İDDMİB President: The earthquake affected the domestic market by approximately 25-30%

TİM Deputy Chairman Çetin Tecdelioğlu said that the earthquake had a negative impact on the domestic market by approximately 25-30%. Tecdelioğlu stated that the current dollar/TL level also creates problems in receiving new orders and sustaining exports.

Çetin Tecdelioğlu, President of Istanbul Ferrous and Non-Ferrous Metals Exporters’ Association (IDDMIB) and Deputy Chairman of the Turkish Exporters Assembly (TIM), stated that there was a serious labor problem due to migration from the earthquake zone to other provinces, and that the earthquake affected the domestic market by 25-30 percent and exports by 25 percent. He said it had a negative impact on about 8.

DollarStating that the /TL level also creates problems in receiving new orders and sustaining exports, Tecdelioğlu said that interest levels and energy costs are other factors that put pressure on exports.

According to TIM data, general exports in February decreased by 6.4 percent compared to the same month of the previous year and amounted to 18.6 billion dollars.

LOW CURRENCY COMPLAINT

Stating that the earthquake region had an 8 percent effect on the decrease in general exports in February, Tecdelioğlu said, “It is not correct to attribute the entire decline in export figures to the earthquake. When we look at the titles, exchange rate policy, interest rates, energy that is not in competitive tariffs affect us very much,” he said.

“Due to the low exchange rate, there is an increase in imports. Our expectation of exchange rate is that it always goes in parallel with inflation. In order for exports to reach the targeted point, it would be appropriate to make changes in the interest-exchange policy.”

Stating that there are serious problems in terms of human resources in earthquake regions due to migration, Tecdelioğlu said, “Earthquake has both direct effects and indirect effects. Its direct effects are already the services to the domestic and foreign market that our exporting companies in that region have done. The indirect effects are the effects on the supply chain of the companies that work as a supplier to large companies such as Istanbul, Izmir and Ankara, of which they are suppliers,” and continued as follows:

“When we look at it this way, it affects the domestic market by 25-30 percent and exports by around 8 percent. These numbers are huge. The shrinkage of up to 30 percent in the domestic market, the shrinkage of up to 10 percent in exports, unfortunately, seriously shakes us these days when we are going through difficult economic conditions.”

According to the information given at the meeting, exports of ferrous and non-ferrous metals sector reached 2 billion dollars in the January-February 2023 period, with a decrease of 13 percent compared to the same period of the previous year.

COMPANIES’ EQUITY IS INSUFFICIENT, CREDIT CONDITIONS ARE HEAVY

Tecdelioğlu stated that the equities of the companies are insufficient in the current conjuncture, and that the interest rates, which are above 30 percent in reality, put the companies in difficulties.

Tecdelioğlu said, “The conditions for using credit are very aggravated. Businesses do not have enough resources. As industrialists, we have made very serious investments and increased our capacities in 2019, 2020 and 2021 with the opportunities created by the pandemic, but our own resources, namely our working capital, are not enough,” he said and added:

“Currently, we are forced to use outsourcing from banks due to lack of equity. This time, when we cannot buy raw materials, we cannot achieve the production we want and the capacity we want. We do not have such a profitability with these high interest rates.”

Emphasizing that the regulation stating that those who receive rediscount credits cannot use KGF is also very wrong, Tecdelioğlu stated that the Early Retirement System (EYT) brings a new burden to companies.

Tecdelioğlu stated that energy prices are still not at a competitive level despite the reductions of 15-25 percent.

TRADE WITH RUSSIA

Tecdelioglu, RussiaOn the question of whether the companies have experienced any difficulties due to the international embargo regarding exports to Turkey, he said:

“We have a Customs Union agreement with the European Union. Our market for more than 50 percent is Europe. We would never want a movement that would contradict the EU, or something that would create tension with the EU. EU as well USA The embargo they put on Russia inevitably affects us indirectly. They can’t say you can’t export directly to Russia, but they’re not happy with us.”

“We have serious warnings, messages, messages from embassies regarding this issue, there are warnings sent to non-governmental organizations here. We say that there is no sanction, this is an opportunity. Our trade with Ruble continues, our export with TL continues. These are opportunities. The exporter needs sales right now, and Russia is a big geography.”

In a recent report in the Russian media, it was stated that the officials of the Russian logistics company, the Turkish customs, stopped the product shipments to Russia with a sudden decision.

Ankara, on the other hand, has declared in its statements several times that it will not allow the sanctions against Russia to be pierced through Turkey and that it has taken steps to prevent this.

Tecdelioğlu stated that a restriction list regarding re-exports to Russia through free zones has been put into effect since the beginning of March and said, “No matter where they come from in the world, if they are going to Russia, if there is a GTIP number in the restriction list, these products are prevented from going to Russia. There is an instruction” and said:

“But this product has come to Turkey, it has changed origin, it has become a Turkish product, the exporting company is a Turkish company, that is, it is not in the free zone, they can send it. Produced in Turkey can go, no problem. Only those who come from second countries and are reexported; Those who come to and leave the free zones are restricted.” (REUTERS)