaknesses are constraints or lack of resources, skills and abilities that

seriously impede the development of exports of SMEs in the sector.

Opportunities. The opportunities are the most favourable elements of the external

environment. These are favourable external factors, of which SMEs in the sector could benefit

in their exports.

Threats. The threats are the most unfavourable segments of the external environment. They

put the biggest barriers to the present or future (desired) state of affairs.

Strengths Opportunities

1. Traditions in manufacturing and export. 1. The sector is defined as export-orientated.

2. Qualified workforce. 2. Financial and expert support provided by

BSMEPA.

3. Competitive labour cost. 3. Project funding under EU structural funds.

4. Favourable geographical location,

expressed in proximity to raw materials and

main markets (EU countries).

4. Public incentives for the formation of

clusters, incl. export clusters.

5. Good technological equipment. 5. Improvement of the image of Bulgarian

wearing apparel and footwear on target and

potential markets and increase in demand.

6. Good price/quality ratio of manufactured

articles.

6. Attraction of new clients and orders as a

result of the crisis in North Africa and the

Middle East.

7. Flexibility of SMEs in the sector and

adaptability of the production. Specialization

mainly in small series production.

7. Revision of already concluded trade

agreements with countries which are

perspective markets (for example, Russia).

8. Strong export orientation of sector

“Manufacture of wearing apparel, including

leather apparel; tanning of leather”. Good

export image, stable positions.

8. Availability of EU strategy for

preservation and development of the sector in

the member-countries, particularly these in

Eastern Europe.

34

9. Strong branch associations (Bulgarian

association of apparel and textile producers

and exporters, Branch union of the LFFHI)

with good representation in international

associations (for example, EURATEX).

10. Established stable trade relationships

with key EU market for the sector.

Weaknesses Threats Threats

1. Strong dependence on a small number of

clients .

1. Shrinking of global consumption and

deepening of the global economic crisis.

2. Few professionals with foreign trade

experience.

2. Increased competitive pressure.

3. Insufficient experience in the organization

and participation in national and international

exhibitions.

3. Strong dependence of imported raw

materials. Increase in prices of raw materials

and electricity.

4. Insufficient knowledge for products on

foreign markets.

4. Strengthening the import regulations on

non-EU target markets.

5. Small number of companies with

registered own trademark.

5. Inefficient policy regarding export

insurance.

6. Low labour productivity. 6. Lack of reliable information regarding

export for decision-making in SMEs.

7. Low level of certification of the

production of SMEs, decreasing their export

opportunities.

7. Reduction of the number of Bulgarian

trade representatives on the existing markets.

8. Difficulties in providing working capital

(VAT, inter-company indebtedness, difficult

crediting).

8. Deepening of the human resources crisis in

sector “Manufacture of wearing apparel,

including leather apparel; tanning of leather”.

35

LOED ANALYSIS

LOED analysis is an instrument that helps identifying how to strengthen the positive effect of

the examined process and to neutralize the negative effects. The word is an acronym from the

letters of words in English - lever, overcome, exploit, and defend. LOED analysis shows how

strengths can be levered, weaknesses – overcome, and how to exploit the opportunities and

defend against the threats identified by the SWOT analysis.

Build on strengths Use of opportunities

Study of non-exporting SMEs in the sector

and analysis of their needs

Actualization of already established bilateral

trade agreements (for example with Russia)

Development of profile of export-oriented

SMEs from sector “Manufacture of wearing

apparel, including leather apparel; tanning of

leather”

Creation of networks or clusters for easier

entrance and establishment on new markets.

Actualization of the strategy for development

of sector “Manufacture of wearing apparel,

including leather apparel; tanning of leather”

Support for participation of SMEs in the sector

in international and national exhibitions and

fairs, such as: the Shoe fair, Riva del Garda,

Italy; the exhibitions in Düsseldorf and Munich,

Germany; PREMIERE VISION, Paris;

