“The export performance of textile companies should be closely monitored”

The textile sector focused mainly on health and hospital textiles due to the pandemic. As export targets increased, sector representatives requested to follow up the government incentives given to the Turkish garment sector, which is the sixth largest exporter in the world.

“The export performance of companies that receive government incentives should be closely monitored, as it is practiced in many countries” said Fahri Şahin, Deputy Chairman of the Board of Bordo Group. Firms that cannot reach the required export figures despite receiving incentives should also review their export strategies. If this is fully applicable, exporting companies that display a really good export performance may receive more incentives.”

Fahri Şahin made evaluations on the latest developments in the textile, ready-made clothing and apparel sectors and made statements regarding the exchange rate risk and export figures in these sectors. Experienced textile businessman Fahri Şahin pointed out that the sector focuses especially on health and hospital textiles due to the pandemic. Şahin also stated that organic ready-made textile and fabric products are also in great demand globally during the pandemic process.

We created an environmental paradigm before the pandemic process”

Şahin said, “An understanding of production that focuses on user experience is displayed in the textile industry. Environmentally friendly, organic, recyclable, antiviral, breathable, non-sweating and smart textile products attract great attention both in our country and in the world. Firms that turned their production strategy into such products increased their exports. There is a great demand for antibacterial and air-cleaning textile products, especially from Europe.”. Fahri Şahin emphasized that as the Bordo Group, they formed an environmental paradigm before the pandemic process. Noting that they received a “Leed Platinum certification and a social compliance audit report at BSCI – a Level” for the production of environmentally friendly and sustainable fashion products Şahin said, “We receive many orders from European brands. We continue our investments during the crisis.”

“Textile manufacturers bear the currency risk”

Fahri Şahin also touched on the exports of textile, ready-to-wear and apparel sectors, which are locomotives of the Turkish economy. He said that these sectors performed well in exports. Fahri Şahin pointed out that the export figures in these sectors have continuously increased in recent months, and noted that the effect of exchange rates on imports has adversely affected the sector. Giving an example from cotton imports, Şahin said; “Cotton and yarn are the main raw materials of the textile industry. Turkish textile manufacturers meet almost half of their cotton needs through imports. For this reason, exchange rates; it affects prices, exports and imports very negatively. Some importing companies start selling cotton and yarn on a dollar basis, and the exchange rate risk is reflected only by the negative data in the sector.”

Fahri Şahin stated that despite the currency risk, Turkish ready-to-wear industrialists are trying to improve their technological and production capabilities. Şahin said, “There are attempts to reach an assertive point in the world by keeping up with constantly changing market conditions. 2019 ready-to-wear export figures are an indicator of this. The most exports are made in ready-to-wear, and the ready-to-wear industry was the sixth largest exporter in the world in 2019.”

“Strategy should be implemented to improve export performance in textiles”

Emphasizing the importance of export incentives and supports provided by the state, Şahin said; “Exports have a great importance in textile, as in every sector. Stable and correct macroeconomic policies will further increase textile exports. A realistic exchange rate policy paves the way for textile investments and exports. It also reduces economic risks to predictable and acceptable levels. An export-based development strategy should be determined for textile exporters. A strategy that will improve export performance in textiles should be implemented in resource allocation, which directly affects export performance. In this context, textile industrialists need to develop transparent and flexible relations with the public. Thus, competition with international textile actors will be easier.”

“The export performance of the companies should be monitored”

Emphasizing that export incentives are not effective enough, Fahri Şahin said, “Interested parties should think about the reasons and solution of this.”. In this framework, he stated that the general incentive system should be associated more with exports and completed his words as follows;

“It is necessary to achieve a certain export figure in return for customs incentives, investment discounts, subsidies and returns. The companies that cannot meet this number should be sanctioned or withdrawn from incentives. While many countries encourage companies to export more with these sanctions, they also support companies that have achieved success in export performance more. If this is not followed closely, export figures do not reach the target, although the incentives continue, and thus an effective export policy is not implemented. As is practiced in many developed or developing countries, the export performance of companies receiving government incentives should be closely monitored. Firms that cannot reach the required export figures despite receiving incentives should also review their export strategies. If this can be fully implemented, exporting companies that have a really good export performance can get more incentives and in this way national export figures can be closer to the worldwide level.”

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