Corn Blast in Textiles
Turkey Textile The sector has recently faced a variety of challenges. This is due to both internal dynamics and international competition. Below are details of the different dimensions of the subject.
Transformation in the Textile Sector: Textile industry is an important part of Turkey's economy. However, due to global competition and cost pressures, many firms are in trouble. Leading to alternative markets such as Egypt has become one of the survival strategies of Turkish textile companies. This directly affects Turkey's workforce in the textile sector.
Cheap Labour Threat: Cheap labor in Egypt and other countries is an important factor that threatens the Turkish textile sector. Egypt attracts attention with its low-cost workforce, which weakens the competitiveness of Turkish manufacturers. Although Turkey produces high quality, it is becoming attractive to brands looking for a cost advantage.
Supply Chain Breaks: The COVID-19 pandemic highlighted the importance of supply chains, and for many countries there have been breaks in those chains. Although Turkey has had some advantages thanks to its rapid supply and logistics capabilities, disruptions in the global supply chain have negatively affected the sector. Egypt and other Asian countries in particular have increased their market share by taking more orders in the process.
Impact on Turkish Export and Textile Sector: As of 2024, Turkey's textile and apparel exports $1 billion $587 millionIt is. However, serious efforts are needed to overcome this goal due to the challenges in the sector. The fluctuations in exports directly affect employment and production capacity in the sector.
Impact on Unemployment Figures in Turkey: The textile sector is one of the major employment areas of Turkey's economy. However, an increase in contraction and competition in the sector could raise unemployment rates. Especially when small and medium-sized businesses are in a difficult situation, it can lead to a loss of workforce. With the negative developments in 2022, an increase in unemployment figures was observed.
Exchange Rate Problem: The fluctuations in exchange rates directly affect export prices by affecting the costs of the Turkish textile industry. Low exchange rates increase imports while reducing the earnings of exporters. This weakens the competitiveness in the industry and creates financial uncertainty.
Egypt Country Advantages
Among Egypt's advantages in the textile industry are its low labor costs and strategic location. Egypt is also capable of rapid delivery thanks to its proximity to the European market. This increases the competition faced by Turkish manufacturers and causes market losses.
Low Labor Costs: Labor costs in Egypt are one-quarter the size of Turkey. This makes Egypt an attractive hub for low-cost production. However, labor efficiency remains at lower levels compared to Turkey; The performance of employees in Egypt ranges from 40 to 50 percent, while in Turkey it is 65 to 70%.
Low Energy Costs: Egypt has an advantage over Turkey in terms of energy costs. Low energy costs reduce production costs, making Egypt more competitive.
Tax Advantages: Tax incentives in Egypt offer attractive opportunities for investors. This increases the willingness of Turkish companies to invest in Egypt.
Strategic Location: Egypt is capable of rapid delivery thanks to its proximity to the European market. This provides a significant advantage, especially for companies that export to European countries.
Investment Increase: Turkish investments in Egypt have increased in recent years. New investment of $500 million is projected in Egypt in 2023 and 2024. Turkish companies have a significant share in the Egyptian market, increasing competition in the sector.
Free Trade Agreements: Egypt's Free Trade Agreement (FTA) with the United States, Arab and African countries makes it easier for Turkish producers to enter this market and makes Egypt more attractive.
As a resultTurkey's textile sector faces many challenges, which can have both economic and social implications. Strategic steps must be taken to restructure the sector and become competitive. These advantages cause Egypt to grow in the textile industry and attract the attention of Turkish companies. In the face of Turkey's high costs and increasing competition, these opportunities provided by Egypt lead to a change of dynamics in the sector. The loss of production in the textile and apparel sector in Turkey varies from parameters such as high cost of production, fluctuations in exchange rates, and international competition. The number of jobs, which was 1.3 million in 2022, fell to 980 thousand in 2023, causing a loss of 300,000 people. This poses serious social problems, not just for individuals, but for their families and society. The rise in unemployment rates threatens economic stability, while the unemployment rate in the young population has risen to 17%.
Bircan HASGÜL
