Xinhua Finance, Istanbul, December 22 (Reporter: Xu Wanhu) - The textile industry in Türkiye is currently facing significant adjustment pressures. Industry insiders indicate that due to the combined effects of weakening external demand and rising production costs, the industry is experiencing its most pronounced downturn in at least two decades.
The textile industry is an important pillar of Turkey's manufacturing and export system. Data shows that since the beginning of this year, more than 300 textile and garment enterprises in the country have applied for bankruptcy protection, and the number of jobs in related industries has decreased by more than 300,000 in the past two years. The industry generally believes that this round of adjustment has gone beyond the scope of short-term cyclical fluctuations and exhibits relatively obvious structural characteristics.
Output slows down, buyers decrease, and traditional markets continue to be under pressure
According to Turkish media reports, in major textile industry hubs such as Istanbul, Denizli, Bursa, Gaziantep, and Kahramanmaras, many factories have currently suspended production or reduced their operating rates to 30% to 40% of normal levels. The export performance, which serves as an important pillar of the industry, continues to be under pressure. The weak demand in European markets, coupled with rising raw material and energy costs, has constrained business operations.
According to official data, as of November this year, Turkey's textile exports amounted to approximately $8.6 billion, while ready-made clothing exports reached about $15.5 billion, totaling $24.1 billion. Although these figures still rank among the country's major export industries, they represent a decline of about 23.6% compared to the historical high of $31.56 billion during the same period in 2022.
Industry insiders point out that the intensified competition from Asian countries is a significant reason for the industry's pressure. Producing countries such as Bangladesh and Vietnam, leveraging lower labor and energy costs, exhibit stronger price competitiveness in the international market.
Mustafa, the head of a textile factory in the suburbs of Istanbul, said that some international orders are shifting to regions with lower costs. "Enterprises have the willingness to upgrade to high value-added fields, but the demand for funds for related technology investment is large, and financing costs have become an important constraint."
Reporters visited Istanbul and found that the business activity in the once densely populated textile trade areas such as Mertel, Osmanbey, and Laleli has significantly declined. These areas used to mainly serve buyers from countries such as Russia, Ukraine, Kazakhstan, and Georgia, but now many exhibition halls have suspended operations.
Multiple merchants have indicated that the main difficulties they are currently facing are reduced orders, increased costs, and limited financing channels. Changes in foreign procurement behavior, a notable decrease in cash transactions, coupled with changes in perceptions of security situations in some regions and weakening economic conditions in client countries, have further affected buyers' willingness to visit.
Industry insiders revealed that the industry is also facing challenges brought by changes in the labor supply structure. Some Syrian refugees who have long been engaged in labor-intensive sectors such as sewing, dyeing and cutting are gradually returning to their home country, while young local laborers show insufficient willingness to enter the textile industry, leading to a prominent labor shortage issue.
Multiple pressures force enterprises to exit the industry, calling for urgent "transformation"
Against the backdrop of shrinking export markets and diminishing cost advantages, some enterprises have indicated that they are struggling to cover basic production costs. As a result, some manufacturers have chosen to exit the textile industry and shift into relatively stable sectors such as warehousing and logistics.
Ahmet Urksuz, Chairman of the Istanbul Textile and Raw Materials Exporters' Association, pointed out that enterprises applying for bankruptcy protection often have a chain effect. "When a company enters into a voluntary bankruptcy procedure, it not only affects itself, but also affects numerous upstream and downstream suppliers of raw materials, products, and services," he said.
Eksuz also warned that if the scope of bankruptcy protection is expanded from banks and public institutions' debts to market liabilities, it may have a negative impact on normal trade transactions and weaken the continuity of industry operations. Currently, the industry urgently needs to formulate a new development roadmap, promoting the industry to emerge from the adjustment period by advancing technological transformation, strengthening brand building, developing technical textiles, and enhancing sustainable production capabilities.
Turkish economist Serpil Tuncer believes that the current pressures faced by the Turkish textile industry are not merely the result of periodic demand fluctuations, but rather the combined effects of rising costs, market changes, and adjustments in development models. As the global supply chain accelerates its restructuring, the traditional approach of relying primarily on labor costs and locational advantages to compete internationally is facing challenges.
Serpil Tuncer stated that the industry needs to place greater emphasis on transitioning to high value-added sectors in the future, including the development of functional and eco-friendly fabrics, as well as small-batch, high-quality production tailored to niche markets, in order to enhance product competitiveness and bargaining power. However, such transformations often come with increased R&D investment, higher technological thresholds, and longer payback periods, posing higher demands on enterprises' financial strength and risk resistance capabilities.
Industry analysts believe that industrial transformation cannot be achieved without policy and financial support. On the one hand, medium- and long-term financing, export credits, and technological transformation can alleviate the financial pressure on enterprises in equipment upgrades and R&D investment. On the other hand, strengthening industrial chain collaboration and promoting the integration of the textile industry with design, branding, logistics, and digital platforms can help improve efficiency and enhance the ability to cope with market fluctuations.
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