An OECD update last week looked at Turkey’s garment sector one year after the February 2023 earthquake. The online event was organized by the Istanbul Garment Exporters Association (IHKIB) and highlighted the impact on key areas such as production, exports and social compliance Standards in the industry. It also presented strategic approaches and upcoming initiatives to address the challenges the industry continues to face.
On February 6, 2023, Turkey was rocked by two major earthquakes that affected eleven provinces in central and southern Turkey – Adana, Adiyaman, Diyarbakir, Elazig, Gaziantep, Hatay, Kahramanmars, Kilis, Malatya, Osmaniye and Sanliufa. More than 50,000 people died and more than 150,000 were injured; Millions of people were left homeless.
Impact on clothing and textile production
About 10 percent of Turkey’s clothing production takes place in the earthquake-affected area, with almost 3,300 clothing factories employing over 81,500 people (11 percent of the total sector) and accounting for 2.6 percent (498 million euros) of clothing exports. Almost 2,450 factories are dedicated to the production of textiles and raw materials, employing almost 150,000 workers (30.5 percent of the total sector) and contributing almost a third (32.1 percent) or 3.04 billion euros to total textile exports.
While most operations in the industrial zones were not at risk of collapse and some provinces were able to resume production at normal capacity as early as March 2023, others started at lower capacities. According to a study by the Turkish Ministry of Industry, around 8,600 production companies were affected, with almost 40 percent of the damage occurring to buildings, around 30 percent to machinery and almost 20 percent to inventories.
“Although most of our factories in these provinces can resume production, it will take some time for our employees to return to work. Because we cannot and do not want to expect people who have suffered severe trauma to return to work. In these provinces, we have focused on temporary housing for our workforce and social support programs rather than production,” IHKIB President Mustafa Gültepe said in March 2023.
As part of the “Stand with Türkiye” campaign, launched by the Turkish Export Association (TIM), international brands such as Amazon, Bestseller, C&A, Decathlon, Inditex, Mango and others helped with monetary donations or food and clothing donations. Business partners showed understanding for temporary production interruptions and order delays.
Economic impact
Regarding the economic impact, Cem Altan, president of the International Garment Federation (IAF), confirmed that the affected area had returned to “normal life” in terms of production, but added, regarding the psychological impact, that it was “for “It is still difficult for those who have lost loved ones.”
Although the eleven provinces represent only a secondary production base for the industry in Istanbul and western buyers and therefore production has not been affected too much, Altan estimates that the reconstruction will require an amount of around 150 billion US dollars (around 138 billion euros). would. Given current inflation, rising energy prices and the fact that people have priorities other than buying clothes, this is “a big problem,” Altan said.
After the pandemic in 2022, things were just starting to improve when the earthquake happened. Altan points to figures according to which sales have increased until June 2023 due to fast deliveries and Turkey’s position as a near-shoring hub for the EU. However, thereafter, textile and clothing exports to the EU declined as demand declined not only in Turkey but worldwide.
“Inflation affects normal purchasing habits; The kidnappings in the Red Sea and terrorism complicate shipping and lead to detours and delays in deliveries to the EU,” explains Altan.
“Turkey is an important procurement destination. Although the earthquake did not cause too many problems economically, the global problems we face are greater. I hope that Turkey will soon be at the top of the list of sourcing countries again,” concluded Altan.
Long and medium term measures
Nilgün Özdemir, member of TIM and the IHKIB International Relations and Sustainability Committee, spoke about the short, medium and long-term strategies needed to achieve this goal.
While reconstruction and particularly the provision of emergency shelter for displaced workers are short-term priorities, medium-term strategies include the creation of “decent and sustainable employment opportunities for refugees and host communities,” including vocational and technical training. Investments by the Turkish Ministry of Industry and Technology and the Organization for the Development of Small and Medium Enterprises (KOSGEB) in this area are intended to ensure that companies can quickly resume operations.
In the long term, it will be important to maintain the region’s production level, and in this context, Özdemir emphasized that sustainability has not been forgotten. She mentioned the European Green Deal, which sets out six critical transformation priorities and 40 measures to help the sector transform. Digitalization, a green transformation, circular economy, social compatibility and green skills are important pillars of action, as are governance and financing.
In Turkey, one million people are employed in the textile and clothing industry, 55 percent of whom are women. With 60 percent of total exports, the EU is the largest market for Turkish clothing and textiles, followed by other European countries (11 percent), CIS (10 percent), Middle East (8 percent), North America (5 percent), Africa (4 percent) , Far East (1 percent) and others (1 percent).