T.C.

YALOVA ÜNİVERSİTESİ
İKSİTADİ VE İDARİ BİLİMLER FAKÜLTESİ

The impact of covid-19 on the textile industry

Prepared
Fatih Emre BOYALI
160201013

Consultant
Dr.Öğr.Üyesi Gülgönül Bozoğlu Batı

Yalova
March, 2021
INTRODUCTION

The focus of this research is the effect of covid-19 on the textile industry.1 First
of all, if we briefly explain the textile sector, which is under the production
sector, it is the name given to the clothing sector in certain molds and to the
production sector in this context. The restrictions and recessions that came with
Covid-19 did not affect the textile industry as well as the industry. The closure
of all factories by China, the textile giant, stopped all exports and imports. In
this process, I will consider the positive and negative content of covid-19 in the
textile industry and how much it affects which country in this process that
comes with the pandemic. This research will be in the form of comparing and
interpreting the pre and post pandemic situations of major countries with other
countries. First of all, the process will continue with some main questions. What
was the situation of China in the textile market before the pandemic? How did
things change afterwards? How did these situations affect other countries? will
continue in the form. This investigation aims to fine out how this pandemic
process influence textile industry different geographic regions.

FIGURE 1: Interconnected networks of global textile supply chain Source: Produced by authors
from the WTO Research Report

1
The sector where mass production is made to meet the ready-to-wear needs of people.
Keywords: COVID-19, supply chain, textiles and apparel industry, global
impact

LITERATURE
Great changes have occurred in the textile industry since the pandemic process.
While some companies or countries lost value, some gained value. The closure
of the factories of textile giant countries such as China has negatively affected
many countries and led the company owners to import and export with other
countries. There are other articles and theses investigated by examining the
effect of the pandemic on the textile industry:

Spain, one of the countries most affected by covid 19, temporarily closed a total
of 3,785 stores in 39 different countries due to the epidemic of its brands such as
zara, bershka and bear.2

As a result of the studies of the Indian Brand Equality Foundation, the most
important sector in the Indian economy, which has a 14% share in the industry
and production line, is the textile sector. It has a 17% share in the country's
exports. Small and medium sized enterprises in the textile sector occupy 80% of
the space. Most of the products produced are made for European and US brands.
With the epidemic, the cessation of production caused great damage to the
Indian economy. According to CMAI, if companies do not get support from the
government, it is predicted that there will be serious business cuts. CMAI, which
includes 3,700 businesses employing more than seven people, says most of its
members have no reserves to see them for 3-6 months.3

It is aviation in an industry most affected by the epidemic. During the process,

several companies went bankrupt and some companies downsized. Lufthansa,
one of the sunexpress partners of THY, has come to a standstill by reducing

2
Just style, april 2020
3
https://www.erlertekstil.com.tr/blog/guncel/covid-19-pandemisinde-hazir-giyim-ureticisi-ulkeler-ne-durumda
95% of the flights. While approximately 7000 aircraft cannot take off
worldwide, all airlines are proportionally parked. 85% of the THY fleet is
waiting in park.4

Due to the covid 19 outbreak, price disputes in some countries called for the
most oil use and reduction in oil production, and oil producing countries to cut
the production of 1.5 million barrels per day. In this context, the sector slowed
down. In addition, since it is one of the most important raw materials used in the
energy sector, China's being the largest producer country in terms of the
production of required products has hampered and slowed the supply chain.5

It employs more than 60 million people and about 3 million people annually in
the aviation industry, which is one of the largest sectors hit by the epidemic
globally (ATAG, 2020). However, in the report published in the international
organization Eurocontrol, it was stated that the flights decreased by 86.8%
compared to the previous years (Eurocontrol, 2020). The fact that this decrease
is due to the epidemic may cause a tragic result such as IATA (International Air
Transport Association) and (SHGM, 2020) in the sector with high economic
returns, leaving 25 million people unemployed worldwide.6

4
https://www.bmd.com.tr/page/rapor_detay/4039/covid-19-salgininin-sektorlere-etkisi.htm
5
https://thinktech.stm.com.tr/uploads/raporlar/pdf/295202014477114_stm_covid_19_kuresel_tedarik.pdf
6
Gülşen YURDAKUL, Abdullah ÇELENK , Mustafa DEVECİ , Tülin DURUKAN, “An Assessment on The Future of
Manufacturing and Service Sectors In The Covid-19 Process and After”.
With covid 19, it is the tourism sector that is one of the most affected sectors.
strict measures were taken in the number of tourists coming to Turkey. With the
closure of flights in July 2020, the number of tourists visiting the country
decreased by 86% compared to the previous years; There was a 78% decrease in
the 7-month total change rate in 2020 (T.C Culture ve Ministry of Tourism,
2020).7

