Danger signals

Cem Boyner is worried about the future of his business. Because the Chinese are buying European retail brands. He believes that this will make it difficult for Turkish producers to sell their projects and find space on the shelves. It is not only in retailing, there are also danger signals coming from other sectors. In tourism new destinations may emerge as rivals to Turkey. The countries of North Africa, which today are seen as a market, could tomorrow be transformed into attractive centers for investment. In banking, technological developments may get rid of banking operations completely. Here are the danger scenarios that could affect the future of 13 sectors...

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WHAT FRIGHTENS TOURISM
Tourism is another sector in which people are talking about danger scenarios. The potential for new tourism destinations is the focal point of these scenarios. People are talking about the possibility of countries such as Libya, Algeria, Tunisia and Egypt resolving their democracy problems and then becoming very attractive destinations as a result of competitive advantages such as price.

Ozdogan Group Board Member Ali Ozdogan says: “The basic reason for this perception is that, following the overthrow of the dictatorial regimes that began with the Arab Spring, the Arab countries have a developable demographic structure and possess touristic resources which are very close to us. It is likely that these developments will affect us within the next ten years.” Özdoğan believes that the danger destinations are not restricted to these countries. Özdoğan says that. as a result of the impact of technological developments in reducing flight times to distant destinations, Asia and the Far East will become low cost exotic destinations.

Cornelia Diamond Golf Resort Spa General Manager Zafer Alkaya draws attention to the climate risks for the sector. Alkaya notes that the Mediterranean basin is in danger of rapid desertification and believes that, for this reason, water resources and sustainable management are very important.

CEMENT MARKETS ARE CONTRACTING
The Turkish cement sector exports a significant proportion of its output. This performance has meant that it has become one of the three top exporters in the world... The most immediate threat to the Turkish cement sector, which has a capacity far in excess of domestic market consumption, are contractions over the next ten years in export markets and the resultant changes in the balances of supply and demand.

When we look at the countries to which Turkey exports it can be seen that these dangers are now already slowly becoming visible. Sabancı Holding Cement Group Chair Mehmet Göçmen says that the excess supply resulting from changes in the balance in supply and demand on the Syrian and Iraqi markets, to which a significant proportion of exports are transported by road, will result in these markets becoming self-sufficient. “In this way, Syria and Iraq will cease to be net importers,” says Göçmen. “It is a similar situation with Libya. African markets are taking protective measures against cement imports.”

COMPETITIVE EROSION IN PLASTICS!
Plastics are one of the areas in which Turkey is strong in the international arena. Turkey ranks eighth worldwide and third in Europe in terms of plastics processing capacities. But the sector is in danger of losing this position in the future.~
Because the sector’s reliance on oil-based raw materials for plastics and Turkey’s dependence on foreign supplies of energy are weakening its competitiveness, Plastic Industrialists Association (PAGDER) Board Chair Hüseyin Semerci says: “With $67 billion, Turkey could to date have easily established at least ten petrochemical plants and become one of the most important countries in the world both in petrochemicals and in plastics. The failure to look ahead has become an obstacle to our sector’s sustainable development in global competition.” At the same time as Turkey is at risk of losing its competitiveness, many developed countries, particularly from Europe, are now increasing their investments in plants to produce finished products in the Gulf countries in order to take advantage of their proximity to raw materials. The dangers to the sector do not stop here, Countries such as China and Taiwan have launched a major offensive in plastic processing machinery.

THE BALANCES ARE CHANGING
There are dangers in several branches of the agriculture sector. In particular, production of durum wheat, which is used in the production of pulses and pasta, is declining. Arbel Group Board Member Hüseyin Arslan says that this is the result of producers being able to obtain higher yields through irrigation and switching to planting products which have higher state support premiums. Arslan underlines that the contraction in the area that is being planted with pulses means that Turkey may become a net importer in five to ten years. “If a farmer turns to other products and becomes used to planting them, then there is no going back,” says Arslan. “If it goes on like this, investors may look abroad, There is a possibility of losing markets because the sector cannot find products.” Barilla is one of the major players in pasta and is worried about developments in its own sector. Barilla Turkey Director Güneş Karababa says that the production of durum wheat is not rising in parallel with the growth rate of the pasta sector and that for this reason Turkey has become a net importer.

THE CHINESE RISK IN MINING
In recent years, the Turkish mining sector has become one of the favorites for investors. But there are significant dangers for this sector which is so attractive from the perspective of the investor. These dangers are mainly the product of the sector’s approach to exports, In 2012... The sector increased its exports by 8,2 percent to $4,182 billion, Its main export markets were, in order. China, the US, India, Italy and Iraq, But recently China’s share has reached worrying proportions.

Mehmet Özer, the Board Chair of the Istanbul Mining Exporters’ Union, says that today China accounts for 43 percent of the mining sector’s total exports. “Our sector has become dependent on China,” he says. “When things are going well then China’s dominance is very advantageous, But any recession on the Chinese market would be a serious threat to the mining sector. As long as our sector does not develop alternatives to China and is unprepared for new markets, then the smallest negative development with regard to China could result in significant losses for mining.”