Although Turkey has achieved great success in textile exports, especially during the last decades, there are many troubles the sector needs to overcome, says Hikmet Tanrıverdi, who has been an effective player of the sector for the past 33 years
ISTANBUL - Turkish Daily News
The textile and ready-to-wear clothing industry, one of Turkey's leading export sectors, has come a long way since the 1980s, the chairman of a prominent Turkish textile manufacturer told the Turkish Daily News recently. The sector currently has an export potential of $15.6 billion, said Hikmet Tanrıverdi, chairman of the Istanbul-based İnci Group, an active player in textiles for the past 33 years. In the 1980s, the sector had an annual export potential of only $90 million, he said, adding that during the last 20 to 30 years the Turkish textile industry has taken a great leap forward and began to make a name for itself in European and U.S. markets.
The sector today has an 8 percent share of the country's gross national product and a 17 percent share of industrial production. It provides 11.5 percent of employment in Turkey, Tanrıverdi added.
Currently, the ready-wear and confection sectors have exports totaling $25 billion annually. Some 10 million people earn their living from working in the industry. �Although we have come a long way, it now is the time to set new goals. Turkey has to get rid of the �contract manufacturer' image and invest in creating brands,� said Tanrıverdi. �Italy creates a global brand every 10 years or so, with major support provided by the government.�
The Turquality Project, the world's first and only government-supported program to create global brands, is a positive step, he said. �It provides incentives to companies looking to create powerful brands, which means more added value and market share in an environment of high competitiveness,� said Tanrıverdi, adding he still thinks resources for the project should be increased and spread.
Overall, Tanrıverdi gave a positive outlook for the sector, but admitted there still are many problems. �Especially the annulment of quotas implemented to far eastern countries in 2004, insistence on a high-interest, low-exchange-rate policy and employee costs are among the main troubles we have to face with.�
Allowing excessive imports instead of implementing a growth policy focused on exports is also a problem, he added.
�China is not a threat only for Turkey, it is a threat for the entire world,� he claimed. �Low labor and production costs have helped it to become the world's largest producer. And China is not the only threat. India, Indonesia and Bangladesh constitute major threats as well.�
On the other hand, the number of wealthy individuals in China is �double the number of the wealthy in Turkey.� In this respect, China is also an opportunity for Turkish companies, he said.
A high interest rate, low currency rate situation is a commonly-voiced concern of sector representatives, said Tanrıverdi. �This implementation does not only negatively affect the textile and ready-to-wear sectors, it also threatens macroeconomic stability. Turkey needs to implement a monetary policy, which would support production,� he added.
At first glance, Turkey may seem like a textile export base. However, the fact that Turkey's exports totaled $6.4 billion in 2007 while imports totaled $8.23 billion, shows this does not reflect the whole truth, reported Şevket Sürek in business daily Referans last month.
The confection export volume of $750 million in 2005, $1.036 billion in 2006 and $1.52 billion in 2007 are not included in that figure, Sürek noted.
�To solve these issues, Eximbank should get back on track, and begin to provide support for the exporter,� Tanrıverdi suggested. �The bank should enable a variety of loan programs, widen its horizons and lower loan interests. It should also implement factoring transactions at a more affordable price.