Ömer Karadeniz, Chairman of the Plastic Industry Federation (PLASFED), argued that the precautionary measure discussed during the Coronavirus Combat Coordination meeting held on March 18, 2020, in Ankara, which proposes the deferral of SGK, VAT, and Withholding Tax payments, should be expanded to cover all manufacturing industries, especially the plastic sector.

The Plastic Industry is Strategically Important

Ömer Karadeniz emphasized the strategic importance of the plastic sector as it provides intermediate goods for over 30 different sectors: "Despite insufficient investments in raw materials, the Turkish plastic sector has grown with impressive momentum, making us the second largest plastic sector in Europe after Germany. With an annual production approaching 10 million tons and providing employment for more than 350,000 people, the sector's direct exports exceed 6 billion dollars. When we include the indirect exports from sectors such as automotive, white goods, packaging, and electrical-electronics, the total exports reach 12 billion dollars. The main strategic importance of the sector lies in ensuring supply security for more than 30 sectors that rely on its intermediate goods," he said.

Global Demand Decline Negatively Affects the Sector

Continuing his remarks, Karadeniz stated: "Due to the foreign exchange shock experienced in the second half of 2018, the contraction in the construction sector, and the contraction in the automotive industry on a global scale in 2019, the Turkish plastic sector found its way out through exports, resulting in a significant increase in sectoral exports during this period. However, our sector, which partially managed to overcome the domestic demand decline through exports, has been hit by the global demand impact of the rapidly spreading Covid-19 pandemic. The sector is facing tough days due to order cancellations in both domestic and export markets."

The Manufacturing Industry Should Not Be Treated as a Stepchild

Karadeniz stated that the government should expand the Economic Stability Shield precautionary package, which has a total value of 100 billion lira, to include the manufacturing industry to mitigate the effects of the Covid-19 pandemic: "While the package includes positive measures such as deferring SGK, VAT, and withholding payments, postponing bank loan repayments, providing stock financing support to exporters, and short-time work allowance, many of these contain barriers for the use of the plastic sector. More importantly, the support for deferring public financial liabilities such as SGK, VAT, and withholding will almost entirely exclude the manufacturing industry, primarily the plastic sector. This inclusion in the precautionary measures will ease cash flow, even temporarily, for businesses facing order cancellations both domestically and abroad. The Economic Stability Shield precautionary package needs to be expanded in this direction."

NGOs Ready to Assist

Reminding that they are ready to provide the necessary support as NGOs for the success of the Economic Stability Shield precautionary package, Ömer Karadeniz said: "Whether it is about widening the existing precautionary package or overcoming the challenges that arise during its implementation, there needs to be a collaborative effort between public authorities and NGOs. The more feedback our public institutions receive from the grassroots, the easier it will be to ensure the success of these measures."

Translated by Artificial Intelligence