July 2015 export figures published by the Turkish Exporters’ Assembly (TİM) show that regression in the textile and raw materials sector and garment and apparel, carpet and leather sectors continues. Textile and raw materials sector made an export amounting to $ 633 million in July 2015. This figure is 9.9 % lower than the export amount of $ 702 million in the same period of the previous year. When January-July period of 2015 is considered, the loss of textile and raw materials sector is 11.4 % compared to the first 7 months of 2014. In this period total textile export regressed to 4 billion 628 million USD from 5 billion 222 million USD.
When 1-31 July 2015 is compared to the same period of the previous year, the biggest markets to which textile export is made are listed as follows: Italy 60 million 404 thousand USD by a decline of 19.17 %; Iran 29 million 470 thousand USD with a decline of 18.02 %; Germany 29 million 325 thousand USD with a decline of 8.10 %; USA 29 million 322 thousand USD with an increase of 18.11 %; England 26 million 923 thousand USD with a decline of 15.23 %; Bulgaria 24 million 858 thousand USD with a decline of 4.32 %; Poland 21 million 156 thousand USD with an increase of 2.72 %; Romania 21 million 129 thousand USD with a decline of 12.23 %; Egypt 19 million 93 thousand USD with a decline of 9.45 %; Iraq 16 million 126 thousand USD with an increase of 74.72 %; Russian Federation 46 million 13 thousand USD with a decline of 28.51 %; Spain 16 million 55 thousand USD with an increase of 1.26 %; China 14 million 872 thousand USD with an increase of 28.77 %; Ukraine 14 million 767 thousand USD with a decline of 45.80 %; Tunisia 12 million 140 thousand USD with a decline of 9.08 %; Netherlands 12 million 52 thousand USD with a decline of 3.43 %; France 9 million 968 thousand USD with a decline of 15.3 %; Belgium 9 million 554 thousand USD with a decline of 19.19 % and Morocco 15 million 782 thousand USD with an increase of 6.56 %. The first 10 sectors making the highest amounts of export in July includes garment and apparel sector as the second and textile and raw materials sector as the sixth.
Garment, Carpet and Leather Export Regressed
Garment and apparel sector generated income amounting 1 billion 497 million USD with a regression of 13 % in July 2015 in comparison to the same month of the previous year. In July 2014, this figure was 1 billion 720 million USD. January-July 2015 period export performance of the sector recorded a decline of 13.8 % as well. While exports made in the first 7 months of 2014 amounted to 11 billion 143 million USD, they amounted to 9 billion 658 million USD in the January-July period of 2015.
Carpet manufacturers generated an export income of 147 million USD with a loss of 19.1 % in July 2015. In July 2014, this figure was 181 million USD. In terms of January-July period, carpet manufacturers that generated an income of 1 billion 326 million USD in 2014 regressed to 1 billion 146 million USD with a loss of 13.6 %.
Leather and leather products sector generated an income of 169 million USD in July 2014 and this figure became 119 million USD with a decline of 29.7 %. In the January-July 2015 period, an export income of 871 million USD was achieved with a loss of 17.2 % when compared to the same period of the previous year.
At the Same Point with the Previous Year
Şeref Fayat, President of Turkish Clothing Industrialists’ Association (TGSD), to whom we talked about this issue said that, “When we look at the figures, we see that the income generated from the garment and apparel export in the first 8 months of 2015 declined by 11.8 % when compared to the same period of the previous year. On the other hand, there is a 5 % increase in our export in the first 8 months in terms of kilogram. As you know, Turkey exports almost 75 % of its garment and apparel products to EU countries. Almost all of the loss in our export income results from the decrease in value of Euro against USD. I can say that we are almost at the same point with the previous year in the first 8 months when the parity impact is cleared.”
No Need to Revise the Targets
Stating that we do not have to revise our targets in the textile sector, Fayat added that, “As the garment and apparel sector, our targets for 2023 are an export volume of 60 billion USD and domestic market target of 50 billion USD. I know that the way of reaching these targets depends on original designs, high value added production and heading towards more branding” and continued by saying, “I believe that, with our potential, experience in the global markets and knowledge, we have the capacity of reaching these targets. Therefore, there is no sense in causing despair because of temporary and extraneous declines in export. I also think that there is no need to revise our strategic targets.”
