Turkish Industry Faces Financing Crisis: Production and Investments at Risk

Financing challenges and rising costs continue to strain Turkish industry. Producers struggle to access financing sources to execute projects, while consumers face difficulties obtaining credit to purchase products.

PLASFED Chairman Ömer Karadeniz stated that there has been no relief yet in access to financing, which has become the biggest problem for Turkish business in recent times. He noted that Turkish manufacturers are losing momentum as they grapple with financing, inflation, cash flow and changing regulations. Karadeniz reported that manufacturers are struggling to find sufficient support in accessing financing and that companies have reached a point where they are reducing production. 

As access to financing becomes increasingly difficult in Turkey, companies are watching rising financing costs with concern. This situation is particularly acute in the industrial sector. Manufacturers are seeking ways to cope with difficulties in accessing financing due to rising raw material and energy costs.

Plastik Sanayicileri Federasyonu (PLASFED) Chairman Ömer Karadeniz said Turkish manufacturers are struggling to find sufficient support in accessing financing. Noting that Turkish manufacturers facing capital shortages have reached a point where they are reducing production, Karadeniz warned that if the situation continues, the risk of reduced production in the industry will increase. Emphasizing that businesses with rapidly eroding profit margins are expecting credit support to meet their capital needs and continue production, Karadeniz said: "Our industry, particularly the plastics sector, which depends on imports for raw materials and wishes to continue production and employment, expects support in accessing financing. Today many of our manufacturers are saying they face difficulties in accessing financing and have become unable to produce."   

Difficulties in accessing financing

causing sector contraction

Drawing attention to companies struggling to sustain operations in a high inflation and high interest environment, PLASFED Chairman highlighted that the inability of both producers and consumers to access financing is causing contraction in many sectors. Noting that companies are trying to survive by sacrificing profitability and investments, Karadeniz stated that the bill incurred by manufacturers so far has been quite heavy.

Growth and investment plans postponed

Pointing out that companies struggling to access financing have been forced to postpone growth and investment plans for some time, Karadeniz said: "Companies are shelving investment and growth plans to protect their existing resources and minimize costs. Unfortunately, companies are going through one of their least profitable periods. At every meeting I attend, the first thing everyone mentions is access to financing. The most important challenge facing companies in this period is managing cash flow and funding working capital. If we cannot do these, we will put companies in a difficult position." He drew attention to the fact that the business world is missing the global theme as it deals with financing access, inflation, cash flow and changing regulations, emphasizing how critical it is to solve the financing problem for Turkish companies during this period when the Turkish economy and global trade are being reshaped.