Turkey reaches for potential
25 June 2020
Turkey will have to move with the times if it is to take advantage of the potential it has to offer in a post-Covid-19 world, says İrfan İşmak, sales and marketing director of Turkey-based aerial platform manufacturer ELS Lift.
İşmak explains how the Turkish machinery sector has been affected by global stoppages, resulting from the Covid-19 crisis. In the first three months of 2020, before the impact of the pandemic was felt, machinery equipment exports from the country totaled $4.3 billion, representing a 0.4% increase on the dame period in 2019.
Since then, there has been a marked change. İşmak says 40% of its export markets have dropped by 52%. In addition, there have been disruption in payments, restrictions in customs and logistics problems, and a delay in deliveries accordingly, mostly connected to Far Eastern countries in terms of raw materials.
Concentrating on the aerial platform sector, İşmak says, ’’Hesitations in all sectors, especially the construction sector, caused a job loss of 40% in rental processes. Country-based disruptions occurred in spare parts, semi-finished products, after-sales services, logistics and customs processes by companies that manufacture the platforms.”
In addition, the dependence on components that are produced outside the country, the necessity to stock parts effectively has become a crucial element in combating the challenges posed by the pandemic.
İşmak adds that in the future legislation should be put in place that encourages the use of domestically-produces machines. “It would be beneficial to take measures to maintain the situation, in which we reduced the foreign trade deficit in the machinery sector to $5 dollars last year.”
He forecasts that the construction equipment sector will recover in about two years and would be strengthened by a reduction in tax rates and financial aid to those companies that export products.
Diverse supply chain
İşmak also believes there should be a more diverse supply chain in Turkey, rather than the risks posed by people being dependent on very few or even a single supplier. The focus, he says, should be on how to establish a diverse, flexible supply chain. “The period of ‘How I can produce cheaply’ has ended and in the new period, sustainability and reliable relations will start to be important”.
He adds, that the major manufacturing countries in the world will refocus their efforts following the pandemic. “They will strengthen their strategy and give priority to the imports of machinery products that they do not produce, so that the potential market that may occur in certain product groups is not lost to China.”
İşmak says it will be vital to be part of this renewed supply chain. “Large businesses have already started to review their supply chains. They are looking at which country, which supplier and how quickly their needs can be met.
He concludes that there are opportunities for Turkey. “Niche and custom production, fast service opportunities, high quality products with low cost, the cost advantage provided by Turkish lira depreciation and prevailing commercial wars will be among the important priorities. Being integrated with Europe in quality, price and performance indexes will make Turkey stronger.’’