ITM 2006: Branded For Growth

Istanbul’s Bosphorus Bridge spans the Bosphorus Strait between Ortakoy on the European side
and Beylerbeyi on the Asian side.

Textile Machinery Exhibition — a biennial event organized by Teknik Fuarcilik ve
Yayincilik Ltd., a Turkey-based textile publication and exhibition service — will return to
Istanbul, Turkey, for its 2006 edition, taking place June 27-July 2 at the CNR Expo International
Fair and Convention Center. The show is the second produced under the ITM banner in Istanbul and
the third in a series of textile machinery exhibitions produced by Teknik. The first, Bur-Tex 2002,
was staged in Bursa, some 100 kilometers (km) south of Istanbul across the Sea of Marmara, or 240
km by land.

Located at the crossroads between Europe and Asia, Turkey — with Istanbul as its commercial
capital — is a vibrant center of textile and apparel activity within a region that spans eastern
Europe and the Middle East. The country has a long history of textile production, including
traditional carpets and kilims that are still handwoven in Anatolian villages even today; regal
silk fabrics produced in Bursa during the time of the Ottoman Empire, mostly from silk threads and
yarns brought from farther east along the Silk Road to that centuries-old textile trading and
manufacturing center; and other fine woolens, cottons and velvets woven in Bursa and other textile
centers during that era.

The Turkish Textile Industry

Turkey’s modern textile and apparel industry began to develop in earnest in the 1960s and ‘
70s. Today, the industry comprises about 40,000 companies employing approximately one-third of the
country’s industrial workforce and supplying some 25 to 30 percent of its exports, according to
Turkish Time, a publication of the Turkish Exporters Assembly. In addition, US Department of
Agriculture (USDA) statistics show Turkey ranks eighth worldwide in cotton production, with 4.2
million 480-pound bales produced in the 2004/05 marketing season; and domestic cotton consumption
for the same season totaled 7.1 million bales, putting the country in fourth place in that
category, after China, India and Pakistan.

According to a report published in the November 2004 issue of Turkish Time and written by
Musa Demir, a foreign trade expert with Turkey’s Foreign Trade Undersecretariat, the country’s
share of global textile exports — most of which are destined for the European Union, which Turkey
aspires to join — increased by 450 percent from the early 1980s up to the time of the report,
making it the 10th-largest textile exporter. Demir noted that Turkey’s textile imports increased
even more — by 1,270 percent — putting it in ninth place in that category. Even so, the country
remains generally a net exporter of textiles, as evidenced by trade statistics compiled by the
Geneva-based International Trade Centre (ITC). These data show 2004 exports of apparel and apparel
accessories, floor coverings and made-up articles are vastly higher than imports, while imports
dominate in trade of raw materials including fiber, yarn and most fabrics — with exceptions found
for man-made woven fabrics; knit and crocheted fabrics; and lace, trims, embroidery and such.

Turkey’s textile and apparel manufacturers have made significant investments in machinery,
with imports totaling US$1.4 billion in 2002 and US$1.7 billion in 2003, according to Demir. There
are a number of manufacturers’ representatives in Turkey, representing many of the major European
machinery makers as well as some US and Asian manufacturers. The country also counts a significant
number of domestic machinery manufacturers, which, in addition to selling to Turkish textile
manufacturers, also export their products — although in lower volumes than the imported machinery,
according to ITC statistics.

The country prides itself on the high quality and competitive prices of its textile
products, according to Kürsad Tüzmen, state minister responsible for foreign trade and customs,
writing in the November 2004 issue of Turkish Time. In addition, he wrote, the industry “offers a
modern and civilized environment of production, structured by an understanding of social and
environmental responsibility, legal compatibility to international law, sustainability in quality
and fast delivery.”

Dolmabahce Palace in Istanbul

The Turkish textile industry, while strong, has gone through fluctuations in
recent years, and today faces challenges brought on by the removal of quotas in January 2005 in
line with World Trade Organization (WTO) policies for member countries and the resulting rapidly
rising volume of inexpensive textile products — particularly apparel products — coming out of China
into the global marketplace. The challenges are exemplified in textile trade statistics for Turkish
textile and apparel shipments into the United States, as provided by the US Department of Commerce
International Trade Administration’s Office of Textiles and Apparel (OTEXA). According to OTEXA
data comparing year-end shipments between January 2005 and January 2006, the value of total
shipments was down by 11.8 percent to $1.6 billion. Within that total, apparel shipments dropped by
22.5 percent to $913 million, while nonapparel shipments rose to $655.7 million, for a 9-percent

