Benetton to Increase Production in Turkey
The problems experienced in the supply processes and the increase in costs during the pandemic crisis caused a change in the way of doing business in the sectors for individual consumption. Textile production, which is one of the sectors most affected by this situation, started to move to regions close to large markets instead of Asian countries where the price of labor is low.
Italy-based Benetton CEO Massimo Renon also expressed that within the framework of the company’s goal of halving production in Asia by the end of 2022, it will increase production in Serbia, Croatia, Turkey, Tunisia, and Egypt and move production closer to major markets.
“Production in Bangladesh, Vietnam, China, and India by 10 percent this year.”
In a statement to Reuters, Renon provided insights on how the problems in supply chains, increasing costs and delivery times, have changed the way of doing business that has settled in the industry in the last 30 years.
‘‘It’s a strategic decision to have more control over the production process and shipping charges,’’ said Massimo Renon, adding that the company has cut production in Bangladesh, Vietnam, China, and India by 10 percent this year.
Renon continued as follows, ‘‘While shipping costs were in the range of 1,200-1,500 US Dollars for a container in the past, this figure is in the range of 10,000-15,000 US Dollars today, and an exact delivery time cannot be given.’’
Renon, the CEO of the company, which has made most of its sales in Europe, but has moved production to countries with lower wages since the early 2000s, indicated that the tenfold increase in sea freight rates was due to the scarcity of cargo ships combined with increasing consumer demand.
