TURKISH LEATHER AND FUR
GARMENT INDUSTRY
With
55% share in Turkish export of leather products, it is the biggest sub
industry. 582 million USD out of the total 1.050 million USD gained in
exportation in 2005, belongs to leather and fur garment industry.
Leather
and fur garment industry, presently exports very large amount of its
production.
In
Turkey, the history of leather garment products goes back to centuries and they
are among the ones which initially traded to foreign markets. Leather garment
export, which started in the 1960’s, first targeted the European countries. As
EU countries, whose name was “common market” at that time, abolished custom
duties for Turkish industrial products, our export level realized a
considerable increase in the 1970’s. Only a few companies took place in this
process and Turkey, whose “know”-how” capabilities were not high in those days,
achieved a considerable level of improvement in a short time.
But the
real increase in exportation started with the liberal economic politics which
was put into practice in the 1980’s. Moreover, this period was evaluated as the
Turkish leather and fur garment products’ second conquest of Europe. But
Turkish leather and fur garment industry made it’s biggest leap with the
political breakdown of the Soviet Union in the beginning of the 1990’s. The new
countries in this geography became a great market for our leather and fur
garment products and still they are the biggest markets we have. With the very
large amount of orders coming firstly from Russian Federation and then from old
Soviet Republics, not only Turkish leather nad fur garment industry, but also
all leather and leather goods industry started to grow; import of raw material
increased, tanneries expanded or new ones were settled up, numbers and
capacities of sewing workshops increased.
In this
way, Turkish leather and fur garment industry started to reform itself in order
to meet changing market demands in rapidly changing Russia. Having started to produce
it’s own models, to create it’s own collections besides the tailor made
production type and became a gigantic sector with it’s “know-how”, today
Turkey, with it’s high quality and high value added products in leather and fur
garment industry, has won recognition in all over the world.
Turkish
leather and fur garment industry’s biggest export markets are Russia with a
share of 22,4%, Germany, with 21.7%, France with 13.1%, USA with 8.7% and
Spain with 5.1%.
Turkish
leather and fur garment products, as the symbol of quality production, could be
able to achieve the same success in new markets as in Russian market, if it is
promoted more all around the world.
Turkish
leather and fur garment products deserve a higher share in world markets.
Companies
in the industry mostly consists of small and medium sized enterprises. In the
leather and fur garment industry , there are approximately 1.500-2.000
companies and 25-30.000 people are employed. 60% of these companies are small sized,
20% are medium sized and again 20% are big sized companies. There is the
advantage of flexible production as the industry mostly consists of SMEs.
As
skilled human labor plays a great role in the leather and fur garment, the
industry again has an advantage of having the qualified and experienced
work force. Main reason for this is the experience accumulated through 35 years
of export and the trained labor force during this period. The schools
established in the recent years to provide education in the area of the leather
and fur garment, are expected to have great contributions to the industry.
When
mentioning about leather and fur garment, another points come to the fore are
orijinal designs and competent designers. With intensive exportation to old
Russian Republics and especially Russia itself, Turkish leather and fur garment
industry rapidly started to leave it’s identity of contract manufacturing and
gained important achievements with it’s own models and collections. The
industry’s capability to create designs and new models expands day by day with
the graduates of technical and design schools opened newly and designers who
are sent abroad for education by the institutions like İTKİB.
The correct moulding is the other issue as important
as design at this point. The comfort that the consumer will feel while wearing
the product passes form the quality of the mould. Turkish leather and fur
garment industry achieves this perfectly with the know-how it posesses today
and fulfills consumer demands on issue perfectly as well, and this is the other
great advantage of our industry in the international markets.
Which brings Turkey to the fore in Russia and Old
Russian Republic countries where leather is the most demanded product, is the
competitive structure of companies in leather and fur garment industry. Turkish
companies, with their succesful organization as well as with their talent to
adapt changing situations, strengten their existence in the world markets.
Turkish producers are so flexible and they meet all demands rapidly.
Because
of its quality, fast and flexible production, nearly all of the world famous
brands’ leather collections are being produced in Turkey.
The advantages of Turkish
leather and fur garment industry in international competititon are:
- Ability and gathered experience in exportation
- Fast production-delivery capabilities of orders and production
flexibility
- Variety and avaliability of quality raw materials
- Developed fashion and design skills
- Experience and quality in fur producing
TURKISH
FOOTWEAR INDUSTRY
Turkish
footwear industry employs 380 thousand workers approximately in 40.000
companies and has external and internal trade volume worth of
2.3 billions $.
Footwear
industry has a share of 1.4% in total GDP and 2% in total investments.
Industry
has the 9th place in the world production with it’s 400 millions pairs of
production capacity and 175-200 millions pairs of real production per year.
The
most important characteristic of the footwear industry is being labor intensive
and depending mostly on small sized companies that 3% of its production is made
in wholly technology oriented companies, %63 in semi technology oriented
companies and %34 in labor oriented companies.
Intensive usage of local sources in production is
another characteristic of the industry. So, a great part of the added value is
created with our country’s own resources. Currently 70% of the production input
demand is met locally and 30% by imports.
The
footwear industry, which was selling approximately 90% of its products to
domestic market in the past years, started to attach more importance to
exportation in recent years.
Consequently,
an exportation of 50.715.301 pairs on quantity basis and
216 million $ on value basis was achieved in 2005.
Turkish
footwear industry, which ranks the 9th in world production and the second after
Italy in Europe, due to not focussing specifically on exportation, does not
have the place it deserves in the world markets.
Presently,
the sector has a share of 0.4% in the 102 billions USD of world exporting
volume. In our biggest market, in Europe, we have the 19th place with a share
of 0.8%.
