Cemil Çiçek, General Manager of Zorluteks
1. Could you evaluate the textile industry? What would you say about the export power of the sector and the domestic market?
As a country, we exported goods worth 255.8 billion dollars in 2023. Our share in global exports increased from 1.02 percent to 1.06 percent. This rate is much higher in the textile industry. Last year, the Ready-made Clothing and Apparel sector ranked third among all sectors with exports of 19.2 billion dollars. 9.5 billion dollars of exports were achieved under the title of Textile and Raw Materials. Exports of 2.7 billion dollars were made on the carpet side and 1.8 billion dollars were exported on the Leather and Leather Products side, which we can also see as a part of our industry. When we look at these basic items, there is a sector that has exported more than 33 billion dollars. Yes, our share in global exports is good compared to Türkiye's average, but we are one of the few players in the world textile. That's why we need to raise our potential even higher with value-added exports.
According to the 2024 Global Insight Report, the textile market will be 1 trillion 250 billion dollars in 2023 and the market is expected to reach approximately 1 trillion 800 dollars by 2031. There is a truly large global market, and if we change the way we do business and increase our added value, we can increase our exports much beyond today's levels. As Zorluteks, we have witnessed the potential in home textiles very closely. As a country, the export level of 3.5 billion dollars in home textiles cannot remain a peak or a target for us. According to a research report published by Spherical Insights & Consulting, the global home textile market size was calculated as 121.8 dollars in 2023 and is expected to reach 216.3 billion dollars by 2033. In such a market, we have the potential to increase our home textile exports to over 6-7 billion dollars. Yes, the export climate last year was not good at all and it was not a good year especially for the entire textile industry. As a sector, there was a decline of around 10% in our exports. The 17 percent contraction of the European market, our largest market, played an important role in this. Despite this deterioration in the global export climate, we maintained our market share in world trade. This year the export climate is relatively better. Despite ongoing cost concerns globally, improving order intake and consumer trends also show that the situation is gaining positive momentum. Türkiye's Export Climate Index, announced by the Istanbul Chamber of Industry (ISO), remained above the threshold value of 50 for five consecutive months in May, indicating that the improvement in the export climate continues. Our domestic market already has a dynamic structure, but we anticipate that the domestic market will have a little more difficulty in the second half of this year as a result of the tight monetary policy implemented. Export is very important for our industry, as always.
In the first five months of the year, 7.4 billion dollars of exports were made in the Ready-Made Clothing and Apparel side, and 3.9 billion dollars were exported in the Textile and Raw Materials field. Exports of 651 million dollars on the Leather and Leather Products side and 1.2 billion dollars on the Carpet side were achieved. Our industry has not yet achieved the momentum it wanted in the first half of the year, but we expect a relatively better outlook in the export markets in the second half. We predict that we will complete the year with export figures above last year.
2. How do you evaluate Turkey among rival and peripheral countries when you look at the world projection in the field of textile sector? Should Türkiye be competitive and come to the fore with its price advantage or in the field of high added value and sustainability?
Frankly, it does not make much sense for us to attempt price competition with countries such as India, Pakistan and Egypt. We need to act in a way that highlights our quality and innovation. Because our main advantage is here.
Türkiye has a very good knowledge of the textile industry, an infrastructure suitable for new generation technologies and trained human resources. Our main reason for choosing EU countries and other developed markets is not price, but our quality outweighs price/quality. In fact, in these markets, quality is the first priority in both final products and textile intermediate products. At Zorlu Textile Group, we understand this from the rising momentum in the demand for high quality yarn and fabric in developed markets, both on our home textile side and in polyester yarn, which is the other main activity of our group. Even though the companies we do business with in these markets force us on prices due to the nature of trade, they cannot easily give up on suppliers who produce value-added products like us because they do not want to risk quality.
On the other hand, there are of course price-oriented customers in different markets. It is not possible for us to meet the demands of these customers by competing with our competitors in countries whose production costs are incomparably lower than ours. Price-oriented companies already have closer relations with Asian countries. Labor and energy costs of these countries are very low. It has serious advantages in unit costs. On the other hand, there are trade pressures imposed on China by both the EU and the USA, and perhaps new trade wars will start after the elections in the USA. That's why China started to establish facilities and invest in textiles outside its own country, in India and especially in African countries. China applies such a method of circumvention due to the 'Certificate of Origin (CO)' regulation and different restrictions required by the EU on imported products. Production, labor and energy costs are very low in all of these countries. Those who prefer price-oriented products go directly to them, not to us.
