Dear Stakeholders,

2024 was a year marked by elections which had far-reaching impacts on the political and economic dynamics around the world, a reshaping of global economic balances and continuing wars. Global economic growth, while demonstrating signs of recovery, remained below its 20-year average, with growth expected to continue around the 2024 levels in 2025 and 2026. According to the IMF, the world economy maintained a 3.3% rate of GDP growth with regional differences becoming more pronounced. The U.S. economy grew by 2.8%, outperforming expectations. In the Eurozone, on the other hand, growth was subdued at 0.9% with fears of a recession becoming especially pronounced in economies such as Germany and France. During this period, as countries focused on their internal dynamics and attempted to adapt to challenging conditions, financial markets and the real sector renewed their strategies to counter macroeconomic fluctuations. High energy costs, particularly in Europe, hampered production and limited competitiveness.

Global trade volume, having grown by 2.6% in 2023, recorded a slightly more vigorous rate of growth of 2.7% in 2024. A combination of trade wars and protectionist policies, geopolitical developments in the Middle East and attacks by the Houthi rebels in Yemen on merchant shipping in the Red Sea continued to disrupt global trade and supply chains and started to shake the economic confidence environment. New increases in tariffs and duties on electric vehicles and batteries, solar panel cells, steel and aluminium products, as well as certain critical minerals imported from China, especially to the USA, ushered in a new chapter in global trade and drastically changed the dynamics. The Trump administration, which took office at the end of 2024, is currently working on the imposition of similar duties on countries besides China. While these policies are aimed at encouraging domestic production in the U.S., they increase export costs for developing countries, resulting in an inevitable decrease in sales to the U.S. market.

The Trump administration has also moved to withdraw from the Paris Climate Agreement while taking steps to increase fossil fuel production. This policy inevitably complicates the investment climate for renewable energy projects.

Central banks around the world have begun to shift from the tight monetary policies implemented after the pandemic in an attempt to control inflation to interest rate cuts. For example, the Bank of Canada moved to cut interest rates in the second half of the year due to the emergence of the US tariff threat. The FED, on the other hand, kept interest rates on hold in a range of 5.25-5.50% in the first 9 months of 2024 and maintained its tight monetary policy. The FED, which cut interest rates in September 2024 for the first time in 4 years, pulled the range to 4.75-5.00%. Due to the lagged effects of monetary policy, interest rate cuts by central banks are expected to be reflected to economic growth starting from the second half of 2025 and throughout 2026. It is hoped the rate cuts will have a positive effect on large-scale consumer spending and corporate investments.

Despite this economic outlook, the rise of the digital transformation and Artificial Intelligence in 2024 has left its mark on many areas. While companies are turning to digital solutions to increase efficiency, especially in production and logistics processes, AI applications have started to transform the dynamics of the workforce. According to the “2024 Work Reimagined” study carried out by the international consulting and auditing company, EY, the rate of generative AI usage increased from 22% in 2023 to 75% in 2024, with the rate reaching 90% in the technology sector. While Environmental, Social and Governance topics remained on company agendas in 2024, some slowdown was observed in global investment trends in this area with USD 24 billion in net outflows from global climate funds in the first nine months of 2024 according to Morningstar, suggesting that ESG investing has been more cautious than in previous years. Still, as part of their long-term compliance strategy, companies have turned to restructuring their supply chains with localized models with a lower carbon footprint. While these developments point to a structural transformation in the global order shaped under a shadow of economic and geopolitical uncertainty, they further highlight the necessity of countries and companies to develop strategies focused on flexibility, resource diversity, digital competence and sustainability.

Under this global backdrop, the Turkish economy recorded 3.2% GDP growth in 2024 with exports growing by 2.4% compared to the previous year to reach USD 262 billion with imports declining by 4.9% to USD 344 billion, with these results contributing to a narrowing of the foreign trade deficit. In addition, the slowdown and low demand, especially in Europe, negatively affected our exports. Markets in different regions, such as China, the United Arab Emirates and the United Kingdom, demonstrated a more positive performance.

