The government are already the right incentives to the crisis, counteract, says textile businessman Kemal Sahin in the DW-Interview. Nevertheless, institutions such as the Central Bank should be independent.
For their Lira-Notes of the people in Turkey always get less euros or US dollars
From the retailer to the big business: Kemal Sahin wanted to stay after his studies in Germany and secured his residence permit, he founded in 1982 with a small gift shop in Aachen’s pedestrian zone. From there he has developed his business to a global Corporation that makes loud claims to be a billion dollars in annual sales and more than 10,000 employees – a good half of them in Turkey. The most important leg are textiles, in addition to its Sahinler operates a Holding company, a catering company, Hotels, construction companies and a free trade zone in Turkey.
Deutsche Welle: US President, Trump has ordered sanctions against Turkey. This has contributed to the crash of the Lira again. Turkish President Erdogan speaks of a “trade war”. With what feelings do you drive these days to work in the morning?
Textile Businessman Kemal Sahin
Kemal Sahin: I follow very closely on the Radio, what measures the government is taking. I also see slow, like the Turkish Lira is gaining value again, yesterday, she has already won five percent.
So you have the impression that the worst was over?
It’s not quite over, but the panic is gone. For us, it is in principle good, but the companies make foreign currency debt, have more difficulties. The first can be alleviated, if the Turkish Lira is gaining value again.
What has been the impact of the crash of the Lira and more specifically, the business of your company?
Overall, we can compete well, this has not hindered our business. For example, our men’s suits: We are a big Partner of Zara, and of which we get more and more orders, because we have good quality, quick to produce and, in the meantime, a little cheaper can produce.
How to run the business of their subsidiaries in the home country?
In our real estate business, we have lost something, because in the area of housing, with prices in Turkish currency is expected, and of course, the foreign materials such as steel are more expensive. We also have a catering company in Turkey, since we have lost so much because we shop in Lira.
And then you still operate a free trade zone in Çorlu, West of Istanbul. It is not even an advantage, if the US increase their tariffs?
This is, in any case, we have American companies. The company, which settle at us, are often technology companies, this is for the Turkey very well. In addition, there are no customs duties. That is, they are less affected by trump’s actions. There, companies can produce in peace and in the world to sell, this is for such times a better investment location.
How it looks with raw materials and means of production, they must import for their textile factories in Turkey?
We import, for example, yarn from Pakistan and Uzbekistan, and in part from America or Greece, the largest share, we buy in Turkey. But even Turkish cotton is charged in dollars, because the Turkish cotton is traded on the stock exchanges. These prices are on the rise, as we have no advantage. And we also import machinery or dyes that come from abroad and are charged in dollars. The largest part of the value creation happens, however, when our staff process in Turkey cotton to yarn and to fabric, as a result, we are more profitable. In the Export of ready-made goods to Germany, we have greater advantages than disadvantages.
The price of the Turkish Lira since the beginning of the year 2018
So the crash of the Lira is not bad?
The Turkey is for the textile sector now, where everything is a bit cheaper, interesting for European markets. My Manager is on the road, he has reported to me that he had received orders for ten million euros in Spain.
How would you evaluate the crisis management of the government of Erdogan?
Last week, the development by leaps and bounds, and Turkey has lost its confidence. We have a trade deficit of about 60 billion dollars, that’s why the company – in particular, energy firms and construction companies – debt in foreign currency. In the world of Finance, you had a bit of a fear of whether Turkey can pay their debts. We have a new government, the committees are not yet formed and you could not perhaps react as quickly. In the meantime, the institutions in Turkey do good work, even the banks.
The people in your country is the same, the watch disappears as your purchasing power?
Of course, people are afraid. Ultimately, Inflation arises and the purchasing power of people is low. Secondly, the companies are shopping abroad for the Turkish market, accounting problems and need to see if you need to terminate employees. These Fears are also there. It is a total concern, everyone is affected. Our President has turned often to the people, some of his messages are very political, he formulated sharply, but he also calms. He calls on the population to panic. Maybe if there are a lot of unemployed, the Inflation escalated to a major crisis, punish the people, the government, but I don’t think so, as far as it comes. He is experienced in elections and is very clever.
On the other hand, he was already long before the beginning of the crisis in the office and has accelerated with each of the statements the fall in price even more…
Where Erdogan or our economy have held Ministerial Speeches, jumped in the courses. There were maybe a couple of communication errors. I don’t think so, the first steps were quite right. Later, it has recognized the situation properly and Erdogan has made the better statements. Ultimately, this crisis, in part, is based on long-term causes. Maybe you would have been able to settle earlier technologies in Turkey. But you would have had to start years ago. And then there was in the last few years, turmoil with the coup, Turkey had problems.
What needs to happen now, in your view, so that the situation calms down and the Lira is more stable?
The institutions such as the Central Bank should be independent to respond. Without the policy, they have made it very many steps. I think in the future we need to strengthen more of the institutions with good technical people and the policy should be less to interfere in such Affairs The government has also taken measures to in the medium term, with the balance of payment deficit: increased exports, in particular, multi-technology exports, more value-added, and more investments, bring in less foreign exchange. Since the government has created many incentive packages. And if they act in the future, will not suffer Turkey to such a crisis. Erdogan is a good way that the political relations of the governments with Germany be better. This is very important, I very much welcome that. Also with France. I advise that we move again in the direction of the European Union. I think this is the best way how Turkey can develop, and I think that is well understood by the government. Turkey and the EU could develop things faster for the Good.