AlbanianEconomy.comYour News from Albania
Exports, lowest increase in 15 years
The average growth for all Albanian exports since 1993 is estimated at 16%, or 12.5% since 2001 when the country was faced with the chronic crisis of electricity supply, which in turn had its effect both in the current exploitation of existing capital as well as other investments.
The industries of textiles and shoes were among the ones most effected by this fall of exports. The results were a modest growth of only 0.6%.
Economically, these results do not look encouraging especially when we consider the fact that these industries make up 57.8% of all Albanian exports and employ about 30,000 people (or 13% of all registered employees).
“We were faced with the growing competition of shoes from China as well as the increased value of our own currency,” the manager of a shoes factory in Tirana says.
The industry of textiles and shoes were re-established in Albania during the 90’s as a result of Italian investments, which at that time were in search of cheap labor, lower taxes and lower electricity prices.
However, the rapid growth of Chinese exports, lower work efficiency and a worsened situation with the supply of electricity, accompanied by a strong rise of the electricity price resulted in many Italian companies increasing production in other countries like Romania and Bosnia, meanwhile reducing it in Albania.
Despite the many difficulties, in Albania there are still many companies, especially in the shoes industry, which have continued to increase their investments and production capacities.
Donianna sh.p.k, an Albanian-Italian owned company, is currently finishing its new factory estimated at EUR 6 million which will employee another 700 people.
“Our aim is to face the competition by expanding the industrial cycle carried out in Albania as well by exporting ready made products,” manager of Donianna sh.p.k says.
Concentration of Albanian exports in only two groups, textiles and leather, has always been of concern to experts whom have always expressed the worry that in such cases the risk of losing exports or the ability to increase them is considerable.
Albania’s other potential exports, “foods, drinks and tobacco” recorded an increase of 6.2% reaching LEK 5.4 billion (US$ 51.8 million; EUR 43.8 million). However, this group makes up only 8.2% of exports and diversification of exports in different types of goods is still a way off for Albania.
Mineral exports grew
During 2005, Albanian exports of the ‘minerals and combustible materials’ grew by 35%. The growth was a result of an increase in production capacities for copper, chromium and crude oil through different concessionary agreements singed several years ago with foreign investors. These products account for 5.3% of all Albanian exports and last year they also grew as a result of the growing base price in the international market.
However, Albanian experts are not very enthusiastic about this growth because the concessionary agreements have given foreign investors the right to receive all profits from exploitation of mineral resources and the remaining added value for Albania is next to nothing.
Another growth of exports was marked by the ‘construction materials and metals’ group of exports, mainly due to the increased exports of construction metals toward Macedonia and Kosova. Total exports for this group reached LEK 10.4 million (US% 100 million, EUR 84.3 million).
