Interview with Textiles Department

In case of Turkey, the creation of a modern textile and clothing industry began with the founding of the Republic of Turkey in 1923. Later on, the industry has become an impulsive force in Turkish economy in terms of both domestic and foreign aspects, starting from 1970s until present. Especially with the boom in Turkish exports in line with the transition to free market economy in 1980, Turkish textiles and clothing industry experienced a successful move by recording an increase rate more than the increase rate of global textiles and clothing industry. It constitutes one of the largest industries in terms of employment and production with a share of 4 % in GDP, 20% in manufacturing output, and 21% in employment in the manufacturing sector.

Turkey’s textile and clothing sector has a great significance in world trade, also. According to the World Trade Organization 2006 figures, it is the 9th largest supplier in textile and 4th in clothing. It is also the 2nd supplier of the EU market in textile and clothing following China.

There are several reasons that make Turkey a leading trade organizer both at home and abroad.

•The economic arena is growing more and more complex by the day, competition is stiffening. In such a global environment to remain competitive, it is imperative for Turkish firms too, to have a global orientation and to monitor market trends around the world. Participation in international trade fairs (ITF) is a quick way to promote exports and to gain a global view. Owing to this crucial relationship between ITF participation and export performance, export support system has been an important element of Turkey’s foreign trade policy. Undersecretariat For Foreign Trade (UFT) has been supporting its exports by securing participation of companies in commercial Turkish Export Products Fairs, Sectoral Turkish Export Products Fairs and National Participation organizations realized abroad since 1995.

•Thus, the major aim of UFT at supporting Turkish firms to participate in ITF’s is to assist their marketing activities and encourage them to achieve an increasing trend in their exports. To some extent, expenditures of a firm, ranging from cost of transportation of exhibition goods to cost of booth rent are met by the UFT.

•Within the framework of the export strategy implemented by the UFT, in Overseas Fairs organized in countries which are specified as new or target Markets, a surcharge is granted to participant firms in the context of promotion system.

•Among a thousand of fairs organized abroad every year, UFT tends to select fairs organized in countries and industries which Turkey has a comparative advantage and is quite competitive. Because textile and apparel industry has a leading role in Turkey’s economy and foreign trade, textile and apparel industry fairs generally constitute an important part of the events participated by Turkish firms. In 2007, nearly 20% of the fairs organized abroad and participated by Turkish firms were related to this industry. Turkish firms participate in these fairs under the effective organizations and strong promotion campaigns of fair organizer firms, which are authorised by UFT on the basis of their professional marketing qualities.

•Expenditures generated in the course of textile, apparel or fashion fair organizations realized by the organizers for the purpose of promotion activities (especially the fashion shows) which make the organizations even more influential, included within the scope of support procedures.

•Apart from supporting participation in overseas fairs, UFT attaches utmost importance to strengthen domestic ‘textile and apparel industry fairs’ and make them known abroad through “Buyer Mission Programs”, in order to contribute to the exporters’ international marketing efforts. Among many others, “International Fashion Fair”, “Texgate”, “Ev Teks” etc. are successful Turkish organizations which has achieved international reputation.

•Finally, the global trend shows that in the medium term the venue of fairs will move to Eastern regions of the world. In ‘The List of 2007 Fairs’ of Union of International Fairs (UFI) and Association of the German Trade Fair Industry (AUMA), there are more than 100 fairs organized both in Turkey and abroad by Turkish organizers. This fact, alone, is a strong proof that Turkey, with her unique geo-political location and high quality products, successful exports performance and competitiveness in various industries is a significant candidate to be the center of international fairs.

•Turkey, through its organizers and participating firms is an important member of international fair organizations. In the very core of this fact lies the cooperation between public and private sectors, which are trying to increase the quality and effectiveness of fair industry as a whole.

In 2006, Turkish textile and clothing exports totaled 19.7 Billion US Dollars an increase of 4%. Share of textile exports reached 8.1 Billion US Dollars an increase of 8% and clothing exports touched 11.6 Billion US Dollars an increase of 2%.

On the other hand, for the period of January- November 2007, textile and clothing exports amounted to 21 Billion Dollars taking a share of 22% of total exports. During this period, Turkish textile exports reached 8.6 Billion US Dollars an increase of 19% and clothing exports increased to 12.3 Billion US Dollars an increase of 18%.

After the abolition of quotas in 2005 the competition is extremely condensed in the world textile and clothing sector. Under these conditions, Turkey aims to be “the leader country” assured its competitiveness with high value added, technology and design driven production via product and market differentiation and providing sustainable export increase. Additionally in parallel to the current trends in the world, Turkey has shown great success in the technical textile production thanks to close cooperation between university-industry and governmental institutions and importance given to R&D.

As it is well known, technical and functional textile segment of the textile industry is growing rapidly in the world markets and it is expected to gain more importance in the coming 15-20 years. These products are being used almost every field of our everyday lives. Agriculture, building technologies, geology, medical uses, ecology, packing industry, and protective and sportive clothing are the main fields where technical textiles are being used.

Meanwhile, technical textile production and product diversification is increasing in Turkey in parallel to the developments of world markets. Turkey has adequate infrastructure in terms of new materials, current technology, know how and human sources to achieve development and growth in the technical textile field.

Technical textile investments in Turkey can be considered as “new”, but it is known that many companies are active in different fields. For example, the following may be considered as the most prominent fields and products:

Both domestic users such as Turkish Armed Forces, hotels, hospitals and foreign users prefer Turkish technical textiles. Turkish producers of technical textiles are generally small and medium size companies. There are also some very large-scale companies. These large-scale companies are well known in the world markets. On the other hand, investments in the promising fields of technical textiles like nonwoven products and automotive textiles are increasing regularly.

