TURKEY: FLYING TO BE LEADER OF FURNITURE INDUSTRYTurkish Furniture Industry soars up Into Prominence And Objectives A Place Among Top 10 Exporters.Turkey’s rapid issue as one of the fastest growth markets in the last few years could hardly have come as asurprise. Sitting on the edge of Asia and Europe, it functions as a trading post between the east and west. It’s acountry with a ample history and a reputation for its classic oriental designs - fashionable with Turkeys easternneighbours.Much of the wealth accrued in the world in the last few years has centralised in neighbouring Middle Eastern andCentral Asian markets. Disposable revenue in these two regions has been increasing at a much greater pace thanin the European markets. Turkey’s strategic placement means it is well placed to extend its reach into the world’sexpanding markets.INCREASING NATIONAL DEMANDNational demand in Turkey has risen sharply over the last decade due to three main factors: Rapid urbanization,a important increase in disposable revenue, and lifestyle changes. Turkish furniture producers have also raisedtheir production capacity during this period in line with the raising demand for Turkish furniture. Now, theurbanization of Turkey’s population stands at around 70 percent, with the rate of urbanization predict at 1.7percent annually until 2015.In spite of the global financial crisis, the industry kept to stand strong and posted year-on-year growth inproduction even in 2009. Demand for furniture is awaited to grow at a compound annual growth rate (CAGR) ofaround 16 percent from 2011 to 2013.Speaking at the Furniture Summit in Istanbul on January 30, 2012, Chairman of the Association of TurkishFurniture Manufacturers (MOSDER), Ramazan Davulcuoglu, imparted certain consumption patterns in Turkey.He shared that the average furniture renewal period for consumers is currently 8 years - he added that this figurehas been falling over the years. He also said that according to consumers, the most significant factor in selectingfurniture is the quality of the product. Around 69 percent of responders pointed this was the most importantfactor, over reliability of brand and price of product.Turkey’s substantial growth in recent years has been reflected in both its production and consumption. From2008, production of furniture in Turkey had raised 25 percent, accomplishing an output value of US$6 billion in2011. Consumption had raised by around 28.6 percent, to US$9 billion in 2011. Production Consumption Year (in US$ billion) (in US$ billion)
2008 4.8 7 2009 5.25 7.5 2010 5.6 8 2011 6 9Turkish Production And ConsumptionSource: MOSDERTURKISH LANDSCAPETurkey stands as the 16th largest producer and 21st largest exporter of furniture in the world, with a globalmarket share of 1.5 percent, according to the Centre for Industrial Studies (CSIL).In Turkey, furniture is acquired both in workshops and industrial-scale manufacturing facilities. Smallworkshops play an significant role in producing handmade furniture. Such workshops are flexible establishmentsin nature and usually have the capacity to enlarge their production line to fulfil large orders. Bigger furniturefirms mass-produce standard patterns by applying automated techniques; the majority of their production isexported.Furniture production in Turkey is centralised mainly in Istanbul, Ankara, Bursa, Kayseri, Izmir and Adana. Thefamous furniture manufacturing zone in Turkey is known as Siteler, placed within Ankara. The number ofrecorded small and medium enterprises in Siteler alone is over 10,000.Mr Davulcuoglu declared at the Furniture Summit 2012 that in Turkey, many large companies’ production nowfollows EU regulations while smaller companies are already working on following EU regulations.Official figures from MOSDER expose that the Turkish furniture industry is composed of 29,346 manufacturersand 32,382 retailers, giving a total figure of 61,728 active companies. It is an industry which providesemployment to some 500,000 workers, including employees in the diverse subsidiary industries.Istanbul and Ankara are the two most active cities in the Turkish industry. Around 40.3 percent of Turkishmanufacturers are based in either of the two cities, which also collectively account for 41.5 percent of workers inthe industry. City Number of companies Number of workers Istanbul 6,458 35,633 Ankara 5,361 30,062 Izmir 2,379 14,142 Bursa 2,130 16,096 Kayseri 740 20,280 Other 12,278 42,000 Total in Production 29,346 158,213 Total in Retail 32,382 100,000 Total Active 61,728 258,213Structure Of Turkish Furniture IndustrySource: TUIK - MOSDEREXPONENTIAL EXPORT INCREASETurkey presently exports to a total of 173 countries across 5 continents. From 2003 to 2011, Turkey receivedgrowth in exports of over 292 percent, with a CAGR of 18.6 percent for this period. Growth during this periodwas substantial and stable except in 2009, when the global financial crisis caused exports to contract by 13percent. Year Export Value (US$ Million) Percentage Change 2003 434.6 -
