Becoming the Chairman of TIM last June, İsmail Gülle has been pulling out all the stops for Turkey to achieve the export targets. Noting that Turkey is coming close to the 200 billion dollar export target for 2019, Gülle said that they are building a new architecture for exports. “We are building a new architecture for exports based on the 5S Vision, that is Strong Turkey, Strong Economy, Strong Exports, Strong Human Assets and Strong Exports Infrastructure. Our priority is to increase the share of exports of high-tech products, which amounts to 3.3% today and to increase our exports value by weight, which is 1.3 dollars per kilogram.”
We held an interview with TIM Chairman İsmail Gülle for ITM News. Gülle shared his views on Turkey’s export target, projects and ITM 2020.
Turkey broke a record in 2018 with 168 billion dollars of exports. For 2019, 200 billion dollars of exports are planned. In addition, you declared 2019 as ”The Year of Sustainability and Innovation in Exports.” Can you tell us about your action plan to reach these targets as TIM, and the contributions of the “5S Road Map” that you announced?
2018 was a historical year for Turkey’s exports with in spite of the trade wars, Brexit, rising populism and regional conflicts. Our exports reached 168 billion dollars, a record-breaking amount for the history of the Republic. Also, I think it is important that I should underline that, we are now applying a new method in calculating our exports and imports. As you know, we didn’t use to record the figures of exports made from the “free zones” and “warehouses.” Although these products are ours and exported from our country, they were not being included in the calculation. In this regard, the “General Trade System” which we started using as of January 2019 is a revolutionary change. According to the General Trade System, our exports increased to 176.8 billion dollars, while our trade balance ratio became 75.3%, the highest in the last 10 years.
In 2019, our exports continued to increase despite the cyclical risks and challenges in the first four months. In the first four months, according to the GTS account, our exports amounted to 59.7 billion dollars. In April, our exports rose to 15.3 billion dollars on a monthly basis, and rose to 179 billion dollars in the last 12 months. This indicates that we are now very close to our 182 billion dollars target set out in the “New Economy Program” announced in September.
We declared 2019 as the “Year of Sustainability and Innovation.” In addition, we are building a new architecture for exports based on the 5S Vision, that is Strong Turkey, Strong Economy, Strong Exports, Strong Human Assets and Strong Export Infrastructure. We have started to lay the foundations for this new architecture with new projects and applications such as “Registration of items that were not registered before for exports”, “Digital transformation for exports” and “TIMTank”, which we have implemented and will continue implementing to maintain the success momentum we have had in 2018.
“WE CAN BOOST OUR EXPORTS IF WE START DESIGNING, PRODUCING AND EXPORTING TECHNOLOGY INSTEAD OF JUST USING IT”
You are planning to increase our share in global exports with your “Turkey with a foreign trade surplus” target. What projects do you have for this? Can you tell us about the prioritized sectors, if any, and target countries?
Our top priority is to increase the share of “high technology products,” which is 3.3% in our exports as of today, and to increase our exports value by weight, which is 1.3 dollars per kilogram. In global trade, it is now impossible to achieve significant changes in exports by producing more and selling more just with competition in prices. Therefore R&D, design, innovation and technological transformation have become a must for exports. I believe the investments made especially in the projects should be monitored better.
The money we invest in innovation, R&D and technology and the funds transferred for these purposes are definitely some of the issues we should seriously dwell upon. Although we are above the OECD average in terms of R&D expenditures as of today, unfortunately, the number of products we can commercialize and put on the market is not at the desired level. We are highlighting this issue especially during the Innovation Week and Design Week events we hold every year. And we also provide the required assistance to our companies to commercialize the products developed at our entrepreneurship houses.
While digital conversion, blockchain, artificial intelligence and IoTare being talked about in today’s world, we should definitely contribute to create the know-how for exporters in Turkey. Now we should not only use technology, but we should be a country designing, producing and exporting technology. This way we can boost our exports, and get one step closer to our “Turkey with a foreign trade surplus” target.
Currently, our share in the global trade has reached 0.9%. As a result of the organizational transformation that we have made within TIM, we have started to prepare comprehensive reports like a think tank with our new branches for our exporters and to direct them from their potential bar to the markets according to the products they export. It was important to share all the details of our road map for Turkey’s exports which we, as TIM, will follow as of the new year, as part of the “Export 2019 Report”, which we announced in January for our exporters, the business world and the general public.
