You must have heard about the 2023 earthquake disaster that happened in Turkiye (formerly Turkey).
This earthquake disaster is beyond my words to explain the situation. As of today, Turkiye is still healing its wounds. I wanted to write a detailed report on the 2023 Turkiye earthquake disaster to present a sourcing agent’s perspective. The disaster affected almost all industries in Turkiye, and we have lost connection to some of the Turkish manufacturers in our existing Turkish supplier database.
Contents
- 1 A Short Summary of the 2023 Earthquake Disaster
- 2 The Most Affected Turkish Industries by the 2023 Earthquake Disaster
- 3 How the Earthquake Disaster Affected Pelotek Sourcing Agent
- 4 Recovery Period: Challenges and Opportunities for the Earthquake Disaster Zone
- 5 The Implications for Buyers and Sourcing Agents
- 6 Conclusion
- 7 References
- 8 Frequently Asked Questions
A Short Summary of the 2023 Earthquake Disaster
On February 6, 2023, Turkiye experienced one of the worst natural disasters in its history. A series of severe earthquakes with magnitudes ranging from 7.8 to 7.5 rocked the country’s southern and eastern areas, inflicting widespread damage and disruption on millions of Turkish people and businesses. The anticipated direct physical damage was more than $34 billion, or 4% of Turkiye’s GDP in 2021(1). The expenses of recovery and restoration might be significantly higher, as might the economic losses caused by company interruptions.
As a sourcing agent who works with Turkish manufacturers, I have witnessed firsthand the impact of the earthquake on the industrial sector. In this article, I will share some of my observations and insights on how the earthquake affected different manufacturing sectors, what challenges and opportunities they face in the aftermath, and what implications this has for sourcing agents and buyers.
The Most Affected Turkish Industries by the 2023 Earthquake Disaster
According to Sagbas et al. (2023)(2), the earthquake disaster had a substantial impact on industrial facilities in the impacted regions, resulting in tremendous economic losses and business disruptions ranging from three months to two years. The study examined 131 industrial facilities throughout five provinces (Hatay, Kahramanmaras, Gaziantep, Malatya, and Adiyaman), accounting for 81% of the total damage. The following industries were the most affected:
Textile and Apparel Sector in Turkiye
The earthquake disaster significantly affected the production and supply chains of many Turkish textile and apparel manufacturers, affecting their ability to fulfill orders and meet deadlines. Some Turkish factories had to temporarily shut down or relocate their operations to other regions or countries. Some also faced difficulties accessing electricity, water, transportation, and communication services. The earthquake disaster also affected the workers’ safety and well-being, as many lost their homes or family members.
The textile and apparel sector is one of Turkiye’s largest and most important manufacturing industries, accounting for around 10% of GDP and 20% of exports. The industry is also significantly concentrated in the earthquake disaster zone, particularly in Gaziantep, Turkiye’s “carpet capital.” You may check our posts “Turkish Clothing Manufacturers(3)” and “Turkish Carpet Manufacturers(4)” to get an idea of the size of these sectors in Turkiye.
Many textile and apparel companies were severely damaged by the earthquake disaster, particularly those with precast reinforced concrete structures with pin-supported roofs. Under significant seismic forces, these structures were found to be vulnerable to collapse or partial collapse. Nonstructural components such as claddings, equipment, machinery, raw materials, and final products were also damaged in many enterprises. Damage to equipment and machinery was especially expensive because they are frequently imported and have extensive lead times for replacement.
Food and Beverage Sector in Turkiye
Another important manufacturing industry in Turkiye is food and beverage, which accounts for around 9% of GDP and 11% of exports. The sector is heavily concentrated in the earthquake disaster zone, particularly in Kahramanmaraş, which is famed for its ice cream.
The 2023 earthquake disaster caused damage to many food and beverage factories, particularly those with metal roofs or metal cladding. Under significant earthquake stresses, these structures were shown to be prone to buckling or detachment. Nonstructural components such as equipment, machinery, storage tanks, refrigerators, raw materials, and final products were also damaged in several enterprises. Storage tanks and refrigerators were particularly vulnerable, as they are vital for preserving the quality and safety of food products.
The earthquake disaster interrupted numerous food and beverage manufacturers’ production and supply lines, hurting their capacity to satisfy market demand and meet quality standards. Due to damage or power disruptions, some factories had to temporarily shut down or limit their capacity. Some people also had trouble getting access to water, transportation, and communication services. The earthquake disaster additionally had an impact on the availability and prices of raw products, including milk, sugar, fruits, vegetables, grains, meat, and so on.
Metal Products Following the 2023 Earthquake Disaster
Another important industrial industry in Turkiye is Turkish metal products, which account for around 6% of GDP and 12% of exports. The industry is also widely spread in the earthquake disaster region, particularly in Malatya, which is famed for its iron and steel industry.
Many metal product industries were devastated by the 2023 earthquake disaster, particularly those with steel frames or steel trusses. Under significant seismic stresses, these structures were shown to be prone to fracture or deformation. Nonstructural components, such as equipment, machinery, raw materials, and completed products, were also damaged at several factories. The damage to equipment and apparatus was particularly serious because they were frequently heavy and sophisticated.
The earthquake disaster in Turkiye interrupted numerous metal product manufacturers’ production and supply lines, hurting their capacity to satisfy customer demands and delivery timetables. Some factories were forced to temporarily close or shift their operations to other regions or countries. Some people also had trouble getting electricity, transportation, and communication services. The earthquake also had an impact on the availability and cost of raw resources, including iron ore, scrap metal, aluminum, copper, and so on.
