1. September 2007

2. Turkey and World Merchandise Trade In year 2005 ; Top 3 countries with the largest export size, Germany, USA, China Turkey; with 73,4 billion USD acquires %0,7 of world-wide export Turkey’s rank in world-wide export is 34 Source: WTO REPORT 2006

3. Turkey and World Merchandise Trade In year 2005; Top 3 countries with the largest import size; USA, Germany, China Türkiye with 116,6 billion USD acquires %1,1 of world-wide import Turkey’s rank in world-wide import is 23 Source: WTO REPORT 2006

4. World-Wide Merchandise Trade Textile + Clothing 2004 : %5 2005: %4,7 Source : DTM (2005) 20042005Change 2005 Rate Agricultural Products788,10851,908% Fuel and Mining Products1.284,101.748,5036%17% Iron & Steel270,70318,2018%3% Chemicals983,101.104,1012%11% Other Semi-Production Industry643,60710,8010%7% Machinery and Vehicles3.530,303.851,409%38% Textile195,40203,004%2% Clothing259,20275,606%3% Other Productin Industry1.003,501.095,509%11% Grand Total8.958,0010.159,0013%100%

5. Turkish Textile and Clothing Sector Textile Large/ Medium Size Companies Capital Intense Approx. 2000 companies Info/Infrastructure Highly Equipped Institutionalized 500.000 Employee  Business Size and Export Performance Clothing Small/ Medium Size Companies Labour Intense 30000 big-little companies Less Equipped Flexible, Fast Decisions 2,5 million Employee

6. Textile’s Importance in Turkish Economy Share in GNP % 7,8 Share in Industry % 19,9 Share in Production % 18,4 Share in Total Employment % 13,6 Share in Industry Employment % 23,9 Source: calculated by DPT, DIE ve SSK data

7. Textile and Clothing’s Contribution to GNP from the Foreign Trade Perspective Source: Calculated by DTM Data Billion USD

8. Turkey’s Textile + Clothing Export TOTAL EXPORT TEXT + CLOTH. EXP T+C YEAR(billion $) Share % 2000 27,8 10,0 36,1 2001 31,3 10,4 33,2 2002 36,1 12,2 33,7 2003 47,3 15,1 32,0 2004 63,2 17,6 27,9 2005 73,1 18,9 25,8 2006 85,8 19,6 22,8 2007-08 66,8 14,7 22,1 Source: DTM, İTKİB

9. Turkey’s Textile + Clothing Export

10. Turkey’s Textile and Clothing Export’s Proportion to Total Export

11. EU25,USA vs. Turkey,China EU25 Textile Import 20.972 million USD China ; 3.921 million USD; %18,7, 1. rank Turkey;3.395 million USD; %16,2, 2. rank EU25 Clothing Import 65.863 million USD China; 16.052 million USD ; %24,4, 1. rank Turkey; 9.792 million USD; %14,9, 2. rank USA Textile Import 20.662 million USD China; 4.601 million USD, %22,3, 1. rank Turkey; 655 million USD,%3,2, 9. rank Kaynak : DPT Ongut Report 2005 Data

12. Turkey Export Clothing Mostly to : 1. Germany 3.459 million USD 2. UK 2.336 million USD 3. USA 1.020 million USD 4. France 969 million USD 5. Holland 887 million USD 6. Spain 751 million USD 7. Italy 658 million USD First 7 Total : 10.080 million USD (% 72) Total Export : 13.987 million USD Kaynak : İTKİB 2006 Evaluation Report

13. Turkey Export Textile Mostly to : 1. Italy 588 million USD 2. Russia 485 million USD 3. Germany 356 million USD 4. Romania 324 million USD 5. Bulgaria 247 million USD 6. Poland 231 million USD 7. England 230 million USD First 7 Total : 2.461 million USD ( %44) Total Export : 5.576 million USD Kaynak : İTKİB 2006 Evaluation Report

14. Cost Composition in Textile Products Source ITKIB Sector Research

15. Cost Composition in Clothing Products Source ITKIB Sector Research

16. Input Price Index YIL Cotton Yarn Index Synthetic Yarn IndexUSD IndexEuro Index Minimum Wage Index 2002 100 2003 119,2114,687,396,9114,9 2004 122,4 87,4105,5145,1 2005 117,3133,88290,9159,7 2006 134,6165,288,4106173,5 Source: TGSD Pres./Ahmet Nakkaş