MICAM – shoes and leather articles, Milan; the

exhibitions in Guangzhou and Shanghai (leather

and shoes), China

Organizing specialized trainings, addressed

at competitive enterprises, willing to expand

their export activity

Development of special programme for

presenting the manufacturers from sector

“Manufacture of wearing apparel, including

leather apparel; tanning of leather” in

specialized exhibitions, organized in countries

with perspective markets, such as: the

International leather goods fair „Le Show”,

Moscow; the International fashion fair CPM,

Moscow; International Fashion fair Kyiv

Fashion, Kiev, Ukraine; Specialized leather

goods fair, Istanbul, Turkey; Istanbul fashion

and prêt-a-porter fair, Istanbul, Turkey

Support for introduction of the EU standards in

quality management, working conditions and

environmental management

Overcome weaknesses Defence against threats

Development of annual programme for

working with non-exporting SMEs. Training

in marketing and participation in fairs

Development of models for entering new

markets by SMEs in the sector

Providing SMEs with access to updated and

useful information (market analysis,

distribution channels, custom and tariff

Organizing „Days of Bulgaria” in our

embassies by countries and promotion of the

36

policy, etc.) in order to promote and support

exports

Bulgarian manufacturers from the sector

Supporting the participation in business

delegations and business forums with

international participation with view to

establishing contacts and attracting clients.

Development of working procedures of the

Bulgarian trade representatives, in order to

assist the export-orientated SMEs in the sector.

37

4. VISION AND OBJECTIVES

VISION

The studies and analyses of the current state of sector “Manufacture of wearing apparel,

including leather apparel; tanning of leather” show that the sector has the potential to maintain

its importance for the national economy, and in particular for the Bulgarian export, increasing

at the same time its effectiveness.

The vision for the future of the sector, which this strategy aims at, is the following:

Maintaining the relative share of the export from the sector in total exports of the country

Maintaining the relative share of the export would mean a significant increase of its value,

since certain revival and development is assumed in other export orientated sectors of the

Bulgarian economy as well. On the other side, the importance of the sector will be retained in

the creation of employment and income growth.

OBJECTIVES

To the ends of realization of the vision, efforts should be directed at the following strategic

and specific objectives:

1. Strategic objective 1 – Increasing the export potential of SMEs in sector

“Manufacture of wearing apparel, including leather apparel; tanning of leather”

One of the most serious challenges faced by national manufacturers in sector “Manufacture of

wearing apparel, including leather apparel; tanning of leather” is the considerable growth of

international competition as a result of the liberalization of global trade in the last years. The

situation in the new world economy order proves that being competitive on the international

market does not depend entirely on advantages stemming from cheap labor force.

Competitiveness depends on a wide range of factors, resulting in good quality of production

at reasonable prices and high flexibility of companies. On the other hand, the situation on the

international markets, although dynamic, shows a return of many West European assignors,

working until recently in the Far East, to the production on the Balkans and in Bulgaria,

particularly. Obviously, this trend will persist due to the need in prompt, precise and reliable

supplies, as well as of small series production. The EU policy for keeping this production in

Europe also favours the development of the sector in Bulgaria, promising good growth

chances in the following 7-10 years.

38

In order to realize this strategic object, the following specific objectives are formulated:

Specific objective 1 – Increasing the number of export-orientated SMEs in the

sector;

Specific objective 2 – Raising the competitiveness of exporting enterprises.

2. Strategic objective 2 – Increasing the market share of the products of SMEs in sector

“Manufacture of wearing apparel, including leather apparel; tanning of leather” on the

global market

Expanding the presence of the Bulgarian enterprises in sector “Manufacture of wearing

apparel, including leather apparel; tanning of leather” on the global market needs persistent

and purposeful actions. The approach to keeping existent markets differs from that for

entering new ones. While sub-contractor companies work traditionally for leading companies

mainly from the European Union, attracting investments and conquering new markets is

related to a number of difficulties, even political. To overcome these difficulties, the joint

actions are necessary of the Bulgarian manufacturers, branch associations and the state, in

observing the rules of fair competition. In this relation, actions are proposed for each of the

objectives that shall be undertaken at micro (SME), meso (branch associations) and macro

(state) level.

In order to realize this strategic object, the following specific objectives are formulated:

Specific objective 1 – Increasing the market share of the Bulgarian goods and services

on the existing markets

Specific objective 2 – Entering new markets

39

5. STRATEGY FOR PROMOTING THE EXPORT OF SMEs IN THE

SECTOR

There are different alternatives of development for attaining the objectives and in this case

two main scenarios were estimated, namely:

1. Maintain the present structure of state institutions supporting business, including the

existing relationships between them and with export-oriented SMEs in sector

“Manufacture of wearing apparel, including leather apparel; tanning of leather”.

