As Ferrous and Non-Ferrous Metals Exporters' Association prepared their strategy in 2009, the industry’s share of Turkey’s total exports was 4.2%. They are aiming to reach a level of 5.5% in 2023. To achieve this target, Istanbul Ferrous and Non-Ferrous Metals Exporters' Association's board have established sub-sector committees in such areas as aluminum, copper, and kitchenware. Hayrettin Cayci, Deputy Chairman of Istanbul Ferrous and Non-Ferrous Metals Exporters' Association, talked to TURKOFAMERICA.
When Istanbul Ferrous and Non-Ferrous Metals Exporters' Association's figures were examined, the United States did not rank among the first 10 countries. What are the main reasons for this? What should be done in order to sell more goods to North America?
When we look at the export numbers of the ferrous and nonferrous metal products group to the U.S., it is not among the top-ranking, but the U.S. is located in the top 10 countries to which we export copper knitted cords, copper wire, sheet aluminum, metal hand tools and metal gift items. The U.S. market in one in which giants compete with each other, only designing products that can stand out, and large-scale firms which have the production capacity to meet demands. They have a chance to compete.
Especially after the global crisis, each country has taken various measures in order to protect producers. Protectionism in the U.S. is much more effective. In addition, the U.S. government discusses each calendar year whether to remove tariffs, which would be a big advantage to emerging countries such as Turkey. This approach has created an uncertainty in terms of exports as well.
Another reason is the U.S. market is very far away from Turkey and the already high freight rates, especially in recent times, experienced significant increases. The shipping time is too long for such a volatile market. So when a product is exported to Europe, the price is relatively the same, but the profit margin in higher, while in the U.S. the profit margin is very slim. In this regard, not that of loss of market share, freight and energy costs have to be supported during the coming years. This would be very helpful.
To enter the U.S. market, different marketing strategies should be developed. For example, when the industry-based trade missions examine the U.S. market, one-on-one meetings with industry organizations and companies would increase the chances of Turkish products becoming competitive in the U.S. market.
When the industry’s 2009 U.S. exports are examined, copper stands out as the product that is exported the most. Keeping in mind of the potential of the industry, which products is it possible to sell to the U.S.?
In the January-June period of 2009 and 2010, on the basis of product groups exported to the U.S., copper wire make up the majority of our export products, with $28.8 million and $17.3 million in exports to the U.S. In many other product groups, we produce world-class products and export them, for example, steel and aluminum kitchenware, in recent years the importance of design has increased and this has helped to increase our exports. Turkey is right now a design pioneer in competition with other countries. I believe the United States is a high potential consumer market for kitchenware, aluminum sheets/ plates, cooper rods, and aluminum construction.
Production and sale of copper wire made by Turkish firms operating in the United States is known. In order to enter the marker, what should companies with similar products do?
The various supports mentioned above that have helped the sale of copper wire and have provided market access will no doubt also be helpful to companies entering the market. Apart from this, the country's geographical size and the high cost of customer visits to the United States bring a unique set of drawbacks. They can be resolved with the provision of travel incentives.
Chinese firms are at the top of the market for the ferrous and nonferrous metals industries in the US. Are Turkish firms able to compete with the Chinese firms on a non-price base? How can a company make a difference in this respect?
Yes, as in other sectors, China also bears the distinction of being a major competitor in the iron and nonferrous metals industry. To compete with China, value-added products with reasonable prices can be produced. Moreover, the quality of the products we export, delivery terms to ensure continuity, and timely fulfillment of our commitments in this market will be of the greatest importance. On the other hand, knowledge of U.S. market conditions and opportunities and making deals with large retailers will have the effect of increasing our exports.
The distance to the North American market and lack of information about the market significantly affects the sale of goods. What should be done to overcome these problems in order to reach a satisfactory export volume?
As mentioned before, an incentive to support freight costs would be useful. Apart from that, some countries began initiatives in Europe, and similar systems can be applied in the U.S. market. In this way, the products which are exported to the market by Turkish companies can be insured by Eximbank. In this way, the companies can benefit from quarantine insurance program.
By the end of 2009 the industry’s exports totaled 4.3 billion dollars. How it is possible to get back to the good old days?
The ferrous and nonferrous metals industry was affected by the world's financial crisis such the same as the rest of the world. It suffered a decline in exports, which was normal. On the other hand, when we look at the export figures in 2010, the 2009 crisis and the effects begin to lessen. When the industry compares the January-June period of 2009 with the current year, we can see a 40% increase. However, this increase us not enough. Therefore, while finding new markets with high import potential, we need to increase our share in current markets.
Turkey’s total export target is 500 billion dollars in 2023 and our industry’s share is 25 billion dollars. To reach this target, we, Istanbul Ferrous and Non-Ferrous Metals Exporters' Association's board, have established sub-sector committees in such areas as aluminum, copper, and kitchenware. We have also begun to form strategies for each sub-sector. Together, each representative of major sectors and major companies will create strategies to overcome barriers to the next stages, I believe we will reach our goal.
What sort of strategy do you predict that the industry will develop in the next 10 years? What are the biggest obstacles and advantages you see?
As we prepare our strategy, in 2009, Ferrous and Non-Ferrous Metals Exporters' Association share of exports was 4.2%. We are aiming to reach a level of 5.5% in 2023. By creating original designs and manufacturing high value-added products, we want to succeed in the branding process. By increasing the number of high-technology products certified to international standards, we want to produce patented product. In addition, the sectors aims at increasing brand awareness by intensive promotional activities.
In this process, to encourage the use of new technologies, we want to support small and mid-sized companies’ R&D activities. We want to work to increase the employment of qualified technical staff from vocational schools. Thus we are planning to make small businesses major exporters. In this context, together with the Ministry of Education within İMMİB, we are building the Industrial Design School.
Last modified onSaturday, 06 May 2017 10:07
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