The Biggest Market: EU
Saying that, as the Turkish textile sector, there is almost nowhere that we did not set foot in, Fayat emphasized that we export garment and apparel products to 217 countries every year and added that, “The biggest market is EU for us. We export almost 75 % of our products to EU countries. We are the third garment and apparel supplier of EU following China and Bangladesh. We can increase our share in this big market by using our geographical proximity. We are not at the desired level in the US market which makes an annual garment and apparel import of 100 billion USD. When I look at the present situation of exchange rate, I see that our share in the US market will increase in the forthcoming years. Iran market which has entered into integration process with the world economy following the nuclear deals whets the appetites of all global powers. There is a big potential in Iran for our sector. Our geographical and cultural closeness as well as the positive image of our existing brands may enable us to do great things in this country in terms of product export, branding and even production in the long-term.”
Stating that Russia will turn back to its old bright days in its import from Turkey after it has overcome economic and political problems, Fayat also pointed out to the importance of African market for Turkey. Fayat also expressed that they target to increase their garment and apparel export to Africa to 1.5 billion USD in the upcoming years.
It Also Affected Turkey
In his explanation to our Magazine Group, Muharrem Kayhan, Chairman of Turkish Textile Industry Employers’ Union (TTSİS), said that, “Ongoing decline in the global trade is affecting Turkey as all other countries. According to the data of the World Trade Organisation, mercantile trade growth was 2.8 % in 2014 and it is envisaged that mercantile trade will grow by 3.3 % in 2015.”
Stating that Asian countries that are more competitive with their low production costs have larger shares in the world textile and garment market, Kayhan added that, “Two main reasons of the decline in the textile and garment products export in 2015 are amount decrease depending on the demand weakness in such export markets as Russia, Ukraine and Middle Eastern countries where political and economic uncertainties exist and Euro/USD parity. Textile and garment export which was 17.7 billion USD in the January-July period of 2014 became 15.4 billion USD by regressing 12.8 % in the same period of 2015.
60.6 % of our textile and garment export amounting to 15.4 billion USD, which corresponds to 9.3 billion USD, was made to EU countries. While 1 Euro was equal to 1.3690 USD in the first 7 months of 2014, it lost value by 18.54 % against USD in the first 7 months of 2015 and 1 Euro became equal to 1.1152 USD. Since the export to EU countries is recorded as USD in the foreign trade statistics, the decline in question resulting from parity reflects on the statistics. When our export figures are made free of decline caused by parity, we can say that the regression in our textile and apparel export is actually around 3 % in real terms rather than 12.8 %.
Continuing his remarks by saying that they envisage that the recovery trend in the US economy will continue and at the end will create a demand increase that will affect the whole world, Kayhan added that, “It is thought that demand increases in US and Iran markets and loss in value in Turkish Lira will reflect positively to the export and recovery in the garment manufacturing and export will support domestic demand for textile products. On the other hand, it is estimated that the loss of value in Yuan, unit of currency of China, will lead to an increasing competition especially in the European markets. It should be noted that Turkish textile and garment industry which has a dynamic infrastructure is currently pioneer in the fields of technology and design and has a high organisation and export capacity.”
R&D and Innovation Are Important
Emphasizing that it is necessary to increase the international market share and competitive power of the sector, Kayhan stated that nation-scale strategic studies in the fields of input costs, R&D, design, innovation and marketing are of paramount importance and added that, “If it is necessary to emphasize once more, the more R&D and innovation are developed, the more brands are created and the more those brands are protected.” Also expressing that it is highly important for sectors to be integrated with one another, Kayhan added that, “Without chemistry industry, it is not possible for textile and especially technical textile to develop. For instance, an advanced chemistry industry is needed for manufacturing dye-sensitive and heat-sensitive nano textiles. Since our textile industry naturally operates in an integrated manner with many sectors including chemistry, the success of other sectors will make positive impacts on the textile industry.”
Stating that the Customs Union created with the EU and opportunity of entering EU countries without customs duties play a key role in the development of sector export, Kayhan said that EU market continues being a prioritised market for Turkey and added that, “Protecting and developing our market share in EU is of great importance. Turkey is the 2nd biggest supplier of EU in textile and 3rd biggest supplier in garment. Our country is increasing its export to EU in both sectors in annual basis. However, Pakistan in textile sector and Bangladesh, India and Vietnam in garment sector constitute a serious risk with their high export ratios and privileged trade policies and potentials. Besides, initiatives are required both at national and sector levels in order to take part in the US market which is a big consumer market.”
