While Türkiye has recently shifted some of its textile manufacturing to Egypt due to increasing costs, the US’s new tariffs and the recently escalated trade wars between China and the US are also bringing different scenarios to the agenda for Türkiye. We received the views of Gürkan Tekin, Chairman of the Board of Directors of the Mediterranean Apparel Exporters’ Association (AHKİB), on the recent developments. He stated that major international brands are extremely pleased with manufacturing in Türkiye, but due to the weakening of their competitiveness, they have recently shifted to countries like Egypt instead of Türkiye. “In addition, we believe that we need to protect manufacturing, employment and exports in our country,” he said and once again reminded the government of their requests for support on this issue. Expressing that they hope that the taxation in America will have a positive impact on manufacturing in Türkiye, Tekin advised companies not to be hasty when investing in other countries.
“Our market share in the European Union dropped from 5.6 percent to 5.1 percent”
Gürkan Tekin stated that thanks to the vertical integration created by the know-how accumulated by the textile and apparel industries and the investments made in all rings of the chain in the half-century period, Türkiye is the second fully integrated supply chain in the world after China: “The Turkish apparel and garment industry, which provides employment to approximately 600 thousand people, managed to keep its share in the world apparel trade above 3.45 percent. However, due to our rising manufacturing and financing costs in 2024, we became 61 percent more expensive than our competitors in Asia and 46 percent more expensive than those in North Africa. As a result, in addition to our market loss worldwide, our market share in the European Union, our largest and traditional market, also decreased from 5.6 percent to 5.1 percent.”
He said that due to the negativities experienced in Türkiye, many European companies think that Türkiye’s competitive power has weakened and have shifted their investments to Egypt, “A serious restructuring has taken place in Egypt by European companies. Today, several European companies are holding meetings and participating in exhibitions in Egypt instead of Türkiye,” he continued.
Tekin indicated that Egypt’s ability to export to the US with zero tax has provided a great advantage to the country, and continued his words as follows: “Similarly, the tendency towards Bangladesh has also increased considerably. There are serious investments and manufacturing structures in Pakistan and India. In line with these developments, we observe that high-volume orders are shifting to these regions. We have companies in the Mediterranean region that have partially closed their factories and moved them to Egypt. In addition, we have companies that continue their manufacturing in Türkiye and invest in Egypt. We have witnessed that this process has started to increase recently”.
Along with the new tariffs by the US, for the mentioned countries, an additional tariff of 10% was imposed on Egypt, 37% on Bangladesh, 30% on Pakistan and 27% on India.
“The capacity in Egypt is full”
Reminding that there has been an excessive demand from Türkiye to Egypt in recent times, Gürkan Tekin shared the information that the capacity in Egypt is currently full, especially in terms of qualified workers. He underlined the importance of one-to-one employment in the apparel industry: “It is necessary to put a person on each machine. Therefore, in order to have sufficient capacity, qualified worker problems will begin to emerge. For this reason, we do not think that Egypt, which will produce at a certain capacity, will be able to provide the manufacturing that brands in Europe and the US want, ”he said.
In this regard, he stated that they think that companies that want to go to Egypt in the coming period will alter course to countries such as Morocco and Tunisia, and drew attention to the need to protect manufacturing, employment and exports in Türkiye: “We demand more support from our government in this regard and we express this on every platform. On the other hand, we hope that the tariffs in America will have a positive impact on manufacturing in Türkiye. We recommend that companies do not rush to invest in other countries”.
Reminding that they are one of the most important business partners of international brands, Tekin said, “Being a reliable business partner based on our close geography, fast delivery opportunities and quality manufacturing approach makes us stand out in this sense. The major brands we cooperate with internationally do not want to lose us because they are extremely satisfied with the manufacturing in Türkiye. However, since we cannot provide competitive figures in terms of price, we see that these brands insist on shifting their manufacturing to countries such as Egypt that can provide more competitive prices”.
Following the collapse of the Baath regime, Syria, along with Egypt, had also become prominent as an alternative for textile manufacturers. He shared his views on manufacturing in Syria: “It will take time for life in Syria to return to normal. We have doubts about whether any secure partnership can be provided for manufacturing. For this reason, we think it is too early to invest in Syria. It would be beneficial to wait for the process to become clear on this issue.”
“In this critical process, encouraging manufacturing with high added value and brand value is extremely important”
Stating that they believe that the way out of the crisis for the Turkish apparel and garment industry, whose total manufacturing is 27 billion dollars and investment volume exceeds 15 billion dollars, is through environmentally friendly value-added manufacturing and branding, Gürkan Tekin said; “It is extremely important for our industry, which stands out positively from its competitors in the world market with its fast manufacturing, high quality, sustainability and design power, to encourage value-added and high brand value manufacturing in this critical process. Therefore, we should carry out structural reforms by cooperating with the relevant ministries and segments. Thus, our country can reach a stronger position in branded exports. We think that if we can strengthen our work on branding, we can have a more resilient structure against future economic difficulties”.
Tekin noted that complying with global sustainability criteria, especially the European Green Deal, is of critical importance for Türkiye to maintain its competitiveness in exports, and listed what needs to be done in this regard as follows:
“In this context, we should invest in manufacturing techniques that reduce our carbon footprint. We should develop projects that will increase the use of recycled and organic fabrics. We should make our manufacturing facilities environmentally friendly by prioritizing the use of green energy. We should switch to artificial intelligence and automation-supported manufacturing systems to make our industry more competitive. We should make demand forecasts with smart stock management and data analytics systems. We should improve customer experiences by investing in e-commerce and digital marketing channels. Because we see that the average unit sales value in branded sales made in retail or e-commerce channels has reached levels of 80-100 dollars”.
Tekin, who also mentioned AHKİB’s export figures for 2024, disclosed that last year, textiles and raw materials increased by 5 percent to reach 1.17 billion dollars, and apparel and garment increased by 10 percent to reach 374.7 million exports. “In the January-March period of 2024, we realized a 1 percent increase in textiles, 285 million dollars in exports, and a 22 percent increase in apparel, 111.6 million dollars in exports. Despite factors such as global economic difficulties, inflation pressure, the widening gap between costs and exchange rates, and difficulties in accessing financing, we are in the plus in both textiles and apparel and garment industries as the Mediterranean region,” he said.