The Turkish textile sector, which did not stop making investments in machinery and technology even in the crisis period, is highly dependent on imported brands, especially on the European ones. Turkey, which exported $ 296 million worth of textile machines and machine parts last year, performed $ 1 billion 814 million worth of imports. Although the domestic textile machinery and machine parts sector continued to grow slowly, the gap between the import and export ratio opens day after day. The domestic industry, which conduct important studies especially in the field of finishing machines, is in expectation of regulations and incentives in order to be able to enter the competition.
By this way, it is aimed to draw a line at the machinery imports, the important item of the country’s trade deficit, and it is stated that Turkey will get rid of the image of a country that buys technology but does not produce. Adil Nalbant, President of Textile Machinery and Accessories Manufacturers Association (TEMSAD) answered our questions about the issue and mentioned the problems and the position of the domestic textile machinery sector in the world. Nalbant stated that Turkey is still dependent on the external sources for technological machines but the domestic machine manufacturers also displays an ever-increasing trend in exportation.
Nalbant began his words by describing the textile machinery and parts sector and listed the products within this field and the Customs Tariff Statistics Position (G.T.I.P); The machines that manufacture fiber from woven materials and weave and cut them; Machines that prepare fibers, manufactures and prepares yarns; Weaving looms (machines); Knitting machines, machines and devices for guipure, tulle, ruching and net production; Auxiliary textile machines, devices and parts; Parts of the machines that manufacture felt and fabric; Machines and devices for washing, drying, dyeing, ironing the woven materials; Sewing machines, furnitures, needles and parts.
Nalbant stated that according to the data gathered from OECD, between 2006-2011 the average trade volume of general machinery and parts increased to $ 1,65 trillion, in which the textile machines had a market share of 1,5 percent and reached $ 24 billion. Nalbant reminded that the exports performed by the Turkish textile machinery and parts sector amounted to $ 27 million in 1999. “In the following 10 years, the exports performed by the sector increased by 10 fold and reached $ 270 million in 2009 and $ 296 million in 2011. In this global sector with a volume of 24 billion Dollars, our country has taken the 14th place among the most exporting countries,” said Nalbant.
Iranian Market Declined While Ethiopia Leaped Forward in 2011
Nalbant also mentioned the export markets of the Turkish textile machinery and parts sector and drew attention to the changes occurred in the recent years. Looking at the export performance in the last ten years, Nalbant said that our country performed exports mostly to India, Bangladesh, Germany, Egypt, Iran, Uzbekistan, Syria, England, Pakistan and France. Nalbant continued by saying; “When we look at the export figures recorded between 2010 and 2011, we see that Syria and Pakistan are replaced by Russia and Ethiopia, where new investments are being made. Due to the increase in demand after the crisis in 2009, Iran became the country to perform the most exports in 2010. However the situation reverted back in 2011 and $ 272 million worth of exports we performed in 2010, increased by 9,6 percent and amounted to $ 296 million in 2011. The target of the textile machinery and parts sector for the year 2012 is 350 million Dollars.”
Adil Nalbant made evaluations about the data gathered from the Central Anatolian Exporters Union (OAİB) and reminded that while Iran was the country to which $ 27 million worth of exports - the highest level of all - were made to, in 2011, the country fell to the 6th place. “Another interesting thing is that among our greatest 10 markets, we experienced a decline in our market shares only in Iran. India, which became our second export market in 2010, strengthened its position as the greatest market by exceeding $ 30 million in 2011. Ehiopia, which was at the 10th place in 2010, made a great progress and became our second market,” said Nalbant.
We are Still Dependent on the Imports for Machinery
Nalbant emphasized that the Turkish textile machinery and parts sector continues its growth in the exports with small but consistent steps. Nevertheless, Nalbant attracted attention to the imported machines in the sector. Nalbant stated that China, USA, India, Germany and Turkey get a share of 48 percent in the textile machinery and parts export figures which reached $ 24 billion globally. “China constitutes 25 percent of the market. In other words, each exported machine out of 4 goes to China, the USA, India, Germany or Turkey. Turkey has a share of 5,2 in the market,” said Nalbant.
