Kucukcalik to Beat China with Style, Delivery—Not Price
December 9, 2004
BURSA, Turkey — Kucukcalik plans to beat the 20-percent-lower Chinese plain and even voile prices by continuing to improve its styling, delivery and service.
"Our customers, especially those in the U.S., can get the cheaper Chinese lines, but who can be sure about the delivery time," said Yilmaz Kucukcalik, co-principal of the $140 million second generation family business with his brother, Yasar.
Kucukcalik said he is the largest Turkish exporter of curtains today. "The U.S. has become a more important market for us. About 60 percent of our business today is done with the U.S. converter and manufacturer, while Europe has declined to about 40 percent of our business." In addition to the general upgrading and shorter delivery times of product lines, Kucukcalik recognizes that bigger is no longer better in the production of commodity voile.
His purchase of Paris-based Compagnie des Etoffes earlier this year signaled a sea change in his thinking as a volume perde (curtain) supplier. Kucukcalik produces 6.5 million meters of perde fabrics monthly, but is willing to consider further acquisitions of small, boutique-style textile firms with the right design energy. "We're not planning to buy more looms. We can produce plenty of fabric with what we have," he said
Thinking smaller represents a change of thinking by Turkish textile producers, who have always added looms and wanted to be ever larger producers of curtaining. Now, the general attitude in Turkey is no longer 'bigger is better' but 'smaller can be beautiful.'
"We want to be like an Italian in Turkey and also be like the real industry, fast and logical in price," he said. "We give support to our customers in technique and fashion. We always cooperate with them. In Turkey, all of us started in the textile business. In our business, the competition is now between the slow and the fast; who is fast is giving delivery first and price second. That's where we are focusing our effort."
The new Kucukcalik strategy also includes the acquisition of other small boutique textile firms like des Etoffes. Small independent editeurs and small volume producers of voiles will continue to have difficulty in selling enough volume to be profitable with what is happening to Chinese pricing, he said.
"Such firms will find it impossible to compete in this business in the future without being under the kind of corporate umbrella that a company like ours can provide," said Kucukcalik. In the last year, many smaller firms have been gobbled up by bigger ones in the textile business – including Fadini and Compagnie des Etoffes. The purchase is expected to provide "new design energy at Kucukcalik."
In the Kucukcalik factory in Bursa, the buyer can find plain jacquard items, yarn dyed printed embroideries, cut and sew facilities in 20 gram to 500 gram per square meter fabrics. Half of the production is fabric, and the balance is readymade, he said, but he also does 10-20 percent of his business in apparel fabrics. The fashion business translates into other ideas for the home lines, he said.
"Our finishing expertise comes from our apparel fabric business. In home furnishings, we have a great knowledge in weaving techniques including fils coupe, yarn dyed and jacquard fabrics. The Japanese still lead the world in polyester apparel fabrics. That's why we have Japanese technicians at Kucukcalik.
"Apparel is difficult. It's a two month business and then it's over. There is no regular business, whereas home provides better market and is more stable," he said.
The home market may be more stable, but the voile segment of the home decorating market has taken a beating from Chinese pricing, according to Kucukacalik.
"China has affected the world pricing of plain voile so dramatically that we are forced to quote an even cheaper price than before to remain competitive," said the leader of this curtaining powerhouse. In fact, the average Kucukcalik price on fancy voile must be not more than $1.20 per meter. While this is more than the Chinese might charge at $1.00, Kucukcalik believes his customers will pay a bit more for better styling and improved delivery which he is working to shorten to four weeks from six weeks. This combination of better styling and better delivery will, he hopes, hold the Chinese producers in check.
Still, he is not taking any chances.
"We're a one stop shop for the curtain business today. We have anything the buyer wants in curtains. All our styles can be coordinated. You don't have to spend all of your time shopping Chinese lines to marry one style to the other, and find they will never match. We do silk, cotton, polyester and nylon. Most of our novelties come from these yarns in blended versions. We also have four Japanese technicians working in our yarn plant to develop new novelty yarns—more than ever before."
"Readymade pricing is also low and even fancy items are becoming a basic. There used to be a plain voile market but today there are too many basic items that used to be considered fancy. We are producing fancy items now with a high twisted yarn that produces the higher quality voile. We are doing very little of what I consider to be plain voile today," he added.
