Turkish Clothing Manufacturers Association (TGSD), the most inclusive non-governmental organization in the clothing industry, held a press conference with TGSD Presidents Ramazan Kaya and Sanem Dikmen and Economic Advisor Dr. Can Fuat Gürlesel before the Istanbul Ready-to-Wear Conference to be held on 12-13 October. At the meeting, which is one of the most important organizations of the Turkish ready-made clothing industry, which broke the record with 1,000 physical participants last year where 1,200 meetings were conducted with nearly 50 purchasing offices and brands, the first three quarter of the ready-made clothing industry were assessed, and the expectations set and targets for the coming period disclosed.
Ramazan Kaya: ''We are Experiencing loss of Turnover, Volume and Employment''
While reminding that, as the ready-made clothing industry, the year started with a target of 23 billion dollars after 21.2 billion dollars of exports in 2022, TGSD President Ramazan Kaya said, “However, due to the slowdown in foreign markets and domestic cost increases, we lost our advantages against our competitors. For this reason, we revised our year-end export target to 19-19.5 billion dollars. Of course, this situation in our industry did not happen overnight. After the pandemic, three trends began to determine world trade: 'supply security and close supply', 'sustainability and green transformation' and 'technology and trade wars that started in between the USA and the West and China'. In this process, our industry achieved significant successes as consumers turned to shopping, and this situation continued until the last quarter of 2022. However, after this period, the decrease in spending trend due to inflation, recession and conflict which taking place especially in Europe, seriously affected our sector. As a result, our turnover in the first three quarter of this year decreased by around 8 percent compared to the same period of the last year. The decrease in quantity reached 15 percent. On the other hand, we predict that the employment loss experienced in the last year will cover 200 thousand people in textile and ready-made clothing as well by the end of this year due to lack of demand, capacity contraction, migration from the earthquake zone and EYT."
''Buyers' Price Reduction Demands Continue to Increase''
While stating that one of the most important reasons for the loss in exports is the weakening of Turkey's competitive power, Kaya set out the reasons leading to this with the following words; “Fast fashion, which entered our lives in 2005 with the freeing of trade and the abolition of quotas, turned into a more convenient, comfortable and sustainable fashion concept with the pandemic. Fast fashion has been replaced by slow fashion. I define this as 'fashion consumes fashion'. With slow fashion, the time pressure on purchasing groups has taken away. Our speed and closer supply advantages, which previously gave us great advantages, no longer come up with the same benefits as before. During this period, our prices have risen due to inflation and increases in labor costs as well in our country. In fact, we have always been more costly than countries such as Bangladesh, Vietnam and India. However, buyers who would be able to tolerate a 15-20 percent price difference are now facing issues when this bar raised to 40-45 percent. In an environment where demand slows down significantly and stocks accumulate, buyers' demands for price reductions continue to increase, but we cannot pull down prices due to high costs."
''We Need to Take a Few Steps Back and Should Focus on Making a Stride''
While stating that the sector should accept the need for change and transformation and take action as soon as possible in order to adapt to changing conditions, to increasing exports and for competitive power, Kaya said, “The most important element that will bring success in the transformation process and our most important competitive power will be our flexibility. Of course, we no longer see flexibility as just the ability to meet incoming orders, that is flexibility in production compared to past. We need to have a flexible structure, from our management steps to our human resources, and from our digital infrastructure to our relations with the public. In addition, if we predict that the quantities in our production and exports will decrease, we will definitely shift our focus to the production of higher value-added products and higher-priced exports. Ultimately, we must ensure product-market-brand diversity and create more added value. This may take us a few steps back at first, but it will allow us to make a greater strides after a year. We must now abandon resistance and adapt to new habits."
''We Can Talk About a Positive Outlook Starting from the Second Half of 2024''
While pointing out that the ready-made clothing industry exported a total of 406 billion dollars in the first century of the Republic and that public supports had an important share in this success, Kaya continued as follows; "We think that the ready-made clothing industry in the world and in our country will never again have the bright years of 2021 and 2022, which were formed with the post-pandemic conditions. For this reason, contractions will continue in the last quarter of this year and the first quarter of 2024 as well. However, if we can enter the transformation process, we can talk about a much more positive outlook from the second half of 2024, especially by 2025. Public supports are critical for success in this new transformation process as well. Inflation in Europe, changing consumer trends after the pandemic and problems in the Turkish economy caused us to experience losses not only in our exports but also in employment, and this situation made the transformation in our sector inevitable. However, we must make this transformation with the sector and the public hand in hand."
Kaya Listed TGSD's Demands from the Public as follows:
1. The minimum wage should increase once by the inflation target in 2024. The government should increase minimum wage support to 2 thousand TL in 2024.
2. In order to overcome the difficulties and prepare for and manage the transformation process, business loans with a term of 3 years and a grace period of 1 year should be provided.
3. The link between Eximbank interest rates and Central Bank reeskont interest rates should be eliminated and export loans with lower interest rates should be provided.
4. The sector used a significant amount of credit between June 2020 and 2023 as a result of the policies and legislations of the concerning period. Foreign currency loans included in these loans should be converted into TL and a restructuring opportunity should be provided for all loan debts.
5. The premium payment for the exchange of export revenues to the Central Bank should be increased to 5 points.
Sanem Dikmen: ''We will Bring Together Hundreds of Brands from abroad with our Domestic Producers''
TGSD President Sanem Dikmen gave information about the 16th Istanbul Ready-to-Wear Conference, which will be held on 12-13 October. Explaining that the conference will be held with the theme of Transformative Journey this year, Dikmen said, “We will talk about the upcoming transformation process, the habits we need to acquire, and the changes in the way of doing business, together with our stakeholders from Turkey and abroad. We have named the second day of our event, where we will discuss the most important issues of our industry such as traceability, transparency, circular economy and wearable technology on the first day, as the 'B2B Bilateral Business Meetings' day, as every year. Here, we will bring together purchasing groups representing hundreds of brands from many countries, spesifically from Europe, with our domestic producers and prepare a commercial platform for them to establish new markets and to form new business connections."
About TGSD
Turkish Clothing Manufacturers Association (TGSD), one of Turkey's most deep rooted sectoral associations, was founded in 1976 and gained the status of a public benefit association with the decision of the Council of Ministers dated 2003. TGSD, which represents the entire value chain of the sector with more than 450 members who realize 60 percent of Turkey's ready-made clothing exports, has the distinction of being most inclusive NGO’s in the sector. The Association, which leads the ready-made clothing industry to become a corporation, to become a world brand with its product and service quality by showing perseverance in innovation and sustainability, to renew all its processes with a focus on digital and green transformation and to make large-scale investments, aims to increase the competitiveness of the sector with the TGSD Development Academy as well. TGSD also keeps its finger on the pulse of the industry with the Istanbul Ready-to-Wear Conference, which it has organized every year uninterruptedly since 2008 and which is also included in international calendars.