How the Earthquake Disaster Affected Pelotek Sourcing Agent
The earthquake disaster in Kahramanmaras in 2023 had a substantial impact on our sourcing projects. I won’t list them all, but I will discuss some of the challenges we faced following the earthquake.
We have lost contact with several Turkish freelancers in our database
We deal with over 100 Turkish freelancers across Turkiye. Some of our important freelancers were residing in the earthquake disaster zone, and we tragically lost communication with four of them forever.
Many sourcing tasks were postponed for one month in February 2023 since we preferred to visit the earthquake region as a team.
Our simultaneous translation client has left Turkey
We were on a long-term contract with a Bitcoin company in Turkiye and we were providing simultaneous translations during their online seminars. This company decided not to invest in Turkiye one week after the earthquake because almost no one was attending the online seminars. As a result, we canceled a high-level contract in which we were using two Turkish interpreters during online seminars and meetings.
We were unable to offer competitive pricing on private-label hats
A client from Germany requested pricing quotations for particularly designed graduation hats in March 2023, and our costs were significantly more than all others from other nations. This was mostly due to the earthquake disaster, as our hat producers purchased cotton from the disaster zone. Even though we were compensated for our services, this was the first time we charged the highest pricing for custom-made hats.
Our client purchased olive oil from Tunisia instead of Turkey
Turkiye is well-known for its high-quality virgin olive oils, and we have a large database of manufacturers in this industry. We were unable to provide competitive pricing quotes for extra virgin olive oils since olive oil manufacturers raised their prices shortly after the earthquake. For purchases, the consumer chose another country. Thank God, six months after the earthquake, virgin olive oil prices have returned to normal.
More samples are available upon request. However, I believe that these instances adequately describe the situation we are in. Our sourcing agent was impacted by the 2023 earthquake disaster, and we are still experiencing issues in several industries. As a result, communication is more important than ever before when purchasing any sourcing service.
Recovery Period: Challenges and Opportunities for the Earthquake Disaster Zone
Challenges
The earthquake disaster presented numerous obstacles to the damaged Turkish manufacturing sectors, including:
- Repairing or rebuilding damaged infrastructure and facilities
- Equipment and machinery replacement or repair
- Restoring or locating alternate sources of electricity, water, transportation, and communication
- Resuming or moving manufacturing and supply chain operations
- Recruiting or retraining employees, as well as guaranteeing their safety and well-being
- Making up for or compensating for lost income and profits
- Customer relationships and market share must be maintained or restored.
- Observance of quality standards and regulations
- Inventory and cash flow management
- Handling insurance claims and legal matters
Opportunities
The earthquake disaster, on the other hand, presented several chances for the damaged manufacturing sectors, such as:
- Improving facility and infrastructure seismic performance and functioning
- Equipment and machinery upgrading or modernization
- Diversification and expansion of manufacturing and supply chain networks
- Adoption or improvement of digital technology and innovation
- Creating or improving business continuity and risk management strategies
- Increasing or gaining access to government and other stakeholders’ financial assistance and incentives
- Making use of or building social capital and solidarity within the industrial community
- Enhancing or promoting Turkish manufacturers’ reputation and competitiveness
The Implications for Buyers and Sourcing Agents
The earthquake disaster had far-reaching consequences for sourcing agents and customers who interact with Turkish manufacturers, including:
- Evaluating the earthquake’s influence on current and potential suppliers in terms of their manufacturing capacity, quality, delivery, price, and so on.
- Interacting with suppliers to express condolences, give assistance, request information, negotiate conditions, and so on.
- Changing sourcing tactics to deal with supply disruptions, such as seeking other suppliers, switching products, delaying purchases, and so on.
- Assisting suppliers in their efforts to recover, such as by giving technical support, financial assistance, market access, and so on.
- Assessing suppliers’ resilience skills, such as earthquake design, emergency readiness, and contingency planning, among others.
- Encouraging suppliers to increase their resilience capabilities, such as through seismic retrofitting, equipment upgrades, supply chain diversification, and so on.
Conclusion
The earthquake of 2023 was a severe tragedy for Turkiye, particularly its manufacturing sector. The earthquake disaster had varying effects on various manufacturing sectors based on their location, structure type, nonstructural components, production methods, supply chains, and so on.
The earthquake disaster presented numerous obstacles, but it also provided some chances for the recovery of Turkey’s impacted manufacturing sectors.
Finally, the earthquake disaster in Turkey in 2023 will have far-reaching consequences for sourcing agents and customers who interact with Turkish manufacturers. As a sourcing agent who witnessed the earthquake’s destruction firsthand, I hope this post provides some useful information and perspectives for anyone interested in or working with Turkish manufacturers. I also hope that Turkiye will be able to recover from this catastrophe and emerge stronger than before.
Despite this disaster, we still continue sourcing from Turkey. I highly advise you to read the “Comprehensive Guide to Private Label Services in Turkey,” if you must understand how private labeling and sourcing processes operate in Turkey. If you are more interested in learning the biggest brands and leading Turkish manufacturers, this post may help more: “The Comprehensive Guide to Turkey Sourcing: Top Turkish Manufacturers and Industries.”
References
- The World Bank. Earthquake Damage in Türkiye Estimated to Exceed $34 billion: World Bank Disaster Assessment Report
- Sagbas et al. (2023). Field reconnaissance on seismic performance and functionality of Turkish industrial facilities affected by the 2023 Kahramanmaras earthquake sequence
- Republic of Turkiye Ministry of Trade, 2022: Turkiye Textile, Apparel and Leather Products Sectors Report, 2021 (published in 2022)
- Republic of Turkiye Ministry of Trade, 2022: Turkiye Carpet Sector Report, 2021 (published in 2022)