Ramazan Kaya, President of the Turkish Clothing Manufacturers’ Association (TGSD), said that the problems in textile and clothing are increasing due to the unfavorable conditions in the domestic market and foreign markets.
Stating that the loss of employment in the textile and ready-to-wear sector exceeded 200 thousand, TGSD Presidents Ramazan Kaya and Sanem Dikmen warned that bankruptcy, company closures and concordatos will be seen in the following period.
The loss of employment caused by the contraction in the ready-to-wear sector, which started last year along with the textile industry, has approached 200 thousand in the last 1 year. Pointing out that capacities also declined by nearly 50 percent in the same period, TGSD President Kaya said, “Companies have come to the end of laying off workers. There are no more workers to lay off. In the next period, we will see company closures, bankruptcies and concordatos. 2024 will not be better than this year. We do not expect a recovery before the second half.”
TGSD Presidents Ramazan Kaya and Sanem Dikmen visited a 310-container living space established next to Adiyaman OIZ in April and made contacts in Adiyaman to determine the needs of the people living in the container city for the winter season and the situation of the companies in the sector. During the event, the presidents met with members of the press at Gelisim Tekstil’s Adiyaman facility and made evaluations on the latest situation in the region and the latest developments in the sector.
Stating that nearly a thousand citizens affected by the earthquake have been living in the container city established by TGSD since April, Ramazan Kaya said, “280 of the 328 containers in the living area located on 22 decares of land belonging to the OSB are full. The settlements are organized by AFAD. We come at certain intervals to identify the needs on site and develop solutions.” According to Kaya, 20 percent of the sector’s employment was realized in the provinces affected by the earthquake.
The region’s share of the sector’s capacity was around 9 percent. Among these 11 provinces, Adıyaman is one of the most important provinces in terms of the garment industry. Nowadays, the wheels are turning in the factories, but employees refrain from working in the garment sector due to migration and Community Benefit Programs (TYP) and daily wages reaching up to TRY 2,000 in some areas.” Emphasizing that although capacities are low, there are businesses that are looking for employees but cannot find them, Kaya said, “When things improve tomorrow, there will be no employees. Trained employees left the region and the sector,” he said.
Ramazan Kaya and Sanem Dikmen also made evaluations on export and domestic consumption data. Kaya said, “As of November 21, there is a 9 percent decrease in exports on a turnover basis and a 15.5 percent decrease on a unit basis. There is a 10 percent increase in unit price. We closed last year with exports of 21.2 billion dollars. This year, the target was 23 billion dollars, but we will close with 19.6 billion dollars. Looking at the general situation of the sector, we are faced with an optimistic picture on paper. There are capacity decreases of up to 40 percent throughout the sector.”
“Exports of military clothing limited the decline”
On why this was reflected so low in the figures, Kaya made the following assessment: “Large companies were more affected by this lack of demand. Small companies were able to act quickly by using these advantages. The Russian-Ukrainian war and now the Israeli-Palestinian war have increased exports of military clothing. This created a barrier, albeit a small one, in front of the decline in exports. This year the sector is having a difficult year. The trouble started in the last quarter of 2022. Due to the recession and inflationary pressure in the main markets, consumers first stopped shopping for clothing. There were over 200 thousand exits in the textile and ready-to-wear sectors. There are no more exits, there are no more people to be laid off.” Stating that everyone in the sector is currently working on concordat, “It will go this way for a minimum of 6 more months. In the second half, the sector will find direction according to the interest rate. Mobility starts between June and September, but we will not see a year different from 2023 in 2024” Kaya said.
According to Kaya, the EU’s share in our exports used to be around 70 percent, but now it has fallen to 59 percent. There is also a decline in the EU’s overall imports, but our share of this decline fell by 11 percent. Our share was taken by competitors. In the US, our sector exports, which were 1.1 billion dollars last year, decreased to 900 million dollars.”
China overcomes barriers with investments in different countries
Explaining that Turkey’s share in the 600 billion-dollar world garment industry exports is 3.5 percent, Kaya pointed out that rival countries are moving forward aggressively. Kaya said, “China is shifting its production to different countries to overcome restrictions. Now there are Chinese investors in Bangladesh, Vietnam and Egypt. This is how it overcomes the imposed taxes and embargoes. The world does not stop. We do not have the power to compete with our competitors. Our labor costs, which were 350-400 dollars, reached 900 dollars. We used to be 10-15 percent expensive, now we have become seriously expensive.”