Considering possible trade wars in the coming period, we need to quickly adapt to regulations such as the EU Green Deal and the Inflation Reduction Act (IRA), which is described as the largest "climate package" in US history. Currently, as a sector, especially our large-scale companies are quite ready for this transformation, but we must quickly make the necessary certifications within the scope of compliance by including SMEs in this process. Currently, the new name of competition is sustainability, and this is actually at the center of added value. Being on the side of price competition is a huge waste of time and an area where we will not get results. However, we have made significant progress as a sector in terms of value-added products for many years. Now, if we put green transformation and sustainability at the center of this, we can make a real leap forward in value-added exports and get ahead in the race as one of the world's preferred green textile manufacturers.
3. Can you evaluate Turkey's situation in the export of high value-added textile products?
It is not easy to concretize and measure added value. One of the methods for this is to look at the average export value per kilogram. As a country, our average export value per kilogram is only 1.57 dollars. In the Textile and Raw Materials category, this figure is over 4.5 dollars. The ready-made clothing side offers a good example in terms of added value for our industry, with the average export value per kilogram reaching 15.74 dollars. Added value, as I said, is a very broad concept. It is actually a set of values that covers all processes including production, sales, marketing, shipping and branding. Now sustainability is included in this. You can create added value differently in different sub-sectors of textile.
However, in terms of added value, it is necessary to open a separate bracket especially for technical textiles. More than 1/3 of the textile products consumed in the world are from technical textiles. It is a field that is growing twice as fast as apparel. According to The Business Research Company's '2023 Technical Textiles Global Market Report', the global technical textiles market size has increased to 213 billion dollars in 2023. It is estimated that it will reach a market size of 267 billion dollars by the end of 2027. As for the Turkish textile industry, it exported 2.2 billion dollars in technical textiles in 2023. According to these figures, the share we receive from the global market is around 1 percent and does not reflect our potential as a country. The potential added value here is incomparably higher than other areas. Because the sectors we can provide products to are endless. You can supply products to many sectors ranging from wearable technologies to composite products, from the military industry to the healthcare sector. I think we can easily make one third of our country's total textile exports with technical textiles.
Technical textiles is also a category that can open value-added areas within itself. As I mentioned before, smart textiles are a great example of this. Many disciplines are involved in smart textiles, including high technology, electronics, chemical, magnetic, thermal, digital and even artificial intelligence. The best example of this is wearable technology. There are many new generation textile products that change color, listen to heartbeats, count steps and report our health status. Today it may seem like a very limited and niche area, but imagine the added value it will bring. The potential of smart textiles is very high in home textiles, healthcare, automotive and many other areas.
There are many successful examples in the sector in this regard, and we are one of them. While Korteks, a part of Zorlu Textile Group, produces value-added yarns with technical textile features, we, as Zorluteks, offer fabrics with technical textile features in home textiles, and at the same time, we can offer pioneering and good examples of smart textile products with the power we receive from this infrastructure and our R&D. We have many smart textile products such as self-cleaning roller and fabric curtains, cool-keeping blankets, curtains that clean the ambient air, antibacterial bedding sets, and curtains with LED lights. In addition, we offer smart textile products that require high-level knowledge to many sectors, from health to defense industry and security, with our products that have yarns that are sensitive to heat and humidity, have high air permeability, and also have antibacterial and antiviral properties. We do not limit ourselves to home textiles in smart and technical textiles, because, as I said before, they have a very wide usage area. Especially customer experience and feedback enable us to produce brand new value-added products from scratch. We develop products for the needs of many different sectors. For example, we produce reinforced fabrics for companies that produce conveyor systems. We produce functional work clothes with features such as filter fabric, flame retardant and anti-static for the white goods industry. We have technical textile products in many different areas such as illuminated panel-coated fabrics for the advertising industry, tents, awnings and sleeping bags. Currently, more than one third of the products we produce consist of technical textiles. We aim to increase this rate to over 75 percent.
4. Particularly in Europe, practices such as border carbon taxes increase the importance of environmentally friendly production and competition. Can you evaluate the importance of sustainability for the textile industry?
As I mentioned before, the new competition criterion is now sustainability. The EU Green Deal, the EU Sustainable and Circular Textile Strategy prepared within this framework... These bring a sustainability-oriented standard in the EU. A carbon tax at the border is just the tip of this. In this context, there is a textile strategy that extends to reducing the environmental footprint of the textile industry, increasing the resilience of the sector and increasing its competitiveness, and ensuring that the value of newly produced products is preserved by reducing dependence on raw materials. With the EU Sustainable and Circular Textile Strategy, many applications such as digital product passport and mandatory ecodesign regulation will be implemented. Circular production is very strongly emphasized. It is planned to ban the destruction of unsold and returned textile products. The EU demands a textile industry with products that are of high quality, can be used for a long time and can be reproduced cyclically.
