Edelvika: From Filter Bags to Fashion – Ukrainian Clothing Manufacturer’s Path to Success Amid Challenges

Edelvika: From Filter Bags to Fashion – Ukrainian Clothing Manufacturer’s Path to Success Amid Challenges

(IN BRIEF) Edelvika, a Ukrainian clothing and textile manufacturer, has undergone a remarkable transformation from primarily producing filter bags to focusing on fashion-related products, particularly traditional embroidered blouses called vyshyvanka. Despite the challenges posed by the war in Ukraine, the family-owned business has not only adapted but also expanded its operations. With support from the EBRD, Edelvika modernized its equipment, increased production capacity, and enhanced efficiency. The company’s investment in new Japanese machinery, which arrived just before the war, has significantly boosted its fabric production, allowing it to triple its capacity and prepare for international exports. Edelvika’s journey showcases resilience and successful diversification, with a strong commitment to preserving Ukrainian cultural heritage through fashion.

(PRESS RELEASE) LONDON, 4-Nov-2023 — /EuropaWire/ — A vyshyvanka, or traditional embroidered blouse, is a deeply symbolic garment for Ukrainians, denoting the cultural and spiritual heritage of the nation. The ornamentation on the blouse is full of energy and includes symbols of health, longevity, love, wealth and protection. It embodies the creativity and inspiration of the Ukrainian people.

These ideas are at the very heart of Edelvika, one of the largest ethnic clothing and textile manufacturers in Ukraine, with a full production cycle from garment design to fabric weaving and embroidery.

The company started with 14 machines in 1994, then grew to 52 machines over time, producing around 1 million meters of fabric in 2004. It now employs more than 230 people and continues to grow, despite the war.

“Noble victory”

The name Edelvika is a German-Latin construct meaning “noble victory”. These days, the name is more relevant than ever.

Edelvika is a family business run by Yuriy Perekhodko and his two daughters. It was Yuriy’s eldest daughter who steered the company in the direction of fashion.

“Filter bags for big factories were our main product. After graduating from university, my eldest daughter started working for me, which meant she had to go to very dusty metal and cement factories,” Yuriy laughs. “One day she didn’t want to work with filters anymore. I asked what she would like to do and she said ‘fashion’.”

In 2010-11, filter bags accounted for 80-85 per cent of the company’s production volumes. Now, they account for only 10 per cent. The rest is fashion related.

“Currently, my younger daughter works here as my deputy,” Yuriy says. “She graduated from Kyiv University of Technology and Design, so she is keen on this business. The elder one was in Europe with her family when the war began. She is now preparing a base for us to export there.”

Path to growth

“We didn’t have our own embroidery department and other manufacturers, competitors in essence, refused to provide us with embroideries, or prices were three times higher,” Yuri recalls. “That’s why we decided to build our own department. Nowadays, we have design department, weaving and embroidery production, sewing (a cutting unit, machine embroidery department, sewing unit) and a testing laboratory. Our premises occupy 10,500 m2 and are located on one hectare in Lutsk. Another 2,000 m2 should be operational by 2024.”

As early as 2015, the EBRD helped Edelvika implement an information management system, with funding from the United States of America, resulting in more efficient bookkeeping and managerial accounting. It was developed specifically for light industry. Later, representatives of leading textile companies visited Edelvika to learn from its experience.

In 2018, a new international advisory project, which ran for around a year, helped the company to rebuild sewing production lines and automate processes. Labour productivity increased 30 per cent as a result. It was funded by the European Union (EU) under its EU4Business Initiative.

“We also received very effective training on lean production for our specialists in the design department,” Yuriy says. “International specialists from Barcelona helped us to apply their expert methods and set up the work of our design department in the right way. Now we have a modern design studio, where about 20 people work. Also, we’ve started another project to further improve production and sales.”

The ongoing project is funded by Switzerland through the EBRD’s Small Business Impact Fund (donors to the SBIF are Italy, Ireland, South Korea, Luxembourg, Norway, Switzerland, Sweden, Japan, the United States of America, and the Taiwan Business-EBRD Technical Cooperation Fund).

Right decision

“Just before the start of the full-scale Russian invasion, we took out a loan from ProCredit Bank as part of the EU4Business-EBRD Credit Line to acquire new Japanese equipment,” Yuriy says. “It was the best decision ever, as spare parts for our old machines were from Russia and disappeared from the market in one day, so we were, quite simply, rescued.”

Two weeks before the war, the machines left Japan for Odesa, Ukraine. The logistics were tough. The machines were redirected to Gdańsk, Poland, but couldn’t be shipped further. The only way was to load the containers onto trains at the port and deliver them through the Lviv region. There were Russian missile attacks as they moved, but luckily, they arrived.

“We waited for about a month for specialists from Japan to start the machines, and we finally put them into operation in August 2022,” Yuriy says. “This year, we have produced twice as much fabric as in the pre-war period. In terms of capacity, these 10 machines replaced our previous 50 machines. With them, and more ordered, we will reach the volume we planned in 2015 and triple our capacity.”

The equipment is very energy efficient. Despite having doubled its volume, the company consumes about the same amount of energy as it did before. It is also ecologically sound, as it does not produce any emissions.

“I met the former director of a silk factory at the Chamber of Industry and Commerce, and he asked how my business was doing,” Yuriy says. “I said that the plan was to produce 3 million meters next year. He did not understand how this was possible. We occupy such a limited space compared with huge factories, yet produce such large volumes. All this is due to the complete renewal of our equipment.”

Timely support

With the introduction of the new equipment, Edelvika will be able to enter foreign markets. It has started the trademark registration process. As the trademark has been registered in Ukraine, it has to go through the same process for the EU in general and then each country individually. It plans to finish this process by year end and start exporting in bigger volumes in 2024.

“The cooperation with the EBRD over time didn’t just help us: we have doubled in size, not just in terms of number of employees, but also production volumes and sales,” Yuriy says. “This has ensured our resilience. I don’t know what we would have done if we hadn’t had that new equipment when the war started. It was very timely.”

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SOURCE: EBRD