Kenan BENLİLER
Plastics Industrialists Association (PAGDER)
Chairman of the Board
As a reflection of the shrinking demand in the domestic market and the problems experienced in accessing finance, we see that our manufactured production has declined, and consequently, the share of exports in our production has increased to 25 percent. We should not forget that as the share of exports in production increases, our sector becomes more exposed to external shocks.
As we leave behind a year where demand in domestic and export markets has shrunk and challenging market conditions have prevailed, influenced by global and regional developments, trade wars gaining momentum after the US elections are causing us to lower our expectations for the future. Although the uncertain environment created by rapidly changing statements makes it difficult for us to make a sound forecast, we can say that 2025 will also be a difficult year as it stands.
Our sector managed to increase its exports in 2024 despite all difficulties. On the other hand, we observe that our manufactured production has declined as a reflection of the shrinking demand in the domestic market and difficulties in accessing finance, and consequently, the share of exports in our production has increased to 25 percent. Although this situation might seem like a positive development at first glance, it should be remembered that as the share of exports in production increases, our sector becomes more vulnerable to external shocks. Considering that the economy in Europe, where we realize approximately half of our exports recently, has stagnated and is predicted to continue this trend throughout 2025, we can say that market diversification is a necessity for our sector. Of course, even if we manage to improve our targets in export markets, it will be difficult to achieve the desired increase in production unless our domestic market revives.
The inability to foresee how the trade war, which intensified after the change of administration in the USA, will develop and what its possible consequences will be, triggers the adoption of a cautious approach in making investment decisions not only in our country but all over the world. Moreover, when we consider the problems experienced in our country in addition to these global developments, such as difficulties in accessing finance, high financing costs, high initial investment costs due to industrial land prices, and currency volatility, we can see how difficult it has become for industrialists to make investment decisions. Although we, as a country, do not have the opportunity to overcome global problems, it should not be overlooked that we have the opportunity to improve investment conditions in our country.
One of the fastest steps that can be taken to improve the investment environment in our country could be the production of industrial land. Currently, the manufacturing industry has the highest share in the gross domestic product (GDP) with approximately 20 percent, while when we look at the share allocated to industry within our country's total area, we see that this rate is only 0.4 percent. Moreover, only 1/3 of these industrial lands are located within organized industrial zones that have a sound infrastructure. In countries with which we compete abroad, a much larger portion of the total area is allocated for manufacturing industry. For example, this rate is 1.5 percent in France (approximately 4 times), 2.1 percent in Italy (approximately 5 times), and 4.5 percent in Germany (approximately 11 times), which is much higher than the share allocated in our country.
When industrial land is so scarce, prices naturally rise. While square meter prices are around 10 euros in Europe, they have reached 350-400 Euros in Kocaeli and 150 euros in Sakarya. In China, which I have had the chance to visit frequently recently, public institutions allocate free land for industrial investments and even offer investors long-term leasing options with completed construction. Thus, by reducing investment costs stemming from land and construction, investment capital is ensured to be channeled into the qualitative and quantitative development of production. To solve this problem, which is one of the most important factors slowing down the development of not only our sector but our entire manufacturing industry, industrial land production needs to be increased.
Despite all negativities, I am confident that all of us, as a sector, will do our best to increase our exports in 2025. In this regard, I believe that the K exhibition, which is the most important fair for our sector, will also be an important tool. As PAGDER, with our travel programs that have now become a brand, we will contribute to our valuable sector members having a smooth fair experience this year, as in previous years.
This content has been translated using artificial intelligence technology.