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Turkey taking giant strides in leather and hides industry |
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2004-7-15
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Continued investments over the years have borne fruits, as Turkey leads in processing bovine hides.
With great foresight the Turkish tanneries and leather goods producers stepped up investments even when it represented a paltry $27 million a year market for US hides and skins. But by 2003, the exports to US rose to $38 million.
Factors which seems to go against the Turkish exporters their unfamiliarity about US standards besides price, quality and reliability in supplies which are highly valued by the US importers.
As far as the Turkish leather industry is concerned, it is the tenth largest industrial sector in Turkey with a total of 6,500 firms employing approximately half a million people. Last 15 years have witnessed rapid developments with annual raw material processing capacity reaching 400,000 MT. Low domestic labor costs and large domestic supplies of hide and sheepskin (pelts) are the advantages enjoyed by the industry.
Russia, Ukraine, Germany, Austria, USA, Canada and England are among the main export markets for Turkish leather goods earning it great amount of foreign exchange.
Buyers from Russia visit Turkey for the primary purpose of purchasing merchandise for cash and returning home with the goods. This type of trade between Turkey and FSU became extremely popular after 1989. In 2001 total Turkish leather goods exports were about $2 million of which $450 million went through traditional channels and the remaining $1.55 million was “tourist trade.”
Turkey has the second largest capacity in the world after Italy for processing hides and skins although a good portion of the capacity is unused. There are about 1,500 firms capable of processing 22,000 hides and 280,000 sheepskins daily
About 1,000 Turkish firms are producing leather garments with an annual capacity of 10 million pieces per year. Turkish leather garment industry is located in and around of Istanbul with some in Izmir.
Turkey exports about 95 percent of its leather garment production. Garments account for 66 percent of the total leather goods exports. Germany and other E.U. member countries have also become important buyers. Turkish leather garment exports constitute about 20 percent of E.U.’s total leather garment imports.
About twenty percent of all official leather good exports are considered leather good accessories. A total of 3,500 firms are operating in this sector of which about ten percent are large sized firms. The total value of the Turkish domestic market is about $1.5 billion dollars with $100 million in annual exports.
More than 300 companies produce shoes in Turkey with an annual capacity of 350 million pieces. Only about half of this capacity is being utilized while the total value of the domestic shoe market is $2 billion. About fifty percent of the shoe production and forty five percent of the shoe exports are leather-faced shoes. While Turkey’s large population (70 million) creates a big customer base for the local industry, Turkish shoe exports have increased in recent years as well.
About 70 million pieces of shoes were exported amounting to a total value of $50 million in 2002. Saudi Arabia followed by Russia, Israel, France and Germany were the leading importers of Turkish shoes.
Following the 2001 domestic economical crisis, the Turkish shoe market shrank by about 50 percent. However, along with the general economic recovery in 2003, the domestic shoe market increased about 30 percent at the same time increasing the demand for imported hides.
During the last fifteen years annual raw material processing capacity reached 400,000 MT annually. However, while domestic demand has grown for the hides and skins local supplies declined due to the decrease in Turkish livestock population. Total Turkish bovine inventories decreased to 10 million head from 16 million about twenty years ago and the sheep population decreased to 25 million from 40 million during the same period.
The supply gap continues to increase while the leather industry continues to grow. Turkish hides and skins imports continued to increase during the last fifteen years with sharp declines in 1994 and 2001 due to domestic economical problems and in 1998 due to similar problems in Russia, the leading export market for Turkish leathers garment exports. It is estimated that presently Turkey has to import seventy-five percent of its sheepskin and fifty percent of its hides needs.
According to official statistics Turkey imported 49 million pieces of sheepskins during 2003. The United Kingdom, Spain, Australia and the United States were the main sources for wool- on-sheepskin imports. Turkey also imported 3.2 million bovine hides mostly from FSU countries such as Azerbaijan, Kazakhstan, the Kyrgyz Republic and neighbouring countries Greece and Bulgaria. Additionally, Turkey imported five million pieces of other hides (goat and other). Kazakhstan and Greece were the leading suppliers. The value of the raw, partially treated and finished hides and pelts import reached $600 million in 2003.
Turkey is the leading buyer of U.S. sheepskins. By value, seventy-five percent off all U.S. sheep pelts exports are shipped to Turkey. Turkish tanneries buy high quality skins for processing and re-export purposes. Turkish tanneries prefer large pelts with dense wool for double-faced pelts, an item the U.S. is well situated to supply.
In recent years, the United States has also become an important supplier of bovine hides to Turkey. Turkish leather goods producers, looking to compete in international markets, are looking for quality raw materials and as such are buying more U.S. hides. In 2003 U.S. hide exports to Turkey increased almost six fold and official figures indicate that 2004 exports will increase about thirty percent over 2003. The U.S. sheepskin and other skins (goat and other) also increased in 2003 about twelve and ninety-two percent respectively.
Available statistics indicate that the export trend is continuing for 2004 with increases of forty percent for sheepskin and eight-five percent for other skins expected by the end of the year. In terms of dollar value, U.S. hides and skin exports to Turkey increased about seven fold between 1999 and 2003 with further increases foreseen in 2004. |
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