Lithuania the Hidden Gem for Textile Manufacturing




Dr. Monika Hauck & Kristina Kacinskyte

Paradigm Shift in Fashion

For decades, western manufacturing companies used offshoring to meet their business needs for cheaper labor, specialization, and economies of scale, but it was not until the 1990s when, facilitated by the North American Free Trade Agreement (NAFTA), it became a dominant business strategy in the apparel and textile industry.

Since 2020, however, the global supply chain disruptions caused by the COVID-19 pandemic have been immense. Fashion brands and retailers suffered production capacity shortages, bottlenecks in global logistics infrastructure, and fluctuating consumer demand. Moreover, breakdowns in raw-material supply, hefty price markups, and geopolitical risks became constant concerns.

Supply-chain management and risk mitigation are at the top of the agendas of fashion executives around the world. Thus, reshoring and nearshoring – industries’ practice to bring their supply chains closer to the home market – is becoming an important topic in the boardrooms. The McKinsey & Company 2021 APPAREL CPO SURVEY, draws on the insights of Chief Procurement Officers (CPOs) at 38 international brands and retailers and highlight that in the future 24 percent of sourcing executives plan to increase reshoring in their sourcing strategy, and 71 percent of surveyed executives plan to increase their nearshoring share.1

At the end of 2021, PVH, owner of iconic brands such as Calvin Klein and TOMMY HILFIGER, announced the closing of its manufacturing site in Ethiopia.2  On the other side of the Atlantic, Hugo Boss has announced its plans to massively invest in its largest own production facilities in Izmir, Turkey. Until now, the company has produced just around 20 percent of its collections in its factories. This is apparently about to change, CEO Daniel Grieder announced.3

Reshoring presents a competitive advantage in planning as it offers agility and flexibility, for example, to design late in-season and top-up the best-sellers. However, companies can also enjoy positive sustainability implications from the movement of manufacturing into the same market as the consumer. The shorter transportation lowers greenhouse emissions and flexibility in production helps to reduce overproduction and its resulting waste.

We are experiencing historic times in fashion. While in 2000 offshoring was a major trend, in recent years with the rise of conscious consumerism and gen Z and Y increasingly looking for brands that align with their values the reshoring phenomenon is expected to increase further. Consumers are expecting transparency across the entire value chain; they want to have more information about both the provenience of goods and the quality of materials used.4 And finally, in Germany and also soon in the EU the Supply Chain laws will make it more difficult and expensive for firms to produce in the Global South countries with different legal and environmental standards. 

But for this change of paradigm to really manifest, the right balance between reliability, flexibility, and price must be found. Industry 4.0 can support reshoring and nearshoring because it provides higher productivity and flexibility which offers opportunities to offset the higher labor costs. Thus, sourcing executives are starting to look for strategic collaboration partnerships with suppliers that invest in digitization (both in analytics, process, and traceability) and upskilling of their workforce.

Turkey, Portugal, or the Balkan Countries have been increasingly used as a destination for more local textile manufacturing by the European and even the U.S. fashion brands and retailers. However, there are more countries in Europe, worth examining and shedding more light on. 

Lithuania and its History in Textile Production

In the northeastern part of Europe, Lithuania is a country with a long history in textile production. The first artisan workshops date back to the 16th century when linen and woolen fabrics – mostly from local raw materials – were weaved for commission or sale. During the 18th and the beginning of the 20th century, large factories emerged all over Lithuania mostly focused on woolen fabric, canvas, and cloth weaving, while some of the factories also worked with silk. After the First World War, the textile industry started to professionalize and grow even more rapidly.5

Lithuania is a flat country overlooking the Baltic Sea. Its humid semi-continental climate with cold winters and mild, moderately rainy summers, contributed to flax becoming one of the most popular crops for textile production. In 1922 and 1926 there were 6 and 18 primary flax processing enterprises respectively. 5 Although in the last two decades, the popularity of flax farming has been decreasing, Lithuanians still associate themselves strongly with linen material and flax. Hemp plantations, on the other hand, have been rising in popularity, driven by a new generation of ecologically oriented agricultural entrepreneurs.

