MOSTLY UNKNOWN BUT STILL PROFITABLE: THE LOHN SYSTEM IN THE NORTH-EST REGION OF ROMANIA

Abstract

The garment manufacturing sector (and, implicitly, knitwear) was one of the most important areas of the Romanian economy during the communist era, satisfying a large part of the existing demand, both in the domestic market and at the external ones. By making a statistic untill the year of 1989, we note that this sector occupied about 10% of Romania's industrial output, 30% of the country's exports and 20% of the number of employees in industry. After 1989, this industry experienced several stages of development, but also stagnation due to the conjuncture that the Romanian economy crossed. Currently, the knitwear market in Romania is dominated by legal entities that carry out lohn production activities at the expense of own brand production, the factors favoring this reality being: relocation of lohn businesses from China to countries like: Romania, Morocco, Tunisia, Turkey, Hungary etc .; high attractiveness of the lohn production system for domestic legal entities, both from an economic perspective and from the perspective of constancy of orders; and so on. This article wishes to highlight the current situation in the knitwear sector in the Northeast Region of Romania, namely the trends from the perspective of the local legal entities working on the lohn production system.

Keywords

• production in lohn system
• the knitwear market
• internal rivalry
• relocation of lohn system activities
• the power of suppliers and buyers
• marketing strategies