Upgrading the Moldovan Apparel Sector

Infinity Director Vladimir Selezniov displays a few garments from his company’s CMT production. (Photo: Krista Vogt / USAID/CEED Project) July 23, 2009. When USAID began working in the Moldovan apparel sector a few years ago nearly all the companies relied on the Cut, Make & Trim (CMT) production model, where foreign clients provide the patterns, fabric and other raw materials, and the Moldovan factories assemble the garments.  While this production method allowed for large orders, revenues and profits were small because the CMT model is at the low end of the value-added spectrum.  For the same reason, wages are typically low in local apparel factories. In order to increase revenues, profits, and operators’ wages, and to use excess production capacity, USAID partnered with ten apparel companies to provide various levels of support to transform a portion of their production from CMT to own-label.  The first step was to focus on the development of new brands.  To this end, USAID supported market research, branding and marketing plan development, and training in fashion and industrial merchandising.  To showcase the end products, USAID sponsored several companies’ participation in Textillegprom, a well-known trade show in Moscow.  Several of the own-label brands are already competing on the regional market with foreign companies such as Zara and Mango.  In just a few years, own-label production has grown from nearly zero to 15 percent of the Moldovan apparel sector.  "We left the Moscow trade show with empty luggage, a sign that clients are very interested in our products," said Svetlana Petraєco, Infinity Vice General Director. For one such company, Infinity, the marketing and financial support from USAID provided the boost the company needed to make the jump to own-label production.  After 11 years of CMT, Infinity Director Mr.  Vladimir Selezniov had the know-how to move to the next level.  He knew the best fabrics, top-selling designs, and the characteristics of each market, but he did not have the investment capital.  With USAID’s help Infinity displayed its line at the Moscow show and the company is already selling small orders to Russia, and working with USAID to put the finishing touches on its new brand – Drake.

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