Several fashion retailers that manufacture clothing in coronavirus-hit China are in talks with Turkish firms about shifting production to Turkey, two sector officials told Reuters, with one predicting new orders worth up to $2 billion.
An outbreak of the newly identified coronavirus has killed 637 people in mainland China, where it is believed to have started, prompting many factories to suspend operations until next week or later as authorities try to contain its spread.
Polish fashion retailer LPP has said it is in talks with factories in Turkey, Bangladesh and Vietnam as a backup plan if Chinese production delays continue.
Turkish manufacturers have in recent years shifted their clothing production up-market as China’s dominance grew globally. But the outbreak has sent some European companies back to Turkey, the officials said.
“Purchasing managers and designers can’t go to China due to coronavirus worries and travel restrictions. So several well-known brands started discussions for production of new seasonal items in Turkey,” said Hadi Karasu, head of the Turkish Clothing Manufacturers Association (TGSD).
Rising Chinese manufacturing costs and a 36 percent slide in the value of the Turkish lira in the last two years, on the back of a currency crisis in 2018, has already made Turkey an affordable option, Karasu added.
“China has some $170 billion in ready-to-wear exports,” he added. “According to our calculations some 1 percent of orders will [now] be shifting to Turkey initially, which could amount to $2 billion.”
Turkey exported some $17.7 billion in ready-to-wear products last year. Any rise could help the import-heavy economy keep a lid on its current account deficit and hit the government’s ambitious 5 percent economic growth forecast this year.
Meanwhile, Turkey has temporarily stopped imports of livestock and animal fats from China over the coronavirus outbreak, Health Minister Fahrettin Koca said on Friday.