Turkish Textile Machinery Industry and New Year Forecasts: 2021 Evaluation

‘‘By the end of the year, it has come in sight that we will have achieved an export figure that is very close to our 1 billion $ export target. It is a proud stance for our industry that, under normal conditions, our 2023 target of $ 1 billion in exports is approached by the end of this year.’’

Turkish Textile Machinery Industry and New Year Forecasts: 2021 Evaluation

Adil NALBANT

TEMSAD – Textile Machinery and Accessories Manufacturers Association Chairman of the Board

The pandemic period has created new experiences for the whole world. In this duration, many problems were experienced in almost all sectors in the world and in our country. Among these, we can count the difficulties experienced in the supply of raw materials, the disruption of logistics operations and increased customs prices, the adaptation to the processes of doing business with remote access, the change in sales and marketing strategies brought about by the measures due to the pandemic outbreak and the like.

In this period, the Turkish textile machinery industry continued its activities intensively and pursued its operations both domestically and abroad to the extent of limited opportunities. We, as TEMSAD, provided services on issues such as ensuring that our members have access to correct information, explaining new support mechanisms, and providing the development of new remote access programs. In particular, we participated in Virtual Trade Committees programs with our members in order to continue our activities in the target markets.

In this period when the global trade balances were stirred up, textile and ready-made clothing orders changed their directions from the Far East to our country, especially as a result of the broken supply chains in favor of our country, and remained at very high levels. Our close proximity to EU countries and our deep-rooted experience in textile raw materials and ready-to-wear products brought our country to the forefront in this period and led to an increase in investments in the textile sector. The high production capacity of our country in technical textile products, medical products, and mask fabrics was another advantage. These advantages and the dynamism in the textile and ready-to-wear industries were reflected very positively on the Turkish textile machinery manufacturers. Making new cooperation agreements with domestic textile associations during the pandemic period, when overseas operations and travels were restricted, also contributed significantly to increasing the domestic efficiency of our industry. In the webinars we organized with the new institutions and organizations we cooperate with, the pulse of the domestic textile market was kept and views were exchanged on updated needs.

Some of our members realized new investments

We observe that there are increasing investments in almost every field of textile in the country, especially yarn, knitted fabric, and technical textile investments are realized intensively. As a result of this, our textile machinery manufacturers have also carried out intensive studies in the country, especially in the field of dyeing, finishing, printing machines, and spare parts of all kinds of machinery. Based on the fact that our 216 member companies under the umbrella of TEMSAD represent 90% of our country’s textile machinery and components, we can confidently say that 2020 and 2021 were a period in which our industry developed and received positive results.

Also in this period, some of our members realized new investments and increased their manufacturing capacities. Our producers, who both increase their capacity and renew and strengthen their technology, have also demonstrated that our sector is in a growing and developing structure day by day.

Despite the high domestic orders for certain products, the deadlines for some machines substituted from abroad have increased to 2.5 years in parallel with the increasing investments in textiles. Especially in the fields of yarn and knitwear, there were serious problems in the supply of machinery. However, in parallel with the increasing capacities in textile and textile machinery, the need for qualified personnel and financial support factors that have been emphasized for years have also emerged in this period.

Evaluations in Numbers by Sector

When we examine the values ​​of investment incentive certificates received in the fields of textile and ready-made clothing, it is seen that a total of 23.3 billion TL investment incentive certificates were received at the end of 2020, and this figure was realized as 21.7 billion TL in the January-September period of 2021. The capacity utilization rate reaching 90% in the textile sector and the appetite for new investments are reflected both in domestic investment figures and export figures. The share of our country in global textile and raw materials exports of 346 billion USD as of 2020 is 2.8% with 9.7 billion USD exports. Thus, our country has become the world’s 5th largest textile exporting country. As of the end of 2021, it is foreseen to set a new record with an export volume of approximately 12.7 billion US Dollars.

The Turkish textile machinery industry, on the other hand, completed 2020 with a decrease of 5.9% with 752 million US Dollars of exports. Meanwhile, despite the pandemic effect, imports amounted to 1.8 billion US Dollars, resulting in a 50% increase in imports. When we observe the January-November period of 2021, we see that we are increasing our market power in our export markets day by day. We see that we have increased our exports by 31.8%, which was 656 million US Dollars in the January-November period of 2020, by exporting 864 million US Dollars in this period. Our biggest export markets are Uzbekistan, Pakistan, Bangladesh, Egypt, Iran, Russia, and India. In addition, approximately 75% of our exports are dyeing and finishing machines.

The country that buys the most yarn, weaving, and knitting machines in the world: Turkey

By the end of the year, it is seen that we are going to accomplish an export figure that is very close to our 1 billion US Dollars export target. It is a proud situation for our industry that our 2023 target of 1 billion US Dollars in exports is realized by the end of this year under normal conditions.

On the other hand, import figures for the January-October period of 2021 are at their peak in parallel with domestic investments. Imports amounted to 1.9 billion US Dollars in this period, and an increase of 45.1% was recorded against the 1.3 billion US Dollars import volume in the January-October period of 2020. As you know, when we analyze our 1.8 billion US Dollars imports by the end of 2020 on a product basis in global comparisons, it is observed that Turkey is the country that purchases the most yarn, weaving, and knitting machines in the world. Likewise, a similar circumstance is expected this year as well.

When we look at the countries where imports are made, China is in the 1st place this year, as it was last year. Germany, Italy, Belgium, and Japan follow, respectively, after China, where purchases are carried out in almost every sub-product group. Compared to the previous year, India stands out among the importing regions this year. In the ranking of our import regions, it is observed that especially yarn machines are imported from India, which has risen to the 6th rank right after Japan.

