While the Istanbul Furniture, Paper and Forestry Products Exporters’ Association is working to expand the export markets dominated by the sectors within its body and to increase the export figures achieved, the recession that is effective in the world and the inflation that has reached double-digit figures in many countries cause disruptions in export activities. Underlining that they are working to ensure that the sectors within the union have a greater say in the international arena, Erkan Özkan, President of Istanbul Furniture, Paper and Forestry Products Exporters’ Association, said: “Our sector is a stable and dynamic sector from production to employment, but the order recession in recent years, disruptions in global trade and tensions between the countries around us affect our work very much. In this process where tight monetary policies are being implemented, the pressure on the real sector is increasing due to the order stagnation, the increase in raw material prices and the difficulty of production. Inflation is expected to decrease after the next 1-1.5 years, and we want our producers to overcome this process with the least damage by spending this process very efficiently with our international activities.”
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Although the sector develops itself, the recession in the world poses difficulties
The furniture, paper and forestry products sector, which focuses on the future by improving its design and product quality day by day, is experiencing difficulties due to the recession in the international arena while aiming to increase its export figures and market share. Referring to the downsizing of companies in this process, Erkan Özkan said, “Although our sector is an employment-friendly sector and invests in both production and employment, it is experiencing difficulties due to the contraction in the world. In this process, many small and medium-sized companies are downsizing their structures in order to survive. This means that in the future, production will decrease, unemployment will increase or there will be a shortage of employees in case of possible orders. Of course, inflation not only in our country but also in the world will stop at some point. We expect it to stop at some point, especially with the tight monetary policies in our country. However, we will work to spend the time until it stops as efficiently as possible. We will try to facilitate the work of our producers, especially those who are experiencing difficulties.”
“It is natural to experience a decline in investment expenditures”
In addition to employment and production investments, R&D processes are important for the growth of the sectors. While the decrease in the investment expenditures made by the sectors in the last year has reached a noticeable level, Özkan said, “It is very natural to experience a decrease in investment expenditures during this recession process. We are faced with the erosion of the profitability levels of companies and the search for various ways of saving by companies that cannot protect their working capital. In this process, companies that do not want to lose both production and employment avoid new investments and R&D studies. This situation may cause market loss or insufficient production volume in the future, but companies cannot do anything else.” Stating that strict policies started to be implemented after the elections in order to stop the increasing inflation, Özkan said, “The increase in interest rates, the difficulty of producers in accessing financing and the increasing raw material and production costs led to a decrease in industrial production. In addition, since there is a stagnation of orders, it is actually very natural for production to decline. If the recession concern in the global market decreases a little and the order stagnation is eliminated, our producers will breathe a sigh of relief.”
It is difficult to increase competitiveness in this period
The furniture, paper and forestry products sector stands out with both product and design quality, but production speed and low price policy are important to increase competitiveness. Underlining that it is not possible to apply a low price policy in such a period to increase competitiveness, Özkan said, “At the same time, when we add the high exchange rate, things become even more difficult. There are tight monetary policies being implemented at the moment. With inflation starting to fall and banks supporting the producers, production and export activities that will develop the economy of our country will definitely stabilise. We will start next year with a challenging start, but we will continue our struggle. We are hopeful for the second half of 2024 and we think things will get a little easier for our sectors.”