Our reflexes on this issue are very important. Is this a threat or an opportunity for us? If we see it as a threat and only act with an approach such as avoiding carbon taxes at the border, we may miss a great opportunity. As I just stated, smart textiles, technical textiles, wearable technology, sustainable textiles, circular production actually offer us a historic opportunity in value-added exports, and I think the EU Green Deal is an invaluable catalyst for this. I don't think we started the race too far behind. Industry organizations in Europe also talk about similar problems. He discusses how to include SMEs in the green transformation during the transition process and discusses the economic cost of green transformation. This shows that we started the race in close places.
This is truly an opportunity. As a country, we export more than 50 percent of our exports to Europe. When we add the Near and Middle East and North America, we reach an export rate of up to 80 percent. Therefore, when we are ready for the EU Green Deal, we will be able to create a serious competitive advantage by increasing our added value in most of our export markets. I am talking about a market that is ready to pay high prices for quality products that meet sustainability criteria. As I have stated before, if we develop our products in a way that focuses on sustainability, technology and innovation and harmonizes them with EU regulations, we can be a pioneer in this transformation and rank among the most sought-after and preferred countries in the world in textile. Price-oriented competition is now completely removed from our agenda, as we talked about today, and we can seriously increase our added value with a sustainability and innovation-oriented competition approach.
As Zorluteks, we have been preparing for the EU Green Deal for a long time in line with Smart Life 2030, Zorlu Group's common sustainability strategy. We are carrying out our final work to complete our harmonization process on this issue. We obtain the necessary documentation. We are doing better than our industry in many sustainability-focused indices. With the STeP by OEKO-TEX certificate, we have the right to use the Made in Green label. Our products with these certificates can be monitored for sustainability with a QR code. We are one of the companies taking the fastest steps towards reducing carbon and water footprint in the industry. As Zorluteks, we managed to reduce water use per product by 30% by using techniques to reduce water use and reuse the resulting wastewater. By certifying that we obtain electrical energy from renewable sources, we managed to reduce our carbon emissions by 85% at Zorluteks.
5. What consequences does the use of new technologies have in the textile field? How does the development of artificial intelligence and automation technologies affect the industry?
Nowadays, technology is everywhere in life and textile is one of the sectors that adapts to technology fastest. Today, Zorluteks is a facility completely equipped with Industry 4.0. Thanks to our digital investments, our customers anywhere in the world can order directly from the factory. We use digital automation systems and digital printing machines that consume the least energy and water and produce the least carbon emissions in the world. I think that with artificial intelligence, a great dynamism will be achieved in every process, including design, research and development. Productivity will increase significantly, flexibility in production planning will increase significantly, and by performing big data analysis much better, we will be able to decide and take action much faster in which areas we can increase added value.
Perhaps we can respond to the criticisms about sustainability that are needed and complained about from time to time all over the world, that it is too slow and that the UN Sustainable Development Goals cannot be achieved, with artificial intelligence, and we can seriously accelerate the green transformation. Although artificial intelligence often leads to speculation about how it may threaten life, it can also strongly highlight the life-improving role of technology. As Zorluteks, we are a company that has tested this ourselves. For example, thanks to many digitalization and technology-oriented investments such as Cleaner Production Software, which we made 3 years before the Green Deal Action Plan was published, today we can calculate the carbon and water footprint on a product basis. We even have product categories that are entirely focused on sustainability. We are a pioneer in Turkey and the world with our Ecodesign products, which reduce the carbon footprint by at least 50 percent. Thanks to our technology, our Reborn Curtain Collection, produced with PET bottles and recycled polyester yarns, and another environmentally friendly product, Reborn Duvet Cover Collection, prepared with process optimizations to reduce carbon and water footprint, are in high demand by our customers.
I think that technology, together with artificial intelligence, will create a serious change and transformation in the textile industry, especially in the field of sustainability and the smart textiles I mentioned before. We are seeing the first signs of a textile transformation movement focused entirely on technology, innovation and sustainability. The European Textile Technology Platform (Textile ETP) has even determined a road map with this focus on European textiles. On this platform, studies continue on many subjects, from the processes of using sustainable textile raw materials to water and energy efficiency, from the production of textile-based three-dimensional composites to digital fashion. In short, contrary to popular belief, technology in textiles is not just about industry 4.0 applications; a new generation of textiles that can create value-added products with technology and innovation is emerging.