In November 2015, the Prime Minister, Dmitry Medvedev, approved the banning of a list of products from Turkey. This restriction entered into force on 1 January 2016. Although there is no official ban on products related to the textile and light industry, the leading entrepreneurs in this area are facing difficulties in matters of export-import cooperation on the Russian-Turkish border.
In this context, these recent developments pose several important business questions. For instance, since the anti-Turkish sanctions have affected the Russian textile industry market, what are the prospects of replacing Turkish imports with Chinese supplies? This, and much more, was discussed on 26 February 26 in Moscow at the conference – Import of Textiles from Turkey: Substitution, Localization and Re-orientation, which was organized by the AVK – Vector-Expo. The event was part of the Russian Textile and Light Industry Week, and united leading experts in the textile and light industry field on one platform, as well as experts in matters relating to economic cooperation with Turkey and Asian countries.
The head of the Center for Eurasian Cooperation and Development (CESIR), Olga Biryukova, opened the conference as the moderator of the event. In her welcoming speech, she noted the need to minimize the financial risks faced by participants of the real sectors of the economy due to the problems posed by political and economic differences. She also put emphasis on the importance of Turkey as Russia’s partner in terms of economic and trade cooperation.
The president of the Russian Union of Entrepreneurs of Textile and Light Industry, who is also a member of the Public Chamber of the Russian Federation, Andrey Razbrodin, was the honorary guest at the conference. He promised to contribute to both Russian and Turkish companies in economic difficulties.
“I am opposed to restrictive measures because they destabilize the market. Regulatory measures that could be built in such a way as to give priority to and align certain indicators of domestic producers would prove to be more productive,” he said, “The state should respond to many of the processes very flexibly and quickly, for example, to regulate customs processes and system benefits, while many issues can be resolved.”
Many participants were in solidarity with Andrei Razbrodinym, and this included the moderator, Olga Biryukova. In her view, the increase in the competitiveness of Russian manufacturers does not have to come about because of sanctions nor due to the reduction in the supplies from other countries, but by actually enhancing the competitiveness of domestic products.
Despite the fact that at this stage, Russian-Turkish relations are experiencing the highest tension, many Turkish textile manufacturers are ready to move their production to Russia. This was announced by the co-owner of the VESTORO company, Jason Tekvani, who remarked, “Our Turkish partners have expressed their desire to expand production into Russia in order to reduce costs.”
Today, Turkey is one of the most important suppliers for the Russian light industry. The Professor from the School of Economics, who is the General Director of the Fashion Consulting Group, Anna Lebsak-Kleimans, commented on this, “Turkey is in the second or third place after China in terms of textile imports in Russia. However, Turkey is more than China adapted to work with our small and medium enterprises.”
However, there are prospects of cooperation and diversification in the field of textiles and supplies from other regions besides China, for example, from countries such as Indonesia, India and Bangladesh. In this regard, the head of the economic and commercial department of the Embassy of India in Russia, Dr. Amit Telang, told the conference participants about the textile industry in India, which has long been present on the Russian market. “In 2014-2015, the volume of Indian textile exports amounted to about 14 billion dollars, which in turn, is about 1% of the total Russian imports. Today, however, the prevailing economic conditions are providing us with an opportunity for more fruitful cooperation,” he said.
Cooperation with Indonesia is a slightly different situation. The Commercial Attaché of the Embassy of Indonesia, Mr. Herёno Prasetё Hadi, confirmed that Indonesia exports a large amount of textile products to Turkey, but the supply volume of both raw materials and finished products to Russia is growing every year.
There was a hot debate on customs innovations. Most of the questions from the audience were addressed to the representative of the Federal Customs Service of Russia, Tatiana Zyblevoy, who spoke about the realities of the customs clearance of goods from Turkey, on measures to minimize loss to Russian entrepreneurs, and expressed openness and readiness to assist in solving the business problems associated with customs innovations.
In general, the conference addressed a wide range of issues covering import substitution of textiles from Turkey. The experts shared their views on ways to minimize the financial risks, overcome logistical barriers, the effective management of financial flows in the conduct of international trade, the reorientation of import flows towards Southeast Asia, and improving the situation in terms of cooperation with the existing Turkish partners.
Text: Anna Maksimova
Photo: Press office CESiR