Omer Karadeniz, Chairman of the Turkish Plastics Industrialists' Federation (PLASFED), argued that the precautionary action stipulating the deferred payment of SSI premiums, VAT and Withholding taxes as discussed in the Coordination Meeting for Fight against Coronavirus held in Ankara on March 18, 2020 should be expanded to cover the entire manufacturing industry.

 

Plastics Industry: Strategically Important

Underlining that the plastics industry is strategically important as a consequence of its supply of intermediate inputs to over 30 industries, Omer Karadeniz said, "The Turkish plastics industry achieved a splendid growth despite the non-existence of adequate investments in raw materials, and today, it has allowed us to have the second largest plastics industry in Europe, only preceded by Germany. The direct exports of the industry that employs more than 350,000 with an annual production of nearly 10 million tons exceeds US$ 6 billion. When this figure is supplemented by indirect export items that are shipped as contained in the products exported by industries, such as automotive, white goods, packaging, electrical-electronics, etc., the total exports amount to US$ 12 billion. The primary strategic importance of the industry stems from its provision of supply security for more than 30 industries which it provides intermediate inputs to."

 

Industry Adversely Affected by the Reduced Global Demand

Continuing his words, Karadeniz said, "The Turkish plastics industry found a way out using exports as a result of the contraction of the construction industry caused by the foreign exchange shock of the second half of 2018 as well as of the global shrinkage of the automotive industry in 2019, during which no substantial increase was observed in exports across the industry. Our industry, which managed to overcome, though partly, the reduced demand from the domestic market, suffered a severe blow upon the rapidly spreading Covid-19 outbreak inflicting damage to the global demand. The industry is having hard times due to the cancelled orders in both domestic and export markets."

 

Manufacturing Industry Not to Be Treated Like a Red-Headed Stepchild

Karadeniz remarked that the precautionary Economic Stability Shield package totaling TRY 100 billion, introduced by the government to mitigate the impacts of the Covid-19 pandemic, should be expanded to encompass the manufacturing industry, and said, "While there are positive measures taken for the packaging industry, such as deferred payment of SSI premiums, VAT and withholding taxes, deferred bank loan reimbursements, provision of financing aid to exporters, short-time working allowance, etc., many of these impede the utilization by the plastics industry. More importantly, however, almost the entire manufacturing industry, especially the plastics industry, will fail to make use of the aid launched to defer public financial liabilities, such as SSI premiums, VAT and withholding taxes. Being included in the scope of this measure will relieve cash flow, even if temporarily, for businesses that have canceled orders both domestically and abroad due to the pandemic. The precautionary Economic Stability Shield package should be expanded accordingly."

 

NGOs Ready for Support

Omer Karadeniz recalled that they, as NGOs, are ready to provide the intended support to allow the precautionary Economic Stability Shield package to reach its goals, and said, "Public authorities and NGOs need to cooperate to both cause the expansion of the current precautionary package and overcome the hurdles in implementing the package. The more feedback our public bodies can get from scratch, the easier it will be for these measures to reach their goals."