2018 will be a year of investments for Sanko
Sanko Holding’s Chairman, Zeki Konukoglu, has thrown down the gauntlet for 2018, declaring it “the year of investment.” “For the sake of Turkey’s future, the government should apply positive discrimination for some sectors,” Konukoglu, whose company has allocated $325 million for investments this year, told DUNYA’s Handan Sema Ceylan. “More incentives should be given to sectors like chemicals and durable goods. Every sector asks for incentives but we have to make sacrifices if we want to increase our standard of living.”
Sanko Holding operates in many sectors such as textiles, energy, cement, construction, packaging, heavy equipment, real estate, health, and education, to name a few. As a global player, Sanko is the world leader in denim. The closest competitors in this area are only onesixth of its size.
In a wide-ranging interview with DUNYA, Konukoglu outlined Sanko’s plans for 2018 and thoughts on the previous year.
“Everyone was in a more cautious, more conservative mode when we started in 2017,” he said. “Unexpected exchange rate increases, especially in dollars and euros, leading to interest rate hikes have overturned our budget balances and companies have not been able to close their balance sheets well. Companies have gone too far in their expectations of profitability. Our only consolation was that in the second half of the year, businesses entered a positive trend and markets started to stir.”
To justify the Credit Guarantee Fund (KGF), it will be important for the economy to accelerate and reach long-term sustainability, Konukoglu added. “The most important thing to do in the future is to increase private sector investments. We must look at how much of our products are domestically produced. We should import basic components, not raw materials, and increase the amount of production here.”
VAT refunds can boost the economy n 2018
“It was the KGF support that gave us a boost in 2017. Now it is worth looking at the VAT. The government will refund TRY 175 billion of VAT to industrialists. The amount that our group will recieve is TRY 150 million. This year we can match 2017’s tempo with these VAT refunds. It may even make more of an impact than the KGF. The need is there, but when the payment will be made is unclear. On the other hand, the second phase of a productive economic transition should be structural reforms.” Konukoglu is more hopeful about 2018. He believes that in addition to efforts at home, the revival of the economy in Europe is important. But economic developments around the world are not the only factors to watch, he cautions. “[Geopolitical] developments to our south, the troubled situation between the US and North Korea, the heated competition between China and the West, all of these can prevent real economic developments,” he said. “The high rate of debt in China is a situation that needs to be watched closely. I think that the US and Europe will continue to be cautious, instead of moving ahead with aggressive interest rate hikes.”