Europe is a must for Turkey’s ready-to-wear industry
China is getting closer to Europe with its “One Belt One Road” project, according to Ahmet Musul, the chairman of Ekol, one of Turkey’s leading logistics firms.
As Turkey’s “geographic proximity” advantage, which had a benefit on its exports to Europe, is slipping away, this will certainly have its impacts on the textiles industry.
At a time when relations with Europe has turned bitter, we discussed with Şeref Fayat, the chairman of the Turkish Clothing Manufacturers’ Association (TGSD), how this sector, whose 75 percent of its exports are directed to Europe, would be affected.
The TGSD is preparing for the 10th Istanbul Fashion Conference, which will take place between Oct. 11 and 12 with the theme “Why Istanbul?”
“In the past, European buyers used to come to Istanbul. Now, half the customers are not coming. Now with our luggage in our hands we go to them,” Fayat said.
Apparently, the ready-to-wear industry has been affected by our shattered image as much as the tourism sector.
Despite the sector’s assertiveness and efforts, the industry fell beneath its export goals.
“Currently, we are 2 percent behind. However, if we take into consideration that Turkey’s export capacity has been raised by 10 percent, we are actually 12 percent behind,” Fayat said.
The TGSD chairman said they aim to finish 2017 with a figure of $17 billion.
“Europe is a must for Turkey. Some 75 percent of our exports are sent to Europe. Germany, the United Kingdom, Spain and Italy are important markets for us. Despite this, only 7 percent of the EU’s imports come from Turkey. It is very important to maintain our position in Europe,” he added.
It is unfortunate that instead of planning strategies to increase our exports we are at a point of just maintaining our position.
Turkey’s number one buyer in the ready-to-wear sector is Germany, followed by the U.K.
We have several strains in our relations with Germany and we will see what happens after the country holds elections soon.
And the U.K. is, of course, in limbo due to Brexit.
“The trade deficit with the U.K. is in favor of Turkey. We sell them $10 billion worth of merchandise and purchase $5 billion worth of products. Eventually, they will have to sit down with us to discuss how to balance this. The question here is, how our sector would be impacted by this,” Fayat said.
European buyers seek an alternative to Turkey
In the meantime, EU buyers are seeking an alternative to Turkey, which has to be within close proximity and has a middle-price range.
Apparently, they are encouraging firms to invest in countries like Romania, Bulgaria and Serbia.
So, what are Turkey’s perks as China nears Europe as well as the search for alternative markets continue?
“There is a wide spectrum of producers which can offer Chinese prices with the quality of Italian production. On the other hand, we can produce a t-shirt from the thread to the design. Our weaving and denim quality is very high,” he said.
During the 10th Istanbul Fashion Conference, which will host foreign participants as well, the emphasis will be on the topic of such perks.
Despite these advantages, Turkey’s median is $16 per kilogram in the ready-to-wear sector, while Italy’s is $60 per kg.
What matters here are brand products, and we are way behind Italy in this.
According to information revealed by the TGSD chairman, Italy exports three times more than Turkey with one-third of the labor force.
“Today, the quantity of our products is increasing, but the value is decreasing. Such a situation is not sustainable. We should go like Italy. We should weigh toward value-added brand products,” he said.
In terms of brand wear, the good news is that, according to Fayat, Turkish brands such as LC Waikiki and Koton will become serious competitors to Zara and H&M in the next decade.