Turkish Textiles putting Quality First
ISTANBUL — While yards of cheap Indian and Chinese fabric and clothing have flooded the world's markets over the last two years, Turkey, Europe's largest producer of textiles, is refocusing its output on quality fabrics, realizing it had to be different or die.
Much depends on the industry's success.
Around 10 percent of the country's wealth is generated by the sector and, according to the Union of Chambers and Commodity Exchanges, the textile and ready-to-wear trade is responsible for some 1.5 million jobs. Add in temporary workers and the number surges to around 2.5 million.
Since the start of 2005, and the end of international textile quotas set out in the Multi-Fibre Agreement, Turkish manufacturers have had to compete with their Asian counterparts - whose unit labor cost is an average of 92 cents per hour in comparison with Turkey's $7.14.
The effect has been dramatic.
"While the sector used to account for a third of exports, it is likely to be below 25 percent this year and will be less than 20 percent in a few year's time," said Ozgur Altug, an economist with the Istanbul-based brokerage Raymond James Securities.
The decline is expected to cost Turkey about $2.5 billion of its $20 billion annual export revenue.
Not such good news. Yet industry insiders remain highly optimistic about the future, mostly because of that old adage about challenges also being opportunities.
Bulent Baser of the Turkish Textile Employers Association says the country's manufacturers are focusing more on fashion fabrics and the "pronto moda," or fast fashion, sector.
"They are, therefore, investing more too in skilled and creative designers and technicians," Baser said.
One of Turkey's key advantages over its Asian rivals continues to be its proximity to Europe, its main market. And that matches the needs of the fast-fashion segment that is growing strongly throughout Britain and the Continent.
Suleyman Orakcioglu, chairman of the Istanbul Textiles and Apparel Exporters Association, notes, "Buyers are increasingly sourcing in countries that are closer to them, because closer markets offer shorter lead times and there is no need for bulk orders, which gives greater flexibility."
Turkey's move towards more fashion-oriented textiles may prove prescient. While the International Textile Manufacturers Federation predicts the world textile and clothing sector will continue to grow at three to four percent a year, reaching some $500 billion by in 2010, the global fashion market is expected to grow much faster.
To boost that growth, Turkey's textile firms also have been looking for new markets.
"We have already organized a very successful fair in Tokyo," Orakcioglu said. "Although this market is very difficult to enter, Turkish products are well liked there."
Also, "many Turkish firms are doing well in Russia," said Barbara Aydin, head of the Modegia knitwear company. "Leather wear ones particularly, like Viziyon and Suede Moda, which sell things to Russians that no European could afford."
Suzanne Simon has seen the changes happening in Turkey.
Simon moved her clothing business, which bears her name, to Istanbul from New York a dozen years ago. "When I got here there were only two big designer companies in Turkey," she recalls, referring to Beymen and Vakko, both Turkish institutions.
"Now, let me tell you, it's a whole different ballgame. Much more competitive and many more companies."
"I think this is the way forward for Turkey's textiles," she said. "A lot of people are looking for higher quality these days, as you can always get cheaper producers from China. The way to go has to be to up the quality and hit the more designer-conscious market."
Aydin's company, Modegia, has been doing exactly that with fabric from Italy, the country that already has refocused much of its production on high- end textiles and is something of a model for Turkey's efforts.
"We started out doing cheaper, youth-oriented clothing but then moved over to more quality products," a change that lured back some customers, Aydin said.
"We found that, while buyers switched first of all to the Far East, many then came back. We do high-end products with Italian cashmere, which may be more expensive than Chinese, but which you can buy in much smaller quantities with bigger color range and with a higher quality."
"This is ideal for smaller 'niche' production," she said.
Aydin also has found that quality also inspires loyalty.
"What you find at the higher end is that customers realize you can't be replaced so easily," she said. "Our business has been good because of this - people see you are doing something they can't get anywhere else."
Domestic producers and designers have been helped along by a shift in Turkey's own tastes.
Simon said, "The Turks have always been into how they present themselves, and while in the past there was more uniformity, as the country has opened up to the rest of the world, there's now a big demand for a more individual look."
Many industry observers in Turkey say that clothing manufacturers are beginning to have second thoughts about China.
"China has oversold itself and doesn't have the capacity it claims," Orakcioglu said. "They can't meet the demand anymore."
"Plus, our labor standards are high and our quality is high," he said. "We are able to make a whole collection."
Published: Wednesday, December 6, 2006
Credits: NY Times