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Textile & Apparel Industry in Turkey
Textile and Clothing industry has a great contribution to the Turkish economy. The industry has been called like the locomotive of the Turkish economy for years. Turkey’s textile and clothing exports have continued to rise recently after they began falling in January, with the elimination of EU and US quotas.
The industrialization efforts of the 60s and 70s gave birth to the modern textile industry in Turkey. At first, this sector functioned as small workshops. But the sector showed rapid development and during the 1970s began to export. Today, Turkey is one of the important textile and clothing producers and exporters in the world.
Turkey’s textile and clothing manufacturers have begun to relocate production in Eastern Europe and Central Asia. In the last three years, Turkish textile and clothing companies have faced increasing difficulties, after being quite successful in the eighties and the first part of the nineties.
Chinese textile exports after decades-old quota systems end on January 1, 2005 and the World Trade Organization believes that within three years the Asian giant could produce more than half of the world’s textiles, up from 17% in 2003.
The end of the quota regime has sparked fears of widespread job losses around the world, including in Turkey, whose textile and clothing exports are about $20 billion a year.
Thus, it is necessary to understand the Turkish textile and clothing sector, the weakness and the strength it has in the World market.
Current scenario of Textiles and Clothing in Turkey
The textile and clothing sector has been the backbone of the Turkish economy with a crucial role to play in the industrialization process and market orientation of the economy in the last two decades. In the 1980s, it was the leading sector linked to the global economy and the export earnings of this strong currency sector contributed considerably to the overall economy. The textile sector continued to be one of the most important contributors to the Turkish economy, being one of the fastest growing sectors in the 1990s with an average 12.2% annual growth, while the Turkish economy had an average growth of 5.2% per year. Total investment in the sector has exceeded 150 billion US dollars, of which more than 50 billion US dollars have been invested in the last 5-10 years.
Textile industry started in the 1960s in small workshops, developed rapidly and transformed Turkey into a global competitor.
The total number of companies in the sector, dominated (95%) by the private sector, totals approximately 44,000 and 25% of them are active exporting companies. The clothing industry consists mostly (80%) of small and medium-sized companies while the technology-intensive textile production was undertaken by large-scale companies. Today, about 20% of Turkey’s 500 largest companies are involved in the textile and clothing sector.
Low labor costs, qualified workforce, relatively cheap raw materials played an important role in the significant growth of the sector; as well as a liberalized economic environment and export-led policies in the last two decades.
The production value of the sector is more than 20 billion USD. Employment in the sector is estimated to be approximately 4 million people (2.5 million employed directly and another 1.5 million indirectly through the sub-sectors). Official statistics also reveal that about 500,000 employees in the sector due to unregistered labor force.
The clothing sector exports around 60% of its production. Capacity utilization rates are around 75% especially among exporting producers.
Turkey also ranks among the top ten global producers of wool fabric, carpets, synthetic filament and fiber, polyester and polyamide filament. While Europe’s third largest polyester producer is a Turkish-American joint venture, Turkey’s synthetic production is rising to 15% of Western Europe’s capacity.
Textile and clothing industry has a great contribution to the Turkish economy. For example, textile and clothing industry is responsible for:
. 10% in GNP
. 40% in industrial production
. 30% manufacturing workforce
. 35% of exports earn
The textile and clothing sector contributes more than $20 billion to the Gross National Product. The sector is mostly important for its export earnings; its share in the country’s total exports has been between 33-39% since 1990.
The most important export market for Turkish textile and clothing is the EU countries, which account for about 65% of total textile and clothing. Turkey ranks second in clothing and textile imports to the EU having an 8.2% and 4.8% share in the total textile and clothing imports from the EU respectively as of 2003.
Exports of textiles and clothing increased by 14.6% on average per year during 1980-2003. Especially until the second half of 1990s, the exports of the sector increased at a rate above the increase in total exports of Turkey as well as the increase in global textile and clothing exports. In 2003, the exports of the sector totaled 15.1 billion USD, having a share of 32.6% of the total exports. Exports rose to 23% in 2003, value periods to 2002. The increasing share of clothing in exports since 1986 means the efforts to produce more valuable products.
