TİM Chairman Gültepe: 15-year customer shifts $250 million in purchases to India

Mustafa Gültepe, Chairman of the Turkish Exporters Assembly (TİM), described on CNBC-e the decision by an international customer he had worked with for about 15 years, and which made average annual purchases of $250 million from Türkiye, to close its Türkiye office and shift its supply to India.

Gültepe, who said he has been active in the ready-to-wear sector for about 35 years, said he held an online meeting with the Türkiye office manager and the UK supply director of the foreign customer he had worked with for a long time. Gültepe, noting that he thought the meeting was being held for order and capacity planning, recounted that he was told of a decision he did not expect: "We have decided to close the office in Türkiye. We will buy everything from India."

Gültepe, stating that the customer in question made average annual purchases of $250 million from Türkiye until about a year and a half to two years ago, said this was not an isolated example and that similar developments had been occurring for the past three to four years.

Gültepe, recounting that he made an attempt to change his customer's decision and proposed that the Türkiye office not be closed entirely and that high-value-added products continue to be produced in Türkiye, said production opportunities in Egypt, Morocco and Algeria, as well as in Türkiye, could be evaluated through the Türkiye office. Gültepe, conveying that his customer did not accept this proposal, stated that one of the reasons for the decision was the free trade agreement concluded between the UK and India.

Gültepe said that under this agreement, the zeroing of the 12 percent customs duty on ready-to-wear products further strengthened India's price advantage. "Those places can already offer much more competitive prices. I was 1-0 down, and then I became 5-0 down!" said Gültepe, noting that although demand for textiles and ready-to-wear in Europe rose 4-5 percent, Türkiye could not benefit sufficiently from this growth.

Gültepe, recounting that in the past production was about 10-15 percent more expensive than China and, depending on the sector, at most 20-22 percent more expensive than other competitors, said that today this gap has risen to at least 60 percent. "There is no problem with foreign demand; the demand is not coming to Türkiye," he said. According to what Ekonomim reported, Gültepe argued that, against rising labor, energy and raw material costs, the rise in the exchange rate has not occurred at the same pace.