In 1938, the largest enterprise in the textile industry was the cotton spinning factory by brothers A. and R. Fainbergs in Klaipėda. The factory was opened in 1925 starting the business with 50 workers. The business grew rapidly and in 1938 it already had about 1,600 workers. At that time, it was considered to be one of the most modern factories in Europe.6

Although the Lithuanian textile industry suffered greatly during the Second World War, it was rapidly rebuilt, the old textile industry enterprises were expanded and new companies were built. At that time flax processing, spinning, and weaving combine, carpet, knitwear, cotton spinning, a cotton combine, and foamed yarn factories were built. The war and the Soviet Union had a major impact on the textile industry and fashion in Lithuania. Fashion establishments that existed from before the war were nationalized, production, as well as, distribution of clothes were centralized. Based on the Soviet model, in 1954 the Lithuanian central fashion house was established in the capital, Vilnius. It controlled the design and production of clothes.7

Šiauliai “VERPSTAS” knitwear factory knitting brigade, 1950. photo of the Lithuanian Special Archive.

DYI patterns in magazine Banga, 1984 from KUDARAUSKAITE article.

Klaipėda “GULBĖ” cotton and wool fabric workshop.

Although during the Soviet Union time, the fashion design in Lithuania was highly regulated and had to be pre-approved to fit the fitted Soviet guidelines, fashion and textile production was of high national importance. 8 After the fall of the Soviet Union, Lithuania gained its independence and the textile industry was privatized. Although over the years many of the olden factories went out of business and the comparative weight of the textile industry in the national economy has been decreasing, companies that managed to continue their work, have established themselves as modern and technologically advanced manufacturers in Easter Europe. 5

The State of the Industry Today

According to the Manufacturing Risk Index reports9, Lithuania has stably kept the spot for the last four years as a topmost attractive location for manufacturing goods in Europe, based on cost, risk, and conditions. The report examined a range of risk and cost factors, including political and economic risk as well as labor costs. According to the 2021 report, Lithuania can offer a sufficient pool of skilled and affordable labor in addition to offering other advantages like existing industrial bases and a simplified supply chain. Its key textile clusters in Kaunas, Klaipeda, Siauliai, Alytus, and Utena, can be easily reached from the country’s three international airports in Vilnius, Kaunas and Palanga, and the seaport in Klaipeda.

To develop products with higher added value, Lithuania’s textile and garment sector is actively investing in creating unique brands and contemporary design while keeping its centuries-old heritage. At the start of 2021, the textile industry employed roughly 24 thousand people or 2.5 percent of the entire workforce. There were 933 businesses in the industry, with 98 percent of them being small and medium-sized businesses (SMEs). The main export market of Lithuanian produced textile, clothing, and leather in 2020 were Germany (15 percent), the United Kingdom (11 percent), and Denmark (9.9 percent), overall, the EU accounted for 81 percent of exports.10

Most sewing companies in Lithuania began subcontracting work for major European and U.S. brands ranging from haute couture to popular chains, such as Next, Hugo Boss, H&M, Mark & Spencer, Nike, Decathlon, and others. The switch happened due to its convenient geographic location, flexibility, and short production and delivery times. Therefore, Lithuania swiftly established a reputation as a flexible, high-quality, inventive, and highly specialized manufacturing nation.

One-Shop Solution for Fabric and Garment Manufacturing

A major advantage of Lithuania is that it can provide a one-shop solution for fabric manufacturing as well as garment production, reducing supply chain complexities. A leading player in this regard is OMNITEKSAS located in Kaunas. Established in 1928, it is a vertically integrated jersey fabric and garment manufacturer. It produces nearly 3.000.000 pieces of jersey garments and over 1000 tons of fabrics each year. The company’s innovative mindset allowed it to become the #1 fabrics developer in Europe with more than 200 fabrics developed each year.

Omniteksas picture

Omniteksas exports around 80 percent of the total production all over Europe. Besides developing designs, Omniteksas helps its customers to create their fabric with specific functional properties. It is specialized in wool and hemp and its blends. But it is also increasingly developing its capabilities in working with other sustainable materials such as bamboo, Tencel, milk protein, eco viscose, recycled cotton, and recycled polyester.11 

Funded by the European Regional Development Fund as part of the European Union’s response to the COVID-19 pandemic, Omniteksas R&D team is developing innovative knitted fabrics with antiviral properties and products made from them (protective clothing, masks, air filters). The goal is to create materials that not only perform the functions of protecting the body and the environment from the COVID-19 virus but also shorten the survival time of viruses.12 

