1. THE TURKISH LEATHER INDUSTRY Istanbul Leather & Leather Products Exporters Association March 2012

2. The history of Leather is as old as mens history; By learning how to hunt, first men also learned to use the skin When the Turks surrounded Istanbul in the year 1453, the place where Fatih Sultan Mehmet stayed, contained plenty of good water suitable for leather tanning, therefore after the conquer of Istanbul, the Sultan reserved this zone for the leather industry, Just outside of the Topkapi citywalls, called Kazleme, the first leather industrial zone was established and lived for about 500 years. 3. 16 years ago, this zone moved from there to Tuzla Industrial Leather Zone, where we can proudly say that the biggest industrial leather zone in Europe where inside ecological production is made. Today there are about 13 Industrial Leather Zones in Turkey which enables us to use modern technology and to produce environment friendly high quality products. 4. TURKEY HAS A STRONG TRADITION OF PROCESSING LEATHER WHICH COMES FROM ITS HISTORICAL PAST. IN THE MEANS OF THIS TRADITION, TODAY, TURKEY IS ONE OF THE MOST ASSERTIVE COUNTRIES IN PRODUCING HIGH QUALITY LEATHER PRODUCTS IN THE WORLD. TURKISH STRONG LEATHER PROCESSING 5. TURKISH LEATHER BRANDS, WITH CENTURIES OF EXPERTISE AND HIGH SKILLED WORKFORCE, TURNS THE LEATHER INTO ITS MOST PRECIOUS FORM. THE SIGNIFICANT DIFFERENCE OF TURKISH LEATHER IS CLEARLY APPARENT IN EACH AND EVERY STAGE OF THE MANUFACTURING PROCESS. THE VALUE CREATED BY TURKISH CRAFTSMANSHIP; THE PERFECT CUT OR SEAMING IS THE PROOF OF QUALITY LIES IN DETAILS. THE UNIQUE FEATURES OF TURKISH LEATHER BRANDS 6. THE TURKISH LEATHER INDUSTRY IS ONE OF THE MOST SIGNIFICANT INDUSTRIES WITHIN THE TURKISH ECONOMY Accounting for; 1 % of Manufacturing Industries Output, 1.7 % of Manufacturing Industries Labor Force, 1 % of Total Turkish Exports Earnings. 7. TURKISH LEATHER INDUSTRY IS ONE OF THE BIGGEST PRODUCERS IN THE WORLD FOR THE SHEEP/GOAT LEATHER PRODUCTION, TURKEY IS THE SECOND BIGGEST PRODUCER IN EUROPE AFTER ITALY AND 4TH BIGGEST PRODUCER IN THE WORLD AFTER ITALY, CHINA AND INDIA. TURKEY HAS THE BIGGEST PRODUCTION CAPACITY OF DOUBLE FACE SHEEPSKIN LEATHER IN THE WORLD WITH 80 MILLION PCS./YEAR. 8. ON THE OTHER HAND, TURKISH LEATHER INDUSTRY DEPENDS ON MODERN PRODUCTION INFRASTRUCTURE IN TANNING AND LEATHER PRODUCTION REALIZED AT ECOLOGICAL CONDITIONS. THE QUALITY OF TURKISH LEATHER GARMENTS AND LEATHER PRODUCTS CAN BE COMPARED WITH ITALY. 