FAMAGUSTA GAZETTE – Rising costs and global competition are pushing Türkiye’s textile companies to relocate some production abroad, a trend that has sparked mixed reactions from industry insiders.
While some view this shift as a strategic realignment for the textile sector—a key contributor to Türkiye’s exports—others worry about job losses and factory closures.
Textile and raw material exports dropped 0.6% in 2024 compared to 2023, amounting to $9.5 billion, according to the Türkiye Exporters Assembly. Ready-to-wear exports fell 7% to $17.9 billion, while leather goods exports plunged 18% to $1.5 billion. Thousands of workshops and small businesses, particularly in central Anatolia, have scaled down or shut down entirely, the assembly reported.
The Turkish Statistical Institute noted a decline in the textile workforce, from 1.25 million in 2022 to fewer than 950,000 by late 2024.
Türkiye has been grappling with inflation for years, prompting the central bank to raise its key interest rate from 8.5% in June 2023 to 50% by March 2024. After easing rates at the end of 2024, the bank reversed course last week, hiking the benchmark rate to 46% to combat renewed inflation and stabilize markets.
Faced with high labor costs and prolonged inflation, some textile firms are turning to countries like Egypt for manufacturing, attracted by more favorable investment climates and lower costs.
The Egypt-Türkiye Business Council said over 200 Turkish textile firms launched operations in Egypt last year.
“Operating costs in Türkiye have risen drastically, and minimum wages have more than doubled,” said Emine Karatas, production manager of ModaNova Textiles. Referring to her company’s partial relocation, Karatas added, “Egypt allows us to handle large orders while keeping creative operations in Türkiye.”
“This isn’t about abandoning Türkiye,” said Hasan Tansel, a manager at Denim Pro, based in Aydin province. “Our high-end lines stay in Izmir, where we oversee quality and design.”
Industry leaders emphasize the need to focus on branding, design, and innovation to maintain long-term competitiveness. “These areas will keep the sector thriving,” said Ramazan Kaya, president of the Turkish Clothing Manufacturers’ Association, in remarks to Ekonomim.
Others remain pessimistic. “We expect another drop in exports this year. Investment is slowing, and Europe’s economic stagnation, as a key export market, isn’t helping,” said Seref Fayat of the Union of Chambers and Commodity Exchanges of Türkiye.
Further job losses and factory closures could follow unless policymakers intervene, Fayat warned.