The manufacturer that survived the earthquake hangs on the exchange rate and the price
In Kahramanmaraş and Adıyaman, which are major production centers of the textile and garment industry, manufacturers, who are shifting production to other provinces due to factory damage, are stuck on price due to pressure from the type of change. While industrialists want to heal their wounds with post-earthquake production, pressure on the exchange rate and high costs are disrupting production. Noting that they held a meeting last week with 25 purchasing groups accounting for 80 percent of the trade volume in this field in Turkey, Turkish Garment Manufacturers Association President Ramazan Kaya said: “We had a delay just 3 weeks after the earthquake.
Türkiye IS 30% MORE EXPENSIVE
There is no cancellation of orders by purchasing groups due to earthquakes. We can heal our wounds with production. We do not have a job loss due to the earthquake. But unfortunately, due to cost and exchange rate pressure after the earthquake, our customers are moving their orders to Bangladesh and India instead of Turkey. There is a 10% decrease in our exports. There is a 20 to 30 percent gap in our capacity utilization,” he said. Noting that the purchasing groups approached Turkey positively and that there was no problem in terms of production, Kaya stated that the brands complained about the price in Turkey. Stating that they had to raise prices due to labor costs and high production costs, Kaya said that Turkey is 30 percent more expensive than competing countries on average.
Brands that buy ready-made clothing from Turkey totaling $10 billion annually announced their support for Turkish ready-made clothing and textile manufacturers after the earthquake. Manufacturers cannot compete due to high costs and prices.
No price compromise
Noting that the earthquake zone deserves positive discrimination in orders, Istanbul Textile and Raw Materials Exporters Association (İTHİB) President Ahmet Öksüz noted that there is solidarity in the sector and that companies with damaged buildings receive external support. Öksüz stated that the purchasing offices did not withdraw their support and that they wanted more orders to revive production and continued: “The purchasing groups have a certain target price and do not go beyond it. Foreign buyers do not make any concessions on this issue. We had already slowed down exports in the second half of last year. There will be a decrease on an annual basis. Our drop in textiles was around 21 percent. With the effect of the earthquake, there will be a decrease in our targets, but I don’t expect a big deviation.”
EXPORT MAY DISAPPEAR
Noting that there has been a reduction in production capacities, Ramazan Kaya said that 30 percent of this reduction is due to decreased demand and 70 percent to cost and price failures. Explaining that the flight of customers due to both contraction in demand and high prices will have an impact on exports, Kaya said: “We have an export of 21.2 billion dollars in 2022. We had a target of 23 billion dollars by 2023. It shows that our exports will stay around 19-20 billion dollars due to cost and lack of demand.”