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December 11, 2017

Turkish furniture sector producing foreign trade surplus for the last 13 years

The Turkish furniture sector has been producing a foreign trade surplus for the last 13 years and is expected to reach $3 billion in exports and $700 million in imports this year.

The local furniture sector achieved $180 million in exports and $200 million in imports at the beginning of the 2000s, started to increase these figures as of 2003, Furniture Industry Businessmen Association (MOBSAD) Chairman Nuri Gürcan said.

As reported by Daily Sabah,  the furniture sector is one of the fastest growing sectors in the last 15 years and that reaching $10 billion in exports is among their 2023 targets. Also, there are almost 65,000 workplaces in the furniture sector, including stores, and 200,000 people are employed directly, along with 10,000 exporters and 36,000 producers.

"The number of large firms in our sector is very few because 90 percent of our sector consists of SME-sized companies. Our industry, which has been continuously growing for almost 15 years and has gained momentum especially with the growth of the construction sector, has reached a serious figure in foreign trade surplus," Gürcan said, indicating that the number of companies achieving $1 million in exports, which was 400 in 2015, reached 571 in 2016.

This year, the number of companies that export approximately $1 million worth of wood products from Turkey will reach 700. These companies export to 172 countries and 202 customs points and increased the exports to Saudi Arabia, the United Arab Emirates and the United States, while experienced a decline in countries such as Libya and Iraq.

Gürcan said that they focus on alternative markets such as China, Nigeria and India and that they closed last year with $2.5 billion in exports and expect to reach $3 billion this year. Turkey increased furniture production quality since the beginning of the 2000s and its added value in the last period by bringing design to the front, he added.

Gürcan added that export value per kilogram, which was around $1.7 15 years ago, is now up to $3.7 in the furniture sector. "We reach an export figure four times imports. Our sector, which has a very high locality ratio, has been generating a foreign trade surplus for 13 years," he noted, adding that the sector, which generates $20 billion in production capacity, exports 34 percent of the annual furniture production of $7 billion, while this rate was 13 percent at the beginning of the 2000s.

"To increase export value per kilogram in furniture, we should focus on R&D and design and break the perception of ‘better quality than China, cheaper than Italy' and create the perception of ‘Turkish furniture' in the world," Gürcan said.

"What remains is to build a brand and do the right marketing. If we can do that, we can move our export figures upwards in dollar terms," he explained.

Given the fact that Turkey sells furniture to the world's furniture production base China, Gürcan suggested that the sector needs to improve its performance in the areas of design, branding and marketing to overcome the fragility of existing markets in exports and to reach traditional markets with high purchasing power such as the European Union and North America, according to Daily Sabah.

Gürcan said foreign residential sales, which increased by 70 percent on average in September and October, also positively affected the furniture sector, adding that the rise in foreign residential sales was about 30 percent higher than in the first 10 months of last year.

Noting that there was a 60 percent increase in foreign residential sales, especially in Istanbul, compared to the same period last year, Gürcan said foreign residential sales were made mostly to citizens of Saudi Arabia, Iraq, Azerbaijan, Kuwait, Libya and Russia.


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