Şener GENÇER
Aegean Plastics Industrialists' Association (EGEPLASDER)
Chairman of the Board
The Central Bank kept the policy rate constant at 50 percent as of November. Undoubtedly, it is quite difficult for our businesses to sustain their assets, protect their capital, and fulfill their export commitments in the face of such high interest rates and suppressed exchange rates. As industrialists, we long for a production and export-friendly investment climate.
We will remember 2024, which we are preparing to leave behind, as a very difficult and troublesome year not only for our sector but also for our country's economy. Looking at the Central Bank's policy rates, we see that they reached 50 percent as of November. Undoubtedly, it is becoming increasingly difficult for our businesses to sustain their assets, protect their capital, and fulfill their export commitments in the face of such high interest rates and suppressed exchange rates. As industrialists, we long for a production and export-friendly investment climate.
In 2024, our plastics sector could not fully realize its export potential due to global fluctuations and increasing exchange rate pressures. While relative declines were observed in our capacity utilization rates, efforts to renew old machinery and invest in high-tech machinery in our sector have virtually come to a halt due to the high cost of accessing financing.
This situation undoubtedly prolongs our sector's problem of value-added production. Our industrial enterprises, fearing idleness, continue their production by lowering their profit margins, trying to stay afloat, and consequently falling into financial difficulties. While fluctuations in oil prices cause significant changes in the costs of our thermoplastic raw materials, this situation continues to negatively affect our colleagues' profit margins.
High energy and input prices, on the other hand, increase our production costs, weakening our sector's competitiveness. Our exports to the European market are also suffering from this situation. Our export market, which we have gained with great effort over 40 years, is being occupied by producers in countries such as Thailand, Egypt, Bangladesh, and Poland. Regaining lost markets will, of course, require a much more arduous effort.
We keep our hope alive for 2025
In 2025, our sector anticipates a sustainability-focused transformation process, driven by digitalization and new markets, particularly with the Border Carbon Adjustment Mechanism set to come into force on January 1, 2026. Undoubtedly, there is some good news amidst these negative developments. Factors such as the crisis in the Red Sea highlight our country's logistical advantage to our target markets, facilitating our sector's access to new markets. The tendency of interest rates to decline in the last quarter of the year, and the strict monetary policy steps taken towards the 2025 target inflation, allow us to keep our hopes and expectations alive, confirming the saying “Every cloud has a silver lining”.
The concept of “sustainability” will continue to be one of the most important agenda items for our sector in 2025. Increased investment is expected in areas such as improving recycling rates, using bio-based plastics, and developing waste management systems.
We will deliver good news with PEGEL
Our Association, which develops projects that will provide added value to our members, aims to cleanly separate plastic waste at its source and recover it through high-technology processes with our project, abbreviated as PEGEL, in line with the principle of sustainability. With this project, we aim to recover various products such as environmentally friendly construction materials, fences for parks and landscaping areas, indoor and outdoor flooring materials, and playground equipment. Together with our Board Members, we visited Dr. Cemil Tugay, Mayor of Izmir Metropolitan Municipality, explained the details of our project, and requested his support. We hope that in 2025, working hand-in-hand with our local government, we will have the opportunity to share our good news with our colleagues on these pages.
This content has been translated using artificial intelligence technology.