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Chinese Textiles Exports to Turkey Booming Despite Trade Barriers

Despite anti-dumping tariffs designed to protect the domestic textile sector, Chinese exporters are doing brisk trade with many Turkish businesses, at least according to many fabric professionals in attendance at the Istanbul Home & Tex fair.

Photo: Istanbul’s Home and Tex Fair: One of Turkey’s key trade expos.
Istanbul's Home and Tex Fair: One of Turkey's key trade expos.
Photo: Istanbul’s Home and Tex Fair: One of Turkey’s key trade expos.
Istanbul's Home and Tex Fair: One of Turkey's key trade expos.

The latest Home & Tex fair in Istanbul showed that trade between Turkey and China in home textiles is buoyant. Of course, there is something of an imbalance, with Turkey importing US$250 million-worth of home textile products from China and in return exporting only $40 million back to China.

A good example of Sino-Turkish business ingenuity comes from the collaboration between Andy Zhu, Director of Beyond Tex, based in Huishan District in Jiangsu Province, and his Turkish Sales Consultant, Ali Kutluktekin. While Zhu was the only Chinese exhibitor at the fair, having met his local partner a few weeks earlier, his tiny stand was one of the busiest. He said: "This is my first time in Turkey and it was fate that I met Ali. He speaks impeccable Chinese and has been able to interest scores of local businesses in our products."

Zhu, whose factory employs 500 workers and produces around 100 different lines, sells knitted fabrics for furniture upholstery. His best-selling cloth is Pony at $1.80 per metre for a minimum order quantity of 20,000 metres.

Explaining his approach to the market, Zhu continued: "We sell at very competitive prices but also compete on quality. Our processing is slightly different from the local market. Our materials are suitable for chairs, ottomans and more simple products."

Photo: Ormanci: “Affluent customers like cotton.”
Ormanci: "Affluent customers like cotton."
Photo: Ormanci: “Affluent customers like cotton.”
Ormanci: "Affluent customers like cotton."
Photo: Deng: “Selling to high-end customers.”
Deng: "Selling to high-end customers."
Photo: Deng: “Selling to high-end customers.”
Deng: "Selling to high-end customers."

Kutluktekin said: "We want to find five or six large furniture manufacturers in Turkey to take our cloth. Then we will be very happy."

One visitor to the Beyond Tex stand was Turkish wholesaler, Murat Keser, who was impressed with the quality and range of colours and was considering placing an order on the strength of what he had seen.

Turkey's textiles industry is one of the country's strongest economic driving forces. It contributes more than 10% of the country's GNP and it employs around one in seven workers.

Turkey is the sixth largest cotton producer in the world, but domestic output does not fully meet local demand, so the country is also the world's third largest importer of cotton. In order to protect the industry from global market forces beyond its control, the Turkish government recently imposed several anti-dumping taxes on textiles imported from China.

Atilla Bulut is the General Co-ordinator of the Istanbul-based Turkish home textiles industrialists' association, TETSIAD, representing both workers and businesses. He takes a relatively hard line on the imbalance of trade between Turkey and China, particularly with regard to what may be perceived as unfair government support for Chinese manufacturers.

Bulut said: "When talking about China we have to look to our strengths. China produces 50% of the world's home textiles, whereas Turkey makes between 5% and 6%. We compete on quality, service and the ability to deal in smaller quantities. Also, Turkey's geographic location is a real bonus, meaning we can reach 150 countries by air in three hours.

"We have had to impose some taxes on certain Chinese products because we know their government is helping businesses and creating unfairness. For example, we know of Chinese companies producing artificial leather for $4 per kilogram and selling it in Turkey for $2. How can they do that without support?

"Despite this, Chinese home textiles sales to Turkey are doubling every year. One large category is 140cm wide material, which Turkey does not produce a lot of, which is used mainly for curtains.

"We are happy for Chinese businesses to sell into the Turkish domestic market because the main focus of Turkish manufacturers is Europe. With labour costs in China less than half of Turkey's we cannot compete on price alone.

"Turkey's average cost for fabric is $10 a kilogram, or for curtains it is $15. China's average is $4 per kilo."

Despite holding certain negative views about Chinese manufacturers' advantages, Bulut believes that there are some opportunities for Turkish entrepreneurs in China. He added: "We are encouraging our members to go to China and do business."

Gülden Ormancı of Istanbul-based Sesli Tekstil is doing just that, selling high-end cotton blankets that retail in China for around $30. She said: "Chinese people mainly prefer polyester blankets, but our products are natural and many more affluent customers like cotton. Our minimum order is 1,000 pieces and we have a number of distributors."

Şevki Aydin, Textile Export Manager for Istanbul-based Tanriverdi, one of the biggest three companies in Turkey, also sells to China. He said: "We have been selling fashion fabrics there for 15 years. Back then there was nobody, virtually no production. We went to trade fairs, made phone calls and knocked on doors to find customers.

"Two weeks ago I was at the Shanghai Textile Fair. China is changing. There is a wealthy upper or upper middle class, which follows European fashion trends.

"We are selling at between $10 to $15 a metre and sending by air and ship. We believe there is further growth for us in this market."

Ali Aydin (no relation) of Istanbul-based Aydin Tekstil, works with partner Chinese companies, mainly to import polyester for re-sale in Europe and elsewhere, which avoids tax. The firm also imports yarn and exports fashion-sensitive upholstery fabric to China.

He said: "Some materials cannot be made in Turkey because of the specialist machinery needed and the production costs.

"We have good relations with China. At first Chinese people can seem a little cold and reserved, but they are really nice and friendly."

Chinese visitor, Robbie Deng, of Hangzhou Shamash Fabric Company, was at the fair to buy from Turkey. Deng has been buying fabric from Turkey for three years and selling it in China to high-end furniture makers and curtain retailers. He reported an interest in spotting the next big thing, with jacquard velvet catching his eye in particular.

Deng said: "I have had a few problems. Once I ordered 300 metres but the supplier sent 500 metres and forced me to buy the extra. Obviously I didn't do business with them again.

"I pay 30% import tax and VAT, but I can still make a profit."

Photo: The Home and Tex Fair: Chinese and Turkish businesses find common ground.
The Home and Tex Fair: Chinese and Turkish businesses find common ground.
Photo: The Home and Tex Fair: Chinese and Turkish businesses find common ground.
The Home and Tex Fair: Chinese and Turkish businesses find common ground.

Home & Tex Istanbul was held from 28-31 October 2015 at the CNR Expo Center, attracting around 500 exhibitors and 50,000 visitors from around the world.

George Dearsley, Special Correspondent, Istanbul

Content provided by Picture: HKTDC Research
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