The Ukraine is becoming more and more of an alternative to Romania for the production of outdoor boots. While it is not a member of the European Union, requiring more paperwork to cross the border, the cost of labor is much lower than in Romania. Above all, while many Romanians have migrated in search of better-paying jobs in Western Europe, the availability of manpower is still plentiful in the Ukraine.
Thus, in the footsteps of Grisport, Tecnica and many other producers of outdoor boots from the Italian region of Montebelluna, Asolo is opening its own factory in the Ukraine this month. Located at Beregovo and equipped with modern machinery worth about €600,000, the new plant is starting up with 80 workers and a production volume of about 700 pairs per day.
The investment follows the takeover of the factory in Romania that was making the boots for Asolo by the family of Luca Zanatta, the company’s chief executive, who took over the brand from Benetton SportSystem 10 years ago. Located in the city of Sibiu, the Romanian factory employs about 490 people and makes about 1,800 pairs per day, or an annual volume of nearly 400,000 pairs.
The Romanian factory will continue to operate for Asolo in the foreseeable future. Like it, the new Ukrainian unit will get the raw materials directly from Italy and put out the finished product, concentrating on the more labor-intensive constructions. Instead of outsourcing a portion of the manufacturing to China, the Zanatta family wanted to control the R&D and the production in order to ensure good quality and to take care of orders from the Italian military.
In fact, the Ukrainian investment was needed because of Asolo’s continued expansion and the constraints of the Romanian business environment. The Asolo brand is expected to generate sales of more than €28 million this year, 8 percent more than in 2007 and 10 times more than 10 years ago, at the time of its takeover. They grew by 10 percent last year. In spite of the weakness of the dollar, the biggest growth is taking place in the USA, where sales under the brand should increase by about 30 percent to $16 million, after growth of 15 percent in 2007.
These scores don’t include those of Lowe Alpine, the British outdoor equipment and apparel brand owned by the same group, which is also doing well. The brand’s sales to the trade rose by 9 percent during the past Fall/Winter season and should be up by 16 percent for Spring/Summer 2008, reaching a level of close to €26 million for the full year. Brisk sales of Lowe Alpine backpacks, which are up by 25 percent, have been among the drivers. The biggest market remains the U.K. with sales of around £7 million (€8.8m-$13.8m).