Is Turkey an Emerging Global Supply Hub?

COVID-19 has impacted global supply chains and made it difficult to source textiles and apparel. Turkey, with its skilled workforce, production flexibility and years of experience, has become a viable location for sourcing textiles and garments. But it has its fair share of challenges. In this note, we examine the pros and cons of Turkey as a key sourcing location for global textile and apparel value chains.

An emerging market economy with a rich cultural heritage, Turkey is located at the intersection of Europe and Asia. It served as a major regional trading center for centuries due to its strategic location and maritime control of major waterways between the Black and Aegean Seas. Although devoid of natural resources, it benefits from vast tracts of arable land and miles of coastline. Textiles and clothing constitute the heart of the Turkish economy in terms of contribution to GDP, job creation, investments and macroeconomic indicators. In 2021, the Turkish textile industry exported $16.2 billion worth of textiles and was the fifth largest supplier in the world, while the garment industry exported $18.3 billion worth of clothing and was the fourth largest supplier in the world.

According to data from the Turkish Statistical Institute and the Ministry of Commerce, Turkey’s textile and garment exports increased by 13.03% year on year in January-March 2022 to reach $9.02 billion, against $7.98 billion in the same period of 2021. With its skilled human resources, modern technology, flexible production capacity and years of experience, Turkey’s textile and garment industry plays an important role in world trade with the competence to meet high standards and can compete in international markets in terms of superior quality and a wide range of products.

The European Union (EU) is by far Turkey’s largest import and export partner, as well as its main source of investment. In 2021, the EU accounted for 51.8% of Turkey’s textiles and clothing exports, and it was the world’s third largest supplier of textiles and clothing to the EU.

Over the past two years, COVID-19 has disrupted operations in the textile and apparel industry. Lockdown-induced supply chain disruptions have been at the top of the agenda of fashion CEOs around the world. The need to build fast, flexible and reliable supply chains has become increasingly important as the severity and frequency of supply chain shocks tend to increase. The goal is to spread risk across multiple supply markets to the point where companies can remove reliance on any one market. Companies these days have started making their collection smarter through analytics, becoming more customer-centric, designing sustainable products, implementing digital tools, and ensuring end-customer satisfaction. Keeping these recent changes in the apparel industry, Turkish companies can provide various competitive features that can help the textile and apparel industry adapt quickly to changing supply chain world today.

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Sharon P. Juarez