With the epidemic, the disruption in the supply chain has increased the cost for
production-based companies. Manufacturers that supply most of their products
from China have come to the brink of bankruptcy. The closure of factories and
shipping routes in the country make it difficult to meet the products. Most
companies of US origin reported disruptions in their supply chains and
disruptions. most US companies have doubled their delivery times (Taylor &
Schwartz, 2020).8

With the covid 19 outbreak, the reduction in oil demand has reduced production
risk and oil prices. On January 20, 2020, Brent fell from $ 65 to $ 58. While it
was not known how OPEC members would react to the developments, it
decided to cut prices. OPEC was expected to extend the production phase until
March 31, 2020 due to the interruption of the lead time. As expected, there was
a decrease in oil demand. Since 2009, China has seen the lowest level, with a 3
million barrel reduction, which corresponds to 20 percent of daily oil
consumption. The decrease in demand also caused a decrease in prices. Brent oil
has experienced a huge decline since November 2018, with a loss of 14 percent
per month in January.9

METHODOLOGY
7
Gülşen YURDAKULa , Abdullah ÇELENK , Mustafa DEVECİ , Tülin DURUKAN, “An Assessment on The Future of
Manufacturing and Service Sectors In The Covid-19 Process and After”.
8
Taylor, D. and Schwartz, J., 2020. Volkswagen Suspends Production as Coronavirus Hits Sales. Reuters.
Available at: https://www.reuters.com/article/us-volkswagen-results2019/volkswagen-suspends-production-
as-coronavirus-hits-sales-idUSKBN2140OF. [Accessed: 15 March 2020].
9
Dr. Recep Yorulmaz, Oğuzhan Demirdöğen.” KOVİD-19 SALGINININ DÜNYA EKONOMİLERİNE ETKİLERİ”. No:
242 / Mart 2020
https://www.orsam.org.tr/d_hbanaliz/Analiz_242_tr.pdf
I will make comparisons for the methodology part of coivd 19's impact on the
textile industry. I will examine values such as before and after on country basis.
The main questions will be as follows.

1. What kind of changes have occurred in European countries?

2. What was the situation of China in the textile market before the
pandemic?
3. How did things change afterwards?
4. How did these situations affect other countries?

5. Which countries were the most affected during the epidemic period?
6. Has this epidemic caused changes in the textile industry?

I will explain in detail the answers I will find, analyzing them and comparing
them in the light of the questions. I will convey information about the situation
of major European countries before the pandemic and the situation after the
pandemic in the textile sector, especially in China, and I will also support this
information with the necessary tables and graphics. I will do this with a
descriptive methodology method. The countries that I will talk about in the
analysis part are the leading countries in textile industry exports and imports.

I have also shared with you a methodology that has already been made as an
example below.
The authors conducted a case study on a knitwear-based RMG c in Bangladesh.
The company provided useful insights and information on its production and
marketing details. The collected data is based on the costing of a 100 per cent
cotton basic t-shirt. The company is expecting to ship the produced styles to its
European brands after withdrawing lockdown, despite making no profit because
of unwanted newly added inventory and logistics costs. For the purposes of this
research paper, however, it has provided the current change in price of raw
materials and projected associated production costs to make similar styles in the
post-pandemic period. The study compared two different costing and pricing
scenarios, before and after COVID-19. The calculations were completed in an
ERP software platform of the respective industry. The net fabric consumption
(Net Cons/Dz) required to make a dozen garment pieces in a repeat style was
found using computer aided design (CAD) consumption. The freeon-board
(FOB) price (transport finished garments up to seaport) was analysed to explore
the change in garment price before and after COVID-19.10

ANALYSIS

BEFORE THE PANDEMIC

Textile Exporter-Importer Countries

China is the world's largest textile producer and also the largest exporter of
textiles and ready-to-wear clothing. It increases its production volume every
year compared to other textile exporting countries. In recent years, the trade
wars on the US side and the production conditions of communities such as the
EU and other countries, changing technology and the effective role of different
producer countries in this sector, quotas and restrictions are the biggest threats to
the Chinese textile and apparel industry.
The EU has approximately 25% of the textile and apparel export market in the
world. Italy, Spain, France, Netherlands and Germany are the leading countries
in this industry. There are approximately 200 thousand textile and ready-made
clothing manufacturers in Europe. 70 percent of these are ready-to-wear while
the remaining 30 percent play a role in the textile sector.

