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Turkish Textile Exodus: Industry Divided as Firms Flee Rising Costs

As reported by Xinhua, Turkish textile companies are increasingly moving their production overseas due to rising costs and growing global competition, leading to a variety of reactions within the industry. This strategic shift, viewed by some as a necessary adaptation, has raised alarms over potential job losses and factory closures in a sector vital to Türkiye's economy.

The Türkiye Exporters Assembly (TIM) revealed a 0.6 percent decline in textile and raw materials exports in 2024, totaling $9.5 billion, with ready-to-wear exports dropping 7 percent to $17.9 billion and leather goods plummeting 18 percent to $1.5 billion. The Turkish Statistical Institute highlighted a stark reduction in the textile workforce, shrinking from 1.25 million in 2022 to under 950,000 by the end of 2024. Amid soaring inflation and labor costs—compounded by the central bank's recent hike in the benchmark interest rate to 46 percent—many firms are seeking cost-effective alternatives abroad.

Egypt has emerged as a key destination, with over 200 Turkish textile companies establishing operations there in 2024, according to the Egypt-Türkiye Business Council. Emine Karatas of ModaNova Textiles in Istanbul told Xinhua that Egypt's favorable cost structure supports large-volume orders while maintaining creative hubs in Türkiye. Similarly, Hasan Tansel of Denim Pro emphasized diversification, retaining high-end production in Izmir for quality control.

However, not all are optimistic. Seref Fayat from the Union of Chambers and Commodity Exchanges of Türkiye warned Xinhua of a potential further drop in exports and lasting damage to the domestic supply chain without policy intervention. As Turkish firms navigate these challenges, branding and innovation may be key to sustaining competitiveness, even as labor-intensive operations migrate.

Source and Photo: Xinhua

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