The earthquakes centered in Kahramanmaraş and Hatay caused significant losses in the skilled labor capacity of the manufacturing industry workplaces in the region.
According to the compilation made from the "2023 Kahramanmaraş and Hatay Earthquakes Report" prepared by the Presidential Strategy and Budget Department, 21.9 billion dollars, which corresponds to 8.6 percent of the country's exports, which were 254.2 billion dollars in total in 2022, were provided from the provinces in the earthquake region.
In 2021, the share of the manufacturing industry in the provinces of the region in the country's gross domestic product (GDP) was calculated as 11.5 percent, while chemistry, textile and food in Adana, chemistry, food and fresh fruits, textiles, machinery and furniture in Gaziantep, iron-steel and fresh fruits in Hatay and Osmaniye, textile-steel and fresh fruits in Kahramanmaraş stood out as sectors with exports over 300 million dollars in the region.
47 thousand 581 manufacturing industry companies are involved
While there were 47 thousand 581 manufacturing industry companies in the earthquake region, 314 of which were large, 779 of which were medium, 3 thousand 769 of which were small and 42 thousand 719 of which were micro-scale, it was determined that 38 organized industrial zones (OIZ) served in the region before the disaster and 4 thousand 997 companies operating in these regions provided employment for approximately 550 thousand people.
Employment in OIZs in the region corresponds to approximately 22 percent of the employment in all OIZs across the country, while 31 thousand 127 workplaces are located in 116 small industrial sites (CSR).
According to initial assessments, the earthquake did not cause significant damage to the planned industrial areas (OSB and CSR) in the region. However, it is foreseen that production may be disrupted for a while in some facilities due to damage to energy and transportation-communication infrastructure or lack of labor.
The most important and irreparable impact of the earthquake on manufacturing businesses was the loss of skilled labor. Operations are expected to be disrupted at some facilities due to key staff losses and difficulties arising from staffing conditions.
It is estimated that exports will be adversely affected as a result of disruptions in production and delivery due to earthquake damages of some organizations engaged in export-oriented production and facilities producing intermediate goods for these cents. Due to the interruption of production, the demand deficit that will occur in some products can be met by imports.
In the survey and field study conducted by the Ministry of Industry and Technology, a total of 8,599 companies were interviewed in 11 provinces, of which 2,398 were face-to-face and 6,201 were contacted by phone.
Total damage 81 billion 155 million pounds
According to this study conducted by the Ministry, the total damage in the manufacturing industry for 8 thousand 599 companies is expected to be 81 billion 155 million liras. Of this damage, 31 billion 117 million liras were building, 24 billion 852 million liras were machinery and 15 billion 126 million liras were stock damage.
According to the first findings made after the earthquake, there is no serious problem in the industrial facilities in terms of buildings and machinery-equipment, while the main problem is expected to be experienced in human resources. It is evaluated that companies will have problems in this regard and this situation will affect the production processes. For this reason, comprehensive work needs to be done on the loss and need for labor force.
While the damage assessment studies on the building, machinery-equipment and human resources continue, necessary arrangements will be made according to the cost that will arise.
On the other hand, the report made the following recommendations in the short term, in order to carry out damage assessments and controls as soon as possible and to start production immediately in usable industrial facilities:
" Providing support at a level to meet the annual depreciation needs of the companies operating in the region in order to accelerate their transition to production
In order not to lose the export markets, especially in the ready-to-wear industry, the export connections of the damaged companies to be shifted to other companies and the contract production
Introduction of credit and tax facilities for the purchase of commercial vehicles and agricultural tractors, including vehicles damaged by earthquakes
- Improving the loan rates extended by the Ministry of Industry and Technology to OIZs and CSRs at the sector and regional level
- Making amortization deferrals according to the damage status of OIZ and CSR loans that have started or will start to repay according to the redemption plan
- Giving priority to the region in OIZ and CSR entitlements
- Implementation of 1-year debt deferral for those who use investment and/or business loans from enterprises within the scope of small and medium-sized enterprises (SMEs) whose production activities have been interrupted due to the earthquake and extending the grace period applied in investment loans for 1 year
- Increasing the credit support limits for the repair of buildings, machinery, equipment and the purchase of new machinery in industrial facilities that meet the definition of SME, giving priority to the region
- Providing one-time value-added tax (VAT) and customs duty exemption for the purchase of machinery and equipment in enterprises that will renew their equipment damaged by the earthquake."
In the report, it was recommended that in the medium term, the owner of the motor vehicle whose traffic records were deleted due to earthquake destruction and the owner and organization and their heirs in life should be a domestic product in the supply of motor vehicles again and that they should be transferred or sold within a certain period of time.
In the report, which recommends providing easy and low-cost loans from Halk Bank for driver tradesmen who will purchase commercial vehicles, from Ziraat Bank for farmers who will buy agricultural tractors and providing tax facilities in consumer loans to be used to purchase motor vehicles or agricultural tractors in the earthquake region, provided that they are registered and registered in their own province, the shortest application of earthquake insurance in existing and newly built OIZs and CSRs It was also proposed that arrangements be made so that it could be implemented in time.
In the report, which is offered to move the industrial facilities from the Marmara Region, which is an earthquake region, to other regions in the long term, thus reducing both the possible earthquake damage and other economic and environmental problems arising from unplanned urbanization, it was recommended to review the damages of the provinces and districts in the earthquake region and to revise the existing incentives and to ensure that the industrial facilities are built in the form of more earthquake-resistant structures, including steel construction.
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