9. THE TOTAL EXPORT OF TURKISH LEATHER INDUSTRY WAS ABOUT 1,5 BILLION $ IN 2011 ACCORDING TO OFFICIAL FIGURES. THE EXPORT PERFORMANCE OF THE INDUSTRY 10. THE TURKISH LEATHER INDUSTRY IS A NET EXPORTER IN THE FINISHED GOODS WHILE IT IS A NET IMPORTER IN RAW MATERIALS. THE TURKISH LEATHER EXPORT AMOUNTED AS 1,5 BILLION $ IN 2011 IS COMPOSED OF FOOTWEAR WITH A SHARE OF 31 %, DOUBLE FACE GARMENT WITH 19 %, LEATHER GARMENTS WITH 16 %, LEATHER GOODS WITH 16 %; RAW HIDES/SKINS AND FINISHED LEATHER TOGETHER HAVE A SHARE OF 16 % IN TOTAL TURKISH LEATHER EXPORT. ON THE OTHER HAND, THE RAW HIDES/SKINS AND FINISHED LEATHER TOGETHER HAVE A SHARE OF 37,2 % IN TOTAL TURKISH LEATHER IMPORT. 11. LEATHER & LEATHER GOODS EXPORT OF TURKEY 2011 FOOTWEAR 31,5% LEATHER GARMENTS 16,5% SADDLERY 16,5% FINISHED LEATHER & FUR 16,7% DOUBLE FACE GARMENT 18,7% TOTAL LEATHER AND LEATHER GOODS EXPORTS : 1,5 bln $ 12. 0 200.000 400.000 600.000 800.000 1.000.000 1.200.000 1.400.000 1.600.000 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 MillionUSD 2011 Total Leather & Leather Goods Exports 1,5 bl $ LEATHER & LEATHER GOODS EXPORTS 1995- 2011 13. 0 500.000 1.000.000 1.500.000 2.000.000 2.500.000 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 MillionUSD 2011 Total Leather & Leather Goods Imports 2,2 bl $ LEATHER & LEATHER GOODS IMPORTS 1995- 2011 14. ITALY 11% CHINA 31%OTHERS 36% FRANCE 4% VIETNAM 5% HONG KONG 8% GERMANY 4% TURKEY 1% WORLD LEADING LEATHER &LEATHER GOODS EXPORTERS 2010 Turkey has a share of 1 % in world total export. TOTAL LEATHER EXPORT OF THE WORLD: 190 BLN $ 15. ITALY 14% CHINA 24% TURKEY 7% PAKISTAN 10% INDIA 10% GERMANY 7% OTHERS 28% WORLD LEADING LEATHER GARMENTS EXPORTERS 2010 Turkey is the 5th biggest exporter with a share of 7 % in the world leather garment export TOTAL LEATHER GARMENT EXPORT OF WORLD: 6.6 BLN $ 16. CHINA 57% HONG KONG 9% GREECE 9% TURKEY 8% ITALY 8% OTHERS 9% WORLD LEADING DOUBLE FACE GARMENT EXPORTERS 2010 Turkey is the 4th biggest exporter with a share of 8 % in the world double face garment export TOTAL DOUBLE FACE GARMENT EXPORT OF WORLD: 2.9 BLN $ 17. CHINA 36% ITALY 10%VIETNAM 8% OTHERS 36% GERMANY 4% HONG KONG 6% TURKEY 0,4% WORLD LEADING FOOTWEAR EXPORTERS 2010 TOTAL FOOTWEAR EXPORT OF WORLD: 99.3 BLN $ 18. CHINA 43% HONG KONG 12% FRANCE 10% ITALY 9% OTHERS 23% GERMANY 3% TURKEY 0,4% WORLD LEADING LEATHER GOODS EXPORTERS 2010 TOTAL LEATHER GOODS OF WORLD: 44 BLN $ 19. THE LEADING MARKETS FOR TURKISH LEATHER EXPORTS TURKISH LEATHER EXPORTS HAVE BEEN DIRECTED TO FIVE MAIN MARKETS IN 2011. THESE MARKETS ARE RUSSIA WITH A SHARE OF 21,2 %, ITALY WITH 9,7 %, GERMANY WITH 8,8 %, FRANCE WITH 6,3 % AND UK WITH 4,6 %. THE TOTAL SHARE OF THESE FIVE BIGGEST MARKET IN TOTAL LEATHER EXPORT IS 50,6 %. 