17. World Short- Staple Spindle Capacity 19901995199820002005 (.000)% % % % % India26.54916%29.39017%34.87421%36.91024%34.14018% China35.65022%41.58525%42.45625%33.82622%75.00040% Pakistan5.0983%8.2815%8.3335%8.4385%10.2785% Indonesia4.2003%6.5004%7.0504%7.0785%8.0004% Thailand2.8002%4.0002%4.0952%3.7192%3.8132% Other Asia23.13514%20.29612%17.80611%16.74511%18.63110% Total Asia97.43259%110.05265%114.61469%106.71669%149.86280% Africa7.6275%8.0585%7.7655%7.1345%6.2283% East Europe8.4565%6.7104%5.6813%5.0313%4.9403% West Europe11.6277%7.2654%6.2564%5.7884%3.7842% Turkey3.9002%4.2193%5.3823%5.4654%6.4183% Russia10.0006%4.3063%3.5532%3.3902%1.7041% Brazil5.7503%9.0005%6.5004%5.5234%4.4982% USA11.5507%6.2614%4.5273%3.7062%1.4301% Other8.9065%12.4137%12.6058%12.9288%9.4745% Total165.248100%168.284100%166.883100%155.681100%188.338100% Source: ITMA 2006 Report

18. East Europe Short-Staple Spindle Capacity 19901995199820002005 (.000)% % % % % Italy1.92517%1.80325%1.66727%1.50726%1.20532% Spain1.90716%1.15916%1.07518%1.01918%2236% Portugal2.00717%1.20017%1.10018%1.01017%86023% Greece1.46813%80011%87714%87715%68218% Germany1.57614%6799%4878%4878%2667% France7667%4096%2775%2775%722% UK6616%2774%1312%1312%1303% Other1.31711%93813%4818%4818%3469% Total11.627100%7.265100%6.095100%5.789100%3.784100% Source ITMA 2006 Report

19. Sectoral Strategies : Parameters of Competition In Production CountriesCorporate Tax Rate Governmental Employment Burdens over Base Pay Average Labour Cost Base Pay USD / Hour Energy Prices Industry KWH/USD Romania1621,01,600,96 Albania2330,71,100,65 Egypt2025,00,850,21 Uzbekistan15 + 831,00,600,25 Poland1941,93,800,7 China3335,00,600,55 India33,716,80,670,8 Bangladesh37,50,00,280,4 Tunisia3521,82,050,45 Vietnam2817,00,280,35 TURKEY3042,82,881,07 Source Ufuk 2015 Pres./Dr. Can Fuat Gürlesel

20. Turkish Textile’s Strenghts 1. High Capital Investment 2. Fast Delivery 3. Proximity to EU Market 4. Product Variety 5. Well-Educated, Entrepreneur Executives 6. Infrastructure of Transportation

21. Turkish Textiles’ Weaknesses 1. High Bank Loan Rates 2. High Labour Cost 3. High Public Burden 4. Expensive, energy, communication, transportation 5. Not Having Brands

22. Investment Incentives (1995-2005) Source :HM

23. Investment Incentives (1995-2005) Total : 173.222 Billion USD Source : HM

24. Turkey 2005 Spindle Capacity 2005 Ring Capacity ; Short Staple 6.418.744 Long Staple 743.000 Total Ring Capacity 7.161.744 2005 OE Rotor Capacity ; 552.634 Source ITMA 2006 Report

25. Turkey 2005 Weaving Capacity 2005 Weaving Capacity Shuttle - Less ; 25.000 Shuttle ; 30.000 Total Cotton-Yarn Weaving 55.000 Filament Weaving 3.000 Wool Weaving 6.250 Source ITMA 2006 Report

26. Business Strategies : There will be 3 types of business in the sector Business TypeConnectionCompetition Elements Business having brands in both domestic and international market Direct contact with domestic and international customers/consu mers “ GLOCAL “ Brands Owner Direct Sales via shops in homeland, abroad Design Collection Fashion Brand Goods produced by contract manufacturers Quality- Price Competition Medium- Large Scale Supplies producing to global brands and buyers Direct contact with Foreign wholesaler / Retailer / Buyer Design Collection Capacity Flexible small parties, Fast Production Ability Both produce and use contract manufacturers Cost/Price – Quality Competition Small – Medium Scale Domestic Contract Manufacturers Direct contact with domestic suppliers Effective, Efficient, Quality Production Flexible, Small Party, Fast Production Small – Medium Scale Cost/Price Competition Kaynak Ufuk 2015 Pres./Dr. Can Fuat Gürlesel

27. Business Strategies; There will be 4 ways of transformation TRANSFORMATIONSOLD WAYNEW WAY PRODUCTIONHIGH CAPACITY MASS PRODUCTION FLEXIBLE, SMALL PARTY PRODUCTION DESIGNSUPPLIER AND CONTRACT MANUFACTURER PRODUCTS VALUE ADDED, BRANDY PRODUCTS MARKETTINGPASSIVE MARKETTINGACTIVE MARKETTING BRANDSUPPLIER AND CONTRACT MANUFACTURER PRODUCTS BRAND OWNED PRODUCTS Source Ufuk 2015 Pres./Dr. Can Fuat Gürlesel