Istanbul Chamber of Industry (ISO), yesterday, declared the 2006 results of Turkey's top 500 industrial establishments research, ISO-500. According to the results while automotive and energy sectors took the lead in Turkish industry; the textile and apparel industry, which has been the powerhouse of the economy for the last two decades, is about to hit rock bottom.
Tupras, with YTL 18.6 billion net sales became the highest ranking company among the top 500 industrialists of Turkey. Ford Automotive with YTL 5.6 billion net sales was ranked the second. Electricity Production Corporation, which is also the top ranking public enterprise, became third rank with YTL 3.95 billion. However, the top ranking textile industrialist, Korteks Textiles Production and trading company, managed to reach only 50th position on the list. Only three textiles companies were included in the top 100 companies.
As Tupras, Toyota Automotive and Ford Automotive are the top three industrialists of Turkey, which have the highest results for exports, a sector-based distribution of exports indicated that Turkish automotive industry with $12.35 billion and 28.1 percent share is the leader of the top 500 industrialists of Turkey. The second and third sectors are metal industry and metallic tools and applications industry.
In 2006, ISO 500 companies accounted for 13.1 percent of Turkish Gross Domestic Product (GDP) and 51.2 percent of Gross Value Added. Especially 480 manufacturing industry establishments produced 59.6 percent of Turkey's manufacturing industry value added results.
In terms of net profits, Tupraş, Eregli Iron and Steel Company, and state owned Turkish Petroleum Corporation (TPAO) were ranked the top three. Mercedes-Benz and Oyak-Renault experienced a considerable rise in their rank for profitability. Mercedes-Benz moved from 8th to 23rd position while Oyak-Renault moved from 25th to 10th position.
In 2006, the percentage of debt in the capital of the companies increased to 47.7 percent from 47.1 percent in 2005. The most important reason for the decline is the regression in profitability.
The regression is accounted for the increasing foreign debt, which also puts a considerable exchange risk on the shoulders of the industrialists. This also means that the relative increase in profitability is not reflected on the share of equities in finances. Moreover, the share declined to 42.8 percent from 45.6 percent.
Head of ISO, Tanıl Kucuk said that when compared to the 2005 numbers, 2006 has been a major breakthrough for all statistics, except for the net profitability. “But we should not fall for these results because 2005 was the worst year ever since 1994, except for the crisis period. For a better understanding, we should compare 2006 results with 2004,” he said. Kucuk underlined that sustainability is the most important criterion to determine the position of the Turkish industry.
Kucuk also said that Turkish industrialists have been demanding for structural reforms yet the governments have not fulfilled their demands. “Our major demand is about the taxes. The amount of the indirect taxes on the industry, in comparison to value added taxes, is increasing day by day. Such a situation, which does not take place in emerging markets of the other parts of the world, affects both the producer and the consumer,” added Kucuk.
Kucuk also said that single party government is not a magical formula for ensuring economic and political stability. “We have been living under a single party government for four-and-a-half years, yet any of these structural reforms took place. Therefore single party governments are not a must for stability. Coalitions may be stable, too,” concluded Kucuk.
(Turkish Daily News, 20/07/2007)