2. Change the structure and transfer the functions of SME support to units and structures

dealing with financing of projects under EU funds and by the state budget, similar to

the model of Operational Programs or the Program for Rural Development.

These scenarios were assessed by the following criteria:

1. Possibility for implementation of the selected scenario within a 5-year period;

2. Practices of supporting export-oriented SMEs in other EU member-states;

3. Estimation of the efficiency of business supporting activities performed by established

specialized structures or by existing programs supporting SMEs on a project basis.

The carried out analysis shows that:

The transition from the presently existing system to a new one on a project

basis will take more than 5 years. Moreover, according to the existing rules for

the period till 2013, this is actually impossible, since all priorities and activities

of operational programs are clearly defined. Such an approach, if possible, for

the next programming period 2014-2020, should be put to negotiations, but in

practice it will again take several years for its actual launch, like the start of OP

in all EU countries for 2007-2013.

The Bulgarian model through BSMEPA is preferred by the major part of the

EU member-states and, although with varying success in different countries,

there is no tendency observed for changes in the near future.

Reported difficulties in the accomplishment of business projects under

operational programs, such as OP “Competitiveness”, indicate that the

efficiency of supporting export-oriented SMEs, regardless of being subject to

critics due to lack of funds and proper focusing, is at relatively much higher

level than the results achieved by business under project designed measures.

Considering the above conclusions, the first alternative was chosen, namely – the drafting of

Export strategy for SMEs in sector “Manufacture of wearing apparel, including leather

apparel; tanning of leather” to be based on the understanding that all measures undertaken will

fall in the frame of the presently existing structures within their actual capacities.

In strategic perspective, the chosen alternative will require both general measures for the

whole system of supporting SMEs, as for example, raising the institutional capacity,

introduction of clear and measurable indicators and criteria for evaluation of their work

efficiency and support to the business, etc., as well as specific changes, related particularly to

sector “Manufacture of wearing apparel, including leather apparel; tanning of leather”, as for

example, sector oriented work approach. As far as this was not an object of analysis and study

of the present strategy document, it would be probably a part of the elaboration of institutional

strategy of the related public administrations.

40

The present Export strategy for SMEs in sector “Manufacture of wearing apparel, including

leather apparel; tanning of leather” provides for the following main steps, related to improving

the support of export orientated SMEs:

1. Creation of the basis for adequate and professional management of the processes of

supporting export orientated SMEs through determining their possible scope – number

and characteristics of export orientated SMEs, use of information from the developed

profile and information from the business in order to formulate precisely the needs of

the business in support, by both the especially created institutions and through other

forms, for example, the project principle, creation of a model for successful

communication with businesses to be supported, etc.

2. Elaboration of the necessary programmes, policies and measure for support SMEs to

export on foreign markets, through measures, designed on markets where existing

positions shall be kept or expanded, joint work with units, disposing of direct

possibilities to support export (for example, foreign trade representatives and MEET),

as well as measures with routine nature (for example), participation in fairs, missions,

visits, etc.;

3. Measures, directed at certain deficits in export orientated SMEs presenting barriers for

their development in export terms, for example: support for the technology

modernisation of SMEs in relation to improving their export positions, creation of

export companies to increase SMEs export; advertising campaigns for rising the

recognizing of Bulgarian products and improving the image of the Bulgarian business,

etc.

4. Measures, directed at increasing the capacity of SMEs, mainly through different

training programmes.

Considering the deadlines of the Export strategy for SMEs in sector “Manufacture of wearing

apparel, including leather apparel; tanning of leather” the envisaged steps are realistic and

could contribute to achieving real results in export supporting.

The political will to provide the funds necessary for implementing of the strategy is also an

important prerequisite for its successful implementation.

41

6. ACTION PLAN

Due to the mid-term 5-year horizon of the Strategy, measures in the Action Plan are

concretely formulated.

Envisaged financial resources are indicative, but they are consistent with the realistic

opportunities to increase the budget of BSMEPA. Estimated resources from Operational

Programs in the next programming period are rather contingent, as the allocation rules are not

yet finally adopted by the EU. At the same time, it is crucial that BSMEPA and MEET defend

fair requests for funds especially for this leading export sector of the country and for the

development of SMEs, which are the backbone of every economy.

In compliance with the selected model, for all envisaged measures specific actions are defined

to be implemented at micro (SME), meso (branch organizations) and macro (state) level.

