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B.Tan Overview of the Turkish Textile and Apparel Industry 36 Table 42. Index of Production Workers Hourly Wages in Manufacturing Industry (1997=100) Source: State Planning Organization Textile Apparel Year Public Private Total Public Private Total 1995 32.4 27.4 28.6 26.3 23.3 24.1 1996 48.0 54.1 53.9 46.0 48.8 48.8 1997 100.0 100.0 100.0 100.0 100.0 100.0 1998 208.8 176.1 177.2 167.5 163.0 162.1 1999 428.2 329.8 333.6 252.2 296.2 292.1 Table 43. Production Index of Manufacturing Industry (Weighted by Value Added 1997=100) Textile Apparel Year Public Private Total Public Private Total 1995 126.6 82.6 83.7 168.4 93.2 94.9 1996 104.7 91.7 92.0 153.3 97.9 98.9 1997 100.0 100.0 100.0 100.0 100.0 100.0 1998 80.1 93.9 93.6 65.6 107.9 106.7 1999 52.5 87.8 87.0 44.8 103.7 102.0 In 1996, the government started giving a special “sector foreign trade company” status to organizations that bring together a number of small- to medium-size companies. These companies specialize in areas related to foreign trade such as financing, logistics, distribution, insurance, and provide these services to their members to help them in exports. Among 26 of these companies in Turkey, 10 of them are in textile and apparel. The customs union, the South Anatolian Project, proximity to Europe, low labor costs, among others, started attracting foreign investment. Among 1028 foreign owned companies in manufacturing, there are 137 apparel and 49 textile firms in 1998 (Table 44). The government is continuing providing incentives to companies that invest in Turkey. Compared to the other sectors in manufacturing, the textile and apparel industry has not attracted considerable foreign investment in recent years (Table 45). Foreign direct investment in apparel industry is about 1% of all foreign investment in Turkey (IBS, 2000)
B.Tan Overview of the Turkish Textile and Apparel Industry 37 Table 44. Number of Foreign-Owned Firms in Textile and Apparel Industry Apparel Textile Year Number of firms Capital (Million TL.) Number of firms Capital (Million TL.) 1990 58 44,686 26 62,817 1991 74 211,081 32 51,045 1992 84 224,054 32 51,045 1993 88 276,592 31 140,090 1994 99 416,429 35 153,437 1995 108 672,224 33 127,920 1996 121 916,516 39 202,635 1997 135 1,258,853 47 1,751,036 1998 137 2,631,069 49 2,695,485 1999 158 11,300,000 56 4,500,000 Source: Turkish Treasury reports [17] Table 45. Number of Foreign Investment Licenses No. of licenses Foreign Capital Share in total Manufacturing (million $) No. of licenses Capital 1994 63 23.9 14.4% 2.2% 1995 65 40.9 15.8% 2.0% 1996 54 40.9 15.3% 6.5% 1997 83 85.7 18.8% 9.9% 1998 65 52.3 14.3% 5.1% 1999 34 23.9 11.3% 2.6% Source: State Planning Organization: Fundamental Economic Indicators [4]. The government also supports the industry by providing investment incentives that ease the financial burden of investment by deferred tax payments, reductions, etc. The textile and apparel industry has been utilizing these incentives to grow. The majority of the investment incentives in manufacturing are given to firms in textile and manufacturing (Table 46). In nominal terms, investments in textile and apparel industry reached its peak point in 1995. Table 46. Government Investment Incentives to the Textile/Apparel Industry Government Investment Incentive Certificates Given Investment Levels (Million TL) Production Textile and Apparel % of Textile and Apparel in Production Production Textile and Apparel % of Textile and Apparel in Production 1995 3,745 2,360 63 1,915,498,755 1,555,159,116 81 1996 3,305 1,124 34 1,424,368,000 676,150,880 47 1997 3,180 1,214 38 2,034,412,000 763,930,056 37 Source: Turkish Treasury reports [17]
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