Textile industry is one of themost important sectors in the economy of Turkey in terms of GDP, exports, andemployment. It comprises to 10 percent of the countrys GDP, and 20 Percent ofthe countrys total employment. It constitutes to 40 percent ofthe total industrial production of the country. Turkeys exports of finishedgarments amount to $8 billion a year, and makes 5 percent of the total globaltrade. Turkey has abundant availability of cotton as a traditional cottongrowing country. This extensive growth of cotton provides a main advantage toits textile sector through uninterrupted supply of quality cotton, which is themain raw material required for textile industries. A survey states that out of Turkeys 1000 biggest manufacturing companies, 228 of them deal in textile, apparel, andcarpet business. It is one of the few countries that have an integrated andgood capacity of operations. The top five foreign markets for Turkey are US, Russia, UK, Germany, and France.
Despite all the achievements, Turkey still faces some constraints. The readymade sector of this country generates around 2.5million direct and 6.5 million indirect jobs. All the industries in Turkey have one common problem cost. After the elimination of quotas in 2005, Turkey is facing a tough competition from its Asian counterparts in terms of labor. Laborcost per hour in Turkey is $7.14, whereas its only 92 cents in the Asiancountries. Therefore to keep abreast of the competition Turkey invests more in taking service from skilled technicians, and designers,concentrating on the quality part. Entrepreneurs invest more money in upgradingtheir machineries, and brining in greater specialization. Along with the growthof textiles which is estimated to reach $500 billion by 2010, global market forfashion garments is also projected to have a drastic improvement. Turkey focuses more on fashion fabrics and the fast fashion sector so as to skim the creamin the market.
The value of Turkish Lira againstthe US dollar and Euro are also making the readymade garment manufacturersuncompetitive. Industry leaders contemplate that, the Turkish textile industryis expected to lose 30 percent of its European market to China as low cost products from China flood the market. This is expected to be around 2.5 billionUSD. They also believe that Turkey will also be facing competition in the US and lose 10 percent of its market to China and India, as they are now strengthening their marketshare. Turkey requires a monetary policy which would support their garmentmanufacturers.
Being the seventh largestproducer of cotton in the world, and proximity to European markets are the mainstrength of its textile industries. Its production also complies with theinternational ecological standards like banning hazardous dyes etc. Its skilledworkforce, modern production equipments, nations infrastructure and liberalforeign exchange regime also ensure sustainable competitive advantage. On thecontrary, the increasing domestic labor cost is one of its greatest weaknesses.Labor cost has increased more than two times than it was during the 90s. Thecost of energy and financing is also more expensive as compared with US and Europe.
An industry expert while commenting about Turkeys textile sector states that, the country should now erase its image of being a contract manufacturer and try to establish a brand in the minds of the people. It can use the branding strategy to differentiate and promote its high quality cotton textile products in the global marketplace. Turkey is one of the most important textile manufacturer and exporter in the world. International trade fairs in textile sector were organized within Turkey, thus bringing its potential to limelight. Now, it stands to be the sixth biggest exporter of readymade garments, and is the second biggest exporter of apparels to Europe, next to China. Its textile industry is the tenth biggest in the world. Turkeys industrial face is changing from a mass producer of ready made garments for departmental stores to a designer and retailer of new designs, and quality labels, with high price tags for upper class people.
References:
1) http://www.turkishdailynews.com
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