Turkey’s Akin Tekstil (ATEKS) has fired 152 employees of its Luleburgaz production plant in Kirklareli province, located on the border with Bulgaria, the company has announced.

Akin Tekstil has also shut down the garment production line at the plant. As a result, the company’s overall production volume and turnover will decline by 14% and 35%, respectively.

Due to the Erdogan government’s real lira appreciation policy, the prices of Akin Tekstil’s backlog do not cover costs given that the increase in the exchange rate remains below inflation, Akin Tekstil said in a filing.

As a result, the company’s garment production department has incurred losses over a long period due to high salaries on minimum wage hikes.

Akin Tekstil has also faced difficulties in accessing loans to cover accumulated losses.

Since the enterprise expected that its losses would grow with the launch of collective bargaining with the labour union on April 1, it decided to fire the garment production line employees.

Istanbul-based Akin Tekstil, launched in 1956 and listed on the Borsa Istanbul in 1996, runs a fabric and garment production plant in Kirklareli.

Table: In 2023, the company produced 1.2mn units of garments in addition to 3.7mn tonnes of raw fabric and 7.5mn tonnes of finished fabric.

The Akin family, albeit sometimes subject to disputes between family members, holds a 81% stake in Akin Tekstil, while a 20% stake is listed.

Not alone

In August, an Istanbul court provided Mega Polietilen (MEGAP) with bankruptcy protection, referred to as “concordato” in Turkey, for a period of three months.

In November, the court extended the period until January 16.

Adiyaman-based Mega Polietilen, launched in 2005 and listed on Borsa Istanbul in 2012, is a textile company that produces polyethylene foam and fabric.

In July 2023, the government launched a new monetary tightening cycle.

The textile industry subsequently became a big casualty of the economic U-turn that accepted the need for higher interest rates amid rampant inflation.

Mega Polietilen became the first listed company to apply for bankruptcy protection.

According to Konkordatotakip.com, a total of 3,497 companies in Turkey applied for bankruptcy protection in 2024, up from 1,516 in 2023 as a whole.

The annual number of bankruptcy protection applications peaked at 3,691 in 2019.

Separately, Textilegence reported on December 30 that Fi Triko, which served as a supplier to Zara, Pierre Cardin, US Polo, LCW and Defacto, has gone bankrupt.

Istanbul-based Fi, launched in 2018, had a monthly garment production capacity of 70,000 units.

Also on December 30, Textilegence reported that a judicial sale process was initiated for a factory owned by Dinateks, which served as a supplier for denim brand Levi’s, due to a debt.

The plant, which ranges over 19,781 square-metres (m2) in terms of buildings, is set on a 37,225-m2 land plot located in Tekirdag Ergene Velimese Organized Industrial Zone in Turkish Thrace. 

The court is asking Turkish lira (TRY) 398mn for the plant, which has the required denim production machinery in working condition.

Dinateks, launched in 1990, bankrupted in June 2024. It also has a production plant in Bulgaria.

Zombies to stay upright to end-2025

Since 2018, Turkey’s government has applied “regulatory forbearance” measures to keep “zombie” companies, which actually bankrupted following that year’s currency crisis, afloat.

With the latest tightening cycle launched in July 2023, the pressure is again mounting.

In December, banking watchdog BDDK extended the measures once again. It made a ruling that the forbearance measures will remain in effect to the end of 2025.

Critics say that with the COVID-19 pandemic, the forbearance "business" went out of control.