Czech Textile Firms Benefiting From Banking Changes

Last November the Czech National Bank weakened the Czech crown in an effort to boost the countries textile industry. The daily newspaper Hospodářské Noviny published an article that showing sector growth in the first half of 2014.

On this week’s Dian Skelton blog I will be discussing this news and what it means for the Czech Republic’s textile industry.

Banks Supporting Business

Dian Skelton is Director at ViewPoint Software ServicesLimited, founder of the MostlyManx shop on the Isle of Man and co-owner of the Laxey Woollen Mills. The Mills specialises in producing Laxey Manx 

Tartan which unique to the Isle of Man.

Last week I brought you the news that the Bangladesh textile industry was suffering due to archaic regulations set by the national bank, who refused to adapt to modern banking regulations. This news from the Czech Republic is perhaps an example of how particular sectors can benefit from banks who are willing to adapt to market changes.

According to the report from ATOK (Association of the Textile, Clothing and Leather Industry) the Czech textile industry, which is focused primarily on exports, has had its most successful year since the financial crisis hit in 2008.

ATOK Director Jiři Česal commented on the announcement by Hospodářské Noviny confirming that the Czech textile industry had indeed enjoyed a steady 3 year period of growth since the central bank intervened in the currency market.

Česal revealed that the textile makers have seen their revenues increase by 12% to CZK 23.4 billion. Česal went on to say that, despite a very strong first half, he did not expect to see a drop between now and the end of the year.  

A Traditional Industry

For the Czech Republic, textile manufacturing for the garment industry is something of a tradition. However, in recent years the largest firms in the industry are orientated more towards producing material for other industry besides clothing.

These firms are also firmly fall into the export category with the largest, Juta, exporting 80% of its output. Juta is just one example of a firm who have benefited from industry growth, with revenues reaching nearly CZK 6 billion last year.

Dian Skelton’s Thoughts

Commenting on this announcement from the Czech Republic, Dian Skelton has said that she is pleased to see big banks making changes that benefit industries that are perhaps not at the forefront of people’s thoughts.

She went on to say that this particularly important when you consider the situation in Bangladesh, where an industry as important as textiles could be neglected by the national banks reluctance to change.