Another full services textile manufacturing provider is AUDIMAS, which is also located in Kaunas. It is the largest sportswear manufacturer in Baltics. In addition to providing services to other brands, Audimas runs its national brand that produces high-performance sportswear and outdoor clothes and supports Lithuanian nation teams in world stage competitions.13

Sustainability Powered by Innovation

Over time, Lithuanian garment producers have refined their production procedures to increase efficiency and make their products more competitive. The majority of them make use of cutting-edge technology and high-tech solutions like computer-aided design. The introduction of automated sewing technology into their manufacturing processes allows them to save time, eliminate fabric waste, and produce high-quality apparel. Lithuania is now more than just a source of raw materials. New businesses and business models are emerging, augmenting the traditional sewing and weaving industry with modern, high-value services and technical innovations.

Choosing a centrally located European country for production reduces the length of the supply chain and carbon emissions. Additionally, it provides easier access to the facilities in case there is a need for inspection. Furthermore, many companies can present internationally acknowledge certificates such as OEKO-TEX®, ISO 14001 certification, Organic Exchange 100, SA8000, EU flower, Woolmark certification, Ekomark, and others

For example, UTENOS TRIKOTAŽAS, a company established in 1967, deals with all textile manufacturing processes in-house, meaning that all production processes, from raw material production through to the final ready-to-wear product, are being made under one roof. The company became the first in Lithuania to receive the EU Eco Flower sign for ecological production back in 2005. And in 2020 the company became the first producer in the world to fully comply with Greenpeace environmental standards. “The Greenpeace textiles procurement standard requires Utenos trikotažas to control the chemicals used via complete testing of the wastewaters released when it bleaches, dyes, washes, and prints the cotton. This collection proves that truly clean, fair, and completely transparent production is in fact possible. And not in some boutique sewing shop, but at an industrial level”, Wohlgemuth​ said.14

Lithuanian textile and apparel industry has a long history of tradition, from growth to production, and is an important sector in the national economy.  However, one thing remains to be said, the future of the industry depends on innovation and its ability to make craftsmanship attractive to younger generations.

Development of Future Talent

Looking ahead in the future, Lithuania is well-positioned to develop future talent in both creative fashion design and technical textile innovation disciplines. Its capital Vilnius has two academic institutions. With over 1500 students VILNIUS ACADEMY OF ARTS, a leading state University, offers study programs in all three areas of art: design, architecture, art theory, and history, while, VILNIUS COLLEGE OF DESIGN is a higher education institution dedicated exclusively to art and design. In Kaunas, the second-largest Lithuanian city, the KAUNAS TECHNICAL UNIVERSITY, with its Faculty of Mechanical Engineering and Design offers a variety of internationally recognized study programs, where scientific engineering knowledge is being developed together with creative thinking skills.

Open for International Business

For the North European and CIS markets, Lithuania is currently known as intelligent supply management and global logistic operator. Many overseas companies have already realized the advantages of collaborating with the Lithuanian textile industry. Foreign capital owns approximately 15 percent of enterprises, with Scandinavian investors dominating the market.10

With its small population of about 3 million people, the country is open for international business and offers extensive support for foreign companies. With more than 120 members LITHUANIAN APPAREL AND TEXTILE INDUSTRY ASSOCIATION is an organization dedicated to creating professional links among the international apparel and textile community looking for sourcing solutions and trade opportunities in Lithuania. The administration and the board of the association consist of 23 pro-active apparel and textile experts that keep raising a profile of the Lithuanian apparel and textile sector, promote Lithuanian fashion and textile brands actively taking part in trade missions, organize the fair ‘Baltic Fashion & Textile’ in Vilnius, facilitation of seminars and round table discussions. The association also provides advice on business opportunities in the Baltics, former USSR as well as Scandinavian markets.

INVEST LITHUANIA, the country’s Investment Promotion Agency informs, connects, and supports foreign companies in Lithuania, all free of charge. It usually takes 1-3 days to start a new business in Lithuania (Source: Centre of Registers, 2021) and the 50+ Bilateral double taxation avoidance treaties ensure that the business environment is both convenient and cost-effective.

