Made in Turkey August 2018

August
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2018 Please mention
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Monthly Economic Newspaper
9
IKMIB continues its efforts for 2023 targets
Istanbul Chemical and Chemical Products Exporters’
Association (IKMIB) strengthens its cooperation
activities to help its member companies to obtain
leadership positions at global markets.
We spoke to Adil Pelister,
Chairman of IKMIB about
exports and developments
in the sector.
What kinds of innovations are
expected in the sector on the matter
of export after Adil Pelister took the
chair of IKMIB?
Since its establishment in 1991, Istanbul
Chemical and Chemical Products
Exporters’ Association (IKMIB) has been
working to diversify export products and
gain competitiveness in products in order
to protect the professional ethics and
solidarity of exporting Turkish companies
in the chemical sector and to increase
exports. As a new management team,
we also organize a number of activities
to protect the interests of our members
who are affiliated with our Association,
to establish strong connections in the
international arena and to help our firms
enter into new markets.
Our goal is, by effectively solving the
problems of our firms, to provide them
for the support they need both on financial
matters and investment and new market,
to be a bridge between state and our
firms, and, by contributing to production
and branding activities, to support them
reach the highest level in export.
In this direction, firstly, due to the
market potential, we are planning to
make the chemical sector more effective
in potential countries such as the United
States of America, China and other Far
East countries. We aim to have Turkish
chemical sector, which is, in Turkey, on
the third seat in exporting among the
other sectors, rise to the second rank. As
a matter of fact, our sector reached to the
position of the second exporting sector
in June 2018. Among the subjects give
priority are the innovative projects such
as decreasing the limit of green passport
to 100 thousand dollars, establishment
of a private visa office for our exporters,
realizing exporter’s easy access to finance,
put the national container line project
into practice, and localization thrust.
What is the effect of increase in
exchange rate of dollar on export
figures and chemical products in the
first half of the year?
Our chemical sector depends on imports
in terms of raw material at the rate
of 70 percent, whereas even plastic and
rubber sectors are dependent upon imports
in terms of rat material at over the
rate of 90 percent. The most used currencies
in the global trade are the Dollar and
the Euro. From this point of view, we can
say that the fluctuations in our country especially
in the recent period in Dollar and
Euro exchange rate have had a negative
effect on the costs of our exporter firms
trading in this foreign currency.
Did these exchange rate increases
cause a drop in production? Even if it
did not happen, what measures did
the producers take?
Although the increases in exchange
rates negatively affect the costs for our
sector that provides the raw material
from abroad in production, it is possible
to prevent the exchange rate risk by realizing
foreign trade operations in Turkish
Lira instead of foreign currency units.
Trading in local currencies has a positive
effect on both sides. Today, Turkey
does business with many countries such as
Russia, India, China, South Korea, Indonesia,
Mexico, Brazilin local currencies.
When we look at export figures, we see
that there is an increase in exports made
with these countries.
“Our goal is to make a big
contribution to 2023 export
targets of Turkey with Digital
Export Platform”
You had mentioned previously the
project “Five Pieces of Gold”, at what
phase is that project?
We started to work on all our other
promises, especially the green passport
issue. We have initiated our initiatives fast
at our TIM chairman and Administration.
In order to increase our exports and
reach our 2023 targets, we need to orientate
our SMEs to exports more. Because
many of our firms which are already on
certain levels have already substantially
completed their institutionalization, they
know how to export and are be able to export
to many countries in the world. Also
most of our big firms are also eligible for
obtaining green passport.
However, the vast majority of our
SME-sized companies still suffer from
difficulties in exporting and finding new
markets. Those who have started exporting
cannot attend foreign trade fairs and
similar business trips because they have
passport and visa problems.
Our goal is, by ensuring the owners of
SMEs, which have reached 100 thousand
dollar annual exporting volume in 3 years
consecutively, or their one the manager
who is authorized signatory to get
the right of green passport,
to eliminate
their travel restrictions
and to
help them find
new markets.
Thanks to
that, we
believe
that we
can also
ensure
that they
can export
more.
Besides,
while we
declare our
“Digital Export
Platform” promise,
we have
foreseen
that our
new
govern-
men-
tal
management
system will
not remain
indifferent to the ver-
satile
digital transformation in the world.
As a matter of fact, both the statements
made by our Ministry of Industry and
Technology to speed up the studies on
this matter and the Digital Transformation
Office established at the presidency
of the republic have justified our vision.
