Turkey is looking to build back capacity for high-quality fabric production as it adapts to changes caused by the Covid-19 pandemic.
Turkey is the world’s fifth largest supplier of textiles, with US$12bn of annual exports, according to the Istanbul Textile and Raw Materials Exporters Association (İTHİB). However, the country has been struggling to recover its position as an important supplier of high-end and luxury fabrics, recouping sales lost on cost to Chinese rivals.
Turkish quality textile producers are now eyeing nearshoring demand, which has grown in Europe as brands mull diversifying sourcing, having been hit with supply disruption during the Covid-19 pandemic. Indeed, Turkish manufacturers are banking on burgeoning demand in Europe for more environmentally sustainable textiles to drive exports.
“Turkey was very strong in silk production, but because of Chinese competition, the country is no longer a [major] provider,” observes Cevdet Karahasanoğlu, the ex-vice president of the Turkish Clothing Manufacturers’ Association (TGSD), and owner of Pameks, which produces high-end fabrics for Italian brands such as Armani, and the US-based Ralph Lauren.
He adds that Turkey is ‘also not very strong anymore’ in producing luxury fabrics such as wool or cashmere. “Only a few factories are producing wool, around 1,000 tonnes per year, but it is mainly used for blankets, home textiles or flat knits,” with only a few companies producing circular knit or woven wool fabrics, he says.
Turkey has struggled to compete with China on price, while Italian and French producers of silk and linen, respectively, still dominate high-end production. But with an eye to the future, Turkish companies have managed to carve out a niche as producers of silk, linen, wool and organic cotton.
Based in Birgi, near Izmir in Western Turkey, Mert Ipek produces some 40,000 metres of silk and 20,000 kg of linen per month, with 90% exported as fabric, and 10% for garment exports. Its linen is sourced from France and Belgium, while the yarn is from China, which it weaves into fabric.
Demand for its high-end fabrics has been buoyant in recent years, with sales increasing 225% in 2018 and 2019. “If the pandemic hadn’t appeared, we would have grown by a minimum of 50% in 2020,” says Tahir Mert, general manager of Mert Ipek. “In 2021, in the first five months, we are replicating 2019 numbers. As for linen, for next summer, we will have much higher sales.”
The pandemic hit Turkish exports last year as demand plunged in the European Union (EU), the largest buyer market for textiles, with imports of woven fabric made from wool and other animal fibres down by 31.8% in value and 22.4% in volume, according to EU trade data figures.
“People’s behaviour and purchasing habits have changed as a result of the climate of uncertainty created by the pandemic, with a decline in customers’ purchasing appetite and luxury spending,” says Mustafa Sürmegöz, general manager of the major fabric manufacturer Yünsa, based in Çerkezköy in Marmara.
He adds that polyester, nylon and recycled polyester have been in greater demand than pure wool or high-quality fabrics made of natural fibre blends.
As well as fabrics and worsted yarn for garments, Yünsa produces upholstery fabric, and fabrics for home furnishing. Its integrated facility has a production capacity of 4,500 tonnes of worsted yarn and can weave 10 million metres of fabric a year. Yünsa exports two-thirds of its production of fabric made from pure wool and wool blends (cashmere, silk, cotton and viscose).
While demand for high-end fabrics for garments has declined, an uptick in spending on home improvement by house-bound consumers during the pandemic has meant “home textiles have been barely affected by the crisis,” says Sürmegöz.
Turkey exported US$2.49bn of home textile products last year, according to the Turkish Home Textile Industrialists and Businessmen’s Association (TETSIAD). Germany, the US and UK accounted for 36.33% of exports, worth US$904.8m, while exports to Italy and the Netherlands were worth US$107m and US$102.7m, respectively.
There has been a ‘wait-and-see’ approach to investing and upgrading machinery by many manufacturers due to the pandemic, compounded by the devaluation of the Turkish Lira, making imports more expensive, says Karahasanoğlu. This problem was compounded by the government sacking the country’s central bank governor in March.
Some manufacturers have continued to invest, however, banking on an upturn in sales as European economies open up following mass vaccinations. Yünsa invested €2.3m last year to modernise its production line, following other investment in finishing, weaving and quality control units.
“Despite setbacks caused by the pandemic, we anticipate a turnaround in the demand for quality fabrics and fibres in the medium and long term,” says Sürmegöz.
Karahasanoğlu also expects investment to rise in the production of fine wool as well as fine cotton as European demand for luxury goods rebounds this year. “Consumers of luxury goods need to go to a store, to touch fabrics,” he points out. “It is not as suitable for online business.”
He adds that fabric made from Lenzing’s cellulose fibre Tencel is expected to become more prominent, given its positive sustainability profile. Selcuk Iplik recently invested €18m to produce Tencel fabric at its factory in Gazientep in Eastern Turkey.
Turkish production of Cupro, a regenerated cellulose fabric made from recycled cotton linter, is also expected to grow due to its environmental credentials, being biodegradable and vegan-certified. “It is a luxury sustainable brand,” says Karahasanoğlu. The biggest Cupro fabric manufacturer in Turkey is Ipeker, in Bursa. Mert Ipek also produces Cupro.
The expected rise in demand for more eco-friendly fabrics is also expected to boost Turkish organic cotton, linen and silk production. “The 100% organic cotton and linen we produce is for our exclusive customers, and in the future it will be more important in the market,” says Mert.
There has also been an increase in demand for silk from independent brands that have sprung up online during the pandemic. “They use the silk for home textiles and loungewear, and we are selling a lot of pure silk for pillow cases and [face] masks,” he says.
Aversion to synthetic fibres among luxury goods consumers is driving steady sales of wool, adds Mert. The factory uses 15 micron Australian Merino wool, and organic wool sourced from Germany.
“Using German wool appeals to consumers in the European market,” he says. The company has also developed natural dyes for wool. “Wool is not growing like silk or linen but in the near future it will be more popular.”
The company’s export focus is northern Europe, primarily the UK, Germany, France and Scandinavia. “We are waiting for the right time to enter the US market,” Mert reveals. “There’s still a lot of potential in Europe.”
While Europe remains the most important fabric export market, Sürmegöz says the US, Russia and the Far East are emerging as leading target markets for Turkey’s fabric sector. He explains that in order to better compete internationally, “Turkish fabric exporters need to focus on strengthening their global sales networks in addition to their production and design capabilities.”
Source: https://www.wtin.com/