Assessing Competitiveness In Moldova's Economy - Economic Growth

Development Alternatives, Inc. Moldova Competitiveness Appraisal: The Hides & Leather Cluster
Introduction
HIDES, LEATHER, AND LEATHER GOODS
Taken together, raw hides, skins, leather, footwear,r and leather goods form an important part
of Moldova’s export economy. In 2003, total exports from this cluster to the EU exceeded
US$57 million, although that figure includes re-exports of imported materials and inputs for
shoe production. In addition, there are continuing exports to Russia, as well as some
significant forays into the U.S. market.
For the EU market, most of the exports from this cluster have been gaining market share, but
only one in a growing market, as illustrated in Figure 18 (which includes footwear with
nonleather uppers, because these items are likely to share production facilities). In leather,
exports of which amounted to less than US$1.2 million in 2003, Moldova has been losing
market share in a (relatively) shrinking market.
Figure 18: Leather cluster exports to the EU, 1999-2003
Moldova has been capturing market share at a high rate for raw hides and skins. The exports
of raw hides and skins, typically only minimally processed (preserved), have on average
increased by 55 percent every year between 1999 and 2003. While the market has been
declining in the EU, world demand for raw hides and skins (as well as finished leather)
remains strong, driven in part by the growing preferences for leather upholstery in
automobiles. A good portion of the hides and skins exported to the EU are coming in from
Ukraine.
July 2004 • DRAFT Page 1