AHKIB President Gürkan Tekin: “Turkey Needs to Reduce Production Costs”

Gürkan Tekin, Chairman of the Board of Directors of AHKİB, said, “In order for Turkey to regain its competitiveness in the ready-to-wear sector, a new road map needs to be determined together with the public administration. Turkey needs to reduce production costs in order to compete with Far East countries.”

Gürkan Tekin, Chairman of the Board of Directors of the Mediterranean Ready-to-Wear and Apparel Exporters’ Association (AHKİB), noted that they have become unable to compete in export markets due to the increases in domestic labor and energy costs and high inflation, and stated that there have been serious decreases in the capacities of companies operating in the sector and that some production facilities have closed. Explaining that the 2023 was a difficult year and that they

expect the current difficulties to continue in the first half of 2024, but that the gains in production and export markets must be preserved despite everything, President Tekin said that they need new supports and incentives to reduce production costs for sustainable production and exports in 2024.

“Exchange rate and cost pressures deepen our losses in export markets”

Noting that competition has become more difficult than ever in the shrinking markets worldwide due to the recession, President Tekin said, “We have difficulty in keeping prices in international markets due to cost increases in Turkey. Far Eastern companies, especially China, offer prices much lower than our prices with the support of their governments. In such an environment, it is not possible for our sector to get business.”

AHKİB President Tekin announced that they are very concerned about the continuation of losses in export markets due to exchange rate and cost pressure, and that contract manufacturing has come to a standstill. Noting that the sector has mobilized all its means from modernization investments to the implementation of measures to reduce costs, but this is not enough, President Gürkan Tekin said that they need new supports and incentives to reduce production costs for sustainable production and exports in 2024

“We need a new roadmap to regain our competitiveness”

Stating that the increase in the minimum wage since the beginning of the year has brought the labor costs of the enterprises to unbearable points and the layoffs have accelerated, President Gürkan Tekin said, “In order for Turkey to regain its competitiveness in the ready-to-wear sector, a new road map needs to be determined together with the public administration. Turkey needs to reduce production costs in order to compete with Far East countries. We can regain our competitiveness through

measures such as reducing raw material and energy costs, increasing production efficiency and technological investments. In addition, in order to be competitive in the international arena as the ready-to-wear sector, we need to develop new products, follow market trends and implement methods to meet customer needs.”

“We should focus on branding and digitalization, and turn to e-commerce or e-export platforms”

Underlining that the Turkish ready-to-wear and apparel industry should be active in e-commerce and e-export platforms by focusing on branding and digitalization investments in order to reach

consumers directly instead of the order-based production model, President Gürkan Tekin said: “Consumers’ online shopping rates are constantly increasing. Free shipping of orders and best price guarantees come to the fore in these preferences. In addition, since customers can shop from various brands and order from the company they want, the e-commerce volume grows year by year with the convenience and positive experience provided by the digital channel. Therefore, it is of great importance for our companies to carry their product promotions and sales to e-commerce and e- export platforms while creating their marketing strategies.”

“There was a 7 percent decline in our annual exports”

Evaluating AHKİB’s export performance in 2023 according to product groups and countries, President Tekin said, “In 2023, there was a 7 percent decrease in our regional exports. 81 percent of our association’s annual exports were clustered in the product groups of women’s outerwear, men’s outerwear and artificial-synthetic machine-made carpets. We exported 161 million 463 thousand

dollars in women’s outerwear, which accounts for 47 percent of our exports, 83 million 632 thousand dollars in men’s outerwear with a 25 percent share and 30 million 119 thousand dollars in artificial- synthetic machine carpets with a 9 percent share. We reached an export value of 92 million 343 thousand dollars in the Dutch market, 58 million 118 thousand dollars in the Spanish market and 32 million 836 thousand dollars in the German market, which are among the countries where we provide the highest foreign currency inflow in our regional exports.”