"Turkey's Top 500 Industrial Enterprises" were The Topic of The Istanbul Chamber of Industry's (ICI) June Assembly
The ordinary June meeting of the Istanbul Chamber of Industry (ICI) Assembly was held under the chairmanship of ICI Assembly President Zeynep Bodur Okyay on the main topic of "The Principal Problems and Solutions in the Economy and our Industry from the Perspective of the ICI 500." The ICI Assembly Members attended an iftar at Odakule after the meeting. Also attending the meeting were Prof. Dr. Nazım Ekren, former Minister of State and the current President of Istanbul University of Commerce, and former Minister of Industry and Trade, Ali Coşkun.
ICI advisors Can Fuat Gürlesel and Erkin Şahinöz made a presentation on the Top 500 Industrial Enterprises at the meeting, where ICI Board President Erdal Bahçıvan informed the Board Members of the results of the Top 500 Industrial Enterprises Survey. He also shared the good news of the launching of an important project concerning collaboration with the universities for the growth of industry, an endeavor that the Chamber values greatly.
The Assembly meeting started off with the opening remarks of ICI Assembly President Zeynep Bodur Okyay, who extended her good wishes for a happy and prosperous month of Ramadan. Zeynep Bodur Okyay honored the memory of the 9th President of Turkey, Süleyman Demirel, who passed away recently, emphasizing his competence as a bureaucrat and as prime minister and president. She commented that the late Süleyman Demirel had contributed a great deal to industry and invited the ICI Assembly to rise for a moment of tribute.
Assembly President Okyay continued her words after the commemoration, remarking that the results of the 2014 survey on Turkey's Top 500 Industrial Enterprises, which were announced to the public on June 16, 2015, captured the wide interest of the press.
In summary, Okyay said the following:
"Turkey's June 7 elections were carried out in mature fashion. I hope the newly formed Parliament will be of benefit to our country. As Turkey's industrialists, our sole expectation from politics is solutions, solutions and solutions. None of us would like to see a repetition of the insincere coalitions of the past. That's why we would like to continue on our way with the formation of a strong coalition. Countries with a strong economy are also politically strong. We can see clearly the financial trends among Turkey's Top 500 Industrial Enterprises. The bottom line is actually that we still have a long way to go. Turkey's becoming a center of attraction is something that will assign many roles to the newly formed government in particular."
Taking the floor afterwards, ICI President Erdal Bahçıvan said in his remarks regarding the item on the agenda that a concrete step had been taken in the discussions held with Istanbul University of Commerce, pointing out that a master's program had been opened at the university under the title of "Industry Policies and Technology Management." Bahçıvan said, "Turkey's industry must be converted into a structure that uses the latest in technologies and has a strong R&D infrastructure. In this context, the university program will provide industrial companies with the opportunity to keep up with global competition by developing itself through value-added production." Bahçıvan stated that the program would be given educational support by academic experts at ICI.
Bahçıvan reminded the Assembly that among the 18 strategies recommended by the "Istanbul Industry Strategy Document" that was drawn up at the start of this year in cooperation with the Istanbul Development Agency were collaboration between the universities and industry and the use of advanced technologies. He called attention to the importance of the Master's program opened at the Istanbul University of Commence by commenting: "The data we announced last week on the results of the ICI Top 500 Industrial Enterprises 2014 survey show that industrial enterprises have a long way to go in terms of R&D and concentrating on technology. While the R&D expenditure of the Top 500 Industrial Enterprises is at the low rate of 7.4 per mille from production to sales, the share of this expenditure in the added value created from high technologies is only 3.2 percent. These results have shown clearly that the stable growth that Turkey needs must be focused on value-added production."
Explaining that the Istanbul University of Commerce was about to complete its work on establishing an "Industry Policies and Development Center," Bahçıvan said, "With the additional contributions of the Istanbul University of Commerce Continuous Education Center, we are also setting up an educational program that is designed for the teams within the ICI that conduct the work of the Incentive Desk."
