Şener GENÇER
Aegean Plastics Industrialists Association (EGEPLASDER)
Chairman of the Board
The Central Bank kept the policy interest rate constant at 50 percent as of November. Undoubtedly, with such high interest rates, it is very difficult for our businesses to sustain their existence, protect their capital, and fulfill their export commitments in the face of suppressed exchange rates. As industrialists, we long for a production and export-friendly investment climate.
We will remember the year 2024, which we are preparing to leave behind, as a very difficult and problematic year not only for our sector but also for our country's economy. When we look at the Central Bank's policy interest rates, we see that they reached 50 percent as of November. Undoubtedly, with such high interest rates, it is becoming increasingly difficult for our businesses to sustain their existence, protect their capital, and fulfill their export commitments in the face of 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, the high cost of accessing financing sources led to a virtual halt in efforts to renew old machinery and invest in high-tech machinery in our sector.
This situation undoubtedly extends the problem of value-added production in our sector into the long term. Our industrial enterprises, fearing idleness, continue their production by lowering their profit margins, trying to stay afloat, and as a result, face financial difficulties. Fluctuations in oil prices cause significant changes in the costs of our thermoplastic raw materials, and this situation continues to negatively affect the profit margins of our colleagues.
High energy and input prices 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 gained with great effort over 40 years, is being taken over by producers in countries such as Thailand, Egypt, Bangladesh, and Poland. Reclaiming lost markets will, of course, require a much more arduous effort.
WE MAINTAIN OUR HOPE FOR 2025
In 2025, our sector anticipates a sustainability-focused transformation process, primarily driven by the Carbon Border Adjustment Mechanism (CBAM) set to come into force on January 1, 2026, along with digitalization and new markets. Undoubtedly, there is also good news amidst these challenges. 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 expectation that interest rates will tend to fall in the last quarter of the year, coupled with the tight monetary policy steps taken towards the 2025 target inflation, keeps our hopes alive and reinforces our expectations that "every burden has a blessing."
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 raising recycling rates, utilizing bio-based plastics, and developing waste management systems.
WE WILL DELIVER GOOD NEWS WITH PEGEL
Our Association, which develops projects that add value to our members, aims to cleanly separate plastic waste at its source and recover it through high-tech 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 explained the details of our project to Dr. Cemil Tugay, Mayor of İzmir Metropolitan Municipality, whom we visited, and requested his support. We hope that within 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.