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, Mustafa Gültepe, chairman of the Istanbul Apparel Exporters’ Association, discusses Turkey’s talent, textile tradition and the outlook for the sector.
Name: Mustafa Gültepe
Title: Chairman
Organization: Istanbul Apparel Exporters’ Association (IHKIB)
What’s the number one question or concern you hear from your members now that was never really a consideration before?
Sustainability and the green transformation of the economy are currently occupying the apparel and textile industry as never before. Turkey, with its proximity to Europe and its vertical structure, has the best prerequisites to drive this development forward. New technologies and manufacturing methods are in the spotlight, as is the constant expansion of state-of-the-art know-how and a highly skilled workforce.
How should factories be evaluating potential brand and retail partners differently now compared to before the pandemic?
The pandemic has obviously affected the relationship and trust between brands and retail partners vis-a-vis the producers and exporters. During the height of the pandemic, many orders were postponed or cancelled altogether, which had a major negative impact on producers and exporters. For this reason, it is now particularly important to rebuild mutual trust and to consider together how cooperation can be improved in the future and made crisis-proof. We need to invest in new forms of trade and contracts and rethink current purchasing practices.
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How can the relationship between these parties evolve?
In addition to agreements such as the contractual security of all partners, it is now particularly important to develop existing partnerships and to push for new ones. The direct exchange with all stakeholders is our focus.
What should be manufacturers’ top lesson from the pandemic? How can they address this in their operations?
The pandemic was a drastic experience for the industry. It has shown that manufacturers need to set up their production carefully, from textiles and yarns to apparel products. The basis of the partnership is decisive for successful cooperation; security and admissions must be given by both sides in order to get through such extreme situations together.
But we also saw that Turkey recovered relatively quickly compared to other textile locations. Due to the specific advantages of the location, especially the proximity to Europe and the possibility of road transport, as well as the fast and flexible production, the Turkish industry has always been able to adapt to the rapidly changing conditions.
What is the state of apparel and textile production capacity in Turkey? From your perspective, what is the outlook for 2022?
Turkish apparel and textile exports have been more than $30 billion in 2021. The industry is working at almost 90 percent of the capacity of the sector, which we expect to continue in the current year. For 2022, the exports of the apparel and textile industry are expected to amount to $32 billion to $33 billion, which is an increase of 10 to 15 percent compared to 2021.
How can the Turkish government best support the domestic apparel and textile industry during this time?
The Turkish apparel and textile industry, especially the apparel wing, is very labor-oriented. Therefore, employment incentives are an important tool the government can use to support the industry. Also, new apparel investments in the Eastern and Southeastern Anatolia and East Black Sea Region can best be supported by the government in terms of employment, taxation and energy cost incentives.
If companies aren’t already producing in Turkey, why should they consider using it as a sourcing location?
Turkey as a modern sourcing hub offers specific advantages for brands and retailers. Its proximity to the European core markets allows for easy, quick and cost efficient transportation via road. Fast, flexible and reliable production is the backbone of today’s supply chains. Foreign investments are supported in a targeted manner, and incentives are created.
Turkey has a young and highly skilled workforce. Incentives for employment expansion are also created, increasing capacities and promoting a highly educated workforce. With its longstanding tradition, Turkey’s textile industry has a great deal of experience and know-how in apparel and textile production and more than four decades of experience in exports to the European market.
What makes you most optimistic?
We can rely on some key fundamental advantages that have sustained the industry so far and will continue to do so in the future. The Turkish apparel industry has deep experience and know-how and has the advantage of vertical production from cotton to apparel products. Because of these firm industry pillars, we can successfully implement and sustainably organize the green transformation of the industry. This transformation will even stabilize the Turkish apparel sector. Turkey has enough of the young, talented, educated human force necessary for this change.
What’s in store for IHKIB in 2022?
As Istanbul Apparel Exporters Association (IHKIB) we are stepping up our activities in 2022, especially with regard to new partnerships and business relationships. The Turkish apparel industry realized $20.3 billion of exports in 2021, and our aim is to increase this number to $23 billion in 2022. With Istanbul Fashion Connection, we have already launched a new platform for supply and demand in Turkey this year. More than 25,000 visitors from about 100 countries attended the kick-off event in February, where over 600 companies presented their collections of all fashion segments. Currently, planning is already underway for the next IFCO event from August 24 to 26.
In addition, Texhibition was conceived for the preliminary stage, which offers another opportunity for face-to-face networking in September.
IHKIB is also continuing E.U. co-financed projects for digital transformation and the digitalization of the apparel industry in Turkey. We are also in the approval phase for a promising E.U. co-financed decarbonization of the industry project and we are doing production-development projects in some sub-sectors of the apparel industry, such as socks and shirts.