The spinning sector, at present, is undergoing a phase of reorganization and adjustment to the international market conditions, main characteristics of which are the intense investment activity, sharp and increasing competition, market concentration in a few, large sized businesses and acquisitions and mergers among the companies active in the field.
The sector is characterized by the existence of a relatively large number of businesses, which are classed into organized, vertical production units on the one hand, and small sized companies on the other. The majority of large companies fall into one of the three most significant groups of the sector (KLONATEX, AKKA, ETMA), which control a significant percentage of the domestic production. Today, the number of spinning mills has been drastically reduced. Specialisation in a specific yarn category (cotton, wool, synthetics, mixed fabrics, fantaisie) is a main characteristic of the company's structure.
Large companies aim primarily at fully verticalising their production, from initial production stages to the point of final products (fabrics, clothes).
Businesses active in the spinning field face problems which have to do with the high interest rates the abolishing of national appropriations, the unification of the E.U internal market, the abolishing of the multifabric agreement and, in general, the deregulation of international trade, as well as the new trade relationship of Turkey with the E.U. The result of all above is the intense competition coming from Third Countries of low production costs, as well as the reduction in yarn prices internationally.
The size of the Greek thread production does not show any significant fluctuations from year to year in the 1992 - 1999 period. Domestic production was declining from the beginning to the mid 1990's, with an average annual drop rate of around 5%. Following that, thread production showed a slightly upward trend, with an average growth rate of around 1% for the 1996 - 1998 period. For 1999, production volume was at 141.900 tonnes, at about the same level as that of the previous year (drop of 0,5%).
Thread imports primarily have to do with thread categories which are not produced to a great extent by Greek companies. Imports volume is estimated at 82.5 thousand tonnes in 1999, a 4.6% increase over the previous year.
Exports are up for the last three-year period and are estimated at 63.2 thousand tonnes in 1999. The main export volume is targeted at E.U countries at 88.5% in 1998. The main destination country for threads is Germany, which absorbed 22.7% of the overall threads export in 1998. Apparent thread consumption in the Greek market had strong fluctuations in the 1991 - 1995 period, while for the 1996 - 1998 period it had an average growth rate of 4%. In 1999, market volume was at 161.200 tonnes, slightly down by 1.1% over the previous year.
The degree of imports penetration was between 38.3% - 51.2% during the mentioned period (1991 - 1999). For the last four year period, it followed an upward course and came up to 51.2% in 1999 up from 41.5% 1996.
Extroversion was steadily on the decline from 1991 to 1994. In 1995 there was an increase, which was followed by a new decrease in the next two years. Starting in 1998, there has been an increase in the demand for Greek threads abroad, as there is a noticeable upgrade in the quality of domestically produced end products. Extroversion in 1998 came up to 35.9%, and it increased to 39.2% in 1999.
For the most part the Greek thread market is dominated by cotton threads, which represented a 54.9% share on the apparent consumption for 1999. Cotton threads of the pegne type occupy the largest share of the cotton market, at a rate of 75% - 80%, while synthetic fibres the remaining 20% - 25%. Synthetics have a share of around 30% on the overall domestic market, while artificial yarns, wools and the remaining kids (silk, linen etc.) occupied around 15% of the Greek market for the same year.
With the incorporation of few spinning facilities, a cotton thread production increase is anticipated for 2000 - 2001, as well as a reduction in the production of synthetics and artificial threads, due to the change of consumer behaviour, which is according to fashion trends emphasizing cotton clothes.
For the current year (2000) it is expected that the apparent domestic consumption of threads will be at around 164.000 tonnes, an increase over 1999 of around 2% (quantity wise). For the coming two-year period (2001 - 2002) it is estimated that the Greek thread market will evidence an average annual growth rate of around 1% (quantity wise).
In conclusion, the factors, which will contribute to the strengthening of the competitiveness of Greek spinning mills both in the domestic as well as in the international field, are:
1.The modernisation of production units, so that they have the capability to meet the high standards of European spinning mill firms.
2.The production of special diversified yarns, so that businesses may establish their position in certain market niches.
3.The control and securing of raw materials, as well as the achievement of economy scale, through strategies of vertical and horizontal globalisation.
Source: Athens Chamber of Commerce & Industry