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We need protection against the unfair competition of the dumping machines of the Far East

13 March 20239 min reading

“Legislation on all matters, especially state-supported Far East goods and used machinery, must be arbitrated as in competing countries. We expect the Investment Incentive Legislation to be revised with this perspective. We want to expand the scope of the list of machines of which import will not be supported and to protect all the products we need for import substitution from unfair competition of the unqualified and dumped goods of the Far East. This arrangement must be prioritized, especially for machine types that have proceeded in global competition.”


 Kutlu Karavelioğlu

 Machinery Exporters’ Association

 Chairman 




Despite all the problems in the world, Turkey’s exports exceeded 250 billion dollars for the first time. In the January-December 2022 period, the country’s exports increased by 12.9 percent compared to the same period of the previous year and reached 254,172 million dollars. Machinery exports, which is a significant power of Turkey, exceeded 25 billion dollars last year. The milling machinery and bakery machinery industries, which have a critical share in machinery exports, also play an important role. We had a talk with Kutlu Karavelioğlu, one of the veteran persons of the industry and the Chairman of the Machinery Exporters’ Association, about the sector’s success in exports and future despite all the difficulties experienced. 

Karavelioğlu said that Turkey’s machinery exports increased its production by 64.2 percent and exports by 29.3 percent compared to the pre-pandemic period. He stated that the share of the sector in Turkey’s total exports never fell below 10 percent and their share in global machinery exports was over 1 percent. The answers given by Kutlu Karavelioğlu, Chairman of the Machinery Exporters’ Association, to our questions are as follows:

Mr. Karavelioğlu, first of all, can you evaluate the last year of the sector for us?

According to the consolidated data of the machinery manufacturing industry, the industry increased its exports, including the free zones, by 9.6 percent compared to the previous year, to $25.3 billion at the end of 2022. Excluding exports from free zones, annual machinery exports reached 2.9 billion dollars for Germany, 1.5 billion dollars for the USA and 1.3 billion dollars for Russia. Machinery exports from free zones to these three countries exceeded 600 million dollars. Exporting 250 million dollars to Russia, which achieved a 62.4 percent increase in exports in 2022, only in December, machinery manufacturers reached the highest data of all time in commercial relations with this country. 

In 2022, when saw an increase of 5.2 percent in global machinery and equipment investments and a 4% increase in machinery industry production, the growth in investments was recorded as high as 13 percent in Turkey. According to the data announced by TURKSTAT, at the end of November, when the total production of the general manufacturing industry grew by 8.3 percent on an annual basis, the production increase in machinery and equipment manufacturing was 16.5 percent.

What is the share of the machinery industry in Turkey’s exports?

According to the consolidated data of the machinery industry, we can say that our share in Turkey’s total exports never falls below 10 percent. We closed the year 2022 at this level and managed to keep our share in global machinery exports above 1 percent. We are now ahead of developed country sectors such as Denmark, Finland and Norway. If we can maintain our speed, we will outdistance Sweden and Spain in a short time.

How does Germany’s umbrella to protect domestic manufacturers affect Turkish machinery manufacturers?

German businesses, which had 3 months of materials in inventories before the pandemic, are now working with at least 6 months of stock. The tendency to stockpile in order to provide self-sufficiency for a certain period of time and then gain time and localize it is not unique to us. The world has left behind the days when production can be made with a few weeks’ raw and auxiliary material stocks; Just-in-Time Production method is a thing of the past, supply chains are more important than anything else. 

We are a sector that provides strong integration to Europe with the stable relations it has established in the international arena. With the New Year, we closely observe the developments in Germany, which has implemented the Supply Chain Obligation Law, which imposes responsibility on importers, including companies with a large business volume, on whether they observe the environment and employee rights from the beginning to the end of the value chain for the goods they will bring into their country. Our increasing share in supply chains and our diversity in product groups will surely balance our overall performance against possible fluctuations in demand. We believe that we will see the results of the relations we strengthened in every industrial field, especially in 2023, thanks to our high performance during the pandemic period..

Did the Russia-Ukraine war have an impact on the sector? Recently, there has been a demand for the Russian market. How are machinery exporters affected by this demand?

After the break out of the Ukraine-Russia war, export orders in the global industry began to decline and the growth in the world economy, which slowed down in the third quarter, left its place to stagnation in the last quarter. We are reaching more and more customers in Russia, where we managed to sell machines worth 100 million dollars every month, even under war conditions, and increased our exports by fifty per cent this year. Widespread promotional campaigns that we started before the pandemic played a major role in this, as Russia was included in our 5 target markets in our Export Strategy Report published in 2020. The contribution of the exhibitions we participated and partnered with and the collaborations we established with sectoral organizations was also extremely high. Our experiences in Iraq and Iran prove that our machinery exports to Russia will continue to increase in case the sanctions become tougher.

How do increasing energy and raw material costs affect the machinery sector?

The competitive advantages of the machinery sector did not reflect on the export amount at the rate it was targeted at the beginning of last year, due to the negative effects of the developments in the world, recession pricing and the cross rate. However, our cost index has increased by around 90 percent in the last 12 months, when the increase in the currency basket was around 40 percent in Turkey. Of course, this 90 percent has been attained thanks to the higher added value of the machinery industry, according to the cost index calculated as 136 percent in the general manufacturing industry according to TURKSTAT data. A significant cost increase at the beginning of the new year came from wages and severance pay. Developing a model that will prevent the overvaluation of TRY in this lively environment enables both the control of the rise in imports and the ability of exporters, whose costs have increased in all areas, particularly in the workforce, to maintain their competitiveness. We should consider that sectors with high added value are less affected by fluctuations in energy and raw material prices than other sectors.

What are your challenges as an industry?

In this period, when economic and geographical unions were put under pressure all over the world, and restrictions on imports were on the rise with protectionist policies, machinery imports in Turkey, which entered the market easily thanks to exchange rates, increased by 10 percent and reached 37 billion dollars annually. We were able to keep the coverage ratio at 70 percent with our import and export increases that are very close to each other, but we think that our competitors will engage in much more aggressive campaigns both in our neighboring geography and in our country this year, when it has become difficult for everyone to receive new orders. We have to urgently fortify the domestic market in order to maintain the competitiveness of our industry, which increased its production by 64.2% and its exports by 29.3%, compared to 2019, before the pandemic.


Legislation on all matters, especially state-supported Far East goods and used machinery, must be arbitrated as in competing countries. We expect the Investment Incentive Legislation to be revised with this perspective. We want to expand the scope of the list of machines of which import will not be supported and to protect all the products we need for import substitution from unfair competition of the unqualified and dumped goods of the Far East. This arrangement must be prioritized, especially for machine types that have proceeded in global competition.

What are your goals as the machinery exporters sector for 2023 and beyond?

Recently, there has been a hesitant optimism in global organizations that we have been following closely to monitor industry’s agenda in the field of mechanical and plant engineering. For example, 86 percent of 600 manufacturers in Germany, of which opinions were asked, say that they are not pessimistic about 2023. Despite the disruptions in production due to problems in the supply chain and shortage of materials, the main factor feeding this perception is the expectation that there will be a recovery in the second half of the year. Of course, the fact that domestic manufacturers will be supported and protected is another factor of trust for companies. Whatever the global conditions, we are confident that we will get better results than our competitors and increase our market share on a global scale by the end of 2023, the 100th anniversary of our Republic.



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