According to the machinery manufacturing industry consolidated data shared by the Machinery Exporters’ Association (MAIB), Turkey’s total machinery exports, including free zones, increased by 11.7 percent and reached 11.7 billion dollars at the end of the first 5 months of the year. Noting that they are working to support the success achieved in the Russian market in the first half of the year with a new success story to be exhibited in Europe, Machinery Exporters’ Association President Kutlu Karavelioğlu said, “Our biggest chance is that the European countries working on industrial transformation have not been able to progress very quickly due to their bureaucratic and cumbersome structures. But we need to be more conscious than a student studying for his exams on the last night, and we need to intensify our preparation processes without being behind our competitors.”
According to the machinery manufacturing industry consolidated data, at the end of the first 5 months of the year, Turkey’s total machinery, including free zones, was 11.7 billion dollars. The sector, which achieved an increase of 33.5 percent in value and 12.7 percent in quantity, on a monthly basis compared to the previous year, reached 2.4 billion dollars in exports. The sector, where the average export unit prices per KG in the 5-month period were above 7 dollars, achieved an increase of 11.7 percent on value basis, although it exported less in quantity this year. In this period, the average export unit price per KG in Germany and Russia, which were the two largest export markets, was 10 dollars, and the unit prices in exports to the USA, which ranked third, rose to 12.3 dollars.
Noting that more than half of the increase of 1.1 billion dollars in the first 5 months of 2023 is due to the increase in exports to Russia, Machinery Exporters’ Association President Kutlu Karavelioğlu stated that they are working to support the success achieved in the Russian market in the first half of the year with a new success story to be exhibited in Europe. said:
“Due to the war going on right next to us, the earthquake that affected hundreds of thousands of our people, and the subsequent elections, it has become an agenda that makes it difficult to follow the developments in Europe, especially in the field of sustainability. Our greatest luck is that European countries, which have been working on industrial transformation for a long time, have not been able to progress very quickly due to their bureaucratic and cumbersome structures. However, we need to be more conscious than a student studying for his exams on the last night and intensify our preparation processes without falling behind our competitors. With the advantages of our country’s administrative stability, we should focus on what we need to do in the next 5 years.”
“Approaches accepted in the world positively differentiate Turkey”
Karavelioğlu pointed out that the new Council of Ministers, which took office in the centennial of the Republic, inspires confidence that it will successfully carry out this process with its experienced staff under the leadership of the President of the Republic.
“We have experienced many examples proving how effective and discriminating the approaches and methods accepted in the world are in unleashing Turkey’s potential. As an example from the last period; Our Ministry of Science, Industry and Technology has prepared a serious infrastructure on Green Transformation, and shared the draft of the Green Transformation Support Program Implementation Principles Communiqué with our institutions, which also includes elements beyond the applications of rival countries. Considering the programs in developed countries, we think that this kind of preparations that will be put into practice should continue at an accelerated pace.”
“We are establishing the necessary infrastructure for our members to receive S-Ratings”
Finally, Karavelioğlu pointed out that the REACH Regulation, which is closely related to all industries, especially the machinery sector, was approved by the European Chemicals Agency.
“This regulation, which foresees the prohibition of nearly ten thousand substances harmful to the environment, but does not contain any predictions about technological alternatives and the transition process, has caused great uncertainty in the manufacturing industry. The CBAM Legislation, whose legislative process has been completed, for the Carbon Regulatory Mechanism at the Border, which is within the scope of the Fit for 55, which expresses the climate policies package of the European Union, has also been published. The transition period, in which reporting obligations will be fulfilled, is expected to begin as of October 1, 2023. While we are trying to contribute to the consultation process regarding the secondary legislation proposal and annexes of our Ministry of Commerce, we are also establishing the necessary infrastructure for our members to receive S-Ratings.”
“First signs of reversal put our hands at ease on recession pricing”
Pointing out that one of the most important tasks for the success of this transformation in the industry in our country falls to the new economy management, Karavelioğlu stated that exports and exporters should be prioritized in the policy change that expresses the return to international economic norms:
“The overvaluation of the Turkish Lira since the second quarter of last year caused the foreign currency revenues to be insufficient against the domestic cost increases. While inflation was high, multiple exchange rates were formed and unpredictable foreign exchange demands became a problem. While the manufacturers, who had to maintain their scale, were fed from the domestic market in order not to lose the foreign market, the importers, who were obliged to provide large margins in the domestic market with rising prices, took advantage of this opportunity, which could not last long, by bringing in more goods. The new model, which is expressed as a return to rational ground in the economy; We believe that it will eliminate the pricing imbalances that have occurred in the last year and accelerate the return from imports to production. We should say that even the first signs of this turn, which will require a gradual transition period, relieve our hands in the recession pricing that swept the global market. We look forward to the days when we will regain our ability to save freely on our foreign exchange incomes.”
“As trust increases, investments in machinery and equipment accelerate”
Karavelioğlu stated that this process will contribute to ensuring the foreign exchange balance and controlling the high foreign trade deficit and concluded his words as follows:
“We are aware that possible increases in interest rates, tightening in credit policy, savings in public expenditures and the real value of TL will limit domestic demand and cause a slowdown in economic activities. What is important here is the continuation of the selective credit policy and the continuation of supporting exports and investments in this way. We believe that if this proven method of financing is persisted, it will increase confidence in the transition to a sustainable and predictable economy and accelerate deferred investments in machinery and equipment.”
