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    "Yellow Jersey" for Kazakh Firm

     

     
     
    © International Trade Centre, International Trade Forum - Issue 3/2005

    Photo: ASSOS

    An ITC project manager's enthusiasm for cycling led to a historic link between ASSOS, one of the biggest names in cyclists' clothing, and Textiline, a small, service-oriented Kazakh company. Together, they established the world's first line of "after-bike" wear.

    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: Maindruphoto

    Service 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.