Nalbant gave detailed information about the Turkish textile sector’s machinery and technology imports and stated that the knitting machines had a share of 25 percent, and the weaving machines had a share of 20 percent in the $ 15 billion worth of imports performed between 2002 and 2011. Nalbant underlined that among these technologies, the finishing machines constituted the segment with the lowest current account deficit. Nalbant continued by saying;
“When we look at the import and export figures of 2011 on the basis of products, the weight of the imports make itself felt. While $ 59 million worth of imports and $ 7 million worth of exports were performed in the fiber manufactured product group. On the other hand, $ 535 million worth of imports and $ 53 million worth of exports were performed in the yarn product group. In the woven products, $ 278 million worth of imports and $ 15 million worth of exports were performed. As for the knitted products, $ 337 million worth of imports and $ 19 million worth of exports were performed. In the auxiliary products, $ 187 million worth of imports and $ 33 million worth of exports were performed. In the felt product group, $ 76 million worth of imports and only $ 1 million worth of exports were performed. In the finishing products, $ 211 million worth of imports and $ 150 million worth of exports were performed. This figure at the same time, equals 71,1 percent, which is the highest level of export import ratio. In the apparel product group, $ 131 million worth of imports and $ 18 million worth of exports were performed. ”
Nalbant stated that last year, with an imports figure of $ 1,81 billion, Turkey became the third country to perform the most imports for the first time. Nalbant also evaluated the change occurred between 2006-2011 by saying; “With an imports figure of $ 1,32 billion, Turkey ranked fourth in 2006. This figure amounted to 1,79 billion in 2007 but the country remained at the 4th place. In 2008, we dropped to the 3rd place in imports with $ 1,05 billion. As a result of the crisis, in 2009, we decreased to the 7th place with $ 0,47 billion worth of imports and in 2010, we retrieved the 4th place by performing $ 1,13 billion worth of imports. In 2011, we performed $ 1,81 worth of imports. India is estimated to perform $ 1,48 billion worth of imports last year. According to this, considering the amount of the imports performed, Turkey has become one of the top three countries for the first time.”
Nalbant reminded the record decline observed in imports in 2009 and stated that the increase started in the same year and the figures were reflected to the year 2010. Nalbant mentioned the booklet of the Turkish Machinery Sector Strategy Document and Action Plan by saying; “It shows that in 2010, Turkey’s textile machinery and machinery parts imports increased by 136 percent compared with 2009. It is interesting that in no other machinery field, such a change has been observed. When we look at the situation from the perspective of the whole world, it is obvious that such an increase is unrivalled.” Nalbant also mentioned the changes occurred in the other countries and reminded that in Indonesia 83 percent, in China 64 percent, in Italy 48 percent, in Japan 42 percent and in Germany 34 percent of increase took place.
Invisable Effect in Imports: Second Hand Machinery
Adil Nalbant emphasized that the Turkish textile machinery and parts sector continues its growth despite every kinds of internal and external crisis experienced in the export markets. Nalbant added that regardless of this growth very significant increases and decreases took place in the machinery imports. Nalbant reminded that in 2009, the imports decline to the level of $ 450 million from $ 2,2 million. He also argued that the period, when the imports hit the bottom, is not regarded as an opportunity and Turkey has become “The world’s most popular textile machinery junkyard”. Nalbant continued by saying “Most of the $ 3 billion worth of machines imported within 2 years after the crisis in 2009, are ‘second hand’ machines. Unfortunately customs legislation based on GTIP, is an obstacle in the diagnosis of this unhealthy situation let alone the treatment of it. There is not a clear answer to the question ‘How much of the importation we perform consist of the second hand machines?’
Nalbant, who calls the second hand machinery imports as ‘untitled disease’, stated that this disease harms Turkey’s future. “India, which we got ahead of in 2011 in the imports, has a Textile Ministry. As a result of their studies, the machines that do not certify that they are less-polluting, are not allowed to enter India today. On the contrary, the machines that have been used for 25-30 years, are sold in Turkey. We believe that precautions against this situation should be taken immediately,” said Nalbant.
Precautions should be Taken Immediately, the Sector should be Protected
Adil Nalbant said that despite the global crisis experienced in 2009, the Turkish textile machinery and parts sector countinues to increase the amount of the exports it performs however due to the problems such as second hand machinery imports, the export limit of $ 300 million has not been able to be exceeded. Nalbant emphasized that it is necessary to take precautions against the situation immediately, otherwise Turkey is going to loose one of its organs. Nalbant remarked that in case the sector is taken under protection and a development is achieved, the export target for the year 2023 will be able to be attained.
Nalbant argued that in order to protect the domestic textile sector from the unjust competition, a similar application to the additional customs duty taxes applied by the government on the imported textile products, should be implemented in the machinery and parts sector. Nalbant also remarked that the manufacturers that have been put under protection, will heave a sigh of relief and have the chance to develop themselves. Nalbant mentioned the things that should be done in this process by saying;
“In order to obtain efficiency from the period, SME’s, which do not have accumulated equity, should be provided with financal support. The manufacturers intenting to recover with this support, should be stipulated to overcome their deficiencies. In other words, they should raise their product and services to the TURQUM Quality Standards of OAİB. The manufacturers, which sacrificed quality through their survival struggle, should be explained that they will not be included in the strategy plan. The companies, which guarantee that they will standardize their quality should be supported in employing qualified human resources, conducting R&D activities, establishing Organized Industrial Zones and decreasing the energy, raw materials and other input costs. In order for the manufacturers, which receive these supports, to enter into competition at home and abroad, Turk Eximbank Country Buyer’s Credits and Halkbank Domestic Machinery Manufacturers Standby Credit programs should be developed. Our manufacturers, who receive these supports will surely carry the country to the target position.”
Nalbant underlined that the machines, for which the industry is dependent on foreign resources on the basis of GTIP, should be detected and domestic production should be encouraged in order to put an end to this dependence. Nalbant added that supporting the joint ventures for domestic production in Turkey, which is the world’s third greatest textile machinery and parts market, will contribute greatly to the Turkish economy and sector.
