An OECD session last Monday looked at the Turkish apparel sector one year after the earthquake in February 2023. The online event was organised by the Istanbul Apparel Exporters Association (IHKIB) and shed light on the effects on key areas such as production, exports and social compliance within the sector. It also looked at strategic approaches and upcoming initiatives aimed at navigating and mitigating the challenges that the industry continues to confront.

On 6th February 2023, Turkey was hit by two major earthquakes, which affected eleven provinces in central and southern Turkey - Adana, Adiyaman, Diyarbakir, Elazig, Gaziantep, Hatay, Kahramanmars, Kilis, Malatya, Osmaniye and Sanliufa - and cost over 50,000 lives, injuring more than 150,000 people. Of a population of 14 million, millions were left homeless.

Effect on garment and textile production

About 10 percent of Turkey’s garment production takes place in the area that was affected by the earthquake, with close to 3.300 apparel factories employing over 81.500 employees (11 percent of the entire sector) with a share of apparel exports of 2.6 percent (541 million US dollars). Almost 2.450 factories are dedicated to textiles and raw materials, employing close to 150.000 workers (30.5 percent of the entire sector) and contributing almost one third (32,1 percent) or 3,3 billion US dollars to the overall textile exports.

While most of the facilities, located in industrial zones, remained standing and some provinces were able to resume production as early as March at normal capacities, other provinces started with lower capacities. According to a study by the Turkish ministry of industry, about 8,600 manufacturing companies were affected, with almost 40 percent damage sustained to buildings, around 30 percent to machinery and almost 20 percent to stocks.

“Although most of our factories in these provinces are ready for production, it will take time for our employees to return to work. Because we cannot and do not expect people who have experienced severe trauma to return to work. In these provinces, we have focused on solving the temporary accommodation needs of our employees and social support programs rather than production,” said IHKIB president Mustafa Gültepe in March 2023.

Through the “Stand with Türkiye” campaign, launched by the Turkish Exporters Assembly (TIM), international brands like Amazon, Bestseller, C&A, Decathlon, Inditex, Mango and others assisted through cash contributions or food and clothing donations. Business partners showed understanding for temporary disruptions in production and order delays.

Economic impact

Speaking on the economic impact, Cem Altan, president of the International Apparel Federation, confirmed that the affected area was “back to normal life” in terms of production, however, referring to the psychological impact, stated that “it is still difficult for those who have lost loved ones”.

Though the eleven provinces provide only a secondary production base for the industry in Istanbul and western buyers and thus production was not affected too much, he estimated that rebuilding would require an amount of about 150 billion US dollars. Given the current inflation, rising energy prices and people having other priorities than buying clothes, “this is a big problem,” said Altan.

Things were just starting to get better after the pandemic in 2022, when the earthquake hit. Pointing to figures, Altan notes that until June 2023, they were still up because of quick deliveries and Turkey’s location as a near-shoring hub for the EU and business increased. However, after June, textile and garment exports to EU went down as demand went down, not only for Turkey but globally.

“The inflation is affecting normal spending habits; the Red Sea hijackings and terrorism are making shipping difficult, causing detours and delays of deliveries to the EU,” states Altan.

“Turkey is an important sourcing destination. While the earthquake did not cause too many problems, the global problems facing us are bigger,” sums up Altan. “I am hoping that Turkey will be on top of everyone’s sourcing list again.”

Long-term and mid-term measures

Nilgün Özdemir, member of TIM and the IHKIB international relations and sustainability committee, spoke about the short-term, mid-term and long-term strategies required to achieve this goal.

While rebuilding and especially temporary shelters for a displaced workforce are short-term priorities, mid-terms strategies include providing “decent and sustainable job opportunities for refugees and host communities”, including vocational and technical training. Investments in the area by the Turkish industry and technology ministry and the organisation for small and medium industry development (KOSGEB) are to ensure that businesses can resume their activities quickly.

In the long-term, maintaining the region’s production levels will be key and Özdemir stressed that sustainability had not been abandoned. She mentioned the Green Deal here, with six critical transformation priorities and 40 actions having been set up to guide the sector for transformation. Digitalisation, green transformation, circularity, social compliance and green capabilities are major action pillars, as are governance and financing.

Turkey has a workforce of textile and garments workers of one million, of which 55 percent are women. With 60 percent of total exports, the EU is the largest market for Turkish garments 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).