Jacquemard, the leading French sock maker, intends to relocate part of its production to Romania, after deciding to close a facility in France, the Les Echos daily reports.
"Considering the manufacturing cost per pair of socks in Romilly, the continuation of production operations in France will lead our company to bankruptcy sooner or later," said Gerard Labouze, the general manager of Jacquemard, as quoted by the French publication.
Jacquemard''s management announced it would be reducing the number of employees by 296 people at the Romilly-sur-Seine factory, citing the elimination of quotas for Chinese textile products and the development of the hard discount sector as its reasons.
In Romania, Jacquemard owns the Elca factory in Campina, which contributes 25% to its total production. This share is expected to go up to one third this year.
"Their intention is to gradually drop the outsourcing contracts with countries such as Turkey and Portugal after having dropped those in Italy and transferring everything to Romania," says Catalin Barbu, the commercial manager of Elca.
The company has hired 90 more people this year and now has a total of 420 employees. The number of employees will increase to 450 by the end of the year.
The hiring of new staff will not stop here, however, as the firm will continue hiring in 2006 once production capacity expands. The factory in Campina currently has 350 knitting machines and will obtain a further 150 such machines next year. Part of the equipment will come from the factories closed in France. Jacquemard has invested more than 300,000 euros in equipment since 2002 when it took over the factory.
It also began construction of a new production facility, a 250,000-euro investment, which is expected to be ready by early next year. They will also start works on another facility next spring, which will be used for storing raw materials and finished products, another 250,000-euro investment.
The company''s output amounted to 8.5 million pairs of socks in 2004, an amount set to increase by 50% this year to 13.5 million pairs in 2005. This year''s estimates also show that exports will account 97% of the total output.
Elca officials say that 95% of this year''s production target has already by achieved.
Production capacity is set to increase by one third to 18 million pairs of socks in 2006.
Elca''s turnover amounted to 10.4 million RON (2.57 million euros) in 2004, while its profits reached 0.75 million RON (185,000 euros). marius.anton@zf.ro
