Hüseyin Semerci's Views on the Effects of Coronavirus

“I find it useful to address the effects of coronavirus in three ways. First scenario; If it is mainly in China, which does not seem so at the moment, it started to appear in other countries quickly. This creates serious uncertainty. There may be short-term opportunities, but this scenario also poses serious problems in the medium and long-term. Because China is the world's largest exporter as well as the largest importer.

If China does not produce and cannot produce, problems related to security of supply may begin. With the domino effect, we may face many problems that will affect all sectors, from raw material supply to intermediate goods supply, that will break the supply chain and ultimately turn costs upside down.

The second scenario, which is the worst scenario; It would be a miracle or a lie for the virus to emerge in Turkey, which we do not meet with this situation. I think we took the precautions late and didn't do our homework well against possible infections. I hope not, but we may encounter serious cases all of a sudden. This possibility puts us in serious difficulty in our largest market, the EU market. As we all know, our biggest market is the EU, and we export half of our exports to the EU. With Iran, which has a very small share in our exports, we were too late to take precautions against human traffic. Even with the others, we always took the measures behind.

Well, what is it, if we say that under the influence of the virus in Europe, it started everywhere, believe me, we would be deceiving ourselves, let it be known that they will not show us the tolerance they show to each other. Just as they will not step into our country, they will not let us in through their doors.

The EU is our biggest market, but we are not the EU's biggest market. It hurts a lot… The third scenario; If it turns into a global and incurable epidemic, which I highly doubt. A great chaos ensues. The world tries to go back to the 1990s, but it can't do that either."

Okay, but not enough…

ŞENMAK Makine, which has gained its competitive power in the plastic processing machinery sector by producing screw-barrels by making a difference in terms of quality, design and performance, is one of the top 5 companies in Europe in terms of production capacity, as well as one of the suppliers with high recognition and prestige in the region.

I asked Hüseyin Semerci, the general manager of the company and the Vice President of the Federation of Machinery and Manufacturing Industry Associations (MAKFED), how the coronavirus epidemic that started in the world and caused the death of thousands of people, especially in European countries, will affect Turkish companies and the machinery manufacturing sector in terms of economy.

We export 65 percent of our production to European countries.

We have business partnerships with big names in the plastic processing machinery sector of industrially developed countries such as Germany, Switzerland, Austria, France, Finland and the Netherlands.

At the end of 2019, signs of slowdown coming from the global market started to show themselves, especially in Europe.

Huseyin Semerci; He said that they confirmed this in the customer visits we made before and after Christmas in order to keep the pulse with our business partners and customers of 2020.

Semerci said that they met their 2020 targets and expectations face to face with their customers by traveling tens of cities and thousands of kilometers in 5 countries such as Finland, the Netherlands, Germany, Austria and Switzerland in a three-week heavy visit traffic, and is also one in the plastic processing machinery and equipment sector due to the contraction in the main sectors, especially in automotive. He said that they obtained the information that there will be a contraction from their customers.

We revised our business program for 2020 in the first week of February, according to the contraction process to be experienced in one-on-one meetings with our business partners and customers in Europe.

The stagnation in European countries was also reflected in our domestic market.

This process negatively affects not only our company, but also companies in the machinery manufacturing industry.

The coronavirus, which was seen in Italy in early March, is taking the country by storm these days, so to speak.

What happened in Italy, especially Germany, France, Spain, England stopped their entry and exit with air and land transportation against the corona, and quarantine practices throughout the country, by closing their borders, had to suspend the activities of companies operating outside the health sector in these countries.

There is a total panic in these countries. For nearly ten days, we have not been able to communicate adequately with our European business partners and customers.

A large part of them entered the working mode as home-office.

Those we met stated that they stopped the orders and could not predict how long this period would be.

In our company, we have a staff of 90 qualified personnel including our R&D center.

In this process, we decided not to recruit as much as we could resist with its economic aspect. In January, we purchased our other raw materials, including the quality steel that we had to buy in our 2020 business program.

Our company located in Hadımköy, which produces in a closed area of ​​6 thousand square meters, is faced with a serious financial burden due to compulsory payments such as rent, energy, personnel payments and other general expenses, SGK, taxes, as well as bank loans that we use for raw material procurement and working capital. .

Although we find the solutions included in the "Economic Stability Shield Package", which consists of 19 articles announced by our President, positively, we believe that there will not be enough solutions to our financing problems that our company and other companies in our sector are experiencing and that will become increasingly severe, therefore we believe that additional new regulations will definitely be made that will bring solutions to our problems.

