Major textile producer goes bankrupt

Sources within Akrom Akal Textile Romania told Business Standard the companies' assets have been put up for sale . "The company no longer exists," they said. However, they did not say who the buyer is.

The company, owned by Turkish AK-AL Textile Industry, entered the Romanian market in 1999. Most of its products were exported. According to the latest financial data available, Akrom Akal Textile had two production centers, one in the city of Suceava and one in Botosani. The latter already ceased production and was available for sale in 2006.

Akrom Akal Textile also laid off half of its staff last year to reduce costs. 

After a 10-year boom due mainly to exports and lohn operations, textile companies have now been struggling for the past two years to survive, and are posting losses. Sudanese businessman Joseph Seroussi, known as "The King of Textiles,"recently told Business Standard he sold one of his five factories because he lacked qualified workers and due to rising production costs.

Earlier this year, the President of the Light Industry Owner's Federation (FEPAIUS), Maria Grapini, said that EU accession would lead to the bankruptcy of some 40 percent of small and medium-sized companies in the field within one year.

Major companies also face this risk. "We have production demands from outside Romania, but cannot comply because our production costs are much too high," Grapini said, adding that it is likely that more textile companies will cease activities.

The local textile market, estimated to be worth some €9.5 billion, is expected to drop by €2 billion by 2010.

"We have production demands from outside Romania, but cannot comply because our production costs are much too high  Maria Grapini President, FEPAIUS