Our goal here is, by embracing digitalism,
which started with Industry 4.0 and
leaped into the area of finance with digital
money, to catch up the digital transformation
in the world and accelerate
it and help our country’s exports reach
2023 targets. In this area, we will work
more closely with our TIM management
together with our government.
“We expect a big participation in
China International Import Expo
2018”
There was a high level of
participation in the Private Label fair
in Amsterdam. What level of national
participation do you expect in a big
fair like the one in China?
As for private-label products sector,
we arranged Turkey National Participation
Organization this year as 10th time
to “PLMA’s World of Private Label” international
trade fair, which is held every
year. This year, 94 Turkish companies,
47 of which are as national participation
and operating on cosmetics, personal
car, cleaning, plastic household goods,
packaging and food sectors, took part in
this fair, which has been holding for over
30 years. We are delighted to have such a
high level of participation.
As İKMİB, we support our exporters
with our national participation organizations
in order to enable our firms to
get new ideas and to make cooperation
links. Overseas fairs offer very important
opportunities in terms of introducing the
products of our exporters, their brands
and making new cooperation. We anticipate
that participation in the “China
International Import Expo 2018” fair,
which will take place in Shanghai, China
between 5-10 November 2018, will also
be on high level in this respect.
Our studies have been continuing to
promote the fair, which so far 41 firms
have applied to, to Turkish exporters and
to
increase
participation.
The fair in
question is extremely important not only
for our exporting firms, but also for the
promotion of Turkey. The Chinese festival
will be organized for the first time and
we regard it as an important opportunity
for our country. The investment possibilities
and trade opportunities in Turkey will
be introduced to the visitors on the booth
with 136 m2, whereas Turkish culture will
be promoted.
Could you tell us at which level
Turkey Exporters Assembly figures
are, compared to the figures made
according to provinces?
According to Turkey Exporters Assembly
(TIM) data, exports rose 11.8 percent
in July and reached 14.11 billion dollars.
In the dispersion of the said exports,
Istanbul takes the first place with 6 billion
dollars. The top ten cities are Istanbul,
Bursa, Kocaeli, Izmir, Ankara, Gaziantep,
Sakarya, Manisa, Denizli and Hatay.
Where are we in the world on exports
R&D studies?
Today, the way of being able to exist
in domestic and foreign trade, where
competition is intense, is done by R & D.
While R & D investments and studies,
which are the biggest factor in the growth
of the country’s economies, have come to
the forefront in developed countries, in
developing countries, although not at the
desired level of industry, R & D investments
in Turkey continues to grow each
year.
Researches show that R&D investments
develop innovative and high-tech
products and increase exports. R&D
expenditures of developed countries are
on average 2.5 to 3 per cent of the Gross
Domestic Product (GDP), while the
proportion of developing countries is less
than 1 per cent.
According to the latest explained data
of Turkey Statistical Institute (TSI), Turkey’s
gross domestic R & D expenditure
has risen to 24 billion 641 million TL in
2016 with an increment of 19.5 percent
by increasing 4 billion 26 million TL,
compared to the previous year. The ratio
of gross domestic R & D expenditure to
GDP is 0.88 percent in 2015, and rose to
0.94 percent in 2016.
As we can see from the figures,
Adil Pelister,
Chairman of IKMIB
Turkey’s R&D allocation ratio
remains under the world
average. It is of utmost
importance that
government promotion
should
be given by our
government
through
tax reductions
and
low-interest
investment
loans to
R&D
activities.
It is necessary
that
our firms
invest more
in R&D
researches by
making use of
these supports,
and their work
needs to be made widespread
in our country.
Could you mention about
protectionism problems that our
exporters face in the world market?
The concept of protectionism, which
was emerged from the politics of localization
and balancing economics of the
countries, has changed dimension in
recent years due to political relations of
the countries. Especially after the recent
US-China crisis, we are facing the risk
that this understanding of protectionism
spread in waves by being accepted also by
other countries. Exporters may encounter
some embargoes against Turkish
products.
Protectionist policies of neighboring
countries such as Iraq, Iran, Algeria,
Egypt (import prohibitions, additional
customs tax, etc.) affect our exports
negatively.
What would you like to say about
being handled innovation and design
by exporters, and investment in
brand and R & D?
The role of exports in Turkey’s growth
and increase in the level of welfare is
huge. Innovation, design and branding
factors come to the forefront in terms of
competing with the countries and increasing
exports by entering into new markets.