Turkey has worked actively to influence the WTO to consider textile-related issues
separately from other trade issues in light of the particularly drastic impacts of the quota
removal on the global industry. Its proposal that the WTO establish a separate textile sectoral
negotiation within its Non-Agricultural Market Access talks has received support from US textile
trade organizations as well as from several other countries that have been, or expect to be,
adversely impacted by the removal of textile and apparel quotas. At the same time, the proposal has
been sharply criticized by China and Pakistan, among other countries that are benefiting from quota
removals, as running counter to the WTO’s objectives to liberalize trade, according to a report
published in Bridges, the Geneva-based International Centre for Trade and Sustainable Development’s
weekly trade news digest.

Turkey also recently reduced its value-added tax on textiles as a protective measure to
bolster its domestic industry, a move that has drawn concern from the International Monetary Fund
(IMF), which agreed to provide a $10 billion loan to Turkey to help it deflect a financial crisis
in 2001. The IMF fears such action might threaten Turkey’s ability to restore its financial health.

Even so, the country’s overall economic health has been improving since 2001. According to
the latest report from the Turkish Statistical Institute, Turkish gross national product (GNP) rose
by 7.6 percent for 2005, including a hefty 10.2-percent gain for the fourth quarter over
year-earlier GNP.

ITM Regional Showcase

ITM 2004 drew 770 exhibiting companies including 650 foreign businesses. According to
Teknik, the high volume of participation from major textile machinery and accessories manufacturers
attracted approximately 60,000 visitors, primarily from the Middle East and eastern Europe, but
also from several western European countries, the United States, Russia and the Far East.

Building on the success of the 2004 show and bolstered by aggressive publicity efforts —
including advertising in major textile publications worldwide and show promotions at other textile
industry events in the Middle East, Turkic Republics and the Far East, ITM 2006 is moving from the
2004 venue, Tüyap Fair Convention and Congress Center, into the CNR Expo — Turkey’s largest
exhibition center, with 10 halls comprising 150,000 square meters of exhibition area. As a result,
says Necip Güney, sales and marketing director, Teknik, “serious foreign visitor attendance” is
anticipated at ITM 2006.

ITM 2006 will move to the CNR Expo International Fair and Convention Center.

The full list of product categories includes: cotton and man-made fiber
preparation machinery and accessories; yarn twisting machinery; yarn preparation machinery, spare
parts and accessories; nonwovens machinery; weaving preparation machinery and equipment; weaving
machinery, spare parts and accessories; narrow loom and quilting machinery; circular and flat
knitting machinery, accessories and equipment; dyeing, printing and finishing machinery and
equipment; laboratory equipment and quality control systems; computer-aided design/computer-aided
manufacturing/computer-integrated manufacturing applications and automation systems; and textile

The larger venue enables organizers to devote up to five halls to dyeing, printing and
finishing; two to spinning; two to weaving; and one primarily to circular and flat knitting
machinery and equipment. Already, exhibit space in the weaving, yarn, and dyeing and finishing
halls is sold out, and organizers say leading technology developers from Belgium, England, France,
Germany, Italy and Switzerland will be present to show their latest innovations.

ITM organizers cite Turkey’s easy access and central position within the region as
advantages that draw both exhibitors and visitors to ITM, and also note the show is less expensive
to participate in than major textile machinery exhibitions staged in Europe and the Far East. In
promoting ITM as a comprehensive, branded international exhibition taking place every two to three
years within their own region, they believe the show will be a more effective venue for exhibitors
to bring their products and innovations to their buyers than smaller, more frequent and localized
shows. As Technical Operations Director Ümit Vural notes, “[At] least two years is necessary for
formation of a certain synergy.”

ITM’s biennial format is supported by Turkey’s machinery manufacturers’ representatives as
well. Mehmet Saraçoglu, general manager, Sarteks Tekstil, points out: “An exhibition is held if
there’s something new…. [I]n order to persuade the foreign manufacturers to come here and join the
exhibitions, they should have a new product to show, and we should be promoting them in Turkey.” He
decries sector-specific shows that are staged more frequently as ”catalog exhibitions” that are
little more than opportunities for the participants to get together.


