Turkey Steps Out

The people behind the Istanbul Jewelry Show have one, not-so-simple aspiration: They want their fair to be a “leading global event.”

Of course, it may be a while—if ever—before “Istanbul” is spoken in the same hallowed breath as Vegas and Basel. But clearly it’s a fair on the move. The show’s 20th anniversary edition, held this March, was the biggest one ever, drawing 864 exhibitors and 40,983 visitors from 98 countries—including a lot more end customers. “In the beginning, all the visitors were exhibitors,” says Cevdet Nyasaroglu, president of Chevo, a leading manufacturer. “Now it’s retailers.” Rotaforte, its organizer, is starting a second Istanbul fair, scheduled for August (originally September), and it plans to spend $2.5 million promoting its shows, with a particular focus on luring more U.S. and European buyers.

Among veteran exhibitors, there was general astonishment over the fair’s explosive growth in recent years: from 700 square meters when it began to 22,000 square meters today. And while there were grumbles about growing pains—particularly over logistics and an often-confusing layout—91 percent of visitors surveyed considered the fair a success.

The fair’s rise is another sign of Turkey’s increasing prominence in the jewelry industry. Already a major manufacturer of jewelry, exhibitors are beginning to see it as a regional hub. As a country that straddles Europe and the Muslim world, buyers see it as an entranceway for the Arab market, considered the next big area of opportunity. Serbulent Sengün, general manager of the Turkish Association of Jewellers, notes that Turkey is also becoming a gateway to former Soviet states like Lithuania. There is also the sense that “the world is moving East,” in the words of Ali Bulut, chief executive officer of Rotaforte, who notes the growing industries in India and China.

Still, what’s happening in India and China has attracted a good deal more attention than the goings-on in Turkey, and throughout the show there was a conscious effort to raise the country’s profile. “We want to explain to the world what is going on over here,” says Sengün. “I look at the trade magazines, and I hardly see any news on Turkish jewelry, even though we are one of the biggest industries in the world.”

And so a contingent of 50 trade press writers were invited to the fair, as were dignitaries like James Burton, the CEO of the World Gold Council, and Gaetano Cavalieri, the director of CIBJO, the World Jewellery Confederation. At the show’s opening ceremonies, attended by the Turkish trade minister, Cavalieri sang the country’s praises: “We see the great potential of the Turkish jewelry industry. In European schools … we were told that during the Ottoman Empire, Turkey reached its historical pinnacle. Today, it is obvious that Turkey has never been more healthy, strong, and optimistic.”

That can also be said for Turkey’s jewelry industry, which has its own audacious goal: To be the world’s leading jewelry manufacturer (it is currently No. 2, behind Italy). Certainly its growth is tremendous. In 1995, it exported $10 million in jewelry. This year, the country’s exports are projected to top $2 billion, and Cihan Kamer, the chairman of the Turkish Association of Jewellers, says his eventual goal is to hit $5 billion.

The government is doing its part to keep the party going. Last year, it dropped its 18 percent valued-added import tax on diamonds and other precious stones, resulting in a big boost in diamonds imported to—and diamond jewelry manufactured in—Turkey. The Turks also tirelessly talk up Jewelry City, a sprawling $170 million 330,000-square-meter complex that will house some 1,100 companies. Set to open this September, it will be the world’s largest jewelry complex.

There is also the prospect of Turkey’s entrance into the European Union. (Negotiations begin in October of this year.) While this won’t likely happen for at least a decade, many think it has already led to dramatic changes as Turkey tries to comply with EU regulations. “EU membership will impact the whole economy,” says Sengün. “We are hoping to have more capital inflows. Venture capital has always been a serious problem in Turkey. There will also be a psychological factor. People will think of Turkey as another European country.”

Still, the EU issue might prove to be a double-edged sword for Turkish jewelry manufacturers. As is true of India and China, Turkey’s current prominence in the industry is partly the result of its reputation for cheap labor costs. Still, its costs are not as low as either India’s or China’s, and being a member of the EU will likely boost them further.

“You cannot be a cheap-labor country and enter the EU,” says Bulut. “We have to change from a cheap-labor country to a more value-adding country.” So a major goal of the industry is to increase design and create higher-quality products.

That’s starting to happen, says Nyasaroglu. “We are producing more elegant items,” he says. “Turkish producers are creating trends, creating fashions, not just reacting to things.” He thinks that, within the next to five to 10 years, major jewelry brand names will originate from Turkey.

All this requires a lot of education and training. Sengün notes that Turkey already has several colleges that teach jewelry design, but he says the wider industry needs to learn as well. “We need to educate the bosses, the jewelers themselves, to understand design concepts,” he says. “You can’t only have designers. A designer might come up with something great, but the jeweler might not understand it.”

Down the road, Sengün wants to have Turkish jewelers cooperate more with the country’s textile and apparel industries. He also wants the industry to further promote the benefits of Turkish jewelry and create a “Made in Turkey” jewelry brand. It all seems a tall order—but, in Turkey today, it’s becoming common to think big.