Nearly 20 companies are preparing to open an office at the Turkish Trade Center in New York. Annual exports, which are currently 60 million dollars, are expected to reach 300 million dollars in a short time.
US President Donald Trump is taking steps to protect the American market against imported products. Customs duties have been increased significantly, especially for Chinese products. Likewise, protective measures have been taken for iron and steel products. While all these complicating applications are being experienced in the US market, a great opportunity has arisen for the Turkish leather industry. So much so that leather exporters are sleeping with the US market these days.
The US market, where only 60 million dollars of exports were made in 2017, has been the target of Turkish leather makers for a long time. As a matter of fact, in the early 2000s, the Leather Promotion Group carried out some promotional activities in this country, but the desired level of success could not be achieved. But this time it seems that the studies carried out will yield results. Some companies have already started exporting.
40 Billion Dollars Market
Mustafa Şenocak, Chairman of the Board of Directors of Istanbul Leather and Leather Products Exporters’ Association (IDMIB), stated that they have participated in the Magic Show Fair held in Las Vegas for three years as part of the Ur-Ge project they carried out with the Istanbul Chamber of Commerce (ITO), and that some of the customers who won customers at this fair. He says that companies have started exporting to the USA. Expressing that they have gathered the companies in the sector from shoes to saddlery, from semi-finished products to apparel under three groups, Şenocak emphasizes that they will carry these companies to the US market. Reminding that the USA’s import of leather and leather products is 40 billion dollars annually, Şenocak continues as follows:
“Due to the problems experienced in the surrounding countries, we started to give more weight to the US market. Our leather exporting companies, especially in the Zeytinburnu region, went into search. Our Ministry of Economy wants to direct companies abroad. With the effect of the incentives given by our government, our exports to the USA started to increase. There are very serious government incentives from travel to marketing. As a union, we are making efforts to find a market in the USA, which we attach importance to, with these incentives given by the government. As a sector, we provide Ur-Ge support to 65 companies in three sub-groups. The companies we will take to the USA will attend fairs there and hold one-on-one meetings. We have completed our preparations to take part in the Turkish Trade Center (TTM) project established by the Turkish Exporters Assembly (TIM). 20 companies affiliated to IDMIB will establish their offices there. We now want to enlarge our share of this market.”
“We are the leader in wool leather”
Pointing out that although Turkey is one of the world’s leading manufacturers in the leather industry, it cannot get a share of even 1 per thousand in the US market, Şenocak states that with the positive results of these projects, the exports of leather and leather products to this country will easily reach 300 million dollars in a year or two. Şenocak continues his words as follows:
“When we evaluate as of January, our exports to the USA increased by 66 percent compared to the same month of the previous year. The USA is one of the countries where we achieved the highest increase in exports during this period. Turkey is the largest producer in the world in the group we call wool leather. We are in the non-fur (zig) group after countries such as China, India and Pakistan. We must make use of this potential. Turkey’s export unit price per kilogram is $1.39. This figure is 156 dollars per kilogram in fur clothing, 135 dollars in leather clothing, 44 dollars in processed fur, 16 dollars in saddlery, 11 dollars in leather and leather products, 9 dollars in semi-processed products and 8 dollars in shoes. We are in a very good position in terms of technology in leather.
We produce in a way that does not harm the environment. We have proven ourselves in the world with our quality. We have the capability of rapid production. The only thing we lack is marketing. We have taken steps to overcome this problem.”
Şenocak states that the leather industry is affected a lot by the economic fluctuations in the world in general, but draws attention to the fact that the USA is a stable market in this regard. Şenocak said, “We have a chance to increase our exports to the USA eightfold with our current capacity. We have little chance to compete with Far Eastern companies in the shoe industry, but we can get a very serious share in leather apparel. We also have a chance to increase our share in unprocessed semi-finished products.”
“Let’s get out of the single market”
Mehmet Musa Evin, Chairman of the Turkish Leather Confectioners Association (TDKD), also underlines that the future of the industry lies in the US market. Arguing that the leather apparel industry should get rid of its dependence on Russia, which is the only market, Evin said, “We have to enter the US market. The Russian market is somewhat declining. There is also a customary open account sale to Russia. That’s why our companies are so swamped. I think we would be much more successful if we spent half of our effort for the Russian market to enter the US market.” Saying that his own company, Luigi Deri, has also started exporting to the USA, Evin continues:
“We met a US importer at the leather fair in Istanbul. They made us prepare a collection. We made one sample each, and then they placed an order. This is how we started to work. As a sector, we can make boutique production for the USA. Italians used to do this before. We want to buy this market. US boutique firms do not want to clear customs. If we can deliver our goods to their stores, we will grow rapidly in this market. For this, we need to have an office in the USA. We have no problems with logistics. In fact, many parts of Russia are much more difficult logistically than the USA.”
Entrance to Canada
One of the most important leather apparel markets in the world is undoubtedly Canada. However, due to the high customs tax, Turkish companies’ exports to this country are almost non-existent. Pointing out that the companies that will enter the US market may also expand to Canada after a while, Evin says the following on this subject: “Canada is one of the biggest markets of the leather apparel industry. However, when we export directly to this country, we encounter a very high customs tax. Whereas, customs duty is not paid when exporting from the USA to Canada. Canadian companies also have offices in the USA. Therefore, we can enter the Canadian market through the USA. The use of leather garments is very common both in the USA and Canada. But as in Russia, the collections do not change very often. I believe that we will be more successful in these markets as we have a structure that constantly adds new products to our collections as an industry. In addition, after the government chose the USA as a target market, it started to give very serious incentives. For example, we used to receive the fair incentive after 13 months; now we get it three months later. It has to continue like this.”
“We can’t hold a price”
One of the names who know the American market closely is Tamer Geçgören, the boss of Süed Mod Deri. The company previously opened an office in New York to sell wholesale to the USA. However, due to China’s dominance in this market, it closed its office a while ago when it was difficult to sell goods especially to large-scale companies. However, his interest in the US market has not decreased.
The company, which produces 40 to 60 thousand pieces of men’s and women’s leather garments annually at its facility in Zeytinburnu, still sells some of it to the USA. Saying that they are in talks with a few new customers who sell boutiques, Geçgören continues: “Large retail chains in the USA buy leather apparel products mostly from China. For global chains, China is still the largest supplier. Since the costs are very high in leather apparel, we are having problems with the price and we cannot keep the price. Still, our exports to the USA continue. In addition, some of our European customers also have stores in the USA. We also export through them. The USA is a difficult but must-be market. We regularly attend fairs. We are making an intense effort to increase our exports.”