The Turkish agencies play an important role in providing sales and service of foreign-made
machinery to Turkish textile manufacturers. As Gürcan Bakkalci, founder of Barok Tekstil Ltd.,
which represents Ital-based SMIT S.p.A., points out, the local representatives know the local
factory owners and how they look at their businesses. He says the traditional investor in Turkey “
is fearless in machine purchasing and renovation, enterprising and ambitious,” and adds, “The ones
who know these entrepreneurs can understand that sales of textile machines will continue in the
same trend in the future.” Bakkalci supports ITM as a biennial show “in a country where there are
investments that continue with regular, systematic updates.”

According to Turgut Karabulut, general manager, Erler Makine ve Mümessillik, Turkey is one
of the top sales markets for the companies Erler represents. Among those companies are Trützschler
GmbH & Co. KG, Schlafhorst, Saurer Allma, Zinser and Volkmann — all based in Germany; and a
number of others.

Istanbul’s Million Stone was used to measure distances to all corners of the Byzantine

“Turkey is the right place and they open offices in order to provide better
service. Each company has different inspectors who live in Turkey,” Karabulut said, noting Erler
also operates a large spare parts store and maintenance workshop to service customers of the
companies it represents.

While foreign manufacturers will be well-represented at ITM 2006, both under the auspices of
their local agencies and under their own banners, domestic manufacturers will certainly not be
absent from the show. As mentioned above, they do significant business not only in Turkey, but also
with customers in the surrounding region and beyond. For example, Alkan Makine has been
manufacturing machinery for the dyeing and finishing sector since 1974. CEO Cüneyt Alkan says the
company’s products comprise 15 to 20 percent of the Turkish market, and it also exports machinery
to 16 other countries, with an eye as well on the US and European markets.

“ITM … will serve as a bridge that connects the Middle East and Turkic Republics with the
European textile market, and it will shape the textile investments in that region,” Alkan said. “
Also, ITM exhibitions are very important in order to increase the trust to domestic machine
producers in the Turkish textile industry.”

Italian Textile Machinery At ITM 2006

Italian manufacturers of textile machinery have responded positively to ITM 2006. More than
100 Italian companies will exhibit at this year’s show, a testament to the importance of the
Turkish market to Italian machinery companies.

The prominent role played by Turkey’s textile and clothing sector internationally has made
the country one of the world’s leading markets for textile machinery. In 2005, Italian companies
exported 232 million euros worth of textile machinery to the Turkish market, which confirmed Turkey
as a leading world market for the Italian textile machinery industry.

The most requested Italian machines by Turkey are weaving machines (27 percent of 2005
exports), knitting machines (26 percent) and finishing machines (25 percent).

The 300 Italian companies (with 23,000 employees) that in 2005 produced machinery for a
value of 2,600 million euros, pay the highest attention to the requests of the textile industry to
propose new solutions of innovation, productivity and safety with the utmost satisfaction of their

On its parts, the Italian Association of Textile Machinery Manufacturers (ACIMIT), in
collaboration with the Italian Trade Commission, has had several opportunities to meet the Turkish
textile machinery sector, as it has set up over the years an intensive program for increasing
contacts between operators from the two countries.

— By Mauro Badanelli, Economist, ACIMIT Press and Economics Office

French Textile Machinery At ITM 2006

The French Textile Machinery Manufacturers Association (UCTMF) will support its member
companies at ITM 2006.

“What is very interesting, in Turkey is that you find there the whole textile industry from
spinning, weaving and knitting to finishing and the customers, the apparel and home textile
industry, as well as the technical textiles producers including nonwovens usages,” said Evelyne
Cholet, secretary general, UCTMF.

In 2005, approximately US$120 million worth of textile machinery was shipped from France to
Turkey. “Turkey is a very important market for our associates,” Cholet said. “In 2005, more than 12
percent of our exports, which represent a world total of $1 billion, were shipped to Turkey; it is
second to China only.

“We are also going to ITM 2006 to meet our customers and prospects from neighboring
countries as Iran, Syria, Russia, Egypt, Bulgaria, Georgia, Uzbekistan and many more,” Cholet
added, noting French companies strive to offer state-of-the-art machinery and have established
long-term relationships with their customers in Turkey.

French companies and companies with subsidiaries in France that will participate in ITM 2006
include Alliance Machines Textiles, Bekaert Carding Solutions, Laroche, Rieter Filament Yarn
Technologies, N. Schlumberger, Stäubli and Superba.

For more information about ITM 2006, contact Teknik Fuarcilik Ltd., Fabrikalar Cd. No:1 Besyol,
Florya, Istanbul,Turkey; (90) 212 592 59 92; fax (90) 212 599 38 82;;

May/June 2006