Crisis in Turkish textile sector: 200 factories moved to Egypt, 300K workers laid off
Textile manufacturers in Anatolia, not only giant textile companies, are also moving to Egypt due to cheaper costs, June 26, 2024. (AA Photo)
Once a leader in Türkiye’s export economy, the Turkish textile sector is now grappling with a severe crisis, exacerbated by rising exchange rates, inflation and wage increases.
The workforce in the industry has dropped below 1 million, while production centers have shifted abroad, particularly to Egypt.
Deep crisis in Turkish textile sector
Here are the major crisis points in the sector:
Export decline: According to the Turkish Exporters Assembly (TIM), Türkiye’s textile and raw materials sector exported goods to 207 countries in 2024, totaling $9.5 billion, a slight 0.6% decrease from the previous year. Ready-to-wear exports fell by 6.9% to $17.9 billion, while leather exports dropped 17.9% to $1.5 billion.
Relocation to Egypt: The depreciation of Türkiye’s currency relative to inflation and wage increases has led many manufacturers to establish factories in Egypt, where over 200 Turkish companies now operate.
Job losses: In the past two years, the industry has lost 250,000 workers, with the workforce shrinking from 1.25 million in 2022 to 950,000 in 2024—a 25% reduction. Therefore, the number of qualified personnel working in the Turkish textile sector is shrinking exponentially.
According to a report by Ekonomim, Mustafa Gultepe, President of TIM, highlighted that textile exports peaked at $10.35 billion in 2022 before falling to $9.49 billion in 2024. Gultepe warned of further employment challenges in Anatolia, where companies struggle to find workers.
Similarly, Seref Fayat, the chairman of the Clothing and Apparel Industry Assembly (TOBB), estimated a total job loss of 300,000 by the end of 2024. He attributed the crisis to suppressed exchange rates, reduced export competitiveness, and economic stagnation in Europe.
Fayat forecasted a 5% decline in exports and continued layoffs in 2025, citing adverse conditions that hinder domestic investments and recovery in key European markets. The future of Türkiye’s textile sector remains uncertain, with urgent measures needed to prevent further decline in one of the country’s historically robust industries.
New trend in Turkish textile industry
In recent years, local textile companies in Türkiye have begun relocating their factories to Egypt due to high inflation and increasing production costs. According to the Egypt-Türkiye Business Council, the number of factories opened by Turkish textile companies in Egypt has now reached 200.
The minimum wage in Türkiye has risen from $450–$500 to approximately $1,000 over the past few years. This increase has caused textile and ready-to-wear products produced in Türkiye to become significantly more expensive compared to rival countries.
TOBB Ready-to-Wear and Apparel Council Chairman Seref Fayat highlighted the situation, stating, “As companies face production challenges, they have started moving their factories to Egypt, where costs are one-fourth of those in Türkiye. For the first time in the history of the Republic of Türkiye, investments outside the country in the ready-to-wear sector over the past year have tripled compared to domestic investments.”
Key factor: Lower costs in Egypt
President of the Turkish Clothing Manufacturers Association (TGSD), Ramazan Kaya, stated that European clothing brands are pressuring Türkiye’s textile industry to move production to Egypt because of lower costs, signaling a critical transformation for the sector.
Kaya evaluated Turkish denim manufacturer Denim Rise’s most recent $8.8 million investment in a ready-to-wear production facility in Egypt’s West Kantara Industrial Zone, which will employ 1,000 people, in an interview with the business-focused patronlardunyasi.com. He explained that the industry is evolving toward a model where value-added production stays in Türkiye while labor-intensive operations shift to Egypt.
