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Textiles for export: lively business seeks better technology - and fashion flair

By David R. FrancisStaff writer of The Christian Science Monitor / May 25, 1984



Budapest

Hungary's top garment exporter, Eva Szabo, hardly qualifies as a fashion horse. Interviewed here, the general manager of Hungarotex, the state-owned foreign trading company for textiles, looked somewhat matronly in a blouse, sweater, and purple knit skirt.

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Her clothes seemed symbolic. The Hungarian textile industry, in general, has not yet joined the world of high, high fashion. Hungarian workmanship is ''very good,'' Mrs. Szabo said. Suits and dresses look solid, long-lasting.

''Where we are not very well fitted yet is in creativity,'' she admitted. Hungarian state-owned textile companies have problems coming up with ''new things'' themselves or following Western fashion trends fast enough.

Her company serves some 300 Hungarian textile producers, about 50 of them ''important'' and the rest small cooperatives. She said Hungarotex has an annual turnover of some $700 million to $800 million. About half of those revenues derive from exports, primarily garments, and the rest from imports of cotton, wool, synthetic materials, and other goods needed by the domestic textile industry.

About half the exports go to neighboring socialist countries; the rest to noncommunist nations.

Like a number of other state-owned companies, Hungarotex was told by the minister of industry to decentralize. The ministry hopes smaller operations will be more efficient and innovative, making decisions faster. So last year two operations were spun off - Modex, a joint venture of 10 producers, and Hungarotex, which deals with ready-made and piece goods, and Tricotex, a subsidiary that handles knitwear.

Mrs. Szabo held it was too early to tell whether the split-up was producing the results hoped for. But with close cooperation among the three enterprises, the division has caused ''no big problems,'' she said.

She noted that the garment business is a ''tough market.'' To deal with that situation, the Hungarian textile industry has gone through ''a close reexamination.'' It decided to move out of the bulk end of the business, with its low prices and goods involving relatively little technological sophistication. Developing countries offer too much competition in these areas.

By now, she reckons, the Hungarian industry is ''medium developed'' in technology. Moreover, Hungarian textile companies are under pressure to use more modern machinery in order to reduce their manpower needs. That, she explained, is because some companies are having a tough time attracting sufficient workers. They are discouraged by relatively low pay and shift work.

In the area of fashion, textile companies are increasingly seeking partnerships with Western designers or producers. For instance, one company makes garments for Cardin, and Cardin, in turn, has established a clothing store on a major Budapest shopping street. Hungarian clothing stores are well stocked, the wares reasonably well displayed. But the Cardin shop, with its high prices and fashionable flair, attracts special attention as something of an oddity in this capital of a socialist state.

The Hungarian government's encouragement of small business has created a new market for the nation's textile firms. Numerous clothing boutiques have sprung up, owned either by individuals or by co-ops. Their owners or managers usually do their own buying, and thus any supplier with a strong sense of fashion and quality - be it an individual making clothes at home or a small co-op manufacturer - has a ready market.

For instance, the cooperative that owns Luxus, a medium-size department store in Budapest, has also set up the Clara Boutique and Clara Haute Couture on Vaci Street, the city's top shopping avenue. The managers of the stores, explained Ferenc Csendcs, a Luxus official, do their own buying and, depending on their success, earn bonuses on top of their salaries.

With the growth of private enterprise in Hungary, there are now more customers for expensive clothing.

Since 1979, after the United States gave Hungary most-favored-nation tariff status, Hungarotex has exported some garments and knitwear to the American market. Last year exports amounted to about $15 million. They consisted mostly of men's suits, jackets, ladies' woolen dresses, pullovers, sweat shirts, and kitchen towels.

Hungary's exports to the US are limited by quotas, however. Unless those are boosted, Hungary will have to find new items to export to boost its sales to the US, Mrs. Szabo said.

She expects the importance of textiles in Hungary to continue a slow decline. The number of workers in the industry - about 200,000 at the present - has been falling 5 or 6 percent a year. The value of exports, but not the quantity, has been increasing.