CHINA
According to 2018 data, China is the world's largest textile and ready-to-wear
exporter with 266 billion USD. China is a country that uses modern textile
machinery in the textile and ready-to-wear sector as well as cheap labor in
parallel with its high population.
Textile exports of Chinese origin in 2018 cover 3/1 of the global market. The
Chinese textile and apparel industry has low purchasing costs created by large-
scale raw material purchases. China manufactured 80 billion USD worth of
10
SAMIT CHAKRABORTY, MANIK CHANDRA BISWAS ‘’ Impact of COVID-19 on the textile, apparel and fashion
manufacturing industry’’
fabric in 2017, and while maintaining its advantageous position in exports due to
its cheap labor and low transportation costs, it also has a domestic market where
demand is increasing day by day due to its large population, whose income level
is increasing.

EU
Italy, which has many ready-to-wear brands, has been the country that exports
the most textile products from EU countries to outside the continent. The EU
exported 116 billion Euros worth of textile products in 2018. Italy ranks first
with 9 billion euro’s (36 percent). Germany and Spain ranks 2nd and 3rd with 5
billion Euros, and France 4th with 3 billion Euros. Britain ranked 5th with the
export of textile products worth 1 billion euro’s.

ITALY
Italy, the heart of fashion, has many world brands in the ready-to-wear industry.
On the other hand, when the products to which Italy exports the most are
examined, it is seen that the exports of ready-to-wear products rank 10, while
textile products exports rank lower. Italian brands are doing business all over the
world with contract manufacturing methods, although it is not reflected in the
export figures of the country. Textile and ready-to-wear industry export figure of
Italy is 36 billion USD.

GERMANY
Germany has well-established brands and a textile and apparel industry with a
long history of production. German manufacturers have stood out with
innovation and quality. Germany is one of the countries that export the most in
product groups such as knitted garment fabric, artificial fiber, synthetic yarn and
textile machinery with an export capacity of close to 40 billion USD.

BANGLADESH
Bangladesh is the shining star of the textile and especially the ready-to-wear
industry. Bangladesh currently manufactures for many world brands using
integrated textile production facilities and advanced technology. When
technology and cheap labor come together, the country reaches a serious pricing
power. Bangladesh, textile and ready-to-wear export figure exceeded 38 billion
USD. The 4 main products of the country that exceed the export limit of 1
billion USD consist of textiles, ready-made clothing and accessories.
Bangladesh has been included in the supply chains of many global brands in the
last 5 years.

INDIA
India is the world's largest cotton producer after China. It uses its production
significantly in the manufacture of textiles and ready-to-wear products. India is
one of the world's largest producers with an annual production of 6.21 million
mt of cotton. Most of the production is done in small looms for the domestic
market. Exports mainly consist of fabrication. With an export share of 37 billion
USD, the difference between India and Bangladesh and Vietnam, which is the
5th in the world, is only around 1-2 billion.
TURKEY
Turkey is one of the major textile exporting countries. Turkey, the world textile
and apparel market with a share of 3.5%, is the world's seventh largest apparel
exporter. Turkey is also the world's 7th largest cotton producer. Turkey, within
the framework of the customs union, is able to export to the EU countries
exempt from customs duties. In particular, the ready-to-wear sector has made
European countries with high purchasing power the world's largest market. At
this point, Turkey, using the geographical proximity and strong logistics sector
has the potential to rapidly increase exports to Europe. In the last 20 years, the
Turkish textile and ready-to-wear sector has stepped out of the traditional
production workshops and reached high quality production facilities. It stands
out with its wide product range, qualified and cheap workforce and proximity to
the EU and Middle East market. Turkey in 2018, made only $ 17 billion in
export garment industry, total exports of textile products amounted to 28 when
incorporated billion USD.

USA
The USA partially lost its export power in a quarter of a century, with many
important textile and ready-to-wear brands shifting their production facilities to
the Far East. Nevertheless, the USA has world brands in many product groups. It
is among the top 10 exporting countries with an export volume of 27 billion
USD. The prominent products in the US textile industry; non-woven products,
industrial fabrics, medical textiles and protective special clothing.

