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'Ride through turmoil & whiz out stronger' - Experts

19
Nov '08
It could be the only country across the globe to hold an optimistic view on future prospects in face of recessionary trends witnessed worldwide due to the meltdown. The Turkish textile and garment industry is not expecting any note worthy drop in orders from its European customers in the near future and expect to bounce back from the current imbroglio.

Experts say orders are still trickling in but may be not on the levels seen in the same period of last year last year. But the main difficulty faced by the exporters they cite, is access to working capital funds because since this crisis has exploded they have been starved of credit by the financial institutions.

Since, the period between commencement of production of a particular order till receiving the payment of the same is quite long, a lot of finances are locked up in the interim phase, due to which their financial requirements are high. So, experts add by saying that in spite of receiving orders from abroad, manufacturers are not accepting them due to this very reason.

They categorically state that closure of companies till date from the sector could have been avoided if the government had acted swiftly to the demand by the industry to increase lending to them. They warn of catastrophic consequences if this situation is allowed to linger for some more time since the industry employs around 2.5 million people and mass lay offs in the sector will turn in to a cascading effect and provide a cue to other sectors to do the same.

This will harm the economy of the country to a great extent they aver. They blame manufacturers who have invested in manufacturing low value and mass produced products like cotton yarn and fabrics and say these are the companies who will be affected the first since it will be impossible to compete with the likes of China and India in global markets as they have an indisputable superiority in these products.

They have appealed to the government to increase the loan capacity of Exim Bank, a bank specifically designed to meet the financial needs of exporters, so that the crisis can be turned in to an opportunity.

But they are also very optimistic about the future. According to them, those companies who manage to ride through the crisis will come out stronger and expect to reap the benefits once this crisis gets over, if and if the government comes to their rescue immediately and lends the much needed capital required by them.

Turkish textile exporters earned US $5.58 billion from exports in 2006 which edged up to $6.55 billion in 2007 and in the first ten months of the current year, exports have grown by 10.79 percent over the same period last year to touch $5.92 billion.

On the other hand apparel which has a bigger pie of exports from the sector shipped products worth 13.99 billion in 2006; $16.05 billion in 2007 and now have amounted to $13.58 billion in the first ten months of 2008, a 3.31 percent increase over same period in 2007.

Fibre2fashion News Desk - India


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