Turkey sees huge increase in orders from global apparel giants, new footwear chains

DAILY SABAH
ISTANBUL
Published 22.06.2018 00:33

The competitive power of footwear and apparel producers, which have a price advantage with the appreciation in the dollar and the euro, has surged.

The fact that foreign buyers have increased their orders from Turkey marked the Turkish Clothing Manufacturers' Association's (TSGD) 5th Procurement Strategies and Prospects Panel held yesterday under the sponsorship of Kimtex Tekstil.

Many global apparel buyers, including Hermes Otto, Newlook, Colveta, Near East Manufacturing and Varnern, announced that they would increase their orders from Turkey by about 20 percent.

Speaking at the panel, TSGD Chairman Hadi Karasu said apparel exports of $17 billion would increase to $18 billion this year, reaching around $25 billion in five years.

Karasu and the top players in the textile sector pointed to the importance of environmentally friendly and quality production to make the increase in demand for the apparel sector sustainable.

In the meeting, it was emphasized that if the necessary steps are taken in this area, apparel exports will have a bright future. Order increases announced by giant buyers in the sector confirm this argument.

For example, Colveta Country Manager Hayrettin Uysal announced that they purchase 40 million euros ($46 million) of products from Turkey per year and plan to increase this figure to 65 million euros within five years.

He said that Turkey's current share of their total purchases is 30 percent, stressing that they plan to increase this to 50 percent. Uysal also underlined that it is important for Turkey to increase production speed and quality in this process.

Newlook Turkey has announced plans to increase purchases by 20 percent, while Hermes Otto Europe's Regional Director Heiko Drews said that Turkey is quite advanced in jeans and denim, noting that when the Turkish lira fell in value, producers became more aggressive regarding price.

Hermes Otto aims to increase purchases from Turkey to over 100 million euros in 2018, a 7 percent growth. It was reported that Verner, one of the major buyers, would increase its apparel order from Turkey, currently 55 million euros, by 5 to 10 percent this year.

Near East Manufacturing, on the other hand, is ready to increase its $100 million order by 10 percent.

Speaking at the panel, LC Waikiki Sourcing Director Şenol Dallı said that they closed 2017 with TL 12.5 billion and that they are targeting a turnover of TL 16 billion ($3.4 billion) with significant growth this year.

Explaining that they make 90 percent of their purchases from Turkey, Dallı said that they would continue to grow abroad this year, achieving $1 billion in net exports.

"We attach great importance to Turkey," H&M's manager for the European region, Serkan Tanka said while also pointing to a rapid growth performance.

According to Tanka, the apparel giant plans a growth rate of 20 percent this year in the Turkish market. Defacto Strategic Procurement Management Director announced their growth target for this year at 30 percent.

Footwear producers also report an increase in demand from abroad.

Istanbul Chamber of Industry (ISO) Footwear Industry Council Member Hüseyin Çetin stated that new footwear store chains were formed, especially in Eastern Bloc countries, and that the purchasers of these chains have turned to Turkey.Indicating that the sector achieved a growth rate of 30 percent with additional customs duty in 2014, Çetin said that significant investments were made in this area, that small and medium sized enterprises turned to industrial production and that large companies abroad made serious purchases from Turkey.

"Those who have three to five stores in Russia now reached 150 stores. Over 10 chains are making purchases from Turkey. About 380 million pairs of shoes are produced in Turkey. Turkey's capacity is 500 million pairs," Çetin added. "When the footwear sector focuses on exports, foreign exchange enters the country and small and medium sized enterprises become industrial producers, this will make a serious contribution to both the country's economy and the sector."

Çetin said that the exchange rate at this level has increased the competitive power of the footwear sector in the world. "Our exports to Russia increased by 120 percent in four months. Before the jet-downing crisis, our exports stood at $120 million. With the jet-downing crisis, this figure dropped to $60 million. I think a trade volume of $200 million will be reached very soon," he concluded.

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