Within the scope of the data of the World Trade Organization 2018, the exports
of ready-to-wear and apparel products reached 546 billion dollars worldwide.
The total export of textiles, other products and home textiles is 292 billion
dollars.
Based on all products, including textiles, ready-to-wear and home textiles, the
world export market was 837 billion USD.
China, the leading country in textile exports, The European Union ranked
second in terms of the total exports of its 28 members. The third country is
India. China realized 67% of EU and world textile exports.
According to 2018 data, the first 2 places in ready-to-wear exports are not
changing as in the textile sector, China and the European Union, followed by
Bangladesh.
China, EU and Bangladesh account for 66% of world ready-to-wear exports.11

11
WTO (2018)
The European Union, USA and China led the list of countries with the highest
import in 2018. We see that almost 38% of the world market is realized in the
market of the first three importers. When the apparel export figures are
analyzed, it is seen that the top 3 importers, EU, USA and Japan, are
determinant in the purchasing power as much as the population size in the
ready-to-wear sector in relation to the textile industry.
According to the textile and apparel import-export data published by the World
Trade Organization, the volume of ready-to-wear and textile trade decreased in
2019. The reasons for this decline are reduced global demand and trade wars and
conflicts between countries / blocs. World textile exports decreased by 2.4% to
305 billion dollars in 2019, while world ready-to-wear exports decreased by
0.4% to 492 billion dollars in the same period. World total commodity trade also
decreased by 3% on value basis and 0.1% on amount basis in 2019, contrary to
the increase in 2017 and 2018.
On the other hand, in 2020, the world total commodity trade is projected to
decline at a much more drastic rate, largely due to the pandemic.

In the world, with a decrease of approximately 0.5 percent in 2019, it was

recorded as 500 billion dollars in ready-to-wear and apparel exports. China
maintains its leadership in the world with an export of 150 billion dollars and a
share of 30 percent. Despite this, China's textile exports decreased by 4% in
2019. The reason for this is that the US and European customers receive their
orders from other Asian manufacturers instead of from China.
In 2019, in textile exports in the world, China is followed by the EU with 135.6
billion dollars export and 27.6 percent market share.
Worldwide, in clothing and apparel exports to the EU, bangladesh, vietnam,
india and turkey are followed.
Globally, while textile exports fell by 2.4 percent in 2019, China maintained its
place. With an export of 119.6 billion dollars and a market share of 39.2%, the
EU follows China with an export of 66.3 billion dollars and a share of 21.7
percent. India follows the EU with 17.2 billion dollars.
EU is in the leading position in the world ready-to-wear imports with 180 billion
dollars import and 34% market share. USA is behind it with 96 billion dollars.
USA is followed by Japan with about 30 billion dollars, followed by Britain,
Hong Kong, Canada and South Korea.

The fact that there is such an effective sector worldwide attracts the attention of
other countries. Accordingly, the number of countries that export and import
textiles in the world is increasing. The biggest market for textile imports is the
EU. It has a value of 67 billion dollars and a share of 21%.
PANDEMIC PERIOD

With the covid-19 outbreak that started in March, many measures were taken,
factories were closed, production stopped. In this situation, the trade network of
China, the largest export country in the world, and the countries it exports to
have been interrupted, and most companies stopped their production and some
came to the point of bankruptcy.
EU trade with China fell from 46.5 billion euros in January 2020 to 43 billion
euros in February. After this decline continued until January, it rose above the
January 2020 level to 49 billion euros.
The main reason for this increase has been a sharp increase in imports from
China (€ 3.5 billion and € 6.8 billion compared to January and March 2020) and,
largely, textile face masks, surgical masks disposable face masks and disposable
disposable covers.
In April 2020, there was a decrease in imports from 5 EU countries except
China (+12% compared to January 2020).
likewise, their exports fell, the biggest decrease was in England (-40%), while
the smallest decrease was in China (-6%).
Looking at the imports of the most traded goods from China to the EU, the
highest increases in April 2020 compared to the same month last year were
recorded for automatic computing machines (+ 884 million €, + 33%), textile
apparel products. fabrics (+ 129 million €, + 36%) and electronic tubes, valves
and related products (+ 92 million €, + 12%).
According to the research, the global textile trade collapsed in the first half of
the year. Exports to the major purchasing regions in the EU, USA and Japan fell
by up to 70%. At the same time, producers' supply chains were disrupted by the
shortage of cotton, fabric and other necessary materials.
With the spread of the pandemic from the Asian region, the fact that most of the
world's exports are from the Asian region has caused the EU and the USA to not
reach textile raw materials or ready-to-wear clothing.
Worldwide expected turnover 2020 decreased by an average of 33% compared
to 2019

