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At the ICI Assembly where Halil Öztop, the General Director of Development Bank of Türkiye was hosted, Erdal Bahçıvan, the ICI President stated that: “Development Bank of Türkiye is our Strategic Partner in Investments”

25.06.2020
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June Assembly of Istanbul Chamber of Industry was held as a video conference on the date of June 24th, 2020. The main agenda of ICI Assembly held by Zeynep Bodur Okyay

ICI Assembly President, was “The Importance of the Visions and Targets of Development Bank of Türkiye in Industry-based Development in terms of Industry’s Future”. ICI Assembly hosted İbrahim Halil Öztop, the General Director of Development Bank of Türkiye in order to hear his opinions and get informed about the new structure and applications.

Erdal Bahçıvan, the President of Istanbul Chamber of Industry drew attention to the importance of relation between the banking and real sector in sustainable economic development and stated that: “Development Bank of Türkiye is a role model by becoming partner for the investment projects containing advanced technological products with high added value developed by our industrialists who have bright dreams for the future of our economy.”

By the speech he made in Assembly meeting, İbrahim Halil Öztop, the General Director of Development Bank of Türkiye recorded that: “We will protect the investor against the fluctuations in interest and exchange rate with Investment Support Credit with maturity for 18 billion TRY and up to 10 years provided by Central Bank of Türkiye. We are still working on meeting the deficiencies in business capital caused by pandemic.”

The June Assembly meeting was opened by Zeynep Bodur Okyay, the ICI Assembly President. When opening the meeting, Okyay said that:

“Considering the industry as an alive organisms, it would not be wrong to say that the blood running through the veins of industry is the fund. Our chemistry is broken down in periods when we are limited to access to fund or our costs increase. We see that view in the research of 500 Top Industry Organizations which is a point of pride for our Chamber. We expect and demand to see a structure where the production economy is placed at the center in the new normal which we will adapt into after Covid-19. We expect to see precautions to keep our production, financing and employment capacity strong and then to see steps to create competitive advantage for us in the global market. Undoubtedly, the fund is the most vital parameters among all.

Announcement of fund package around 9 trillion dollars for fighting against the negative developments caused by the pandemic in the world underlines the importance of it once again. We believe that reassuring steps will be taken to reduce the risk premium to the reasonable level rapidly with correct policies. Besides, it is of great importance to deepen our capital market, diversifying the instruments, improving the investment area, maintaining and increasing the interest of foreign capital in addition to the bank supports.

We can move Istanbul which has ranked as 53rd in global finance index to the top ranks only by taking such steps and complying with the terms that international investors expect. We need to use the driving force of global liquidity which is probably to be abundant after Covid-19 as a support and to construct a sustainable financing system for qualified production. We should not go on with a production and investment approach which only based on banking system and lacks of alternative fund opportunities. Otherwise, it would not be easy to get rid of the foreign-dependent economy trap that the liquidity fluctuations in early-2000s directed us would not be easy.

Okyay, the Deputy President of ICI Assembly gave the floor to Erdal Bahçıvan, ICI Board of Directors President to make his speech.

Stating that structural transformation investments in the industry and advanced-technological industrial investments will not be possible to realize without long-term, qualified fund resource, Bahçıvan said that: domestication and nationalization model in financing by the Development Bank of Türkiye will create excitement for everybody. Telling that this investment requirement results in the need of fund, Bahçıvan mentioned that it is unlikely for private sector to finance such investments with its own resources. Bahçıvan expressed that as seen in many industrialization examples in the world, Türkiye needs to have a new generation Bank of Development. Bahçıvan stated that Development Bank of Türkiye fortunately is restructured with the name of Development and Investment Bank in order to provide long term, cost-efficient investment and project credits for major-scaled investments that they are in need of.

Reminding that examples such as China, South Korea and Germany in the world clearly demonstrates it, Bahçıvan recorded that the active size of the development banks in these countries varies between 15 and 18 percent of GDP of the countries. But, pointing out that the credits distributed by the same development banks are between 10 and 13 percent of the GDP of the countries, Bahçıvan told that if it reaches this size, the Development of Türkiye would become the largest bank in Türkiye and will make a significant contribution to the moving the Turkish industry to a higher league.

Stating that a development banking model with a strong capital which can fund major-scaled investments with its project funds and become stakeholder when necessary and provide cost-efficient and long term financing is of vital importance for Türkiye, Bahçıvan underlined that industrial companies in Türkiye will be enabled to develop new and high added value products and enhance their competency capacity in the international arena thanks to the financial support it will provide in R&D, innovation and technological product manufacturing areas.

Mentioning about the guarantee system regarding the investment credits, Bahçıvan said that: “Quality of the project or the investment itself is not considered as a guarantee in our country, unfortunately. Generally in cash guarantee is demanded, and our companies have difficulty in finding guarantee and have to bear with high costs. We think that qualified investments in our country should be freed from such old type collateral habits such as title deeds and real estate. Instead, the value to be created at the end of the investment should be deemed as a guarantee through a project-based perspective. Briefly, we should believe in the future of Türkiye. In this regard, I invite Development Bank of Türkiye to become and develop the investment projects which includes high added value products of our industrialists who have very bright dreams about the future of our economy that are produced by advanced technology, and to further develop all together. I have no doubt that we will succeed it all together.”

Mentioning that the short-time working allowance has made great contributions in protecting the employment, Bahçıvan recorded that they are very happy to see positive signals for many sectors to have a busy business schedule once again during the normalization period beginning with June. Bahçıvan expressed that it is mandatory to extend the duration of short-time working allowance for three months or even until the end of the year and realize the other supports to contribute the protection of the employment taking into consideration that the impacts of the pandemic will continue and recovery process will last very long for many sectors.

