Turkey: A Thriving Market

A profile of the Turkish textile industry

Country Profile
By Carmen Pang,Executive EditorTurkey: A Thriving MarketTurkey is moving into the spotlight as the country’s textile and apparel industry experiences unprecedented growth.

Distribution of textile investment in TurkeyDuring the days of the Ottoman Empire, Turkey played a key role in fostering international trade with its strategic location at the crossroads of Europe and Asia.Today, the country is again gaining prominence in the global arena — this time as a major player in the textile and apparel trade. In fact, the textile industry has emerged as such an important business sector for the country that a brand-new international textile machinery show will debut this June (see related story on page 24), marking yet another new chapter in the country’s long textile history.One organization that is actively promoting the Turkish textile industry to the world is the Istanbul Textile and Apparel Exporters Association (ITKIB), a group that comprises four exporter associations — the Ready-Made Garments Exporters Association, the Textile and Raw Materials Exporters Association, the Leather and Leather Products Exporters Association and the Carpet Exporters Association — representing more than 20,000 companies.Powering The EconomyITKIB calls the textile and apparel industry the “leading force” in the Turkish economy and Turkish exports. In the past decade, the Turkish textile and apparel industry has achieved a steady 9-percent annual growth, a stunning figure compared with the average 3-percent gains by the Turkish economy as a whole during the same period. Moreover, textiles and apparel account for:• 10 percent of Turkey’s gross domestic product;• 20.7 percent of its industrial production;• 22.6 percent of production by its manufacturing industries;• 21 percent of its manufacturing labor force; and• 33.7 percent of total Turkish exports.According to ITKIB, the rapid growth of the textile and clothing industry is attributable to several factors:• The establishment of the Customs Union between Turkey and the European Union (EU) created favorable market conditions for Turkey. In turn, free trade agreements signed with preferential EU countries under the Customs Union provided opportunities for the industry to expand further.• In 1995, the year before the Customs Union took effect, investment permission granted by the Turkish government to the textile and apparel industry accounted for 63 percent of the total number of permits granted. The move greatly increased investment and production capacity in the industry.• Furthermore, in the past decade, the integration of many former Soviet Union states into the market economy created new and dynamic markets for Turkish goods. Export SurgeBetween 1992 and 2002, Turkey successfully doubled its textile and apparel exports from $5.7 billion to $12 billion. In 2002, the apparel industry had a global market share of 4 percent and the textile industry had a global market share of 2.8 percent.For 2003, estimates provided by ITKIB show that Turkish apparel exports increased by 24.6 percent from 2002 to reach $11.1 billion. Meanwhile, textile exports gained an estimated 22.5 percent to reach $3.9 billion.The biggest markets for Turkey’s textile and apparel goods are EU countries. According to ITKIB, in 2003, of the $15.1 billion worth of exported textile and apparel goods, $9.6 billion worth went to EU countries, making Turkey the second-largest supplier to that region.The second-largest market for Turkish textile and apparel goods is the United States. In 2003, apparel valued at $1.5 billion and textiles valued at $207 million were sold to the U.S. market. Moreover, the volume of U.S.-bound exports has been increasing at a soaring rate of more than 20 percent annually over the past several years. Fibers And FabricsCotton is the mainstay for the Turkish textile industry. In 2002, cotton production was about 900,000 tons, making Turkey the sixth largest producer in the world. But despite such output, all cotton produced is consumed domestically. In all, the country’s industrial production of textiles uses about 1.4 million tons of the crop annually.On the other hand, the manmade fiber industry has been expanding. Production has grown from 608,596 tons in 1999 to 710,939 tons in 2002. However, as with cotton, the domestic production of man-made fibers is still not sufficient to meet consumption demands, which totalled 820,474 tons in 2002.The cotton yarn industry has been outperforming other yarn sectors in terms of production, capacity and export. In 2002, Turkish cotton yarn production was 1.22 million tons and capacity was 1.64 million tons. Of this production, close to 100,000 tons were directly exported as cotton yarn, while about 870,000 tons were indirectly exported in apparel and fabrics.On the fabric side, according to 2002 numbers, Turkey’s cotton fabric production capacity was 630,000 tons; actual production totalled about 550,000 tons. That same year, the country exported more than 168,000 tons of cotton fabric, while an additional 278,546 tons were used in exported apparel products.MachineryTurkey is one of the world’s largest purchasers of textile machinery. According to the Italian Association of Textile Machinery Manufacturers (ACIMIT), Turkey is second only to China in terms of machinery orders from Italy. Preliminary numbers provided by ACIMIT show that Turkey bought 373 million euros worth of machinery from Italy in 2003. Compared to 2002, the volume increased by 28 percent.Turkey’s spinning capacity also is one of the highest among the world’s textile producers. Based on the number of spindles, it touts a 3.79-percent share of the world’s short/long-staple ring-spinning capacity, and 52.29 percent of the EU’s capacity. Similarly, based on the number of rotors, its global share of open-end spinning capacity is about 6.15 percent, and its EU share is about 51 percent.Turkey has about 2.5 percent of the world’s and 26.2 percent of the EU’s shuttleless weaving capacity. Its share of the world’s and the EU’s shuttle loom capacity stands at about 2.1 percent and 76.8 percent respectively.The FutureThere are high hopes among many that the Turkish textile and apparel industry will keep growing at a steady pace in the coming years. The growth may not be as phenomenal as it has been in the past decade, but industry experts agree that its geographical location is still a big asset in bridging international trade.
Summer 2004