Turkey exports $3.7 billion in gold jewelry (07.01.2008)

Turkey's jewelry sector has grown significantly over the last 20 years, though competition from the East has brought along with it worries.

İstanbul Precious Minerals & Jewelry Exporters' Association (İMMİB) President Atasay Kamer says Turkey's jewelry sector has an annual processing capacity of 400 tons of gold and 300 tons of silver and is among the top five gold bar importers. Kamer says the economic value of this capacity is approximately $10 billion. Last year 239 tons of gold bar, worth $5.8 billion, were imported while 148 tons of processed gold, worth $3.7 billion, was exported, he said.
Processed gold exports are creating significant contributions to the Turkish economy, such as a high added value, jobs and tax revenue, Kamer said, adding that they expect imports to be around 200 tons and exports to increase by 50 percent.

He also said the jewelry sector employed 100,000 people in 1990, with current figures closer to 350,000. Small enterprises lead the industry, processing gold in traditional small workshops. Kamer estimates the number of these workshops at 10,000 with approximately 50,000 employees. He also states that there are 100,000 retail jewelry shops in Turkey that employ around 300,000.

These small enterprises do not employ professional managers and experts, leading to a lack of a professional structure and know-how and difficulties in the financing of operations.

Another issue Kamer brought attention to was the dependence on international gold prices, adding that Turkey is significantly behind in establishing a corporate culture and encouraging people to deposit their gold savings into banks in order to benefit from financial markets.

Competition is not far behind. Kamer says the number of rival countries in gold exports has increased. He said China and India in particular have boosted efforts to increase their market share in the global gold trade, leading to an increase in labor costs in Turkey. "This may cause a huge market share loss in exports," he said, adding that the increase in excise tax imposed on precious stones like diamonds was another obstacle for the jewelry sector. High excise tax rates would reduce the competitiveness of the Turkish jewelry sector and force the market to move to Eastern countries, says Kamer.