(Money and interest payments of the loans we use, postponement for one year from the payment terms without interest, interest-free breath loan application to skip this process without damage, "Postponement of SSI, VAT and withholding payments until the end of the year, and postponing until the end of the year without interest in energy expenses, etc.)

I have to say that KGF should be more active in this process, while I appreciate its positive regulations in loans, especially public banks.

It seems that this virus epidemic, declared as a pandemic by the world health organization, will cause serious damage to human life and economies.

In the "Economic Stability Shield Package", we will support the principles of 'continuing employment and production' as much as we can, and with the support of our President, the ministers who manage the economy and industry of our country, we will I believe they will protect it by putting their support into effect.

As ŞENMAK, we are never pessimistic, and we will continue to contribute to the economy of our country by making extraordinary efforts for new markets in this process, ”says Hüseyin Semerci, General Manager of ŞENMAK.

We are among the 5 companies that export the most in the Plastic and Rubber Machinery Product

We are one of the top 5 manufacturers in Europe, there is no company we did not touch or visit, we started to try the American market.

Company and product information

Our company was established in 1987, has a history of more than 30 years. However, since 1990, we have been producing screws and barrels that are used in injection and extrusion machines that process all kinds of plastics and are described as plasticizing equipment with the general name of screw-barrels. We have been in the service of the plastics industry for about 30 years. As of today, we are one of the 5 largest manufacturers in Europe in terms of production capacity. We are also the leader in our country. It's not very common in the machinery industry, but we work in two shifts. We have valuable investments, valuable machines, we work in 2 shifts with the idea of ​​using them to the fullest and increasing our capacity. We have 90 employees. Europe is one of our biggest markets… We make 60 percent of our production in Western Europe. We have two groups of customers. The first group is those who produce plastic machines, and the second group is those who buy that plastic machine and produce plastic products. We call the first of these as OEMs and the others as end users. All our customers in Europe are our OEM customers. In other words, we have been the supplier of the most important brands in their field in Europe and the world for many years. Our first export started with France in 2004. For us, the company we worked for in France became a school. They gave a serious supplier training. He also ignited a mental change in us. It has been a driving force in terms of both documentation and quality expectations. Our view of what we do has changed. An adventure of about 16 years… After that, we started to work with many companies from Germany. We are currently working with brands that have important brands in the plastic processing machinery industry in countries such as Germany, Switzerland and Austria. We produce with the same quality as our colleagues around the world produce. Unfortunately, our country is not a country that produces its own need for tool steels and high alloy steels. All of the steels we use in our products are of Western European origin. We are in a position to compete with the world. We put our heart into this work. We do what we know. Industrialism is just like that… When we look at the past, the point we have reached is the biggest source of morale and motivation for us.

Are you falling for market diversity? New markets mean an increase in production at the same time…

We are considering entering new markets. While working for OEM companies abroad, we work entirely for the end user, namely plastic and rubber factories, in the domestic market. We work with companies in Turkey's first and second 500 companies, and with many companies in TİM's top 1,000 exporter companies list. In other words, the cable industry is one of the most ambitious areas in the automotive industry, white goods industry, packaging industry, electrical-electronics industry, cable industry...

2019 has been an interesting year, both in the domestic market and in the European market. Although we did not lose customers and gained new customers, the decline in business in Europe prevented us from meeting our 2019 growth targets. Especially Germany is the machine supplier of the world… There was a contraction not only in Europe but also in the global market. When their business decreased, our business also fell. We are doing a job like tailoring on our export side. So we must have all the dimensions from A to Z. That's why it is difficult to manage this business in end-user markets, that is, to manage it on an export basis in plastic factories, because either that product will come to us or we will go to that product and take the proof. It is difficult to manage this process... That's why it's easier when working with machinists we call OEM... They give us their measurements and technical drawings, and repetitive jobs come within certain standards. Therefore, we generally prefer OEM customers in export markets. It is a region where European plastic and rubber processing machinery is concentrated. In this region, we have established the Şenmak brand quite a bit. There is no company that we have not touched or visited. They know us, we know them. These relationships do not come to life immediately, they require a long process. Things don't work just with the price index like we do. In fact, price is not the first target, quality comes first, then deadline and maybe then price.

