Kazakhstan has a long history in the textile business and, until
the collapse of the Soviet Union, it produced textiles and apparel
for the whole country. In the 1990s, the former Soviet republic's
industry was privatized, but needed assistance to be able to
compete in world markets.
The ASSOS-Textiline deal is part of a larger ITC initiative,
financed by the Swiss Government and the United Nations Development
Programme, that has helped Kazakh clothing manufacturers become
successful exporters.
In 2000, as part of a project to make contacts between Western
buyers and Kazakh manufacturers, an ITC project manager, who is an
avid cyclist, decided to contact the Swiss firm ASSOS, which
produced his favourite brand of sportswear for cyclists. ASSOS was
founded 30 years ago to bring avant-garde technologies and
innovative engineering to the world of cycling. For example, it
invented the first Lycra cycling short in 1977. Cyclists using
ASSOS products have won more than 200 gold medals at Olympic Games,
world championships and other professional cycling races, and have
frequently worn the coveted "yellow jersey", a T-shirt presented to
the current overall leader of many bicycle races.
Need to build confidence
ITC initially brought a delegation of top Kazakh clothing
manufacturers to meet with possible European clients, but ASSOS was
sceptical. It was not convinced of the idea of linking with a
Kazakh company and was particularly doubtful about whether a Kazakh
company could match its quality standards and technology, and about
the prospects for producing its range of apparel in Kazakhstan from
a marketing standpoint.
And Textiline, like many other Kazakh companies, had its doubts
about exporting. The company was trying to succeed in a domestic
market dominated by inexpensive Chinese imports, and it had no
experience selling abroad.
Gaining skills
A combination of training and marketing missions to Europe,
organized by ITC, helped to bolster Textiline's export abilities
and confidence. Textiline learned how to develop presentation
techniques and marketing skills, and about market requirements such
as packaging, labelling and environmental standards. This gave the
company the confidence to approach demanding foreign markets.
It was its first marketing mission that jump-started Textiline's
understanding of how to succeed abroad.
By visiting leading European textile and clothing companies, and by
gaining some experience with Europe's highly competitive garment
markets, Textiline officials realized how important proper
management, marketing and networking can be in creating
long-lasting business relationships. The Kazakh company also began
to understand where it fitted into the market in terms of price,
quality and fashion.
"We can sew, but we cannot sell" was the conclusion the company
came to after the first mission. As a result, it requested
additional technical assistance to improve its marketing.
The company also realized that making clothes well - an achievement
in itself - was not enough to compete as a supplier. It therefore
improved its design capabilities and created a new collection aimed
at the international market, while addressing the sourcing of
materials and improving skills at the enterprise level.
At the company's second marketing mission, buyers found the
workmanship of the new samples to be excellent and other aspects -
design, fashion levels, fabrics and presentation -
acceptable.
The ITC project helped improve Textiline's performance, and the
company's experience with international markets spurred the
development of an entrepreneurial spirit.
Photo: MaindruphotoService mentality pays off
As it happened, this change in mentality, plus Textiline's meeting
with ASSOS, was an advantage when ASSOS became the Swiss Cycling
Federation's official technical supplier.
Under the contract with the Federation, ASSOS had to produce
leisure apparel. The company had started to work on a range of
leisure clothes three years previously, but the products were only
being used internally. Suddenly it needed to work fast to get the
line out.
But ASSOS could not find what it wanted from Western European
producers. It wanted to make some modifications to available
products, but Western producers couldn't help, claiming the request
was too complicated, expensive or impossible.
Faced with a dead end in Western Europe, the company's Chief
Executive Officer, Roche Maier, set up a meeting in the Kazakh city
of Almaty to meet with the firm that had impressed him the
most.
There, ASSOS received the kind of welcome and cooperative spirit it
was looking for. That meeting led to dozens of visits and to the
research, design, development, testing and prototyping of what
became the "ASSOS DB" line of after-bike wear.
The change from export novice to expert is not easy, however, and
can take some time.
"Success does not come immediately," says Matthias Knappe, the ITC
manager who brought ASSOS and Textiline together. "Companies need
to develop a service mentality towards buyers. Then export success
will only be a matter of time, as experienced by Textiline."
The change cannot be made in a single step, he says. "For
Textiline, penetrating the domestic market and competing against
foreigners at home was the first step towards success. Exports to
neighbouring countries, which have a structure and consumer tastes
similar to those at home followed as a second step. Third, with
active learning and attention to details, it finally achieved
export orders to the highly demanding Swiss market."
