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Exports of machinery amounted to 4.4 billion dollars in the first 2 months

As of the end of the first 2 months of the year, the total machinery exports of Türkiye, including free zones, amounted to 4.4 billion dollars.

Exports of machinery amounted to 4.4 billion dollars in the first 2 months

According to data compiled from the Machinery Exporters Association (MAIB), Türkiye's total machinery exports, including free zones, amounted to 4.4 billion dollars at the end of the first 2 months of the year.

There was no decrease in this period, although the base effect of the high increase of 20 percent in the first 2 months of last year was observed. Exports of construction and mining machinery, textile and apparel machinery and food industry machinery drew attention with an increase of 29 percent in quantity and 22 percent in value.

Electric motors and generators and machine tools exports decreased by up to 28 percent in quantity and 25 percent in value, according to the data.

Machinery exports to Russia, where exports continued to decrease due to sanctions, decreased by 130 million dollars at the end of February. The share of Germany and the USA, whose exports, including free zones, amounted to 950 million dollars in the first 2 months, increased to 21.5 percent in total machinery exports.

"Russian sanctions made our competitors to hide data"
In a statement to the AA correspondent regarding the export figures and developments in the sector, MAİB President Kutlu Karavelioğlu mentioned the effects of the sanctions against Russia, a strong market where machinery manufacturers can relieve their commercial losses at a time when investments in the world are braking, on the world machinery trade, and recorded the following:

"The machinery sector has recently been heavily affected by the restrictions on dual-use products that are assumed to be used in Russia's defense needs. In this process, which has turned into an unnamed embargo, the increasing uncertainty in the list of products subject to sanctions, the fact that a machine that was not included in this list when the order and advance payment was received was included in this ambiguous list while waiting for the balance after delivery, and the fact that our money remained in Russia has been putting our sector in trouble for a while.

The pressure applied through the banking system reduced our machinery exports to Russia by 37 percent in the first 2 months; our loss may exceed 1 billion dollars at the end of the year. The West, which knows the difficulties of taking back this big market that it left to China, does not stop looking for ways to send its machinery without putting its businesses at risk. This concerted effort is causing significant distortions in the data on foreign trade in machinery. We attribute the hesitancy of some European countries, which earn more from the trade rather than the manufacture of machinery, to the shifts in trade routes."

"While our customers are slowing down, our competitors are speeding up"
Karavelioğlu stated that the first signs of financial recovery are emerging in a global tightening environment.

According to World Trade Organization data, world trade in goods decreased by 5 percent in 2023, while EU machinery and equipment production was estimated to have decreased by 1.4 percent in base-adjusted prices, Karavelioğlu added.

Noting that in an environment where financing costs, consolidation and regional conflicts are so high, it is natural that the risk appetite in developed countries decreases, Karavelioğlu said:

"In fact, a downturn in this direction for Europe started before the pandemic, and the region's weaknesses became invisible thanks to urgent measures to address the deterioration in supply chains. However, the machinery manufacturing industry of each country is not affected by this conjuncture at the same rate. PMI data, which fell as low as 46.5 percent in the Eurozone last month, has skyrocketed in countries such as India, Brazil and Mexico, which have managed to attract large machinery investments in recent years. In short, while our customers in our main market are slowing down, our competitors in developing countries are speeding up. The fact that our machinery exports to Germany and the USA continue to increase in the fierce competition among machinery exporting countries reveals our strength in technology development as well as the strength of our ties in the West."

"The intense investments should not give an opportunity to unfair competition"
Kutlu Karavelioğlu pointed out that the strategic approach to the machinery sector, which is at the center of the redistribution of production and the twin transformation, continues in the 12th Development Plan.

Karavelioğlu reminded that machinery and equipment investments, which increased by 12 percent in total between 2019 and 2023 in the world, increased by 70 percent in Türkiye and reached up to 168 billion dollars annually.

Karavelioğlu expressed that with this extraordinary performance, Türkiye's share in the world's machinery and equipment investments will increase to 3 percent in 2023, and said, "Since a significant part of these investments are made by our machinery manufacturers, in this challenging period dominated by crises, machinery production increased by 12 percent in the world on a quantity basis, while ours increased by 65 percent. The contribution of the incentive certificates issued in the same 4 years with a total fixed investment amount exceeding 5 trillion liras cannot be denied in this vitality. However, despite all its benefits, we should also see that the incentive legislation can create an element of unfair competition by rendering the defense measures developed against dumped goods in our import regime dysfunctional."

"Our general manufacturing industry is the only one left that does not respect local products"
Karavelioğlu, President of MAİB, underlined that the effects of technological polarization in machinery, which constitutes the largest item of world trade after oil, positively reflects on Türkiye's exports, but does not benefit its imports.

Karavelioğlu stated that the industrialists imported 12 billion dollars worth of machinery from China, to which they could not sell machinery, in this environment where they were creating a good alternative among their Western competitors with their price, quality and technology diversity, and carried the foreign trade deficit to 17 billion dollars, and continued as follows:

"Everyone should be self-critical of the fact that the share of domestic machinery in the machinery allowed to be purchased with incentives remains at the level of 39.6 percent in the general manufacturing industry, while it is 89 percent in energy investments, 67 percent in services, 71 percent in mining and 96 percent in agriculture, although it is not disclosed after the first 4 months of 2023. Within the scope of the 1.25 trillion TL investment incentive certificates granted in 2023, the share of machinery to be brought duty-free and VAT-free reaches 18 billion dollars. In January, when we imported 3.3 billion dollars worth of machinery, our production decreased for the first time since the pandemic and at a serious rate of 5.5 percent. While the contraction in our main market and the loss of ground in Russia continues, the continued rise in imports is a threat that could interrupt our superior performance of the last 4 years."



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SteelRadar Insight - Sayı 1 (Haziran 2024)

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