Recently, we started to try the American market. We had a fair participation. Both the United States and Canada are two countries that host important brands in plastic processing machinery. We have started our first contacts, there are works that we have brought to the proposal stage. But it will not be easy, it is a process that requires patience. Distance is no longer an issue, you're getting over it. However, learning the culture of doing business is a very laborious and time-consuming process. However, North America is a very large market where wealth is high and money is spent, and we want to evaluate this market.

Competition and rivals…

Turkey has come to a good position in screw-barrel production. We have respected colleagues who do good work. This is also a driving force for us… Competition is a good thing in this sense… We were at the K 2019 fair with 4 companies from Turkey in the past months. Turkey is now on its way to becoming a brand in the screw-barrel industry. I am not complaining about this variety, on the contrary, I am satisfied. Turkey is on its way to becoming an important center in the screw-barrel industry. In other words, there is a situation that will reinforce the belief of a person who has a problem with the screw-and-sleeve, I can solve this problem in Turkey. Apart from this, the Far East is of course an element. But we try to avoid that competition a little bit. We are trying to stay out of competition with our Far Eastern competitors in the same segment with the quality, performance and design features we impose on our product. Because it's not very wise to compete at that point. Because they are doing this work on a large scale. Far Eastern companies have shares in Turkey, European and American markets. But our luck is that we are doing tailor made business. We have important competitors from European countries. We have competitors concentrated in Germany and Italy. Apart from that, we also have a few competitors in Spain and Switzerland. But we managed to position our company among the top 5 in Europe with our production capacity and enthusiasm for doing business. Of course there will be competition. Competition keeps you vigorous, keeps you fit. It paves the way for development. We have disadvantages, we have advantages. What is our disadvantage? We buy the steel from Europe. We pay additional shipping charges. All of our consumables also come from Europe. Our advantage over the Far East is that they still do not give confidence to Europe in terms of quality continuity. As a country, we are on the way to becoming an industrial country. Mentally, this process continues. Sometimes we lose business to our competitor in Germany and Italy at the price. However, it is possible to say that we are competitive, very competitive in general.

Investing abroad

We have no idea of ​​investing abroad, but we have the idea of ​​opening a liaison office in Germany as both a sales and purchasing office. In fact, we had such an idea and we announced it in 2018, we signed the preliminary agreements. However, at the last moment, we could not make any progress with our business partners there and we shelved it. However, we have the thought of opening a center in the center of Europe, including a sales and purchasing office. The purchase is a serious cost for us. The sum of raw materials and consumables is already half of the revenue… Solving the need for raw materials from Europe is among our plans.

Domestic market assessment

We work in the form of 60 percent export and 40 percent domestic market. Turkish plastics industry is a strong sector… There are huge players. Our plastics industry is the second in Europe and the seventh in the world… Plastic and rubber industry are two very big industries… If we talk about screw-barrel and go back 15 years, we were 3-4 companies based in Istanbul. Today, there are around 20-30 producers in different cities of Anatolia, other than Istanbul, to meet certain needs, even if they are not fully equipped. As companies producing in Turkey, we can meet all domestic market needs. But there is freedom of trade in the world and therefore imports are also in question… But if you do your job well, you stand out from the others. So you are preferred. Our business has a very important trick. The parts we make determine the capacity of the machine and the quality of the plastic. We produce the most important part of the machine. When you provide this trust to customers, you become preferred.

2019 review 2020 expectations

As I mentioned in the first question, 2019 was a year where we were far from our budget sales targets. We could not calculate the contraction in Europe. We expected a contraction in the domestic market. I can say that there has been a partial recovery since the second half of the year. We experienced a growth in the country that exceeded our expectations. I think it's about Şenmak's dynamics and the trust it gives to its customers. While all economic data were negative, Şenmak achieved a growth of around 20 percent in the domestic market. However, despite our growth compared to last year, we fell behind our targets in export markets where we are more ambitious. We did not lose customers, our sales decreased as our customers' business decreased.

Unfortunately, it is not possible to say very good things about 2020… But we are in an effort to leave this negative picture. Regarding this, we spend as much time as possible on our sales staff, our own internal dynamics, production and planning. We are thinking about how we can leave this bad trend. We think about what we can add to our company, especially in the field of efficiency. We consider efficiency under two headings. We analyze it as efficiency while producing and efficiency while consuming. 2020 is a year where we set ourselves ambitious growth targets again… We will compensate for the contraction in Europe by acting more aggressively with new customers.