Textile sector in need of government support

The global economic crisis has certainly had a negative impact on the textile industry, according to the chairwoman of the Antalya Exporters Union, or AİB.

"The textile sector ranks fifth among the list of 'most vulnerable sectors to the crisis' today," said Azize Kalkavan. "If the same crisis had happened two or three years ago, we would not have been affected this much since the development of the sector was more stable then. Today we are caught in the wave just as we have lost our advantage of competition due to high bank loans, increase in total costs, decrease in demand, and ultimate loss of confidence," she said.

Yarn producers have been affected the most by the current crisis. This mainly stems from the state failing to promote investment and investors at the right time, said Kalkavan, adding that yarn production necessitates more technological infrastructure, as well as an expert engineering team. Yarn production can ensure high margins of profit if done in an environment of low cost labor, energy and good investment, she said.

Narrowing profit margins
"Our profit margins have narrowed substantially in the last six months. We are afraid this trend may get even worse next year. Customers demand discounts, which are not easily applicable unless we see a fall in raw material prices, energy costs and employee salaries," said Namıl Keskin, owner of Kadıkoğlu Tekstil, a local firm in Antalya.

The textile sector has contracted 15 to 20 percent during the last year affected by the outbreak of the crisis, said Kalkavan, adding that companies free of liquidity problems can survive this contraction while others are eliminated. "The private sector is advised to save. How is that possible? If we save on raw material or energy, this would mean a decline in production, and if we save on labor by laying off workers, that would lead the economy deeper into depression."

"Our biggest rivals are China, India and Pakistan, while we also compete with Egypt and African countries in ready-made clothing. China is expected to be affected the least by the crisis as the liquidity accumulated in the country so far will be transferred to the private sector now. Moreover, the investment climate in these countries cannot be compared to those in Turkey," she said.

"I doubt these countries will be able to benefit from their situations and turn them into a sustainable advantage. We can beat them with faster delivery, more production and better quality in the long term."

The foreign exchange dilemma
"The crisis had a negative impact on us because we buy raw fabric and yarn in dollars. If the fluctuation in the foreign currency prolongs, we will have to halt operations. However, we want remain optimistic and think that government support will lend a hand to the sector and heal it soon," said Aliye Kural, owner of Kural textile firm. "Without government aid, we will be turning over all our advantages to China, India and Pakistan forever," she said.

The sector is waiting for government grant that could include a discount in the monthly social insurance payments, energy price cuts, systematic tax auditing in order to prevent tax evasion and lower interest on bank loans, said Kalkavan.

"Although we should all work on remaining optimistic, we should also keep in mind that once the wheel stops, it could be very hard to get it going again," she said.