Upstream Focus is Sourcing Journal’s series of conversations with suppliers, associations and sourcing professionals to get their insights on the state of sourcing, innovations in manufacturing and how to improve operations. In this Q&A, Burak Sertbaş, chairman of the Aegean Apparel Exporters’ Association, discusses the importance of shared values along the supply chain and what sets Turkey apart as a sourcing destination.
Name: Burak Sertbaş
Title: Chairman
Company: Aegean Apparel Exporters’ Association
What’s the number one question or concern you hear from your members now that was never really a consideration before?
The increase in raw material prices, increase in freight costs, container crisis and difficulties in finding organic cotton.
How should factories be evaluating potential brand and retail partners differently now compared to before the pandemic?
In the pandemic period, our manufacturers faced problems such as order cancellations, payment delays, and hence stock management difficulties. So building strong partnerships has been one of the most important issues for us.
This period has been a great opportunity for our companies to renew themselves on issues such as sustainability, circularity, renewable energy and digitalization. As Aegean Apparel Exporters’ Association, we encourage our manufacturers for sustainable production, so they are evaluating potential brand and retail partners within these perspectives. For example, it is very difficult for a brand and retailer that is not sensitive to the environment to be our potential partner.
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How can the relationship between these parties evolve?
It is so important to establish long-term relationships between these parties. Of course, these relationships should be two-sided. Brands and retailers should support manufacturers, just as producers try to fulfill customers’ demands.
Brand and retail partners, and also manufacturers, should share the same values. I observe suppliers change their facilities and administration style because of demands that come from their customers.
Demand for sustainable products from the final consumer side is also increasing. When all parties share the same values—be respectful to the environment, think about the next generations’ future, reduce carbon footprint, decrease energy consumption, etc.—the relationship develops effectively. Also, during the pandemic, we met a new and very advantageous term for us—near-sourcing. As the issue of sustainability gains importance day by day, the issue of near-sourcing will also retain its importance. Turkey will be the best partner in Europe.
What should be manufacturers’ top lesson from the pandemic? How can they address this in their operations?
Have as much market diversity as possible. The other most important lesson learned from the pandemic is that firms may face unexpected risks at any time, and they should be prepared for such risks. The pandemic also taught the importance of digitalization. Furthermore, raw material supply from distant regions is not a good choice at the crisis time. We should understand the importance of working with local partners.
What is the state of apparel production capacity in Turkey? From your perspective, what is the outlook for 2021?
Through nine months, the export volume of Turkey in the apparel sector is $14.8 billion. Turkey is one of the biggest suppliers of Europe. The top five global export markets for Turkey are Germany, Spain, England, the Netherlands and France. Our export volume is increasing annually among these countries. The capacity utilization ratio of apparel manufacturers is 81 percent, according to August reports. At the end of 2021, the expectation about export volume is approximately $20 billion.
How can the Turkish government best support the domestic apparel industry during this time?
The Turkish government should encourage investments in sustainability and circularity, and there should be more subsidies for small-size firms. Also, the cotton supply is a key issue for the apparel industry. The Turkish government should increase its support to cotton producers to encourage local production and decrease imports. Economic stability is the key figure for manufacturing; as we know, we all face high inflation risk in the world.
If companies aren’t already producing in Turkey, why should they consider using it as a sourcing location?
Turkey is an area that includes all textile components such as fabrics, yarns, accessories and all kinds of ready-to-wear. As I mentioned earlier, Turkey is one of the biggest suppliers of Europe with the advantage of being closely located to Europe. Especially, near-sourcing has become even more important with the pandemic.
The other reason is that Turkey stands out with its high-quality and fast production. During this time, the investments for apparel and textile sectors have risen, and Turkey’s facilities are ready for every production regardless of order quantity.
Moreover, Turkey has a fair and equal working environment, and most of the factories are getting certificates about organic production and sustainability.
Turkey has young and talented designers, and the infrastructure of Turkey’s textile and apparel industry is really solid. Partners sourcing from Turkey usually choose this base as a long-term stakeholder due to its high potential.
What keeps you up at night?
At the start of the pandemic, most of the sectors like the fashion industry had a nightmare. However, the Turkish textile and apparel industry proved its strength. With our fast and high-quality production, fair and equitable working environment, and the value we give to women’s employment, we always succeed in being the favorite sector of Turkey. Finally, if we ignore raw material price increases, we can say we are safe in our bed.
What makes you most optimistic?
When we think about 2020, our biggest customers were facing lockdowns. In this bad scenario, Turkish apparel manufacturers shifted their power to PPE production, and with their fast response to critical situations, Turkish manufacturers survived the pandemic crisis unscathed. In addition, the pandemic crisis taught Turkish manufacturers to be prepared for any situation. The Turkish ready-made clothing industry, which managed to maintain its export level even during the pandemic period, deserves to be viewed optimistically.
What’s in store for the Aegean Apparel Exporters’ Association in 2021?
During the restrictions due to pandemic, Aegean Apparel Exporters’ Association continued its activities virtually for its members, especially within the framework of sustainability. We have declared 2020 the year of sustainability. Our main goal is to increase the awareness of our member companies on sustainability. With the relaxation of restrictions, our physical activities—including trade mission and national participation to the international trade fairs, such as Premiere Vision Paris and Munich Fabric Start—have begun for the increase of sustainable export.
At the end of third quarter, our export volume is around $1 billion. And at the end of 2021, we believe to reach $1.5 billion as Aegean Apparel Exporters’ Association. Also, we expect all members’ facilities to work with full capacity.