In spite of the global economic crisis, the Turkish furniture industry has continued to prosper over the last years by triggering the growth of the national economy. The stimulus package adopted by the Turkish government (including cuts of value added taxes in the housing sector and incentives to export) has, of course, fostered this positive performance.
In the meanwhile, different opportunities for the growth of the Turkish furniture sector have arisen on the international arena. Turkey is comparatively the strongest candidate to offer what the ‘Arabic Spring’ consumers need to recover in their urban and rural areas: roads, houses, hospitals and new schools. The Turkish government strategy of ‘Zero Problems with Neighbours’ has fostered the increase of economic relations between Turkey and the Arabic countries. As a matter of fact, cities like Erbil, in Iraq, are making everything easy for attracting Turkish companies to build business center and houses (there is no tax for 15 years and land is free of charge for investors). Considered the strong synergy with the construction companies, the Turkish furniture manufactures have now great opportunities to exploit the demand in Arabic countries.
A further opportunity comes from the neighbouring Middle Eastern and Central Asian markets, where disposable income is increasing at a higher rate than in Western European markets. The long history in producing classic oriental designs enables the Turkish furniture companies to be closer to the tastes of these countries. The flexibility characterising the Turkish furniture also plays a crucial role in meeting the needs of these new markets.
Finally, Russia is among the countries offering major opportunities for the Turkish contract furniture. The relations between the two countries have been improving in a number of fields and have gained a strong institutional basis. On this ground, Turkish investment have been increasing in Russia, which is actually, the biggest market for the construction sector. Many Turkish companies have been involved in the construction of hotels, which have been decorated by Turkish contractors and furniture. Apart from hotel investments, Turkish companies are currently involved in the construction and decoration of the sport complex in Sochi town, which is getting ready to host the 2014 Winter Olympic Games.
All these opportunities are well-known to the Turkish furniture companies exhibiting at the IMOB 2013 Istanbul Furniture Fair from 29 January to 2 February. By visiting the Fair, housing 350 exhibitors over a 120.000 square meter area, CSIL verified that Turkish furniture manufacturers are constantly monitoring the North African and Middle East countries not only for the geographical proximity but also for the potential of these markets in terms of disposal income. Libya and Iraq are indicated as the most targeted markets by the Turkish furniture companies. There are also companies which are strongly investing in Russia to boost their furniture business. Boydak holding is an example. Given the size of the Russian market, the company has decided to acquire the Fabryki Mebli Forte’s Russian furniture manufacturing plant in the city of Vladimir in order produce directly on site and now it is planning to further strengthen its distribution channels.
CSIL report “The Furniture Industry in Turkey” is part of the Country Furniture Outlook Series, covering at present 70 countries. Each Country Report contains all the main furniture statistics and indicators useful to analyse the furniture market. Publication date: February 2013.
Language: English. The report is available for online purchase and immediate download at: www.worldfurnitureonline.com