Nevertheless,
Turkish footwear industry, with its increasing product quality, technological
and human force substructure day by day, has the power to create world trade
marks to compete in international area.
Therefore,
having a fundamental tradition coming through centuries, industryr’s first
target is to take a bigger share in world footwear trade by focusing more on
the image of country.
Turkish footwear industry, which has started to work as small sized industry in
1950s, has made great progress in the process of becoming industrialised with
the machinery investments made in the 1980s. As a result of new market searches
which became widespread in the 1990s, the industry has increased its
exportation to the world and especially to Russia.
Presently,
our main footwear export markets are; 10.8% Germany, 9.6% Saudi Arabia, 7.2%
Greece, 6.4% Bulgaria, 5.8% the Netherlands, 5.4% Russia, 4.9% Iraq, 4.7%
Romenia and 4.4% Israel.
As
exportation started to gain importance, companies which could produce large
amounts of footwear above the average quality complying with the European
standards started to appear. The industry, which has carried out certain
activities especially towards increasing its exportation and widening its
market range in recent years, established a sectoral foreign trade company on
marketing and delivery..
Development
in the industry’s technological investments are also continuing. Turkey uses
the same technology with other countries in the production of footwear.
Especially the machinery of those companies which attained certain levels in
their size are at a very supreme level in terms of technological equipments.
There are nearly 50 CAD-CAM drawing and cutting hardware in Turkey and this
number points a very good level of technological development.
But
skilled labor force is still very important for footwear production as it
fundamentally depends on labor.
Anatolian
Footwear Vocational High School Education Center established by TASEV, has the
capacity to met the demand of the sector for skilled labor force.
Also,
in 2004, Footwear Education Institute project was implemented within a MEDA
project managed by the Turkish Representative of European Commision.
Turkish
footwear industry produces high quality products due to it’s inherited art from
traditional workshops. However, as the creation of unique designs and original
products is very important in international competition, Turkey started to make
extensive investments in creating footwear concepts.
The design competitions which have been arranged with the
partnership of Mimar Sinan University and TASEV in the last five years, have
great influence on the direction of the industry.
Certificate
programs are also organised in leather garment and footwear design by Fashion
Institute which is the school and the source of Moda Bella, the famous Italian
fashion magazine. With these certificate programs, it is aimed to provide the
people working in the industry with new knowledge and skills on the theme of
design .
To
conclude, with its current production capacity, level of quality reached,
flexible production approach and vision of placing importance to design and
research and development, Turkish footwear industry has reached its saturation
point in the domestic market became a candidate industry to climb to the top in
international markets.
In this
respect, Turkish footwear industry has great advantages. These advantages are;
- Ability to follow closely the Western concepts in terms of fashion
and design,
- Existence of skilled and productive labor force,
- Ability to deliver the orders in a short time,
- Ability of especially producing small amount orders, changing the
designs and models rapidly,
- Flexible production approach,
- Ability to make any kind of footwear.
Turkish
footwear industry has the capacity to become a more important player in the
world markets with these advantages and its high quality products.
SWOT
ANALYSİS
The
problems threatening the existence of Leather industry
Economic crisis. Low labor force of competitors
(China, India, Pakistan, Bangladesh and others)
Focus on the single market Unfair competition
Low management capabilities Hardness of draw in a loan
Short-term rapid growth of debt High credit interests
Not to have a standart products Long-term payments and
delay problems about payments,
Problems to make continuous production, Unfair
competitive environment
Insufficient markets and marketing activities,
Environmental issues
Inadequate encouragement from the government
High costs of refining facilicity in order to protect environment,
High customs duties, special consumption taxes
Financial deficiencies
Dependence on foreign for raw materials and leather
chemicals
Lack of R and D efforts and technology
Lack of domestic raw leather Small capacities
Scant control for imported products Lack of equity
capital
High prices of energy Lack of e-business awareness
Strengths
of the Leather Industry
To abide by the time of delivery
To have good relations with intermediaries
To produce world standard products
To provide a multitude of intermediaries in
the distribution channel
To employ a foreign language speaking staff
To conduct research for country information
To collect information related with
competitors
To hold a positive approach on closely
monitoring the fashion
Weaknesses
of the Leather Industry
High input costs
Problems in pricing policy
Insufficient promotional activities of
companies
Environmental pressure on production
Lack of brand-building of companies
Insufficient budget allocation for marketing
activities
Insufficient government support for leather
industry
Failing to act in cooperation with other
companies in determining the export price
Low prices
Insufficient publicity efforts.
Lack of a developed sales promotion
Insufficient public relations
Lack of the government’s subsidy for sales
Delays in VAT rebate payments
Lack in differentiating the insurance
premiums of exporter companies from that of others
Opportunities
in the Leather Industry
Having engineers educated in manufacturing
Developing production techniques
Finding new markets
Opportunity of institutionalizing the
promotion of leather products
Caring for human health in leather production
Having leather factories in free trade zones
Initiating publicity activities by companies
Changes in prices
Joint pricing policy application
Continuity of exports for brand creation
Introduction of Turkish companies to the
world
Threats
in the Leather Industry
Gradual climb in international competition
China’s entry into the leather market
Volatile prices
Environmental pressure on leather production
Human health problems in leather production
Lacking efforts to improve product standards
Inadequate marketing activities
Changes in prices
Inadequate governmental subsidy
Acting collaboratively in determining the
export price
The abundance of risks in working without raw
material and inventories
Excess inventories
Analysis of the leather,footwear and leather
goods industry in Turkey
By Egemen
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