According to this table, as of the end of 2021, it is estimated that exports will increase by 30% to around 1 billion US Dollars, and imports are expected to reach 2.4 billion US Dollars with an increase of approximately 33%. According to these figures, it may be possible to move our global textile machinery export ranking (we were in 9th place at the end of 2020) up a few steps. In addition, we estimate that our import ranking (we were in 3rd place at the end of 2020) will again be in the top 3.

Prospects and Highlights for the Upcoming Period

If we evaluate the machinery industry, per se, the sector that survived the pandemic period with the strongest return in the world was the machinery manufacturing industry. We can confidently state that our manufacturing is competitive in this field and we have reached higher production figures than our global competitors. By the end of this year, a total production increase of 30% is expected in machinery. With the increase in capacity investments in many sectors, we observe that many digital transformation processes are gaining momentum. In this respect, we believe that the textile machinery industry will spend the next period very productively, as in the Turkish machinery industry.

Issues such as the breakage of the supply chains that took effect after the pandemic, the increase in logistics costs, the difficulties in the supply of raw materials and energy problems will be on our agenda for a while. Although developed countries continue to struggle with these problems, Turkey is becoming a more important country, especially for the EU. Logistical proximity and their trust in our experience in textile manufacture have made our country an important supply base in this period. In addition, we need to consider the fact that with the revival of the Silk Road within the scope of China’s belt road project, we will become a logistics center for products that need to be transported from production areas to consumption areas. In this context, if the threats and opportunities are evaluated together, and we can state that we are in a suitable period for the production of textile machines, which are not manufactured in our country, in parallel with the increasing demand for machinery.

‘Textile Industry Sustainability Action Plan’

We also consider that the EU Green Deal will be an important determinant in global trade. The textile industry initiated the first transformation activities in our country regarding the said agreement. The textile industry, which is one of the industries that creates waste and causes high carbon emissions, has been the industry that took the first step in this field in our country with the ‘Textile Industry Sustainability Action Plan’ study under the leadership of the Turkish Exporters Assembly (TIM).

The textile industry of our country is in transformation for sustainable productions on the main topics such as recycling and saving consumed water, reducing energy consumption (using renewable energy sources), increasing the use of organic raw materials (organic cotton, hemp, etc.), obtaining recycled textile products from plastic bottles or various textile wastes. In this context, the leading brands in Europe have started to audit their suppliers in our country over these issues. With the replacement of the fast-consuming disposable fashion, high quality, and long-lasting products produced with environmental sensitivity, it is seen that we are living in a period in which the observance of environmental sensitivities in production begins to come before product costs.

In this context, our country’s textile machinery industry is in rapid harmony with the transition process. Intensive R&D activities are carried out on machines that consume low energy, minimize the water used (reducing by 50-80%), and are environmentally friendly. We can easily claim that we are at a challenging point in the world in terms of both filtering systems and machines that minimize water consumption.

The future of our Turkish textile machinery industry is quite clear for 2022 and beyond

We can express that the path for our Turkish textile machinery industry is quite clear for 2022 and beyond. We have become a strong sector with our strong manufacturers that have become global brands, and domestic companies that have proven their technology and quality in our domestic and target markets. The fact that we have reached a point where we can provide both low-price and high-quality advantages compared to European machinery manufacturers in the machinery groups we specialize in is a source of pride for our industry.

The upcoming period will be a time in which countries that can take part in the new order of the world transformed after the pandemic, remain strong, and most importantly, can continue to produce. We hope that we will be able to get through these times in which very basic problems such as supply and raw material costs, energy problems will be experienced, in our favor.

As the textile machinery industry, we have a busy agenda ahead of us. We will try to realize these topics in order to contribute to the production, export, and development of our sector in every aspect. One of the problems is the lacking of qualified personnel. Unfortunately, this is one of the most fundamental problems of our capacity-increasing and growing sector. We aim to carry out projects to contribute to the solution of this problem and to train personnel for our sector through cooperation with Vocational High Schools and İŞKUR. In addition, we will expand the scope of our university-industry collaborations and try to contribute to the R&D competencies of our members with new collaborations. In addition, within the scope of localization efforts, we will continue to inform and guide our entrepreneurs, who have investments in the production of new types of machines, to provide correct and efficient resources.

We will continue to stand by our member companies, both at home and abroad, in all matters concerning our industry. We will continue to present our problems and solution suggestions to the decision-makers, and we will continue our efforts for the development and progress of our industry.

Global Events and ITM 2022 Exhibition

The end of the frequent curfews and other strict measures that occurred in 2020 by the middle of 2021 and the speed in the vaccination processes have reactivated the global trade. In this duration, where domestic and international activities increased, our sector companies both increased their activities to meet the domestic demand and continued their intensive work in export markets with both sector exhibitions and regional visits.

Among these increasing physical activities, the ITM Exhibition, which could not be organized in 2020 and 2021 due to the effect of Covid-19, will be a very important meeting point for our industry in 2022. ITM Exhibitions, which are held every 2 years in partnership with Tüyap, Teknik Fairs, and TEMSAD, have become a global brand of our industry and have become the meeting point of domestic and foreign textile machinery technologies with end-users in our country.

The ITM 2022 Exhibition, which will take place on 14-18 June 2022, will be the largest industry organization that global brands and procurement committees will meet with great interest after the pandemic. We think that the ITM 2022 Exhibition will be an important event where both our members and the new generation machines of other sector technologies will be exhibited and will arouse great interest in terms of domestic and foreign visitors. The ITM Exhibition will be an important meeting, especially in this period when our Turkish textile industry gains momentum and makes investments, as well as in terms of supplying the necessary technologies for new investments in neighboring countries and directing the investments.

We will take our place at the ITM Exhibition with the intense participation of our members and the purchasing committees of our domestic and foreign cooperation organizations.

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