On the basis of analysis of exports of different product groups, important and priority

markets for the sector are identified. However, as mentioned above, data is not available on

the participation of SMEs on those markets. Therefore, in order to suggest indicative

promotional measures on the identified markets, it is assumed that in crisis periods the efforts

should be directed both at preserving the existing market positions and entering new markets

as well but rather at conquering new markets. The fact that Bulgarian exports are already

made on the existing markets, allows assuming that this will be an advantage for SMEs which

orient to these same markets.

42

ACTION PLAN

Objectives and measures Implementat

ion deadline

Responsible

institutions

Financial

resources Funding sources Expected results Implementation

indicators

1. STRATEGIC OBJECTIVE 1: Increasing the export potential of SMEs in sector “Manufacture of wearing apparel, including leather

apparel; tanning of leather”

1.1. Specific objective 1: Increasing the number of export-oriented SMEs in the sector

1.1.1. Study of non-exporting SMEs in

the sector and analysis of their needs

12.2012 BSMEPA,

BAATPE and BU

of the LFFHI

5 000 BGN Budget of BSMEPA Prepared report

on SMEs in the

sector which

have not realized

exports until end-

2011 but have

such potential

Number of SMEs

to work with in

order to help

them enter

foreign markets

Micro level:

- providing of information

Meso level:

- encouraging and supporting companies to submit information;

- analysis of the needs of SMEs from the sector

Macro level:

- analysis of the needs of SMEs from the sector and overall coordination of the process, incl. preparing a report

1.1.2. Development of profile of

export-orientated SMEs from sector

“Manufacture of wearing apparel,

including leather apparel; tanning of

leather”

12.2012 BSMEPA 10 000

BGN

Budget of BSMEPA Developed

criteria to

determine

whether a SME

has export

potential

Published

criteria

Micro level:

43


ion deadline

Responsible

institutions

Financial


indicators

- providing of information

Meso level:

- encouraging and supporting companies to submit information;

- assisting BSMEPA in the development of criteria for export-orientated SMEs

Macro level:

- development of criteria for export-orientated SMEs

- development, maintenance and update of the database for export orientated SMEs from the sector

1.1.3. Development of annual

programme for working with non-

exporting SMEs.

12.2012 BSMEPA,

BAATPE and BU

of the LFFHI

15 000

BGN

Budget of BSMEPA Elaborated

programme

Increased

number of

exporting SMEs

Micro level:

- participation in trainings in marketing and participation in fairs

Meso level:

- development, together with BSMEPA, of annual programme for working with SMEs

Macro level:

- development, together with the branch associations, of annual programme for working with SMEs

- organizing of trainings of experts from SMEs in the sector in marketing and participation in fairs

1.1.4. Supporting the participation in

business delegations and business

forums with international

participation with view to establishing

contacts and attracting clients

Permanent MEET, BSMEPA 100 000

BGN

per year

Budget of BSMEPA, OP

“Competitiveness”,

donors

Developed

annual

programme for

participation in

business forums

and delegations

Number of

organized

business

delegations and

forums; number

of participating

SMEs; number of

established

contacts as a

result of these

participations

44


ion deadline

Responsible

institutions

Financial


indicators

Micro level:

-participation in business delegations and forums

Meso level:

- providing information to BSMEPA for the needs of developing annual programme for participation in business forums and delegations

- submission of opinions on the developed annual programme for participation in business forums and delegations

Macro level:

- development of annual programme for participation in business forums and delegations

- overall coordination of the implementation of the programme for participation in business forums and delegations

- maintenance of database for the programme, incl. carried out business delegations and forums; participating SMEs; contacts established as a result of these

participations

1.2. Specific objective 2: Raising the competitiveness of exporting enterprises

1.2.1. Providing SMEs with access to

updated and useful information

(market analysis, distribution

channels, custom and tariff regimes,

etc.) in order to promote and support

exports

Permanent BSMEPA, OTEA 50 000

BGN per

year

Budget of BSMEPA,

OP “Competitiveness”

Created internet

portal

Number of users

of the portal

Micro level:

- active searching of information to increase the export

Meso level:

- encouraging and supporting the companies to use the provided information

Macro level:

- development of internet portal and permanent update of the information on it

1.2.2. Organizing specialized

trainings, focused on competitive

enterprises, willing to expand their

export activity

Permanent BSMEPA, ABI 100 000

BGN per

year


“Competitiveness”