Mentioning about the works of ICI regarding Covid-19, Bahçıvan stated that: “As a Chamber, we organized an event where we discussed Eximbank Contributions to Export in New Normal Period with the participation of Mr. Ali Güney, Eximbank Director and Deputy Directors on 5th June, Friday. Similarly, we hosted Prof. Dr. Cevahir Uzkurt, KOSGEB President, Deputy Presidents and Head Directors with other staff on 15th June, Monday . The meeting where we discussed the KOSGEB supports for the industry was very beneficial both for the Chamber and the KOSGEB. We made an effort to learn about the current problems of our sectors and to share our works that we have realized as the Chamber with them by participating in the invitations of our sectoral associations as much as possible in this period as well. Works for the project of “Post-Covid-19 Sectoral Risks, Opportunities and Route Maps” that we initiated and where we discussed the opportunities and risks before our sectors in the New Normal process continued at full steam in this period. During the last three weeks, we made an effort to include your valuable opinions and recommendations into our report by holding 17 sector meetings with the participation of Assembly and Profession Committee Members. We aim to complete it at the beginning of July.”

Mentioning about the ICI-Standard of Struggle Against Epidemic/Pandemic Specific to Covid-19, Bahçıvan recorded that they completed the gudeline which is the most important and comprehensive phase of the project and they introduced it to the public by a press release and presented to the use of our industry on 17th June. He told that in the project which includes taking the necessary health and hygiene measures in industrial facilities while adapting into the new normal and applying this as a standard, procedures, instructions and question forms will be completed rapidly and presented to the use.

Mentioning that they created a web page for the project that they initiated with pilot applications in industrial facilities, Bahçıvan added that: Companies can identify risk groups specific to Covid-19 on this website, follow all documents and developments regarding the standard, and train their employees by means of training movies.

İbrahim Halil Öztop, the General Director of Development Bank of Türkiye made a speech for ICI Assembly members. Öztop stated they tried to overcome the crisis by acting responsibly both as the state and the nation during the Covid-19 pandemic. Pointing out that it is of vital importance for companies in the manufacturing sector to comply with the measures regarding the pandemic, Öztop explained that cash flow problems began to be seen in March. Mentioning that Central Bank implemented precautions in addition to the Economical Stability Shield, Öztop recorded that he believed that monetary and financial precautions would support the manufacturing potential and eliminate the negative economical impacts and thus Türkiye will turn to the growth path again.

He stated that they have been strongly supported by Erdal Bahçıvan, ICI President in restructuring process of Development Bank, and they improved their operation fields as a bank. Reminding that the headquarter moved from Ankara to Istanbul, Öztop recorded that they were established in 1975 and defined themselves as a 45-year-old brand new bank. Expressing that they established Turkish Development Fund recently, Öztop stated that they have provide financing opportunity for real sector investments under reasonable conditions and contributed to the reduction of regional development difference through their researches.

Mentioning that they have continued their researches to get over the deficiency in the business capital even though they are specialized in the field of investment loans, Öztop stated that they tried to supply the funds separated for Türkiye to fight against the pandemic by the international development organizations and to provide to the firms as a business capital in the second half of the year.

Informing that the amount of long-term funds obtained from international financial institutions with the guarantee of the Ministry of Treasury and Finance has reached a total of 3.6 billion dollars in the last 15 years, Öztop recorded that they foresee that additional resources will reach $1.5 billion in 2020. Telling that they provided finance support for the projects regarding Solar, wind, hydraulic, geothermal projects as well as landfill gas and energy efficiency projects by means of international resources they provide, Öztop expressed that 54 percent of their loan portfolios consist of renewable energy and energy efficiency projects.

İbrahim Halil Öztop, the General Director of Development Bank of Türkiye stated that they provided Investment-Certified Advance Credit with maturity up to 10 years and fixed interest by 7,75% for 18 billion dollars on 8th June in order to support the sectors and investors who conduct high efficiency and high added value production, and shared that:

“We will contribute in limiting the impacts of the pandemic on Turkish economy and protect the investor against the fluctuations in interest and exchange rate. We continue our efforts to eliminate the "business capital" deficiencies in businesses facilities upon the impacts of pandemic. We have added KGF warranty into the credit guarantees that we will allow to be used. We supplied a financing for 316 million Euro from the World Bank within the scope of the Project for Increasing Registered Employment. Through this project, we aim to provide the private sector facilities who are intended to grow and develop their business with the access to technical assistance in 24 provinces that we specified and to contribute to the increase of the registered employment. We foresee that additional resources that we will supply from development finance organizations will reach around 1,5 billion dollars in this year. We played an active role in investment banking, while providing long-term new resources to the economy to finance sustainable development. We signed a protocol with T.R Ministry of Industry and Technology so that Technology and Innovation Fund and Regional Development Fund included under the roof of Turkish Development Fund could be established to make investments in many companies and enterprises in our country. We aim to be partners with start-ups, especially through the Technology and Innovation Fund for 350 Million TL which will revitalize technoparks. We will continue to support the investments by becoming partner with larger companies by means of Regional Development Fund for 400 Million TRY. We plan to diversify and present our resources with the Eurobond export and domestic bond export to the industrialists and business people in the following period.

And, ICI Assembly Members shared their opinions and directed their questions to Öztop. Öztop listened and answered the opinions and questions of the industrialists.