With the monetary policy implemented as part of the efforts to tackle inflation, the CBRT raised the policy rate to 50% in 2024 and maintained its tight stance. The monetary policy, which proceeded with high interest rates throughout 2024, stimulated interest in TL assets and squeezed domestic demand. The CBRT’s first interest rate cut was implemented in the last quarter of the year. With this tight monetary policy being accompanied by weakening domestic and external demand, high financing costs and a strong Lira, manufacturing industry remained under pressure throughout the year. However, in the last quarter of the year, signs of recovery began to emerge in industrial activity with the ICI Türkiye Manufacturing PMI reaching an 8-month high of 49.1 in December, indicating that the contraction had eased.

While global interest rate cuts are expected to create a significant opportunity for developing countries to attract investment, Türkiye’s removal from the grey list and the renewed confidence provided by the implementation of disciplined economic policies have led to an increase in foreign portfolio investments. By the end of 2024, portfolio investments had increased by 3% to USD 130 billion. The rating agency, Moody’s, upgraded Türkiye’s credit rating from B3 to B1 for the first time in 11 years, leading to a rise in investor interest in short-term instruments and more liquid instruments, while the country risk premium (CDS) fell to 276 basis points, its lowest since February 2020, accelerating inflows into bond markets.

While investments in short-term financial instruments gained momentum, the increase in long-term production and employment-oriented foreign direct investments remained limited. Direct investment, having decreased from USD 13.7 billion in 2022 to USD 10.7 billion in 2023, could only edge up to USD 11.3 billion in 2024, underlining the importance of providing structural transformation elements in order to increase permanent investments, rather than hot money.

According to the OECD and IMF’s 2025 projections, global growth rates are expected to remain stable, while Türkiye’s GDP growth is projected to slow to 2.7% in 2025. In the coming period, geopolitical risks, uncertainty in global trade and weakening domestic and foreign demand will continue to be the most important factors shaping the economic outlook. In addition, interest rate cuts by the FED and the ECB will play a decisive role in the direction and cost of capital flows to developing countries such as Türkiye.

As Akkök Holding, we have resolutely focused on our investments and growth targets in order to strengthen our leading position in the chemicals and advanced materials sectors. The projects we have carried out throughout 2024 have led to important steps being taken towards sustainable growth and increasing our competitiveness in global markets. The investment decision taken by Aksa Akrilik to manufacture ultra-high molecular weight polyethylene (UHMWPE) fibre Mithra, which is 15 times stronger than steel of the same weight and 40% stronger than the para aramid of the same weight with the highest impact resistance, Epsilon Composite becoming a 100% Akkök Holding owned company, and the completion of the construction and development work at Akkim’s first epoxy resin production facility in Türkiye are examples of these steps forward. On the other hand, we are carefully exploring both organic and inorganic growth opportunities in order to further enhance DowAksa’s position in the global market. 

Last year, we became the anchor investor of the 212 NexT fund in line with our goal of investing in advanced materials and deep tech startups. Two investments were completed within the scope of the fund in 2024. For 2025, we plan to continue investments in synergistic technology collaborations in foreign markets, while pursuing sustainable investment opportunities, and to invest in the innovative start-up ecosystem.

We continued to move forward in line with our long-term growth strategy in the energy and real estate sectors. While expanding its energy trading activities by licensing in the European Union and neighboring countries, Akenerji continued to meticulously evaluate local and international investment opportunities in the real estate sector. Restructured with the partnership of Torunlar Group, Akcez transitioned to a new investment period in 2024. Sahrayıcedit, our new project in Istanbul, stands out as a sustainable and innovative investment with its modern urbanism approach. Developed with the revenue sharing model, the project marks an important step in line with our long-term value creation goals given its scale and the advantage of its location.

The year 2024 was marked by strengthened economic stability and a continuation of the financial rebalancing process in Türkiye. Akkök Holding recorded turnover of USD 4.2 billion and exports of USD 802 million. In the coming period, we aim to increase our clout in the international market with 4% growth in exports to USD 832 million and a 6% increase in employment. When evaluating new investment opportunities, we always consider their contribution to exports and sustainability as a primary criterion.

In line with our long-term strategies, we continue to create sustainable value in the sectors we are operating in. With the contributions and support of our stakeholders, we continue to grow in parallel with our comprehensive investment strategy and innovative perspective, and are taking firm steps towards our goal of reaching a more commanding position in the competitive environment.

I would like to thank all of our business partners and employees for their support and determination during this difficult period globally.

Respectfully,
Raif Ali Dinçkök
Chairman of the Board of Directors