Developed

training

programme and

organized

Number of

trained

specialists;

number of SMEs,

which expanded

45


ion deadline

Responsible

institutions

Financial


indicators

trainings their export

activity

Micro level:

- participation in the organized trainings

Meso level:

- submitting opinions on the materials, developed by BSMEPA and ABI

- encouraging the participation of SMEs in the organized trainings

Macro level:

- development of training programmes

- organizing trainings of experts from SMEs in the sector

1.2.3. Support for introducing the EU

standards for quality management,

working conditions and environmental

management

12.2013 BSMEPA, MEET,

BAATPE, BU of

the LFFHI

According

to

published

grant

schemes

OP “Competitiveness” Bulgarian SMEs

meet the EU

standards for

quality, working

conditions and

environmental

management

Number of SMEs,

which introduced

the EU standards

Micro level:

- participation in projects under OPC for introduction of the EU standards

Meso level:

- encouraging the participation of SMEs in projects for introduction of the EU standards

Macro level:

- providing of information about the available grant schemes and encouraging the participation of SMEs in projects for introduction of the EU standards

1.2.4. Support for the realization of

products with own trademark

06.2014 BSMEPA, MEET,

BAAPTE, BU of

the LFFHI

200 000

BGN total

for the

period

OP “Competitiveness”,

budget of

MEET/BSMEPA

Bulgarian SMEs

have developed

their own

trademarks

Number of

companies,

exporting own

trademarks; sales

46


ion deadline

Responsible

institutions

Financial


indicators

on existing

markets; sales on

new markets

Micro level:

- development of own collections

Meso level:

- trainings in marketing and sales of products with own trademark

- promotion and support of the participation of SMEs in fashion shows and exhibitions on target markets

Macro level:

- Ensuring the assistance of OTEA by countries; for the next planning period OP “Competitiveness” should provide for schemes to stimulate companies, selling

and exporting products with their own trademark

2. STRATEGIC OBJECTIVE 2: Increasing the market share of the products of SMEs in sector “Manufacture of wearing apparel,

including leather apparel; tanning of leather” on the global market

2.1. Specific objective 1: Increasing the market share of the Bulgarian goods and services on the existing markets

2.1.1. Update the strategy for

development of sector “Manufacture

of wearing apparel, including leather

apparel; tanning of leather”

On annual

basis

BSMEPA,

BAATPE, BU of

the LFFHI

15 000

BGN per

year

MEET/BSMEPA Updated sector

strategy

Micro level:

- providing information and opinions

Meso level:

- providing information, incl. by participation in sociological surveys,

- participation in discussions for identifying barriers to exports, SWOT analysis, objectives, measures, etc.

Macro level:

- overall coordination of the process of elaboration, updating and implementation of the export strategy of the sector

2.1.2. Development of working

procedures of the Bulgarian trade

representatives, aimed at assisting

12.2012 MEET, BSMEPA,

OTEA

20 000

BGN

Budget of BSMEPA and

OTEA

Developed

procedures

Number of

developed

procedures

47


ion deadline

Responsible

institutions

Financial


indicators

export-orientated SMEs in the sector.

Macro level:

- study of the needs of SMEs in the sector in information and services to be provided by the Bulgarian trade representatives

- elaboration of working procedures of the Bulgarian trade representatives to the benefit of SMEs in the sector (incl. preparation of business forums,

assistance for meetings with business partners, acquainting SMEs with specific trade practices, etc.)

2.1.3. Support for participation of

SMEs in the sector in international

and national exhibitions and fairs,

such as: the Shoe fair, Riva del

Garda, Italy; the exhibitions in

Düsseldorf and Munich, Germany;

PREMIERE VISION, Paris; MICAM

– shoes and leather articles, Milan;

exhibitions in Guangzhou and

Shanghai (leather and shoes), China

Permanent MEET, BSMEPA,

OTEA by

countries

2 000 000

BGN per

year



Developed

annual program

of exhibitions and

fairs, which are

important for

manufacturers in

the sector

Number of

participating

SMEs

Micro level:

- participation in organized international and national exhibitions and fairs

Meso level:

- submitting proposals for organization of exhibitions and fairs (incl. with regard to time and deadlines for informing participants, vision and organization of

the national stand, related events, etc.)

