Thu, Aug 16, 2018 - Page 12 News List

Manufacturers to escape Turkey’s woes

EUROPEAN HUB:Most tool makers take orders in US dollars, so they would not be affected by the lira’s collapse, while demand in Turkey remains high, the TMBA said

By Lisa Wang  /  Staff reporter

An escalating US-Turkey row is expected to have limited near-term effects on local manufacturers, including machinery suppliers, given their slim exposure to the Turkish market, government officials and industry representatives said yesterday.

Turkey’s financial markets have been rattled since US President Donald Trump on Friday last week announced sanctions on Ankara due to its detention of a US pastor.

On Monday, the Turkish lira tumbled to a record low against the US dollar and prompted concern that the currency crisis might spread to other emerging economies.

“The lira crisis is different from the Asian financial crisis in terms of intensity,” Deputy Minister of Economic Affairs Kung Ming-hsin (龔明鑫) said yesterday, dismissing the likelihood of repeating the 1997 Asian financial crisis that stemmed from Thailand’s mounting foreign debt and caused a sequence of currency devaluations in East Asia.

“The problem is rooted in Turkey. We have not yet seen any spillover effect,” Kung said, adding that the Ministry of Economic Affairs would closely monitor developments.

Taiwan Association of Machinery Industry (TAMI, 台灣機械公會) chairman Alex Ko (柯拔希) also said that the impact should be minimal.

“Local machinery suppliers export less than US$100 million of goods to Turkey a year, even though the country is the third-largest export destination for Taiwanese machinery makers,” Ko told the Taipei Times on the sidelines of a news conference for the annual Taipei International Plastics & Rubber Industry Show and the Taipei International Shoe Making Technology Show.

“We are not worried. Most local manufacturers have received strong orders,” Ko said.

Local machinery manufacturers are to see exports grow at an annual rate of more than 10 percent this year, he added.

Last year, machinery makers exported US$25.6 billion of goods, up 21 percent from the previous year, TAMI statistics showed.

Taiwanese machine tool makers would not be directly harmed by the lira’s collapse, as suppliers take orders in US dollars, Taiwan Machine Tool and Accessory Builders’ Association (TMBA, 台灣工具機暨零組件公會) secretary-general Carl Huang (黃建中) said by telephone.

Demand also looks healthy, as the TMBA has not seen large-scale exits of foreign investors and manufacturers from Turkey, meaning there is still demand there, Huang said.

Foreign manufacturers have over the past few years made Turkey their major manufacturing hub in Europe, he said, adding that it is not easy for them to pull their entire supply chains out of the country overnight.

Taiwan External Trade and Development Council (TAITRA, 外貿協會) chairman James Huang (黃志芳) echoed Kung’s comments.

“Based on our initial understanding, the impact on the supply chain is not significant,” Huang said.

TAITRA plans to arrange a trip to Turkey in the second half of the year, Huang said.

Separately, TAMI said it expects the plastics and shoe technology trade shows to bring NT$20 billion (US$648.13 million) in orders to local manufacturers, as the number of visitors is expected to reach a record high.

The trade shows started yesterday and are to run through Sunday at Taipei Nangang Exhibition Center’s Hall 1.

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