Romania the new Italy of manufacturing

Romania may not be a shopping destination for most fashionistas, but a sleepy town called Timisoara outside of Bucharest houses a factory, ModaTim, that has probably manufactured many of your wardrobe favourites. From Gieves & Hawkes to Jaeger and Reiss, ModaTim provides top notch tailoring for many of Britain's favourite fashion labels. The factory, which is family-managed by Ovidiu Sandor and his sister, believes that a "Made in Timisoara" label can rival the quality and craftsmanship of "Made in Italy," or "Made in France."

Many of the world's largest clothing companies have already cottoned on with Romanian manufacturing and conglomerates including H&M, Zara, Lacoste and Dolce & Gabbana have all shifted to producing clothes with Romanian factories. A growing demand for affordable and expertise manufacturing has helped turn Romania into one of the largest suppliers of clothing to its new EU partners, with exports worth more than 3.5bn euros (£2.4bn) a year.

Romania has a long tradition of supplying European clothing firms. Even during the Col d War years, ModaTim sold goods to Western Europe and the US, although that market diminished towards the end of the 1980s. Timisoara, meanwhile, has always had close links to Western Europe, thanks to its proximity to the Hungarian and Serbian borders, as well as its ethnic German, Hungarian and Serb minorities.

Whilst ModaTim's factory may be booming, figures showed that total Romanian textile exports declined between 2004 and 2005. Analysts are worried that this trend may continue into 2006 and 2007, as fashion firms look for cheaper markets and Asian producers close the quality gap with their European rivals. Some industry observers predict that EU membership and increased competition may lead to the closure of as many as a quarter of Romania's 8,000 clothing and garment companies.