OBG talks to Hüseyin Özdilek, President, Özdilek Holding

Interview: Hüseyin Özdilek

HUSEYIN ÖZDİLEK: The textiles sector is labour intensive, and because cotton can be speculated on the stock market its price rises artificially. Currently, the price of cotton is distorted by speculation, which is naturally having an effect on supply and demand, and, ultimately, the production of finished goods. In addition, it is impossible for Turkish firms to compete with China and India in terms of labour costs. Turkey therefore has to rely on its proximity to Europe and use this logistical advantage to reduce costs. Overreliance on the European market has had a negative affect, in light of the downturn there. However, Turkey has organisational, planning and design skills and quality, which, combined with our advantageous location, means we can maintain a competitive edge by shifting exports to other regional markets. There are also opportunities if the country becomes more active in the production of technical textiles, for instance, those used in the medical industry.

Is there an ideal exchange basket for textiles producers, and what challenges or opportunities have resulted from the lira’s devaluation? ÖZDİLEK: The value of money should depend on the GNP of a nation. I am having a difficult time understanding the volatile changes in the dollar and the euro, because I don’t believe there have been corresponding changes to GNP. For example, firms that go into debt in dollars and invest in euro can profit or lose money due to the parity between the currencies, and because investments depend on feasibility we support investing with debt. However, the global crises are also affecting investments. Investments in industry, services and agriculture will lend to the development of Turkey, as these lead to more employment, greater tax returns and higher GNP.

How worrisome are figures, such as the decrease in credit expansion, that seem to suggest an economic slowdown may be on the way? ÖZDİLEK: I do not agree with the concerns about a slowdown. Recently, investment in construction has been rising as a result of migration to big cities, and large transport infrastructure projects are also under way. The level of education is much improved from years past, and access to the internet and information is much higher, with almost every household connected and mobile use surging. Even families where the parents had no opportunity of higher education are competing to put their children into universities.

People are aware of the importance of combining theoretical and practical education. In the past, young Turkish people who studied abroad often remained abroad for work, but increasingly, they are returning to Turkey to start their own businesses, bringing renewed dynamism to the economy.

In terms of the expenses associated with production and inputs, what is the greatest challenge for players in the textiles sector? ÖZDİLEK: There are few challenges in this business – you find the customer and you sell the product.

Producers need to work effectively to be competitive, providing reliable quality at a stable price. It is important to have a solid background and a customer portfolio that can be served sustainably. There will be no problems once that is accomplished, because there is supply and there is demand.

Turkey has a strategic location to work from and a steady and reliable source of human capital. Some 30% of the population works in agriculture, but this is set to decline to around 10%, just like in developed countries. We cannot say that we will necessarily have a great deal more efficiency in agriculture production, but the country’s pool of employees will increase as those who leave agricultural work migrate to the cities or into jobs in the industrial and service sectors.