Message From The Chairman
At Akkök Holding, we have successfully completed this year as always in our 70-year journey. On this occasion, we wanted to convey some of our predictions about 2023 to you, our esteemed stakeholders, by evaluating the developments in the world and in our country throughout the year.
The rapid recovery in 2021 after the COVID-19 pandemic brought inflationary effects and this situation triggered the central banks to make a series of interest rates hikes in the first quarter of 2022. However, when the highest global inflation rates of the last 40 years were reached, it was understood that it was too late to intervene. Adding to the Russian occupation of Ukraine, the ensuing energy crisis and the difficulties in accessing finance, the global growth rate, which was 6% in 2021, unfortunately declined to the 3% level in 2022. This rate was recorded as the lowest growth rate in the last 30 years, excluding the 2009 financial crisis and the 2020 pandemic. In light of the developments, we have entered 2023 with the rising risk of recession. Strong interest rate hikes are not expected to continue for the remainder of 2023, also due to the bankruptcy of banks such as SVB and Credit Suisse.
However, dynamics in major economies remain different. While growth is expected to come to a standstill in Europe in 2023 with the efforts to get rid of the effects of the war and the transition to alternative energy sources, the Chinese economy is expected to grow by more than 5% with the end of the ‘Zero Covid’ policy and the accelerated increase in individual consumption. In the USA, where the Dollar and the labor market are stronger, it is estimated that the FED will remain at 5% interest rate in the new year due to the high interest rate sensitivity of banks. Our general expectation is that economic activity will recover, especially from the second half of 2023, with the cessation of interest rate hikes globally.
Contrary to many economies struggling with inflation, our country prioritized growth and supported employment. In this framework, practices such as policy rate cuts, high minimum wage increases, and lowering the corporate tax rate from 25% to 23% were introduced in 2022. Thus, while a growth rate of 7.6% was achieved in the first half of 2022, the unemployment rate declined to around 10%. In the rest of the year, growth slowed down due to the rising negative impact of the global conjuncture and our own vulnerabilities, and the year ended with a growth rate in the region of 5%. However, the growing current account deficit, the election atmosphere, low foreign exchange reserves and frequently changing regulations, especially inflation reaching 80% during the year, make commercial activities very difficult. Difficulties in accessing finance, high energy costs and low external demand are likely to further constrain economic activity in 2023. It should not be overlooked that taking short-term measures may cause more fundamental problems in the long run.
At Akkök Holding, we continued our growth and investments without slowing down in 2022, despite this challenging macroeconomic environment. With the active participation and support of our subsidiaries, we develop long-term growth plans and implement innovative investments that will add value to our country and our stakeholders in all sectors in which we operate. For example, only in 2022, we invested nearly USD 200 million in projects such as the facility established by Akkim for the domestic production of epoxy, a completely imported product, the installation of DowAksa’s 3rd carbon fiber production line, and Aksa’s outdoor technical yarn facility. We closely follow all developments and innovations in technology, consumer habits and business models and integrate them into our processes.
We continue to achieve our tangible sustainable growth targets with these investments, in which we ensure a balanced increase in new products and capacity. This year, we also established the Green Strategy Group with our group companies to strengthen cooperation in sustainable and environmental growth. Thus, we will take concrete steps on behalf of our action plans in areas such as the circular economy, renewable energy and adaptation to climate change, which are the current requirements of sustainable growth.
As a result of all our efforts, we achieved a total turnover of TL 78.5 billion in 2022, which was a challenging year. Our EBITDA rose by 130% to TL 13 billion. In addition, our exports grew 30% and reached USD 797 million. I would like to thank all our business partners and employees for their continued support and determination during this difficult period globally, as we continue to implement our investments with a long-term perspective and the goal of creating added value.
Raif Ali Dinçkök
Chairman of the Board of Directors