In an environment where textile and garment sector recorded an export volume of $ 25 billion in total, the leading figures of the sector demands the authorities to lift the taxes which make the import of raw materials difficult.
One of the biggest items of the export of Turkey, textile and garment sector closed the year 2013 by recording $ 17 billion in the export of garment products and $ 8 billion in the export of raw materials and the Chairman of Istanbul Ready Wear and Garment Exporters’ Association (IHKIB) which is the biggest exporters’ association of the sector, Hikmet Tanrıverdi expressed that: “We recorded an export volume of $ 14.3 billion with an increase of 8.1 % in the period of January – October of 2013 in comparison to the same period of the previous year. We exported our garments to 191 countries in the last 10 months. Now we have turned into a sector that can produce fashion and brand. Our target is to become “organiser country” in the sector.
Tanrıverdi added that: “Increases were recorded in the export volumes of three basic product groups of the garment sector in the period of January-October of 2013, which ranged between 4.6 % and 14 %. In the period of January – October of 2013 in comparison to the same period of 2012, export volume of the knitting ware and accessories, mostly exported product group, reached $ 7.6 billion with an increase of 8.9 %, the export volume of woven clothes and accessories reached $ 4.8 billion with an increase of 4.6 % and the export volume of other ready products group which also includes home textile products reached $ 1.8 billion with an increase of 14 %.
The countries to which we made the majority of our export in the abovementioned period are Germany, England and Spain. We made export amounting to $ 3.1 billion with an increase of 8.1 % to Germany, $ 1.8 billion with a decrease of 3.4 % to England and $ 1.2 billion with an increase of 3.5 % to Spain. By the end of 2013, we will have been made export amounting to $ 17.350 billion. Our target for 2014 is $ 20 billion.”
The biggest cost results from raw materials
Continuing his remarks, Tanrıverdi said that: “The most significant cost item is the raw material. That is, fabric. Labour is the second and energy is the third item. We have to buy raw materials from abroad in order to be able to compete with the world. With the preservation methods applied in Access to raw material, it is rather difficult to set competitive prices. We strongly believe that obstacles before the import of raw material should be abolished. Employment taxes are also very high. We have certain regional discounts with the new investment incentive application. As association, we have an ongoing project in Şanlıurfa. However, all the enterprises cannot benefit from these incentives. We expect that these problems should be solved as soon as possible.
We are becoming a country producing fashion and brand
Stating that they made a projection for the upcoming 10 years of the textile sector, Tanrıverdi expressed that: “We predict a sector which has completed its transfer from garment production to fashion production with ever increasing brands, designs and collections complying with the trends and strong identity in foreign retail market. We plan to make export amounting to $ 60 billion in 2023. We plan to realise $ 30 billion of this export volume as organiser country and the rest with the influence of production and brandisation. As in the past, we will continue being the pioneer and leader sector in export, investment, employment, added value, fashion and brand.”
We reached psychological limit in export
Ismail Gülle, the Chairman of Istanbul Textile and Raw Material Exporters’ Association (İTHİB) stated that: “While the capacity usage rate of the sector was 77.8 % in September, 2012, this rate rose up to 79.2 % in September of 2013. This means that textile sector continues producing and exporting.”
Gülle added that: “Our sector has a psychological export limit of $ 10 billion. It seems that rising up to $ 10 billion from around $ 8 billion will take longer time than we expected due to several global negativities developing beyond us. However, our sector continues its evolution within its long-term programme both in different product groups and different markets. We mostly sell branded products and collections. The production and export of value added products are on continuous increase. These data show that we are on the right path. However, slowdown experienced in the EU market puts pressure on us and all the enterprises exporting goods and services in the world. The closer target for us is to achieve a real increase independent from the influence of the parity and fluctuations in the raw material input costs. This means achieving an export volume slightly above $ 8 billion next year. A growth rate of not lower than 5 % for a year is significant in the existing conjuncture.”
Credit card arrangements can negatively affect us
Cem Negrin, the Chairman of Turkish Clothing Industrialists Association (TGSD) said that: “63 % of all domestic sales reaching to 50 billion Turkish Liras, which corresponds to 31.5 billion Turkish liras, is made through credit cards. Limitations on the credit cards can affect garment expenses and sales performance of Turkish brands in a negative manner.”
Negrin added that: “Garment sector has reached its targets for 2013. The export target which was set as $ 17 billion has been exceeded. In the domestic market, garment expenses increased by 6 % and reached 50 billion Turkish Liras while organised retail market expanded by almost 10 % and reached a size of 31.5 billion Turkish Liras. We expect an export volume amounting to $ 18.5 billion, domestic market size of 53-54 billion Turkish Liras and organised retail market size of 34-35 billion Turkish Liras for the year 2014. The import volume which was recorded as $ 2.7 billion in 2013 is estimated to reach $ 3 billion in 2014.
The most significant development marking the year 2014 will be the abolishment of the preservation measures which were imposed on yarn and fabric, as the basic inputs, and have been in force for more than 2 years. In this way, manufacturers will experience significant improvements in the costs.”
Also touching upon investments, Negrin said that: “New and renewal investments will continue in the sectors of knitted and woven outerwear and subsectors of socks and underwear. Annual actual investments reaching to 450-500 million Turkish Liras following the new incentive regulations will preserve its magnitude in 2014 as well. We hope that obstacles imposed on the import of raw materials will be abolished and limitations on payment by instalments will be reviewed in 2014.”
