What Turkey’s Garment and Textile Industry Needs Most

Halit Gümüser, managing director of Kipas Holdings, the parent company of Kipas Textiles, has one message to the international community: Remember Turkey.

The world has no short supply of bad news, which means that disasters will dominate headlines for a while before making way for the next terrible thing. Gümüşer saw this happen with the cataclysmic monsoon floods in Pakistan, which left a third of the nation underwater last year. It happens with deadly building collapses, military takeovers and full-blown invasions. Now he’s worried it’ll happen with the pair of earthquakes that shook parts of the country to their foundations in February, killing more than 46,000 people and leaving a million homeless.

“Time passes and we forget,” Gümüser said. But manufacturers in the region need more than goodwill and charity to recover, especially those who have lost their factories and are feeling unmotivated. He expects at least 10 percent of Turkey’s garment and textile exports to be redirected as a result of disruptions to production. In Kahramanmaras, a major spinning and dyeing hub where Kipas Textiles operates 25 facilities and employs 6,500 people, the devastation has been so great that most of the factories there are unlikely to restart before June. Some may not be able to pick up the pieces until the end of the year.

Kahramanmaras is just one province. In the 11—formerly 10—cities that surround the tremors’ epicenters, more than 1,600 companies and nearly 1,300 textile mills, accounting for 15 percent of Turkey’s garment and textile industry, reside, said Cem Altan, president of the International Apparel Federation and a board member of both the Istanbul Apparel Exporters Association and of the Turkish Clothing Manufacturers Association.

More than half of businesses in the affected regions have been dealt some level of damage, Altan said, though a bigger issue is the 350,000 workers, comprising one-third of the entire sector’s workforce, “who have lost their lives or lost their loved ones and have still not recovered from the shock.” Infrastructure damage also continues to interfere with critical services such as communication, electricity and water.

Sheltering survivors whose homes were destroyed is perhaps the bigger hurdle to resuming production, he noted. Over the past three years, companies surrounding the impact zone have been able to invest in a 25 percent increase in production capacity. Coupled with the recent slump in orders due to the global economic slowdown, newer facilities in Bursa, Denizli, Istanbul and Tekirdağ to the west will be able to pick up any slack.

“Because the number of tents and container homes is limited and they take time to build, people are leaving the cities and moving to other cities where they have families,” Altan said. “We’re getting help from Turkish individuals, companies, NGOs, foreign help and, of course, the government to provide shelter to those who have no homes but this is a slow process.”

Gümüser agreed that finding accommodations for the 1,000 employees who lost their homes has been challenging, though the company is looking to construct some housing once authorities give it the green light. Kipas Textiles, he noted, was a “little bit lucky.” While its buildings were pummeled by the earthquakes, none collapsed. The company’s machinery took some hits, too, but nothing critical. That’s not to say it has emerged unscathed. More than 40 of its employees were killed when the earthquakes struck.

But Kipas Textiles has been able to rally, restarting some of its spinning and weaving facilities to churn out the tent fabrics that are currently in short supply. If everything goes according to plan, roughly 70 percent of Kipas Textiles’ spinning capacity will be recovered by the end of March, Gümüser said. And since its denim production wasn’t “seriously affected,” it should be able to hit full capacity on those lines in April. Non-denim is a slightly different story, but the manufacturer is slowly working its way up as well. A lot hinges on the workers, of course. While it’s down to 50 percent of its workforce, it’s hopeful that it can coax more to return when more housing is in place.

“Our customers were really surprised at how fast we restarted,” Gümüser said, noting that timelines were pushed back by around a month. “Our operation delays and production shortage were not as much as you might expect.” Still, he anticipates a 10 to 20 percent drop in Kipas Textiles’ turnover rate this year, or $100 million. In February alone, it lost $40 million.

Exactly how much the disaster will cost Turkey’s entire garment and textile industry is still something that’s difficult to say at this point. A preliminary assessment by the World Bank estimates that the earthquakes cost the entire nation $34.2 billion in physical damage, or around 4 percent of its 2021 gross domestic product.

