May 18, 2020 / 3:00 PM / 13 days ago

Albanian garment industry unravels amid coronavirus pandemic

ELBASAN, Albania (Reuters) - Ardian Lami had been a waiter for 15 years when he found himself without a job after Albania shut down bars and restaurants in March because of the coronavirus outbreak.

People work at a garments factory in Elbasan, Albania May 14, 2020. REUTERS/Florion Goga

Urged by his wife Albana, he began working for her employer, CityTex, Workwear&Uniforms, one of 762 garment and shoe factories producing goods for foreign clients, a sector employing 70,000 people and making up 42% of Albania’s exports.

The government allowed the industry to carry on working despite opposition calls that it was a hotbed of infection, claims vindicated by an outbreak of the virus at two sites of one shoe factory.

“I liked working as a waiter, but when you have two little daughters you need stability. This job here is an art of its own, and I am liking it more than waiting on tables,” the 36-year-old Lami said.

With bars in Albania opening on Monday to serve clients outside at a safe distance from each other, Lami did not answer a call from his former employer.

He might be in for a surprise.

The garment industry’s perceived stability was mainly due to late orders from Italian and German clients for army and police uniforms, his employer Gjergji Gjika said.

Gjika, also head of the association of garments and footwear industry, predicts that this industry alone will weigh down the country’s gross domestic product this year by six percentage points, adding that it normally contributes 15-18% to GDP.

The European Bank for Reconstruction and Development (EBRD) predicted Albania’s economy is due to shrink 9% in 2020 thanks to its heavy reliance on producing garments and footwear for the Italian fashion industry, as well as a decline in tourism.

“We were effectively closed. We were hit by two misfortunes at the same time. There were no future orders and we have not since January seen a penny for work we have done,” Gjika said.

Only about 20% of Albania’s garment and footwear firms were operating. No factories were running at 100% capacity, and although some were producing face masks to help fight the virus, those companies accounted for 2% of the industry, Gjika said.

The government made “a war wage” one-off payment of 40,000 Lek ($353) to 179,000 workers after 50,000 became jobless, including in the garment sector, and approved sovereign guarantees to help pay employees.

“For us to work, China has to produce for the Italians to design fashion so they can ask us to stitch garments for them. The cycle lasts from four to six months,” Gjika said.

“The (summer) season is gone. This has never happened.”

Gjika said a sovereign guarantee did not help because the banks made it too hard to get loans and the clothing sector pays 39.4% of its profits, or $12 million, in taxes every month.

“Some might survive, but makers of shirts, fashion and shoes have stopped. I see the last one expiring in end-June and even if they work day and night we cannot resume before September,” he said. “We expect to lock the plants down soon.”

Reporting by Benet Koleka, additional reporting by Karin Strohecker, Editing by Ed Osmond

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