A stronger competitor
The benefits have not been limited to exporting for Textiline. It
has now been able to gain domestic market share against imports.
The company doubled sales during the project period and received a
contract for manufacturing sportswear for the Kazakh Olympic team
for the 2002 Winter Olympic Games in Salt Lake City, United
States.
In addition, Textiline has opened three new stores in Kazakhstan,
drawing on its experience with shop design in Switzerland and the
European Union.
Textiline's openness and attitude towards new ideas and changing
old structures and habits was, in the words of Mr Knappe, "a key
ingredient to increase competitiveness, both at the domestic level
and in foreign markets".
ASSOS introduced its new clothing range, and its new
Kazakh partner, in this brochure sent out to the company's
distributors.
How it all happened…
The International Trade Centre - an agency of the United Nations
and the World Trade Organization - often coordinates market
development projects. In the spring 2000, this is what they
contacted ASSOS about.
How did they find our little company? A project manager of this
UN-related institution happened to be an avid cyclist and he
decided to contact his favorite cycling apparel brand. The UN's
International Trade Centre had organized a delegation of the top
five Kazakhstan apparel sewing companies to meet with potential
European clients. When we first heard it, our question was: "What
and where is Kazakhstan?"
At first, we told our contact to forget it. We were sure that the
ASSOS quality standards and technology could not be met in
Kazakhstan. Also, we thought it would be impossible to produce
ASSOS products in Kazakhstan from a marketing point of view.
However, the UN project manager insisted on a meeting (thank God he
did!). Together with our future partner, he visited ASSOS; we had a
cup of tea, we took notes and we wished them a nice trip back…
Shortly afterwards, ASSOS became the Official Technical Supplier of
the Swiss Cycling Federation. One condition within the contract
was, however, to also provide leisure apparel. Although ASSOS had
started to work on its own leisure line 3 years earlier, the
products were only being used internally and privately by our
technicians. Up to this point, ASSOS did not have an own leisure
line, so we needed a custom solution and we needed it quickly. We
contacted a variety of European producers of leisure wear to
purchase a small customized collection (not an ASSOS product but
simply off-the-shelve articles with some ASSOS improvements). It
was an amazing experience for ASSOS: all we heard was "too
complicated, not possible, too expensive, can't do it, let's
simplify, no flexibility, etc.". It was a shock and a frustration
to ASSOS. Conclusion: Roche Maier (ASSOS CEO) decided to get on an
airplane to Almaty, Kazakhstan, to meet the one guy who had
impressed him most when seeing him at ASSOS a few months earlier.
The welcome was simply amazing: red carpet treatment, full
attention and immense willingness to create and execute the ASSOS
wishes. Our hosts were eager to make changes, to do things over and
over again in order obtain a unique and perfect product. In
Kazakhstan we found the ASSOS mentality and strive for perfection
regardless of cost.
Four years later, developed under a no restraints policy, dozens of
trips back and forth, exchange of human resources, excessive
research, design, development, testing and countless prototyping,
ASSOS finally introduces its new line:
ASSOS, the only after bike wear.
In Kazakhstan we not only found a partner, but also a friend which
gave our engineers the playground to go crazy and explore the
boundaries of what is technically possible, not easy,
labor-intensive - all with only one goal in mind: total
functionality, total comfort for when we are off the bike.
KAZAKHSTAN
Kazakhstan is an amazing country revealing a vast range of
landscapes ranging from mountains, forests, steppes and deserts to
the Caspian seashore. This former republic of the Soviet Union,
nowadays an independent state, is huge (5 times France!) with a
relatively small population of 15 million. Over 100 ethnic groups
live on the ancient land of the Kazakh nomads; they excel at
interlacing their cultures and combining Oriental wisdom with
Western pragmatism.
Back in the Soviet times, Kazakhstan was the one republic
responsible for producing textile and apparel for the entire Union.
Factories with over 4000 sewing machines weren't anything abnormal
- the textile industry has a long tradition in Kazakhstan.
After the USSR's breakup, the Kazak textile industry restructured
into private companies. The UN initiative, which was also funded by
the Swiss Ministry for Economical Developpment, aims at broadening
the current markets, securing jobs and tradition as well as
acquiring technology intelligence.
Steve Hirsch is a Washington-based freelance journalist, writer
and editor specializing in international news. He is the former
Editor-in-Chief of UN Wire.
Matthias Knappe, ITC Senior Adviser on textiles and clothing,
contributed to the article.