The leather and leather products sector is a leading sector of our country in terms of production value as well as export potential.Owing to the progress it has made in recent years,the sector has reached a position where it can export technology,know-how and facilities.At the same ,it has proven itself regarding quality.

In consideration of its 2.5% average share within the manufacturing industry,about 2% share in total registered employment,annual leather processing capacity of 400.000 tons and technological infrastructure,our sector obviously boasts of considerable competitive power.In 2004,it has yielded an export fiqure of $ 762 million,including footwear,having around a 1.2% share in our total exports.When exports via shuttle trade are recalled,this share becomes 6%.According to records of Exporters Unions,which include exports with special invoices,the fact that exports of the sector surmounted $1 billion has been most welcome to us.

Accounting for approximately 40% of the world raw leather processing capacity,our country is just behind Italy.

Because of high labor costs and escalating social pressure against environmental pollution,the world productionof leather and leather products is shifting from developed countries towards developing countries having the advantage of cheap labor.

In this framework.our counry’s leather and leather products sector having a high potential of development with respect to the $ 100 billion world leather and leather products trade is disadvantaged when if comes to its Far Eastern rivals in terms of labor of costs,but advantaged in terms of labor productivity,technology and quality.As it happened in the example of Italy,it is possible for those industrialists of ours who produce fashionable and high quality products in specialized organized industrial zones,involved in large-scale production,to be able to compete against the price advantage of their Far Eastern competitors.

The basic factor that is going to preserve the sector’s competitive power in world markets and boost foreign demand towards the products of the sector is to enter world markets by high value-added product groups,made in accordance with contemporary tastes of consumers,relying on fashion-brands.

In this context,I believe differentiation and branding in products,usage of advanced technology,high quality production and linked with that,generating(a positive image for Turkish goods)in international markets is crucial.

Generating such an image is certainly difficult by individual efforts of companies. In the light of that view,our work in the Foreigh Trade Undersecretariat led to the development of the “TURQUALITY” logo,bringing together the concepts “Turkish”and “quality”and was placed under protection as copyrighted by the Foreign Trade Undersecretariat.Although TURQUALITY is positioned as an upper brand in the eyes of consumers,it is furthermore a system of accreditation covering all processes-from prodection to marketing,sales to after sales-for product groups which bear the potential for branding and which give our country competitive advantage.

Therfore,for consumers,TURQUALITY is a ‘quality guarantor’ encompassing come basic values like contemporariness,modernity,quality and innovationism;for all accredited brands or brands planning to be accredited to use this certificate,it is a “catalyzer of development”providing financial support and executive information build-up and hence speeding up the achievements and branding operations of Turkish brands in international markets.

This project,kicked off in 2004,initially,with the ready-to-wear sector including leather apparel,is set to be extended to other sectors starting from 2005.The project was launched in Moscow and will be fuither promoted in Paris,London and Madrid,respectively.

Besides this project,we have also launched the “Fashion and Textile Business Cluster Project”in 2004.A Fashion Institute is to be set up within iTKiB(Istanbul Textile and Apparel Exporters Association)to conduct activities such as raising production and exports of high value added products in the textile and ready-to-wear sector,assembling highly qualified human resources in fashion and design,developing KOBis(small and medium sized enterprises)capacities to devise collections and desiqns through business clusters in fashion and design.

For the future performance of the Turkish leather and leather products sector,to likewise develop the production and design capabilities of companies in the sector,embarking on such cluster work and building educational institutions for fashion-brands is crucial.

On the other hand,next up,in order to augment the competitive power of the sector,emphasis on qualified labor force,R& work and increase in productivity through new technological investments seems to be unavoidable.Possessing40% of the world raw leather processing capacity,our country produces nearly 25 % of the world raw leather output.At this point the need arises for the sector to move from traditional export markets towards new ones and raise capacity utilization rates.

Viewing from that angle and bearing in mind the shuttle trade with Eastern European countries,I would like to call your attention to the CLS,especially Russia,which emerge as our real export markets,the biggest importer in the sector the USA and a growing market,China.

I hope that the Turkish leather and leather products sector will make even larger strides in quality, design,production technology,marketing and distribution.I believe our sector will make good use of its potential and attain the position it deserves in world markets.