Companies that produce innovative and
high-tech products are taking part at the
forefront of the world market. It is possible
for the market to be able to create
new designs and produce productions
with high value added only with research
and developments activities. When we
look at the countries with the greatest
economies of the world, we see that these
countries have reached their current positions
as the result of R & D activities.
Achieving sustainable exports and
boosting the unit kilogram value of exports
are significantly dependent on R &
D and innovation power. In this regard,
as IKMIB, we support our exporters
with both design competitions that we
organize and activities such as R & D
Project Market. Giving importance and
priority to R & D will take our firms a
step forward.
After Turkey’s PIC/S membership,
what changes are expected in
Turkey’s pharmaceutical market?
The International Pharmaceutical
Inspection Cooperation / Scheme (PIC /
S), an association established by authorities
that administer drug registries around
the world, is known as the most respected
and valid institution recognized on
this field. Turkey’s PIC / S membership
became effective from January 1, 2018.
In this way, the technical barriers which
prevent the drugs produced in Turkey
from globalizing were also largely eliminated.
The inspections made by Turkey
Pharmaceuticals and Medical Devices
Agency (TITCK) are accepted worldwide
and also quality and safety of the drugs
produced in Turkey are registered. We
expect this to reflect favorably on prices
and increase exports of pharmaceuticals.
What are the effects of the economic
and political developments taking
place at the regional and global level
on the sector?
The economic and political developments
that have taken place at the regional
and global level directly and indirectly
affect our sector. In particular, if that the
chemical industry is dependent on abroad
by 70 percent in terms of raw materials is
taking into consideration, it is necessary
for our firms to increase market diversity
and invest in R & D and branding in
order to be affected at a minimum level
through these developments in the world.
On the matter of raw material sources,
especially in terms of plastic raw materials
used in construction plastics and
automotive industry, serious investment
is needed for establishing petrochemical
plants in our country.
When the domestic and abroad
problems faced in international trade
and common problems of chemical
sector are taken into account, with
which solutions are these problem
can be overcome or eliminated?
In the chemical industry, which is
dependent on abroad in the production
of raw material, our sector will play an
important role in financing deficit of
Turkey with the supports of our State and
increase in domestic production. Therefore,
it is necessary to create a center
of attraction in the field of petrochemicals,
to establish new companies and to
commence production. If the planned
investments in petrochemicals start up,
we anticipate that, our chemical exports
will be over 20 billion dollars after 2019.
However, our exporters may have
difficulty in accessing financing, we are
preparing an action plan, as the voice of
our sector, to extend the deadlines for
our exporters to reach direct financing.
We are also working with relevant
institutions and individuals on solutions
to the problems of our sector, such as
facilitating visa procedures and limiting
the lower limit for green passports to 100
thousand dollars.
Sectoral clustering is also important
in terms of firms moving together, taking
advantage of state support for common
needs. In this regard, we support our
firms, which operate in chemical sector,
with sectoral committee meetings we
organized, as IKMIB, and various R & D
projects.
What happens in the second half of
2018 on the next road map? (Fairs,
new projects, etc....)
First of all, until the end of 2018,
among the fairs and delegations which we
will arrange national participation organization
both at home and abroad are;
10-14 October 2018 COSMEET Home,
Cleaning and Care Sector and Cosmetics
Sector Procurement Delegations- Istanbul
/ Turkey,
21-25 October 2018 Qatar Sectoral Trade
Delegation- Doha / Qatar
5-10 November 2018 China International
Import Expo- Shanghai / China,
12-15 November 2018 Medica 2018- Dusseldorf
/ Germany,
14-16 November 2018 Cosmoprof Asia
2018- Hong Kong / China,
25-28 November 2018 Athens Sectoral
Trade Delegation 2018 - Athens / Greece
is located.
Along with these, we bring together
our exporters at sectoral committees,
which we have formed, and try to find
solutions to their problems with common
sense. As the chemical sector, we have set
2023 target as$ 50 billion. We can list the
topics standing out in the road map that
we have set for reaching the 2023 targets
as follows: Updating of the Customs
Union Agreement with the EU in favor
of Turkey, guaranteeing the supply of raw
materials with new formulas, investment
in specific special chemicals, sectoral clustering
and the creation of scale synergies
in R & D. We will continue to follow our
efforts without slowing down so that our
chemistry sector will come to a better
point.