- encouraging SMEs to participate in the organized national/international exhibitions and fairs

- providing opinion on the developed annual programme of exhibitions and fairs which are important for manufactures in the sector

Macro level:

- development and implementation of an annual programme of exhibitions and fairs, important for manufactures in the sector

2.1.4. Updating of already established

bilateral trade agreements (for

example, with Russia)

Permanent MEET, BSMEPA

after proposal of

the branch

associations

Budget of BSMEPA Amended

bilateral

agreements,

adopted by the

Number of signed

updated

agreements

48


ion deadline

Responsible

institutions

Financial


indicators

CM of the RB

Meso level:

- elaboration of proposals to MEET and BSMEPA for updating of already established bilateral trade agreements

Macro level:

- preparation of the processes on updating of already established bilateral trade agreements, incl. submission of proposals to the CM of the RB

2.1.5. Development of special

programme for presenting

manufacturers from sector

“Manufacture of wearing apparel,

including leather apparel; tanning of

leather” in specialized exhibitions in

countries with perspective markets,

such as: International leather goods

fair „Le Show”, Moscow;

International fashion fair CPM,

Moscow; International Fashion fair

Kyiv Fashion, Kiev, Ukraine;

Specialized leather goods fair,

Istanbul, Turkey; Istanbul fashion

and prêt-a-porter fair, Istanbul,

Turkey

Permanent MEET, BSMEPA,

OTEA by

countries

100 000

BGN per

year


“Competitiveness”,

donors

Developed

program for

participation,

identified SMEs

with potential to

enter perspective

markets,

developed vision

of the Bulgarian

stands

Number of

participating

SMEs; number of

concluded deals,

as a result of

participations

Micro level:

- participation in organized specialized exhibitions

Meso level:

- providing opinion on the developed programme for participation in specialized exhibitions

- encouraging SMEs to participate in the organized specialized exhibitions

Macro level:

- development and implementation of special programme for presenting manufacturers from sector “Manufacture of wearing apparel, including leather

apparel; tanning of leather” in specialized exhibitions in countries with perspective markets

49


ion deadline

Responsible

institutions

Financial


indicators

2.2. Specific objective 2: Entering new markets

2.2.1. Development of models for

entering of the sector SMEs to new

markets.

10.2012 BSMEPA, OTEA 10 000

BGN

Budget of BSMEPA Elaborated

models, directed

at SMEs from the

sector regarding

the steps for

entering new

markets

Number of

developed and

adopted models

Macro level:

- elaboration of models for undertaking the necessary actions/steps by SMEs for entering new markets

2.2.2. Creation of networks or clusters

aimed at facilitating new market

entries.

06.2013 BAATPE, BU of

the LFFHI, SMEs

in the sector,

MEET

OP “Competitiveness”,

BSMEPA, own funds

Created

networks/clusters

aimed at entering

new markets

Number of

created

networks/number

of clusters in the

sector

Micro level:

- participation in export networks or clusters

Meso level:

- participation in the creation and development of networks or clusters

- encouraging the participation of SMEs in created networks and clusters

Macro level:

- participation in the creation and development of networks or clusters

- encouraging the participation in the creation and development of networks or clusters

2.2.3. Creation and dissemination of

information and advertising

materials, analyses and catalogues for

promotion of sector “Manufacture of

wearing apparel, including leather

apparel; tanning of leather” abroad

Permanent BSMEPA 60 000

BGN per

year



Developed

information and

advertising

materials for the

sector

Number of

attracted new

partners

50


ion deadline

Responsible

institutions

Financial


indicators

Micro and Meso level:

- providing information for development of materials

Macro level:

- development and dissemination of information and advertising materials, analyses and catalogues, promoting the sector

2.2.4. Organizing „Days of Bulgaria”

in the embassies by countries and

promoting of the Bulgarian

manufacturers from the sector.

Once each 2

years

MEET, BSMEPA,

OTEA

Budget of MEET Developed

programme for

organization of

“Days of

Bulgaria” by

countries

Number of

inquiries by

foreign

companies;

number of

established new

partnerships

Micro level:

- participation in the organized events

Macro level:

- development and implementation of programme of thematic “Days of Bulgaria” by countries

51

7. MONITORING AND CONTROL SYSTEM

It is of great importance for each strategic document, first, to be realized according to the

preliminary set objectives, deadlines and resources; second, to be sustainable over time and to

develop the laid down activities and effects. Therefore, it is recommended to supervise

(monitor) and evaluate the implementation of documents, as well as to outline adequate

actions, in order to correct and improve the activities set out therein.

