Turkish biscuit exporters face losses amid Mid East conflicts

Burak Coşan - ISTANBUL

Turkey’s biscuit sector, which made around $2.7 billion worth of exports in 2014, has been facing serious losses this year due to conflicts in neighboring countries, specifically in the Middle East region. Some exporting companies have even begun to apply for unpaid leaves for their workers to compensate for losses in the Central Anatolian province of Karaman, where there are many biscuit makers which export to the Middle East.

“We can see mass layoffs unless the situation improves,” said a company representative, who wanted to remain anonymous.

Biscuit makers have been suffering from decreases in exports due to the conflicts in Syria, Iraq, Yemen, Libya and Egypt, according to sector representatives. They added the consumption volume has also decreased by 25 percent in the domestic market, compared to last year.

“Normally the domestic consumption starts to decrease by June after schools are closed, but we saw a dramatic decrease in May this year and we had to lower our production volume. Our sale figures have been decreasing due to the contraction in our exporting markets,” said Şimşek Bisküvi Chairman Erol Şimşek.
Şimşek added the companies also have problems maintaining their production costs and setting product prices due to dramatic fluctuations in U.S. dollar and euro parity.

Another company representative said some 300 workers were on unpaid leave as of May.

“We face losses in almost all exporting markets. The rise in the U.S. dollar’s value has also worsened the situation for us,” said Bifa Bisküvi CEO Mustafa Pınarbaşı.

The deteriorating ties between Turkey and other countries in the region have played a big role in the dramatic decrease in Turkey’s exports, said a sector representative, calling for normalizing ties soon.