Ender Yorgancılar, Chairman of the Board of the Aegean Region Chamber of Industry (EBSO), emphasized that the high loan interest rates, the uncertainty in the exchange rates, the possible decline in domestic and foreign demand were the issues they complained about the most.
Yorgancılar pointed out that banks today give loans with interest rates ranging from 30 to 50 percent depending on the credibility of the companies, and that there is no bank that gives loans with a 14 percent policy interest, “The President of the Central Bank said ‘Don’t take a loan, brother,’ at the ISO. After all, if the industrialist has a job, he has a check, a salary payment; There is SGK payment, tax to be paid. They have to take loans from banks to pay for them,” he said. We talked to Ender Yorgancılar about the problems of industrialists.
– The producer price index was based on 145 percent. How do you manage costs?
Increases in energy, minimum wage increase, raw material price increases caused by foreign exchange increase… When we put these together, the cost also increases. Firms are trying to get out of this business by raising prices.
The business world always pays attention to this: raising prices too much does not mean that you will increase your sales. No matter how much the minimum wage is raised, there is a certain purchasing power. When the minimum wage rises, product prices also increase. This is reflected in inflation.
– The head of the Central Bank had explanations of turning stock and credit to the industrialists, but then he said that I was misunderstood, what will you say, does the industrialist really stock up?
It was already a misrepresentation. He also realized it. Most companies need working capital. They use credit. There’s nothing wrong with stocking up on these. If you have an order that you receive in the next three or four months, you stock up to buy the raw materials or auxiliary materials you need to fulfill these commitments. Otherwise, there is no environment to stock up at the moment.
– The private sector has a serious foreign currency debt, what kind of problems are there in paying them?
I’ve been saying this for years, if you don’t have foreign currency income, you won’t get into debt with foreign currency. If you are not exporting, if you are selling the goods you produce here in TL, why are you taking foreign exchange risk? If someone without foreign exchange income borrowed 1 million dollars last year, that debt has now become 18 million dollars, according to the level of the exchange rate. Do you have a chance to win this in 6-7 months, no one can win.
IT DOESN’T MEAN TO TAKE A CREDIT
– The gap between the loan rates in the market and the policy rate is widening, can you find a loan?
Banks today have loan rates ranging from 30 to 50 percent, depending on the credibility of the companies. Currently, there is no bank that gives loans with 14 percent policy interest. The President of the Central Bank said ‘don’t take a loan, brother’ at the ICI. But if you don’t buy it, it doesn’t work. After all, if the industrialist has a job, there is a check to be paid, there is a salary payment; There is SGK payment, tax to be paid. They have to take loans from banks to pay for them. When we look at the indebtedness of the companies with their equity ratios, it is seen that there is a loan need in the general structure of Turkey. Firms’ equity indebtedness is increasing due to increased costs, the increase in exchange rates and the insufficient reflection of costs on product prices. Therefore, the cash needs of companies are also increasing. The need for credit usage arises from these.
– Is there a need for an investment in these market conditions?
Investing always happens in Turkey. Is there a need for investment? Because we are close to the EU and we have the opportunity to meet their demands quickly. Due to the increase in freight prices, the EU meets its needs from us. But there is also a point that should not be overlooked. There is a slowdown in Europe. This may adversely affect our exports in the coming days. In the same way, if the policies to be implemented to reduce inflation in the country cause a slowdown in demand, this will be reflected in production.
– So production can stop?
There are several risks for production in the upcoming period. Due to the Russia-Ukraine war, Europe turned to us for some products. In the Far East, they came here because the deadlines were long and the freight prices were high. These are our pluses. But we also have cons. Due to rising inflation in Europe, there may be a contraction in demand due to purchasing power. Domestically, we have a very high inflation rate at the moment. If there is a decrease in demand with the policies to be implemented by the government, this will also be reflected in production.
UNCERTAINTY IN THE CURRENCY CAUSES CONCERN
– What are the most basic complaints you receive from your members at the moment?
We made a survey among our members. High interest rates on loans, uncertainty in exchange rates, and the decline in domestic and foreign demand are among the main complaints of our members.
– What steps should be taken to accelerate investments?
The industrialist wants stability and being able to see ahead. If we can see ahead, investments will come as a result.
– You say stability, but policies are constantly changing, new decisions are being made…
The word hoarding used by the head of the Central Bank is a word that the industrialists do not deserve. If there is no production in a country, development is a dream. In the years when the industrial production index increased, we see that Turkey’s growth developed upwards. In this sense, the industry needs to be supported and morale given. In this respect, stability is important. The person sitting in this type of position needs to give pep talk to the market. Instead of stockist, it would be more accurate to say how can I reduce inflation.
YEAR-END INFLATION MAY BE 80 PERCENT
– What are your predictions about year-end inflation, growth, exchange rate and unemployment?
There are figures announced by TURKSTAT and the Central Bank, they are constantly being revised. The gap between PPI and CPI has widened. This needs to be closed. Inflation has reached 80 percent. There are four months left until the end of the year, we do not know what kind of measures to reduce inflation will be announced during this time. My guess is that year-end inflation will be between 70-80%. Growth can occur between 3-4 percent.
It is very wrong to say anything about the exchange rate. December 31 is the last day for currency-protected deposits, we do not know if it will be extended. There are those who say the numbers that I do not want to pronounce in the exchange rate, there are those who say that it will be 20-22 TL, this completely depends on the world conjuncture. Unemployment will not go down to single digits this year.
– Turkey is going to the elections, what do you expect as an industrialist?
It is our greatest wish that the election is made on time. It is our greatest wish that the new government will take measures to reduce inflation regarding the economy and put them into practice as soon as possible.