Monitoring may be defined as: (a) inseparable part of the current project management (as is

accepted the realization of the export strategy for sector “Manufacture of wearing apparel,

including leather apparel; tanning of leather”, aiming at the achievement of certain change, in

the case - the improvement of export activity of SMEs in the sector); (b) an instrument,

helping to control the management and the decision-making process; (c) description of events

and conditions within a certain time period; (d) systematic collection of reliable, updated and

important information on the progress, changes and outcomes of the undertaken programme

activities. These essential characteristics of monitoring determine it as one of the most

important components of the management of strategic documents, programmes, projects, etc.

Evaluation on its turn represents a systematic review of concrete management activities to

provide information for the full range of short-term and long-term impacts on consumers. The

evaluation of a programme may include assessment of the workload, operating procedures or

personnel, but its main objective remains the effect and impact of the implementation of the

programme (the strategic document).

Therefore, monitoring shall establish the status and follow the progress made in the

implementation of different components and sub-components, and the strategy as a whole.

Monitoring shall also identify the emerging problems and the factors behind them, and

suggest the possible measures and solutions of these problems. The obtained information is

expected to be timely submitted at disposal of the responsible authority (mainly the BSMEPA

and MEET). The point is to allow these authorities and other competent state institutions, if

appropriate – undertake timely “corrective actions” to help achieving the objectives set in the

Strategy.

It should be underlined that if monitoring focuses on the observation of: (a) actions taken and

resources expended, (b) results achieved, (c) carrying out the process in time, (d) the effects

received, assessment is aimed at determining the extent to which the general and specific

objectives of the document are achieved and also includes a systematic review of specific

management operations to provide information about the full range of short and long-term effects.

The main points that should be observed in connection with the implementation of this Strategy

are:

Compliance with the schedule of activities;

Volume, speed and degree of resource use;

Achieved results;

Achievement of objectives and impact of the strategic document.

When the monitoring should take place? – The aim of current monitoring is to register the

effects and deviations from what was previously planned early enough, as to make their

correction possible before their consequences become too serious to overcome. It should not

be forgotten that monitoring has to be performed frequently enough to allow adjustment of

deviations from the plan.

52

Based on this methodology, the monitoring and evaluation of the implementation of this

Strategy involve the following sequence of actions:

1. Selection of criteria and indicators for monitoring and evaluation;

2. Monitoring of the implementation;

3. Comparison of achievements and targets;

4. Proposal and taking of corrective actions.

According to the adopted Strategy objectives and measures, the following basic monitoring

and evaluation indicators are proposed:

Number of SMEs to work with to the ends of their externalization;

Published criteria to determine whether a particular SME has an export potential;

Increase in the number of exporting SMEs;

Number of carried out business delegations and forums, number of participating

SMEs; number of established contacts as a result of such participation;

Number of users of the portal, containing updated and useful information (market

analyses, distribution channels, custom and tariff policies, etc.), aiming at encouraging and

supporting export;

Number of trained experts; number of SMEs, expanded their export activity;

Number of SMEs, introduced the EU standards;

Number of companies, exporting own trademark; sales on existing markets; sales

on new markets;

Number of developed working procedures for the Bulgarian trade representatives,

to help export orientated SMEs of the sector;

Number of SMEs in the sector, participating in international and national

exhibitions and fairs;

Number of signer updated agreements;

Number of SMEs participating in specialized exhibitions, organized in countries

with perspective markets; number of concluded deals, as a result of participations;

Number of developed and adopted models for entering new markets by SMEs in

the sector;

Number of created networks/number of clusters in the sector;

Number of attracted new partners as a result of the creation and dissemination of

information and advertising materials, analysis, catalogues, etc. for the sector;

Number of inquiries by foreign companies; number of established new

partnerships as a result of “Days of the Bulgaria” in the embassies by countries.

Progress surveillance and monitoring shall be carried out by BSMEPA, which is the “owner”

of the Strategy. To this end, it shall appoint an official from its administration, who will be

responsible for collecting information for the purposes of monitoring the implementation of

measures and who will prepare annual reports to the Executive Director of the Agency.

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Annual reports will serve as interim evaluations of the implementation of the Strategy. At the

end of year 2020 a final report shall be prepared covering the entire period of the Strategy.

These reports are public. The results shall be disclosed to the public.

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