Continuing by saying, "The ICI 500 2013 and 2014 survey data show that one of the most important issues for the industrialist is financial management," ICI President Bahçıvan called attention to the fact that for the last two years, the industrialist was being forced to spend half of his profit from principal operations on financing. Bahçıvan said that industrialists needed a substantial innovation in this area, going on to say, "Our other important cooperative endeavor with Istanbul University of Commerce will concentrate on 'Financial Innovation.' In the coming days, we will be organizing a panel on this subject which will be attended by international speakers."
ICI President Bahçıvan also called the attention of the Assembly members to some striking figures that were released as part of the ICI 500 data. Bahçıvan said that the operational profit of the Top 500 companies had dropped compared to the previous year. Explaining that the Top 500 Industrial Enterprises brought their 2013 operational profit up to 8 percent but that this rate had dropped down to 6.4 percent in 2014, ICI President Bahçıvan also said that the group's EBITDA had fallen to 10.7 percent this year from its rate of 11 percent in the previous year.
Sharing this information with the Assembly, Bahçıvan congratulated all of the industrial companies that had been instrumental in conducting the survey and called attention once more to the need for production-focused growth.
Present at the meeting as a guest who was involved in the cooperation established with Istanbul University of Commerce, a subject that occupied a significant part of the ICI President's speech, was Istanbul University of Commerce President and former Minister of State Prof. Dr. Nazım Ekren. Prof. Ekren took the floor to address the Assembly and spoke about the joint projects that would be carried out with ICI. President Ekren divulged that his university's goal was not only to provide education in the fields of commerce and finance but also to contribute to the fields of industry and development. He said in this context that the protocol that had been signed with ICI a year ago was now beginning to bear fruit. Prof. Dr. Ekren noted that the Industrial Policies and Development Center established at the university would be following up on global trends related to industry policies and would work to determine how the industry can react strategically. The Master's Program for Industry Policies and Technology Management, said Ekren, would cover theoretical and academic studies, remarking also that industrialists would support the program in its implementation.
Heir to the Throne Program: Speaking on the educational program on the Transfer of Entrepreneurship Across Generations, Prof. Dr. Nazım Ekren explained that instruction on entrepreneurship and negotiation techniques would be given to individuals managing family enterprises. Mentioning the University's "think tank," the Thoughts and Projects Academy, Nazım Ekren explained that work was being conducted on growth-friendly tax policies.
The guest speakers were given the floor after these comments to speak on the item on the agenda. Taking the floor in this context, ICI Advisor Can Fuat Gürlesel stressed that every year, the ICI 500 companies disclosed a steadily diminishing amount of information. Gürlesel compared Turkey's economic growth with the growth figures of the ICI 500 companies and underlined the subject of the debt/equity rate, commenting that Turkish companies could not enhance their competitive power by using shareholders' equity less.
Pointing out that industrial companies needed to play a more decisive part in profitability rates and take on a price-determining role, Can Fuat Gürlesel said that the capacity of companies to add value was not determined by competitive power but by outside factors and external elements. Making the point that the structure of the work force did not support profitability, Gürlesel said that hiring qualified or cheap labor was a preference that had to be reconsidered in the context of profitability.
Following this, another guest at the June Assembly meeting, Erkin Şahinöz, said in his presentation that the industrial sector had grown by 3.8 percent in 2014 and that this was a 1.02-point contribution to the 2.9 percent expansion of the Turkish economy. Şahinöz remarked that the growth rate of the industrial sector, which had expanded at a rate that was slower than the economy in 2012 and 2013, had exceeded the growth rate of the economy in 2014.
Commenting that the differences in the 2014 figures of the state and private sector companies included in the Top 500 Industrial Enterprises was striking. He said that in the period 2011-2013, there were 13 state enterprises in the ICI 500 whereas this figure fell to 11 in 2014. He called attention to the fact that in 2014, there had been a 36 percent increase private sector enterprise profit in the ICI 500 and that public enterprise profit had diminished by 63.2 percent. He remarked that while the losses of private sector enterprises shrank, the losses of those public enterprises that had recorded losses rose to 166 percent.
Şahinöz also pointed to the most heartening results of the ICI Top 500, which was that R&D expenses were rising proportionately, remarking that R&D expenditure from production to sales had risen from 0.51 percent to 0.74 percent in 2014. Şahinöz commented at the same time that the increases in R&D expenditure from production to sales calculated on the basis of income statements were a little less.