Companies in Europe expect their turnover to drop "only" by -22% in 2020,

significantly better than the -33% reported in the second survey. Companies in
East Asia expect their turnover to drop by -26%, close to that reported in the
second survey (-24%). Turnover expectations of companies in South East Asia
and South Asia deteriorated significantly. These areas were then hit by the
Corona epidemic and therefore the full effect was felt with a delay. Compared to
2019, the expected turnover for 2020 decreased to -38% in South East Asia and
-31% in South Asia. Turnover expectations in Africa, South America and North
America have not changed much since the second survey.
CONCLUSION

The textile and ready-to-wear industry is one of the sectors most affected by the
covid-19 pandemic. The closure of factories by textile giant countries such as
China and the prohibition of product entry and exit into the country brought this
sector to a standstill. This pandemic has also caused some awareness. Some of
these have provided expertise in what companies should do in such crisis
situations and how to manage the crisis. With the pandemic, the export of textile
products changed hands on a country basis and enabled new countries to be
included in this sector. Especially with the participation of relatively small
countries in Asia to this sector, they have completed the deficiency of China.
However, while a decrease is expected with the pandemic in China, which
ranked first in exports before the pandemic, it increased the number of imports
and balanced the loss in exports. Europe, which ranks first in imports, has
increased this number even more and made a positive progress in the pandemic.

On a global basis, the textile industry is expected to increase from 595 billion
dollars in 2020 to 650 billion dollars after the pandemic (2021) and there will be
a 10 percent increase in the annual growth rate. As I mentioned above, the real
reason for this growth was the specialization of companies in crisis management
and the right decisions and practices. Looking at the current growth rate of this
sector, the estimated figure for 2025 is to reach 800 billion dollars. However, in
my opinion, the gradual reduction of the pandemic with vaccines and taking
necessary precautions may cause the countries that remained behind during the
pandemic to take the lead again and the new participant countries in the
pandemic process and increase their share in this sector may be left behind.
Therefore, I think the market share in this sector will go on par with the share in
2020. In addition, the use of online ordering, which increased with the
pandemic, affected the textile industry and took the companies working in this
direction much further than other companies. In this way, they have overcome
their damages during the pandemic process and have provided an extra
opportunity in their hands in the future.
RESOURCES:

https://thinktech.stm.com.tr/uploads/raporlar/pdf/295202014477114_stm_covid_19_kuresel_t
edarik.pdf
https://www.bmd.com.tr/page/rapor_detay/4039/covid-19-salgininin-sektorlere-etkisi.htm
https://www.erlertekstil.com.tr/blog/guncel/covid-19-pandemisinde-hazir-giyim-ureticisi-
ulkeler-ne-durumda
https://www.erlertekstil.com.tr/blog/guncel/covid-19-pandemisinde-hazir-giyim-ureticisi-
ulkeler-ne-durumda
https://www.bmd.com.tr/page/rapor_detay/4039/covid-19-salgininin-sektorlere-etkisi.htm

https://thinktech.stm.com.tr/uploads/raporlar/pdf/295202014477114_stm_covid_19_kuresel_t
edarik.pdf

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3762220&download=yes
https://www.ihracat.co/2019/11/tekstil-ve-hazir-giyim-sektoru-dunya.html
https://www.trademap.org/
http://madb.europa.eu/
https://www.ihkib.org.tr/tr/bilgi-bankasi/dunyadan-haberler/i-4398
https://www.worldatlas.com/articles/top-10-textile-importing-countries-in-the-world.html

https://www.setas.com.tr/en/news/impact-of-corona-pandemic-on-global-textile-
industry
REFERENCES:
Gülşen YURDAKULa , Abdullah ÇELENK , Mustafa DEVECİ , Tülin DURUKAN, “An Assessment on The
Future of Manufacturing and Service Sectors In The Covid-19 Process and After”.

Dr. Recep Yorulmaz, Oğuzhan Demirdöğen.” KOVİD-19 SALGINININ DÜNYA EKONOMİLERİNE ETKİLERİ”. No: 242
/ Mart 2020
https://www.orsam.org.tr/d_hbanaliz/Analiz_242_tr.pdf

Taylor, D. and Schwartz, J., 2020. Volkswagen Suspends Production as Coronavirus Hits Sales.
Reuters. Available at: https://www.reuters.com/article/us-volkswagen-results2019/volkswagen-
suspends-production-as-coronavirus-hits-sales-idUSKBN2140OF. [Accessed: 15 March 2020].

SAMIT CHAKRABORTY, MANIK CHANDRA BISWAS ‘’ Impact of COVID-19 on the textile, apparel and
fashion manufacturing industry’’

Dr. Sheng Lu, Associate Professor, Department of Fashion & Apparel Studies, University of
Delaware