Invest Lithuania picture

Although highly culturally and economically repressive, the half of a century lasting Communism regime, left gains in women’s rights and gender equality in Lithuania. Today Lithuania has 52 percent, the highest share of women scientists and engineers in the EU (Eurostat, 2020). Lithuania ranks 5th globally for digital skills availability (IMD World Competitiveness Center, 2021).15

Lithuania offers interesting opportunities for international fashion companies for both production outsourcing and for building their textile production infrastructure via direct investment. International companies can assemble world-class R&D teams here at highly competitive costs, and the government is supporting such activities via a swathe of incentives.

A first-mover of direct investment in Lithuania is LTP GROUP which was one of the first foreign-owned companies registered in the newly independent Lithuania in 1991. On the company’s website, its founder Morten Ostergaard states “One of the main reasons why we chose Lithuania was because of the exceptionally talented and friendly people. Many of our competitors sent ex-pats to run their companies, but we always believed in the local talent. We took the time to build strong local teams. This gamble paid off; our people and culture is now our greatest asset”. Today, LTP has expanded its production into furniture manufacturing. The skills required by both industries are very similar, from product design, development, textile sourcing, quality, manufacturing, and supply chain. LTP’s main furniture factory is built on the base of a small sewing factory making dresses.16

Another example of Scandinavian investment is SPARTA SOCKS company. Established in 1918 it is now one of the leading socks manufacturers in Europe producing about 300 000 pairs of socks per month. In 2019 the company was acquired by Denmark’s JBS Textile Group.

So why Lithuania?

McKinsey & Company 2021 APPAREL CPO SURVEY suggests that in order to face the uncertainties of the current times, brands and retailers need to shift toward a sourcing model that is flexible, fast, sustainable, digitally enhanced, and consumer-centric is required for brands and retailers. Lithuania seems to offer just that. It is a cost-effective manufacturing country that meets European quality and sustainability requirements. Because Lithuania is a member of the European Union, it benefits from the free movement of capital, services, goods, and labor and is well geographically positioned. Its textile industry is built on deep tradition and specialization which is supported by international investment and high technological staff competencies. And finally, the close relationship between talent, education, and an open business mindset creates a nexus that fuels innovation.

If you are interested in further exploring opportunities in Lithuania, you can reach out to:

Otherwise, stay tuned! We will be featuring more sustainable fashion companies, innovators, and experts from Lithuania and the Baltics in our next articles.


  1. Saskia Hedrich, Julian Hügl, Patricio Ibanez, and Karl-Hendrik Magnus. “Revamping fashion sourcing: Speed and flexibility to the fore.” McKinsey & Company. 12 November 2021.
  2. Salerno-Garthwaite, Andrew. “Fashion’s reshoring rush: Why now and for how long?” Vogue Business. 22 November 2021.
  3. Storbeck, Olaf. “Hugo Boss moves production closer to home to shorten supply chain.” Financial Times. 30 December 2021.
  4. Patrizia Gazzola, Enrica Pavione, Roberta Pezzetti, Daniele Grechi. “Trends in the Fashion Industry. The Perception of Sustainability and Circular Economy: A Gender/Generation Quantitative Approach.” Sustainability, 2020: 1-19
  5. Maciekus, Venantas. “Tekstilės pramonė .” Universal Lithuanian Encyclopedia. n.d.
  6. “Broliai Feinbergai ir tekstilės fabrikas „Klaipėda“.” LRT. 5 April 2020.
  7. Bartlett, Djurdja. “Snapshot: Lithuanian urban dress, 1940s to twenty-first century .” In Berg Encyclopedia of World Dress and Fashion. Vol 9: East Europe, Russia, and the Caucasus , by Joanne B. Eicher Djurdja Bartlett, 214-216. Berg Publishers, 2010
  8. Kudarauskaite, Radvile. “Culture Under Censorship in the USSR: Homogenous Soviet fashion and Desirable Western Trends.” 2020 Vision Fashion Communication. 2020.
  9. Wakefield, Cushman &. Global Manufacturing Risk Index. 2021.
  10. “Apparel, textile and leather industry .” Enterprise Lithuania. 2021.
  11. “Services .” Omniteksas. n.d.
  12. “2014-2020 Operational Programme for the European Union Funds Investment in Lithuania.” Omniteksas. n.d.
  13. Audimas. n.d.
  14. “Greenpeace : Utenos trikotažas becomes the first producer in the world to fully comply with organization’s environmental standards.” Globe News Wire. 24 February 2020.
  15. Invest Lithuania. n.d.
  16. “Founders.” LTP Group. n.d.

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