After the EU, the US is a big and imminent market. Turkey is the 19th clothing supplier and ninth textile supplier of the United States with a 1.9% and 2.9% share respectively. Next to the EU and the American market, new markets are North African countries namely, Tunisia, Egypt and Algeria; Middle Eastern countries namely Syria, Israel and Saudi Arabia; Eastern European countries namely Romania, Bulgaria, Poland and Hungary; and CIS countries. The sector faces quotas only in the United States and Canada. The Russian Federation was also a large market for the Turkish textile and clothing sector until the financial crisis of August 1998. It was the 3rd largest market for clothing and the 9th largest for textile products in 1997. Russia continues to be a promising market for textile products. and clothing sectors. with its high consumption potential that will appear in the following years especially after developments towards a better integration to the world economy and to Member perspectives.
Turkey is a very important cotton country, which is an advantage in raw materials for the clothing industry. Turkey is a traditional cotton producer and uses this advantage in the textile and clothing sector. Turkey is the first in Europe and the 6th in the world production of cotton with an average production of 800,000-900,000 tons per year.
a year In addition, with the completion of irrigation projects within the Southeastern Anatolian Project (GAP), Turkey’s most comprehensive development program, current cotton production is expected to double by the year 2005.
During 2003–04 season Turkey produced 893,000 tons of cotton. About 30% of the cotton production is high quality long staple cotton and the rest is medium quality. The cotton industry provides a competitive advantage to the textile industry, which uses cotton as its essential raw material.
Cotton Market Trends
Main destinations for cotton yarn exports are Italy, Portugal, Greece and Belgium and for cotton fabric the UK, Italy, USA and Belgium. While Turkey used to be a net exporter of cotton, the trade balance reversed in 1992 and since then Turkey has been a net importer of cotton as domestic demand has persistently exceeded available stocks. Next to cotton, Turkey has a strong reputation in synthetic fiber, wool and mohair production. Turkey is ninth in synthetic fiber, eighth in wool and third in mohair production in the world.
Home Textile Industry
In addition to the Turkish textile industry, Turkish domestic textile industry has also shown growth in terms of production and export. In recent years the production of home textiles has shown a steady growth due to the increase in domestic and foreign demand for home textiles. Turkish home textile industry has recorded growth in terms of production and export in recent years. Almost all types of home textiles are produced in Turkey. These may be listed as follows in order of their export value: sheets, blankets, table cloths, towels, bath towels, veils, curtains, lace, inner curtains, curtains or bed downs, blankets, pillows, cushions, quilts, duvets.
In home textile sector, apart from large-scale companies there are many small and medium-sized companies scattered all over the country. As a division of the textile industry, the domestic textile sector accounts for a 3.2% share in Turkey’s total exports and has been an important subsector for the Turkish economy. European countries are the most important markets for Turkey’s home textile exports. Currently, Germany, Great Britain, France, the United States, the Netherlands and the Russian Federation are the main markets for Turkey’s domestic textile exports. New markets such as Poland, Hungary, Romania and CIS countries are gaining more and more importance.
Foreign Investments in the Sector
The products of the Turkish textile and clothing sector have a good reputation in foreign markets as a result of the availability of high quality cotton in Turkey, wide use of CAD (Computer Aided Design) and CAM (Computer Aided Manufacturing) and the increase in the number of qualified employees
The sector is aware of the trend in international markets towards a growing demand for healthier and more environmentally friendly products and tries to adapt to these developments through legal and technical regulations.
However, it is difficult to maintain its competitive position in the world market full of emerging players. Thus, manufacturers shifted their operations to value-added products and creation of brand names. Currently, 30% of Turkish manufacturers have their own designs and brands in international markets.
As current studies reveal, developed countries will have a declining share in global textile production while developing countries will increase their production capacity to meet the growing demands. It is also estimated that by 2005, the developing countries will increase their self-sufficiency in textile production. The United States with an estimated 200% increase in textile consumption is also estimated to have a 32% decrease in self-sufficiency by the year 2005.
Turkey, with its adaptability to European standards and regulations related to the environment, health, quality and safety aims to move into the production of more and more valuable products, into an era in which the Turkish textile industry will be known for its quality. trademarks and product prices for the Made in Turkey sign.
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