By Paul Cochrane for just-style.com
Turkey's clothing and textile sector has rebounded this year on the back of strong sales to Europe and emerging markets, with clothing exports up 11% to US$9.5bn as of August 2010, and textile exports reaching US$4.1bn, up 23% on 2009.
"Last year was a disastrous year, with clothing exports down 23%. This year we're recovering, exports are up, but 17% below 2008 and 10% below 2007," said Mehmet Kumbaraci, director general of the Turkish Clothing Manufacturers Association (TGSD).
Current export figures suggest the TGSD's forecasts for 2010 were relatively solid, with ready-to-wear exports projected at around US$14bn and textile exports at US$6bn. Their predictions, however, had looked rather rose-tinted in the spring.
"We were rather pessimistic at the beginning of the year, but textile exports in August were US$480m, up 10% on the previous month, and US$1.1bn in clothing exports, up 6% on July. I expect for the end of the year exports will be more than US$14bn for clothing, and about US$6bn for textiles.
"All plants are fully occupied, including high quality orders from suppliers in Pakistan, Bangladesh and China," said Kumbaraci. Demand ranges across the industry for all types of garments, he added, with no notably higher demand for any specific items.
Turkey was the only 'top 20' exporter to the European Union (EU) to record gains in the first five months of 2010, up 18.5% in Euro earnings between January and May. The other 19 main exporting countries - including China and India - have seen exports fall, stressed Zafer Çaglayan, Turkey's state minister for foreign commerce, at the launch of Istanbul Fashion Week 2010 in late August.
Despite overall textile and garment purchases by the EU falling this year, Turkish manufacturers have increased exports due to what Kumbaraci called the sector's principle of "fashion-fast-flexible."
Lead times have gradually dropped from two months to under four weeks, while the sector's highly skilled workforce, technology and design capabilities have retained Turkey's value-added edge with retailers who are not keen on having too high an inventory in the current economic climate.
This was reflected, for example, in Hugo Boss's decision to enlarge its men's wear factory in Izmir this year, while German men's wear brand Roy Robson has opened a men's wear factory nearby, said Kumbaraci.
"Since we have demand we are urging our members, which are congested with expected and un-expected demand from all over the EU, to invest in more technology and nano-technology, as well as make their own designs," he said.
"We are also encouraging young designers to go to Europe, and for manufacturers to hire young stylish designers that know about the European and American markets."
While the EU accounts for 80% of Turkey's exports, according to the TGSD, domestic clothing sales are also up this year - having fallen 15% in 2009 - and exports to emerging markets are faring well, particularly for Turkish-made brands in Tunisia, Iran, Iraq, Syria, Azerbaijan and China.
"The Chinese are now wearing more, so local demand is going up there and people want to have goods from abroad. 'Made in Turkey' products are in high demand and we are urging retail chains to open in China, and some are going," said Kumbaraci.
US recovery slow
Exports to the United States, however, have not recovered because import has primarily been for lower-cost garments and textiles than offered by Turkey. Exports are currently valued at US$300m a year compared to US$1.5bn a few years ago.
The TGSD is urging the government to push for Qualified Industrial Zones (QIZs) to be established in Turkey which would exempt products from US import taxes, as is the case for QIZs in Egypt and Jordan.
But while the sector is buoyant, it is facing global problems such as the record high cotton prices, and the TGSD is pushing the government to be more flexible with the minimum wage in poorer parts of Turkey to enable the sector to better compete internationally price-wise.
The TGMA's long-term goal is for Turkey to account for 5% of global clothing exports - as in 2005 - at some US$22.5bn to US$25.3bn by 2014, and US$60bn by 2023.
"Next year looks brighter, yet I am not sure if the crisis is 100% over everywhere. We have to be optimistic on one hand and cautious on the other," said Kumbaraci.