The Turkish denim sector is adjusting to a 27 percent minimum wage increase that took effect on Jan. 1, lifting the country’s minimum monthly wage to 33,030 Turkish lira ($769.17).
In a recent interview with Sourcing Journal, Ahmet Öksüz, chairman İTHİB, the Turkish Textile and Apparel Exporters’ Association, said the actual cost to manufacturers will be $1,000 per month once food, transportation, service taxes and benefits are included.
The move places Turkey at the higher end of the wage spectrum among global sourcing destinations, reinforcing its shift away from volume-driven production toward higher-value, more specialized manufacturing. While rising labor costs add to the uncertainty facing the industry, the wage increase helps cement Turkey’s position as a more premium denim hub—one defined by technical expertise, product differentiation and a growing range of specialized capabilities rather than low-cost basics.
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“Rising wages are one of several interconnected cost pressures facing the industry today. However, Turkey’s denim sector has historically demonstrated strong resilience through its integrated supply chain, speed-to-market advantage, technical expertise and sustainability know-how,” said Ibrahim Ethem Buyukpepe, acting general manager of Calik Denim. “While the environment remains challenging, we believe that companies investing in efficiency, innovation and long-term partnerships will continue to strengthen their global positioning.”
Only a small portion of Istanbul-based Denimtek Tekstil’s in-house team is directly affected by the wage increase, as Denimtek operates with a lean organizational structure and works closely with long-term production partners. No major changes are planned in terms of staffing levels or shift structures and hiring decisions will continue to be based on business needs, particularly in product development, sampling and customer-focused roles.
Instead, Levent Korkmazer, the founder and managing director of the jean manufacturer, said the impact of the wage increase will be felt more at the production-cost level rather than at the direct payroll level.
No structural downsizing or abrupt changes are planned for Calik Denim. Continuity and operational excellence are the company’s priorities, Buyukpepe said, adding that hiring and workforce planning remain aligned with its long-term growth, innovation and customer needs. “Any adjustments we make are driven by efficiency and process improvement, not solely by wage increases,” he said.
The mill’s workforce structure is diversified across different roles, skill levels and functions. While the minimum wage adjustment naturally impacts certain employee groups, Buyukpepe said the company manages this within a balanced compensation framework that prioritizes fairness, competitiveness and long-term retention rather than focusing on isolated percentages.
In terms of how the wage increase will impact brand partners, Buyukpepe pointed out that pricing decisions are never driven by a single cost factor. “We take a holistic approach that considers value creation, long-term partnerships and market dynamics. Our focus remains on offering high-value, innovative denim solutions rather than passing short-term cost fluctuations directly onto our customers,” he said.
Buyukpepe pointed out that Calik’s approach to wage adjustments is part of a broader, long-term workforce and productivity strategy rather than a short-term cost reaction. “We have been proactively planning through efficiency improvements, operational optimization and continuous dialogue with our teams to ensure a smooth transition. Our focus remains on maintaining stability, motivation and sustainable growth across our operations,” he said.
Denimtek anticipates indirect production costs to naturally rise across the supply chain. In Turkey, once the minimum wage increases, Korkmazer said prices of almost all goods and services tend to rise shortly afterward. Eventually, the USD/TRY exchange rate also adjusts. As a result, after one or two months, he said the overall cost balance usually normalizes, and the real impact becomes limited rather than structural.
“Minimum wage increases contribute to higher production costs, but they are not the sole driver of pricing,” Korkmazer said. “Therefore, we do not see minimum wage increases alone as a reason for permanent or aggressive price increases for our clients.
Up a hill
The minimum wage hike adds to the growing number of factors challenging the Turkish denim market’s price competitiveness.
Though Turkey is a major supplier for the EU, the country is facing rising costs and competition from Egypt and North Africa, which are gaining importance through new investments in garment manufacturing.
However, Korkmazer warns that this sourcing shift may create quality-related issues. While Egypt, which is structurally more suitable for basic, high-volume orders, may appear more cost-competitive than Turkey on paper, in in practice, he said there are still serious challenges in production stability, quality consistency and execution.
“Turkey, on the other hand, continues to have a strong advantage in value-added, complex, and higher-quality products,” he said. “At the end of the day, low-quality production being cheap has no real meaning for brands.”
Korkmazer added that rising wages, together with energy costs and raw material volatility, will push the Turkish denim sector further toward higher value, better engineering, and stronger quality standards. “Companies that can deliver consistent quality and flexibility will remain competitive, and Denimtek clearly positions itself in that segment,” he said.
Additionally, mills are operating in a softer demand environment. This type of climate requires agility and differentiation—qualities that Buyukpepe said Calik is delivering through innovation-led value, flexible production capabilities and close collaboration with customers. “Rather than competing purely on price, we aim to deliver solutions that support our partners’ long-term brand and sustainability goals,” he said.
Korkmazer echoes this sentiment. “We believe that competing purely on price is not sustainable. Instead, we focus on value-added products, customization, and flexible production solutions. In a slower market, customers look for reliable partners who can solve problems, not just offer the lowest price. This approach allows us to remain competitive without sacrificing margins or quality,” he said.
Suppliers are also up against regulatory demands such as the Digital Product Passport (DPP), Green Claims Directive, the Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive.
Most companies have been burdening the financial requirements it takes to comply with these frameworks, however a new initiative by the Istanbul Apparel Exporters’ Association (IHKIB) and supported by the Istanbul Development Agency (ISTKA) aims to help apparel suppliers respond to global brands’ growing expectations regarding low-carbon production, traceability, and digital reporting.
The 12-month “Twin Transition in the Apparel Supply Chain” project will provide participating companies digital and sustainability transformation assessments to measure operational and sustainability maturity, roadmaps, mentoring and advisory support for supplier upgrades and online seminars focused on transformation. It also includes access to finance and consultancy for companies seeking EU and national funding schemes to accelerate transformation investments.
Turkey’s denim manufacturers are in a constant state of futureproofing their businesses.
Productivity and smart manufacturing have been strategic priorities for Calik Denim for several years. “We continuously invest in digitalization, process optimization and advanced production technologies to enhance efficiency, quality and speed. These investments support sustainable competitiveness while also improving working conditions and skill development for our teams,” Buyukpepe said.
For Denimtek, Korkmazer is adamant that the technology is used to support quality, speed, and consistency, not to replace craftsmanship. “We invest in production planning, digital workflow management, and efficiency-enhancing tools where they add real value. The goal is smarter production, not cheaper production at the expense of quality,” he said.
Beyond wages, denim companies are taking holistic steps to retain their workforce.
Since Denimtek’s core team is relatively small, Korkmazer said retention is built on long-term collaboration, trust, and clear communication rather than short-term incentives. “Stability, respect for experience, and involvement in decision-making are key elements of our working culture,” he said.
Likewise, Calik Denim strongly believes in employee engagement, development and well-being. “We invest in training programs, internal communication, workplace safety, social benefits and career development opportunities. Creating a strong sense of belonging and purpose is central to our retention strategy,” Buyukpepe said.