Bindiya Vakil, CEO of Resilinc, a risk-management supply chain platform, says the sector, as a whole, could be thrown back by six to nine months. Even if a manufacturer isn’t situated in the impact zones, it could have a supplier there. Logistics, too, have also been curtailed. After it was badly battered by the seismic activity, Iskenderun port, a major destination for cargo, is still in shambles. But the broader fashion industry will be fine—it has plenty of options.

Indeed, representatives from Adidas, Asos and H&M Group said they didn’t anticipate any production hiccups. A spokesperson from C&A, which sources 8 to 12 percent of its annual demand from Turkey, said that the impact has been more from a “people and capacity” perspective.

“With this in mind, we have taken a flexible approach with them and where product would not meet the required delivery dates due to seasonality, we are working with them on re-designing the styles to ensure that this remains commercially relevant,” the Belgium and Germany-based retailer said. It’s also offering suppliers expedited payments on any outstanding invoices, and supporting them by obtaining any required raw materials from its global supply network until they can reestablish their own.

Dr. Sheng Lu, assistant professor of apparel and fashion studies at the University of Delaware said that the wider sector’s exposure to Turkey is significant but not extensive. In a benchmarking study he conducted with the United States Fashion Industry Association in 2022, he found that while 36 percent of U.S. brands reported sourcing from Turkey, the “vast majority” placed less than 10 percent of their total orders with the country. This was beginning to change, however. Roughly 20 percent of respondents said they planned to further expand sourcing from Turkey from 2022 through 2024.

“U.S. companies see Turkey, in general, as a ‘balanced’ sourcing destination in terms of speed to market, flexibility, sourcing costs and compliance risks,” Lu said.

A similar opinion has formed across the pond, where Turkey is a tentpole of many companies’ nearshoring strategies. The nation produces 12 percent of the European Union’s clothing, a market share that has stayed stable over the past decade “thanks to its geographic proximity, duty-free access and relatively complete supply chain,” he added.

“Many EU companies treat Turkey as an alternative to sourcing from Asia,” Lu said. “Apparel items sourced from Turkey were typically priced higher than those made in Bangladesh and lower than those made in China. In other words, as ‘made in China’ became more expensive, Turkey was regarded as one alternative.”

But a supply chain isn’t just products; it’s people. And for the people of Turkey, February’s events have been nothing short of a national trauma.

“There are people who sleep in factories, who take their children, their animals to work because they lost everything or they are in fear of going back to their houses,” said Pinar Özcan, a representative for one of IndustriALL Global Union’s affiliates in Turkey. “Most houses are damaged and need to be rebuilt. Some lost their kids, some lost their mothers, some lost relatives and close friends. They are still learning to live with this wound. For sure, wounds will heal with time but it will be so harsh.”

Serhat Karaduman, CEO of Calik Denim, says what the sector needs most to recover is continued “sensitivity and support” from all stakeholders. It, too, has lost employees. Because its integrated production facility in Malatya, one of the worst-hit provinces, suffered no major damage, however, the mill was able to turn the building into a temporary support center to house and feed survivors in partnership with the mayor’s office, the Turkish Red Crescent and the Turkey Disaster and Management Authority, better known as AFAD.

“The severity and impact of this natural disaster are strong and our priority is to ensure the health and safety of our employees and to ensure the continuity of these,” said Karaduman. “Therefore, this was our main focus at the very beginning.”

With “great support and understanding” from its global partners, Calik Denim was able to begin dispatching shipments on Feb. 17. By March 1, it was back on track.

“Once again, we have seen how big a family in this industry we are in these difficult days,” said Karaduman. “We believe that we will get through these days in unity and solidarity.”

The manufacturer is still in the process of determining how much the earthquakes will cost it financially. It continues to monitor the situation, he added, and is in constant contact with its employees.

“The good news is the partners who have been working with Türkiye for a long time have told me that they will not leave Turkiye because of this disaster,” said Altan, using the official name for Turkey. “They allowed factories to carry on the orders who are late for delivering the goods because of earthquake or transport problems.”

Philanthropy is desperately needed but it’s also a short-term fix, he said.

“We need business from our partners,” Altan added. “This is the biggest help they can give to us.”