Today, various technical textile products are being produced in Turkey as it is mentioned above. As to the leading export items, flexible intermediate bulk containers of man-made textile materials, tyre cord fabric of high tenacity yarn of nylon, polyesters or viscose rayon, glass fibers and articles and nonwovens can be written down.

Turkish technical textile export has been in an increasing trend since 2000. During the seven years between 2000 and 2006, Turkey’s technical textile export rose by two folds.

The Customs Union between Turkey and the EU, which entered into force on 1 January 1996, constitutes the legal basis of Turkey’s FTAs and obliges Turkey to align itself progressively with the preferential customs regime of the Community. This alignment will concern both the autonomous regimes and preferential agreements with third countries.

Consequently, due to its obligations stemming from the Custom Union, Turkey will align itself with the EU’s preferential trade policy towards third countries.

In this respect, considering the EU’s new preferential trade strategy, namely 'Global Europe' towards new countries or country groups, such as South Korea, India, Ukraine, ASEAN, ANDEAN, there is certainly room for more FTAs for Turkey. Also, in an attempt to boost its trade with third countries, Turkey takes active role in regional organisations such as 'Organisation of Islamic Conference' and 'Organisation of Black Sea Economic Cooperation' as well.

In this context, Turkey’s foreign trade with third countries has increased between 2000 and 2006. In the said period, while Turkey’s foreign trade with third countries increased by 166%, the rate of increase with FTA partners was 222%. With regard to textiles and apparel sector, this increase has been even higher than the general trend. Especially, in trade with the Euro-Mediterranean countries, Turkey’s exports to countries such as Morocco, Tunisia, Egypt, and Syria showed significant increase thanks to the Pan-Euro-Med diagonal cumulation of origin system.

On the other hand, in the framework of its preferential trade agreements, Turkey has also opened its market to the third countries as well. Therefore, Turkish textiles and apparel industry turned out to be much competitive due to imports from third countries.

Turkish textile industry has newly established, modern, integrated and plants, comprising spinning, weaving, dyeing, printing and finishing capacity. On the other hand, together with the young qualified and growing population, clothing industry has the ability to adopt new fashion and to meet buyers’ preferences from all over the world. It has various advantages including diversified production line from basic items to fashion products, creating its own style fashionable and quality products with brand names. Considering that almost 80% of Turkish clothing industry is composed of Small and Medium Scale Enterprises (SMEs), it enables the industry to be flexible under fluctuating conditions in domestic and foreign markets.

Besides, relatively reasonable production inputs and its close geographical location to, not only the largest importer of both textiles and clothing –the EU-, but also its neighboring markets such as Russia, Central Asia and Middle East, make Turkey a leading exporter of textiles and clothing in the global context.

The year 2005 has introduced a significant change in global trade regarding textiles and clothing industry. With the elimination of quotas, some countries were afraid of suffering from cheap products that will rapidly flow in their domestic markets from low cost countries, and some were unhappy with the situation of losing their special access to the leading buyers (European Union-EU and United States of America-USA) and facing increased competition. In this context, the very important issue for some developing countries that are facing severe competitiveness in textile and clothing arising from Asia, was to develop higher value-added production capabilities, which required a strong determination in scrutinizing policies by the governments.

In that new era, Turkey has performed well, with its above-mentioned qualifications, skills, long-term experience and favorable geographical location.

Furthermore, Turkey has generated some policies by concentrating on a structural transformation based on high value added products, branding, relocation of the clothing industry and finally, on clustering models. Consequently, Turkish textile and clothing sector will be perpetuating its strength and sustainable competitiveness in the global textile and clothing trade for the next decades.

It is true that in the past two years, clothing sector experienced a recession period. The rate of the increase in clothing exports has declined due to the changes in the international clothing trade. For example, while the increase rate in clothing exports was 13 % in 2004, it has declined to 6 % in 2005 and 2 % in 2006.

The reason of the decline can be explained by both the changes of conditions in international trade and also the trends and economic performance of the major importing markets. As the most important factor, the complete elimination of quotas in 2005, paved the way for the East Asian countries enter the major markets where Turkey has been enjoying preferential market access, like EU.

It can be comfortably said that, the sustainable competitiveness of the clothing sector has recovered in 2007. It was a year of success that Turkish clothing exports increased to 123 Billion Dollars in the first 11 months. The increase rate was recorded as 18 %.

The Turkish leather industry is a giant production branch which takes it roots beyond the centuries.Today, with its organized leather industrial zones in Tuzla, Menemen and Çorlu, which have water treatment plants, leather production facilities in Bursa, Usak, Gerede, Gaziantep and various leather garment workshops and factories.

Because of its quality, fast and flexible production, nearly all of the world famous brands leather collections are being produced in Turkey. Leather and fur garment industry, presently exports very large amount of its production.

The competitive advantages of Turkish leather and fur garment industry in international competititon are:

As all of the other industries, leather sector will have to overcome some challenges due to severe competition in the global markets, in the following years. The sector has to generate policies for its adaptation and sustain its performance.

With the aims of promoting Turkish Leather both in domestic and foreign markets, forming a marketing, market development and promotion strategy to accelerate exports of Turkish leather leather products and footwear industries; increasing their market share beginning with export markets, establishing the Turkish leather image in the world, organising permanent activities in research and development, promotion, and branding, 'Turkish Leather Council' (TLC) has been founded in the year 2005.

TLC was established with the support of the companies active in the leather industry, with the Foreign Trade Undersecretariat coordination, under the organisation of Istanbul Leather and Leather Products Exporters’ Association and the Aegean Leather and Leather Products Exporters’ Association.

We believe that Turkey will continue to be one of the countries leading world textile trade by combining all her competitive advantages, even challenging China in some segments such as with high value added and brand oriented products and in the forthcoming days.