Syria, which has attracted intensive Turkish investments in the recent years, experiences breaks in it relations with Turkey due to its internal problems arose the previous year. The Turkish investments that have been made in the region since 2000s, either ended up or the Turkish elements were withdrawn due to the internal uprisings and conflicts. While the political and economic relations between the two countries came to a halt because of Turkey’s policy towards the Syrian government, the future of many investments made in various fields such as textile, construction and cement became vague. Many company owners are unable to visit their own facilities. These facts about Syria, which forms the longest border of Turkey with 800 km, also affect the Turkish textile sector’s entrance to the Middle Eastern market negatively. Syria, which has a population of about 20 million, gives the impression of a country searching for its fate.
Turkey and Syria, which removed almost all the borders and became ‘brother’ countries two years ago, had intensified their political and economic relations within the preiod of 10 years. Owing to the cost and enery advantages, lots of Turks made investments in the region. Official figures show that the Turks made $ 1 billion worth of investment in the region. Turkey assumed the role of the partner country in the civilianization-democratization process beginning with Beşir Esad’s coming into power after Hafız Esad. The value of trade carried out between the two countires was calculated to be $ 750 million at the beginning of 2000s. Now this figure is around $ 2 billion. In this process, the target was to reach $ 5 billion worth of trade volume in 2012. With the free trade agreement signed in 2004 between Turkey and Syria, the customs duties were aimed to be reset gradually within 12 years. As Syria allowed importing second hand machineries in 2004, Turkey experienced an increase in the machinery sales it performed to Syria, which meets 50 percent of its total machinery imports from Turkey. Syria demanded mostly the high agricultural machinery, food processing and packaging machines, textile machines, pumps and compressors, heavy equipment and machine tools.
However as the Arab Spring affected Syria, Esat’s government used military force against the dissidents and increased the pressure on them. As a result of this the relations between the two countries received a serious wound. After Syria withdrew its Embassy in Gaziantep in December 2011, Turkey is preparing to shut down its Embassy in Syria nowadays. All these created a heavy blow on the economic relations between the countries. The Turksh, who have investments in the region, either had to close their plants temporarily or completely withdraw from the region. Many investors were unable to visit their own plants due to the problematic transitions between the two countries.
Especially Hatay, Gaziantep, Mardin, Şanlıurfa and Kilis, where daily cross-border trade is carried out, were badly affected by the tension in the region. The Turkish investors make statements for the termination of this uncertainty as soon as possible and for the resumption of the activities in the region. As it can be remembered on September 25 2011, Syria took the decision to stop imports from Turkey. As a result of this decision, $ 1 billion 152 million worth of exports performed from Turkey to Syria were reset. Turkey used to export mostly vegetable oil, plastic goods, home textiles, synthetic yarns, fibers and carpets. The import ban imposed by the Syrian Government on the products with customs duties of more than 5 percent, affacted all product groups.
The Border Cities Received a Deep Impact
Adil Konukoğlu, Chairman of Gaziantep Chamber of Industry stated that 15 Turkish companies, which have investments in and around Aleppo, stopped their productions and that the Turks returnet to their country. Konukoğlu remarked that the events that took place in the region are really painful. Konukoğlu continued by saying; “We used to perform about $ 120 million worth of exportation to Syria. There were companies in the region that engaged in the production of yarn, plastic pots and television. However they all had to close their facilities. Approximately 65 thousand people were visitng Gaziantep just for trade and our annual trade rate amounted to $ 200 million. However everything has stopped. Nothing is imported or exported between Turkey and Syria.”
Hikmet Çinçin, Chairman of the Hatay Chamber of Industry, stated that 5 or 6 Hatay based companies have facilities in Syria and the production in all of these facilities has been stopped. Çinçin added that in addition to the loss made in the fields of textile, plastic pipes and pesticides, a great loss was created again as the daily commercial shopping stopped. “About 500 or 600 million Dollars worth of trade was performed annually by the Syrians in their daily visits to Hatay and the total trade made between the two countries were recorded to be around 2 billion Dollars. Besides, Syria was the transition point through which we enter the Middle East market that worth 10-12 billion Dollars. Several mutual agreements have been canceled in the recent months,” said Çinçin.
We can not Visit Our Own Plant
Hateks and Akteks are the two important companies that have investments in Syria. The Hatay-based Hateks (Hatay Textile Enterprises) has a facility in Aleppo. Abud Abdo, CEO of Hateks, stated that they have been unable to visit their own plant in the region for 6 or 7 months. “It is stated that there is no security of life in the region. However we continue the production there. Our business is conducted by our Syrian partner. On the other hand about 10 Turkish employees of us have returned to Turkey from Aleppo,” said Abdo.
The company established with a $ 7 million 500 thousand worth of investment under the name of Hateks Aldawlia Co. Ltd. in the Aleppo Organized Industrial Zone, started to operate in 2010. The company that manufactures towels, bathrobes and towel by-products, 88,5 percent of the company’s shares is owned by Hateks Inc.
AKTEKS was Growing in the Syrian Market
Akteks, which is also a Gaziantep-based company, stated that it continues production in its plant in Aleppo. Mehmet Ali Mutafoğlu, CEO of Akteks, underlined that the situation of many Turkish investments in the region worsens.
Akteks, which has been engaged in the production of acrylic and BFC since 1984, started the investment process in Syria after its development in Gaziantep region. The company that is an investment initiated by Mutafoğulları, which is one of the well-known families of the region, realized its first investment in 2002 in Aleppo and became the first foreign and Turkish investment in Syria. Akteks, the investments of which are located in Sheikh Najar and Der-Cmell Area, has a facility with a closed area of 80 thousand sqm and an open area of 15 thousand sqm. 200 people are employed in this facility, where acrylic, chenille, fancy yarns and BFC carpet yarns are manufactured. The company’s production capacity in Syria is stated to be 25 thousand tons per day in acrylic and 10 tons in BFC.
While continuing its investments in Turkey, Akteks strengthened its presence in the Syrian market. In 2005, the company that made a tricot yarn investment in 2002 in Aleppo, renewed its plant, which caught fire, and increased the number of its employees and capacity. The company sells nearly 75-80 percent of its production to the domestic market of Syria and the rest of it to the Middle East and Arab countries.
A 180 million Dollars worth of shopping project of Renaissance Construction located in the region, which – in addition the textile - attracts many other important investments, has stopped. Güriş Holding, which has two cement factories in Syria (In Rakka and Al Hasekeh Areas), has made a 280 million Euros worth od cement investment. However, after all these events, the company stopped its production in the region and suspended its investments. The holding is stated to have made a loss of 50 million Euros.