In addition, in this report we identified 47 products with the “Announced Comparative Advantages” methodology based on our calculated competitive advantages, out of the top 200 imported products exported to all the world, and analyzed the potential target markets in detail. We have brought into the open that as a result of the positive feedbacks we received, we increased the scope of the same research to 1000 products in February and concluded that we have a comparative advantage with 285 of our products, and in March we examined all 5923 products based on the 6-point GTIP codes and found that Turkish export products had a comparative advantage in 1472 products. On a sectoral basis, we have a comparative advantage in 38chemical products, 33 automotive products, 31 garment products, and 27 steel industry products.
As for the potential of our advantageous products, out of the 200 products in our study, 62 target markets emerged in 62 different countries where our products have a comparative advantage, while the number of potential markets increased to 132 in our 1000 product study.
“IT IS IMPORTANT THAT WE SHOULD MAKE OUR EXPORTS SUSTAINABLE AND PERMANENT”
What are your expectations regarding the investments and exports in the textile industry? What does Turkey Exporters Assembly do to support the textile manufacturers and exporters? Which factors play a role in the global success of the textile manufacturers in exports?
First of all, I should note as a business person who has dedicated 40 years to textile and ready-to-wear clothing, that now Turkish fabrics and Turkish design are in demand in the world with its quality. Today, our designers dress world-famous people and export their services to global brands. In this way, the added value is increasing in our industry.
In particular, the garment industry is making significant contributions to our economy in terms of the high export unit price and added value. While the unit price of our ready-to-wear industry was 14.5 dollars in 2018, we reached a figure of 6 billion dollars in the first 4 months of 2019, and it continues making a great contribution to total exports by increasing the exports compared to the previous year.
The export success of the garment industry shows that our country is able to produce quality and competitive products. However, the exchange rate fluctuations and the geopolitical and financial problems can cause problems periodically in the garment industry as in all of our markets. In this sense, we recommend that our exporters concentrate more on design, R&D and design, and increase their market diversity in order to maintain their competitive strength.
Especially in the Latin American, US and Canadian markets, our products are capable of receiving much more demand. Maybe our exporters have difficulty in reaching these markets considering the distance or the transportation costs. In particular, it is important for us to continue to reach new markets and to make our exports sustainable and permanent by going beyond our traditional intensive markets.
Technical textile industry gained an important momentum in Turkey recently. Very special products are being developed and exported worldwide. And you have also provided support with your positive opinions in the process of technical textiles in Turkey. What can you say about this?
Today, although it is not possible to think of technology separately from any industry, as we all know, wearable technologies that can react to temperature, impact and light are now gaining ground in our daily lives. Technical textiles have become indispensable in today’s high-tech areas from defense technologies to wind energy due to their mobility, durability and lightness. Our industry with a significant experience, know-how and design capabilities in this field may increase its share in Turkey’s exports much more by further strengthening its position for existing investments and products in the technical textiles. When innovation meets technology, it can offer many small or big solutions in life, and we need to use this technology on problems we face and commercialize it.
What are the contributions of the branded comprehensive international trade shows organized in Turkey to the national economy and exports?
Most of us, exporters, are stakeholders in the trade show industry, due to its nature. While we focus on production, the trade show industry serves as our showcase both in Turkey and abroad. Therefore, it offers a great contribution to the development of exports in Turkey. According to the 2018 data, a total of 22.8 million visitors, of which 714 thousand are foreign have visited 370 national and 129 international trade shows. A total of 14 trade shows including Ready-to-Wear, Garments and Home Textiles were held in our industry. In addition, the introduction of new technologies in the trade show industry, such as block chains as part of the digital transformation, provides good results in terms of better matching the seller with the customers.
“I BELIEVE OUR INDUSTRY CAN GROW FASTER IN THE WORLD WITH REPUTABLE TRADE SHOWS LIKE ITM”
What will be the contributions of ITM 2020, which will be held on 2-6 June 2020, to the textile industry, investments and exports? Could you evaluate the ITM exhibitions, which have become a global meeting point with hundreds of participants and tens of thousands of visitors worldwide where global technology leaders make their launches for their new products?
I believe that our industry can grow much faster by increasing our share with new initiatives, and with trade shows like ITM, which has made a name in the world now, although the share we receive from the trade shows in the world is between 1 to 1.5%.
ITM 2018, which was held successfully last year, hosted nearly 60 thousand visitors. ITM is a trade show, which has become a brand in our country in this field, because it brings together all the players of our industry and allows us to keep up with the new machinery technologies. I am confident that this year’s show, where technology and textile will come together, will be an organization that will open up new horizons in our industry and create innovative ideas.