Kenan BENLİLER
Plastics Industrialists' Association (PAGDER)
Chairman of the Board
While 2024 passed under difficult economic conditions for our country, our sector was also deeply affected by these challenges. Economic measures implemented to reduce high inflation led to a contraction in domestic demand. On the other hand, weak demand in Europe, our main export market, prevented the decline in domestic demand from being compensated through exports.
As a result of developments in our region, we are leaving behind a year where economic activity slowed down and challenging market conditions prevailed. It is our greatest wish that the wars and conflicts continuing in our immediate geography, which have caused numerous casualties, come to an end as soon as possible and that our region finds peace.
While 2024 passed under difficult economic conditions for our country, our sector was also deeply affected by these challenges. The tightening of financial conditions by economic and fiscal policies implemented to reduce rapidly rising inflation in recent years also brought about a contraction in domestic demand. On the other hand, during this period, weak demand in Europe, our main export market, prevented the decline in domestic demand from being compensated through exports.
The Eurozone manufacturing Purchasing Managers' Index (PMI) remained below the threshold of 50 throughout 2024, indicating a contraction in production. Moreover, it is worth noting that this contraction deepened further in the last quarter. In this context, we can say that one of the main determinants of our sector's performance in the coming period will be its ability to compensate for this European-sourced demand contraction with alternative markets. Despite these negative developments in our export markets, it is worth noting that our exports increased by 2.6 percent in the remainder of the year. Although this growth rate remains below both our country's total export growth and manufacturing industry export growth, it presents a very positive picture when current conditions are taken into account.
PRODUCTION LOSSES MUST BE COMPENSATED
Unfortunately, we observe that the success shown by our sector on the export front is not sufficient to compensate for production losses caused by the contraction in domestic demand. Due to the base effect of the production slowdown caused by the devastating earthquake that occurred in February 2023 and resulted in the loss of many lives, the industrial production index increased in the first quarter of 2024. However, we observe that industrial production declined in both the second and third quarters of the year. At this point, the worrying development for our sector is that the drop in production was much sharper than both total industrial production and manufacturing industry production, and the sector negatively diverged in this aspect. Yet, for many years, our plastics sector has grown faster than our manufacturing industry thanks to its dynamic structure. Therefore, developments that will enable us to compensate for these production losses in the coming period will be critically important.
FINANCING COSTS MUST BE REDUCED
Undoubtedly, global developments, as much as domestic developments, will be decisive in our sector's 2025 performance. On the other hand, facilitating access to finance and reducing financing costs are essential for preserving our competitive strength. Influenced by the financing bottleneck experienced in recent years, Industry 4.0 investments in our country have been postponed. Meanwhile, these investments are accelerating globally. The number of robots per 10,000 employees in the manufacturing industry is 415 in Germany, 219 in Italy, 180 in France, and 151 on the world average, whereas in Turkey, this number is only 43. If we cannot implement these investments quickly, it is quite likely that we will largely lose our competitive power in the medium to long term. Therefore, it would be appropriate to determine investment priorities in a way that does not harm the inflation-fighting program and allocate resources to these areas.
As PAGDER, as in previous years, this year we organized individual and national participations in the leading fairs of our sector worldwide and contributed to our sector members having a smooth fair experience. Furthermore, our travel programs, which have now become a brand, were the most popular programs among our sector members, and thanks to this, we had the pride of organizing the largest delegations from our country. We will continue to work to further advance our travel programs in 2025, when the K fair and Chinaplas fair will take place. Now, Plast Eurasia, the most important fair in our country and region, is opening its doors. We wish all our sector members participating in the fair a successful event.
This content has been translated using artificial intelligence technology.