"Our customers, especially those in the U.S., can get the cheaper Chinese lines, but who can be sure about the delivery time," said Yilmaz Kucukcalik, co-principal of the $140 million second generation family business with his brother, Yasar.
Kucukcalik said he is the largest Turkish exporter of curtains today. "The U.S. has become a more important market for us. About 60 percent of our business today is done with the U.S. converter and manufacturer, while Europe has declined to about 40 percent of our business." In addition to the general upgrading and shorter delivery times of product lines, Kucukcalik recognizes that bigger is no longer better in the production of commodity voile.
His purchase of Paris-based Compagnie des Etoffes earlier this year signaled a sea change in his thinking as a volume perde (curtain) supplier. Kucukcalik produces 6.5 million meters of perde fabrics monthly, but is willing to consider further acquisitions of small, boutique-style textile firms with the right design energy. "We're not planning to buy more looms. We can produce plenty of fabric with what we have," he said
Thinking smaller represents a change of thinking by Turkish textile producers, who have always added looms and wanted to be ever larger producers of curtaining. Now, the general attitude in Turkey is no longer 'bigger is better' but 'smaller can be beautiful.'
"We want to be like an Italian in Turkey and also be like the real industry, fast and logical in price," he said. "We give support to our customers in technique and fashion. We always cooperate with them. In Turkey, all of us started in the textile business. In our business, the competition is now between the slow and the fast; who is fast is giving delivery first and price second. That's where we are focusing our effort."
The new Kucukcalik strategy also includes the acquisition of other small boutique textile firms like des Etoffes. Small independent editeurs and small volume producers of voiles will continue to have difficulty in selling enough volume to be profitable with what is happening to Chinese pricing, he said.
"Such firms will find it impossible to compete in this business in the future without being under the kind of corporate umbrella that a company like ours can provide," said Kucukcalik. In the last year, many smaller firms have been gobbled up by bigger ones in the textile business – including Fadini and Compagnie des Etoffes. The purchase is expected to provide "new design energy at Kucukcalik."
In the Kucukcalik factory in Bursa, the buyer can find plain jacquard items, yarn dyed printed embroideries, cut and sew facilities in 20 gram to 500 gram per square meter fabrics. Half of the production is fabric, and the balance is readymade, he said, but he also does 10-20 percent of his business in apparel fabrics. The fashion business translates into other ideas for the home lines, he said.
"Our finishing expertise comes from our apparel fabric business. In home furnishings, we have a great knowledge in weaving techniques including fils coupe, yarn dyed and jacquard fabrics. The Japanese still lead the world in polyester apparel fabrics. That's why we have Japanese technicians at Kucukcalik.
"Apparel is difficult. It's a two month business and then it's over. There is no regular business, whereas home provides better market and is more stable," he said.
The home market may be more stable, but the voile segment of the home decorating market has taken a beating from Chinese pricing, according to Kucukacalik.
"China has affected the world pricing of plain voile so dramatically that we are forced to quote an even cheaper price than before to remain competitive," said the leader of this curtaining powerhouse. In fact, the average Kucukcalik price on fancy voile must be not more than $1.20 per meter. While this is more than the Chinese might charge at $1.00, Kucukcalik believes his customers will pay a bit more for better styling and improved delivery which he is working to shorten to four weeks from six weeks. This combination of better styling and better delivery will, he hopes, hold the Chinese producers in check.
Still, he is not taking any chances.
"We're a one stop shop for the curtain business today. We have anything the buyer wants in curtains. All our styles can be coordinated. You don't have to spend all of your time shopping Chinese lines to marry one style to the other, and find they will never match. We do silk, cotton, polyester and nylon. Most of our novelties come from these yarns in blended versions. We also have four Japanese technicians working in our yarn plant to develop new novelty yarns—more than ever before."
"Readymade pricing is also low and even fancy items are becoming a basic. There used to be a plain voile market but today there are too many basic items that used to be considered fancy. We are producing fancy items now with a high twisted yarn that produces the higher quality voile. We are doing very little of what I consider to be plain voile today," he added.