20. Italy 9,7% Russia 21,2% Others 38,5% Germany 8,8% France 6,3% UK 4,6% Iraq 4,4% Ukraine 3,3% Hong Kong 3,2% Leather & Leather Goods Exports: 1,5 LEATHER & LEATHER GOODS EXPORT MARKETS; 2011 21. FINISHED LEATHER & FUR MARKETS OF TURKEY- 2011 CHINA 15,7% OTHERS 39,6% ITALY 9,1% HONG KONG 15,8% RUSSIA 10,3% UKRAINE 9,5% TOTAL FINISHED LEATHER & FUR EXPORTS: 239 Million $ 22. LEATHER GARMENT MARKETS OF TURKEY- 2011 FRANCE 15,0% RUSSIA 18,6% GERMANY 16,7%ITALY 8,8% SPAIN 6,7% AUSTRIA 3,6% OTHERS 30,6% TOTAL LEATHER GARMENT EXPORTS : 236 Million $ 23. DOUBLE FACE GARMENT MARKETS OF TURKEY-2011 OTHERS 22% GERMANY 10% FRANCE 8% KAZAKHSTAN 7% ITALY 6% RUSSIA 47% TOTAL DOUBLE FACE GARMENT EXPORTS: 268 Million $ 24. LEATHER GOODS MARKETS OF TURKEY 2011 OTHERS 31% DENMARK 5% RUSSIA 6% GERMANY 11% UK 17% ITALY 30% TOTAL LEATHER GOODS EXPORTS : 236 Million $ 25. FOOTWEAR MARKETS OF TURKEY 2011 UK 3% OTHERS 47% BULGARIA 3% GERMANY 5% S. ARABIA 7% IRAQ 13% RUSSIA 22% TOTAL FOOTWEAR EXPORTS : 450 Million $ 26. TURKISH LEATHER AND LEATHER GOODS SUPPLIERS THE BIGGEST SUPPLIERS FOR TURKISH LEATHER & LEATHER GOODS PRODUCTS ARE CHINA, ITALY, SPAIN, VIETNAM, INDONESIA, PAKISTAN AND INDIA. THEIR SHARES WITHIN THE TURKISH LEATHER & LEATHER GOODS PRODUCTS ARE AS FOLLOWS: CHINA WITH 36,5 %, ITALY WITH 11,6 %, SPAIN WITH 6,2 %, VIETNAM WITH 5,3 %, INDONESIA WITH 4,2 %, PAKISTAN WITH 3,7 % AND INDIA WITH 2,8 %. 27. TOTAL LEATHER & LEATHER GOODS SUPPLIERS OF TURKEY 2011 OTHERS 29,7% ITALY 11,6% INDONESIA 4,2% VIETNAM 5,3% SPAIN 6,2% PAKISTAN 3,7% INDIA 2,8% CHINA 36,5% TOTAL LEATHER AND LEATHER GOODS IMPORTS : 2,2 28. TURKEYS LEATHER AND LEATHER GOODS IMPORT TURKEYS LEATHER & LEATHER GOODS IMPORT CALCULATED AS 2,2 BILLION $ IN 2011 IS COMPOSED OF FOOTWEAR WITH A SHARE OF 40 %, RAW HIDES/SKINS WITH A SHARE OF 18,8 %, FINISHED LEATHER AND FUR WITH 18,4 %, LEATHER GOODS WITH 18,1 %; LEATHER GARMENTS WITH 3,9 %, READYWEAR OF FUR SKINS WITH 0,8 % IN TOTAL TURKISH LEATHER IMPORT. 29. LEATHER & LEATHER GOODS IMPORT OF TURKEY 2011 RAW HIDES & SKIN 18,8% LEATHER GARMENTS 4,7% LEATHER GOODS 18,1% FINISHED LEATHER & FUR 18,4% DOUBLE FACE GARMENTS 0,8% FOOTWEAR 40,0% TOTAL LEATHER AND LEATHER GOODS IMPORTS : 2,2 bln $ 30. FUTURE VISION OF THE TURKISH LEATHER INDUSTRY THE TURKISH LEATHER INDUSTRY HAS ADOPTED A NEW STRATEGY IN ORDER TO GET MORE MARKET SHARE IN INTERNATIONAL MARKETS. THE ELEMENTS OF THIS STRATEGY ARE; FASHION AND DESIGN ORIENTED MARKET DEVELOPMENT MARKET DIFFERENTIATION BY PROMOTIONAL ACTIVITIES AND FAIRS, STRONG PLACEMENT OF THE TURKISH LEATHER BRANDS IN WORLD MARKETS. PRODUCT DIFFERENTIATION BY RESEARCH & DEVELOPMENT STUDIES AND COOPERATIVE ACTION WITH FOREIGN COMPANIES.