2004 587 +35 2005 684.6 +17 2006 764.7 +12 2007 1,026.9 +34 2008 1,332.9 +30 2009 1,153.3 -13 2010 1,414.6 +23 2011 1,703.9 +20Exports from 2003-2011Source: TUIKIraq continued unchanged from 2010 as Turkey’s top destination for exports. In 2011, exportations to Iraqamounted to US$250.7 million, up 38 percent from 2010’s export value of US$181.4 million. In total, Iraqreported for 17 percent of all furniture exports from Turkey in 2011.Exports to neighbor Turkmenistan saw the largest growth, with exports in 2011 showing a 63 percent increasefrom 2010, to reach US$68.5 million. The United Kingdom was the only top 11 export address to experience afall in Turkish imports, recording a drop of 0.4 percent. Percentage Percentage of Country 2010 2011 Change Total Exports Iraq 181.4 250.7 +38 17 Germany 115.1 147.5 +28 10 Azerbaijan 73.1 97.4 +33 7 Iran 73.5 93.7 +27 6 France 63.2 79.3 +25 5 Turkmenistan 42.1 68.5 +63 5 Holland 40.6 49.6 +22 3 Russia 31.2 43.9 +41 3 Saudi Arabia 25.7 37.9 +48 3 United kingdom 35.4 35.3 -0.4 2 Italy 27 30 +11 2Furniture Exports By Country ( In US$ Million)Source:TUIKInformation from the International Trade Centre (ITC) and the United Nation Statistics Division (UNSD) pointsthat in 2011, the biggest furniture export segment was panel furniture - which made up 29 percent of totalexports. Sofas and Sitting Sets were the 2nd biggest export segment - making up 26 percent of exports.IMPORTS STILL LOWER THAN EXPORTSThe Turkish furniture industry had a commercial surplus in 2011, with export volume nearly double of importvolume - net trade last year totaled to a surplus of around US$758.7 million. Since 2009, Turkish exports haveraised by around 20 percent annually, and this trend is waited to continue this year. The strong export growth iswaited to see Turkey positioned among the 10 biggest furniture exporters in the world in the near future.The value of Turkey’s furniture imports has been rising at a falling rate since 2003. In 2011, Turkish importstotaled to US$945.2 million - approximately 55 percent of total exports. This value represented a 28 percentincrease from 2010. However this figure is still lower than the increase in imports received in 2010 from the yearbefore, which was 38 percent. Import Value Year Percentage Change (US$ Million
2003 177.3 - 2004 285.3 +61 2005 370.9 +30 2006 511.8 +38 2007 680.1 +33 2008 738.2 +8 2009 535.4 -27 2010 738.4 +38 2011 945.2 +28Imports from 2003-2011Source: TUIKChina strengthened its position as Turkey’s top supplier of furniture imports. In 2011, China’s exports to Turkeyaccomplished US$277.6 million, which reported for 35 percent of all of Turkey’s furniture imports that year. Ofthe top 11 sources of Turkey’s furniture imports, Romania and the United Kingdom recorded the biggestpercentage growths. Romanian exports to Turkey raised by 100 percent to reach US$24.6 million, while UnitedKingdom exports to Turkey raised by 230 percent to accomplish US$19.7 million. Percentage Percentage of Country 2010 2011 Change Total Imports China 222.3 277.6 +25 35 Italy 62 83.9 +38 10 Germany 68.3 81.1 +19 10 Poland 34.1 46.4 +36 6 France 32.6 39.2 +20 5 Spain 26.6 36.4 +37 5 Romania 12.3 24.6 +100 3 Indonesia 17.7 20.2 +14 3 Vietnam 17.8 20.1 +13 3 United kingdom 6 19.7 +230 2 Japan 16.2 15.1 -7 2Furniture Imports By Country ( In US$ Million)Source: TUIKTURKISH FURNITURE ENLARGES TO WESTERN MARKETSIn recent years, Turkish furniture brands have started taking market share in Italy, Germany and China, thedominating powers in the global furniture industry.This was according to the Executive Board Chairman of Burosan, Murat Dilme. He added that Burosan, anational furniture company in the southern state of Adana, has established exports to Italy.“Our goal is to serve Turkish brands find more confidence in markets in all corners of the world,” said MrDilme. “We have become a trademark when it comes to office furniture. We are proud to export our productsfrom Adana to the rest of the world and 10 percent of our income comes from exports.”Burosan provides a broad range of products to both the European and Middle Eastern markets. “After offeringfurniture items to the Italian Aviano Air Base, we have made military bases for NATO member countries, theUnited Nations and the United States throughout the world our potential markets. We will supply all thefurniture requires of the United States bases in Bulgaria and Romania by 2012,” added Mr Dilme.
THE FUTURE IS BRILLIANTTurkey’s relatively young population is an significant determinant of the industry’s substantial performance inthe long run. 2011 forecasts point that 26.6 percent of Turkey’s total population is under the age of 14. Inaddition, only 6.3 percent of the total population are aged 65 or above. The median age of the Turkey’spopulation is 28.5 years.Turkey’s total population is estimated to have reached around 79.7 million by July 2012. Its big populationcombined with Turkey’s relatively young population bodes well for the country’s furniture industry - an industryknown to be traditionally labor-intensive. If Turkey is able to keep to nurture its industry and its workforce, itwill only be a matter of time before it accomplishes its aim of becoming one of the world’s top 10 exporters offurniture.http://www.furniturefromturkey.com/turkish-furniture-manufacturers/turkey-flying-leader-furniture-industry.html