Small, medium Turkish firms see mergers as way out
Güncelleme Tarihi:
by Ayşegül Sarıkaya- Referans
Oluşturulma Tarihi: Ocak 21, 2009 00:00
ISTANBUL - Struggling to overcome a significant decline in consumer demand, small and medium sized companies operating in various sectors seek ways to join forces.
As the effects of the global financial crisis show no signs of wavering, many small- and medium-size enterprises, or SMEs, are perceiving mergers to be their only way out.
Companies operating in many sectors, including white goods, retail, catering, logistics and machinery, are seeking for acquisition or partnership opportunities.
This tendency to seek out acquisition or partnership grew more popular following an announcement from Finance Minister Kemal Unakıtan that the government would provide incentives to company mergers. According a model that is still in the making, there will be two different kinds of incentives for SMEs and small-scale enterprises.
The enterprises that collect less than 2 million Turkish Liras in annual turnover will be able to benefit more from these incentives in case of their merger. The planned incentive system will also feature tax exemption for one or two years.
Some 73 out of 130 companies operating in white goods supplier industry have decided to be involved in mergers or partnerships in order to survive the crisis. Meanwhile, representatives of the machinery industry, who established the Machinery Industry Sectoral Platform, is preparing for a joint advertising campaign to pep up the sector. In retail, smaller markets that are in distress have been gathering under the of sector’s bigger players. For example, CarrefourSa purchased 12 supermarkets from Pınar Marketçilik in the Black Sea city of Samsun, and the Kiler market chain is still in talks with some other small markets.
The outdoor consumption sector also aims to overcome the crisis with partnerships. Güney 2M said it planned partnerships with a few firms this year while Gıdaser, a subsidiary of Esas Holding, said it is open to new acquisitions and partnerships. The catering sector, on the other hand, will join kitchens with a "clustering" model.
Coordination the key
The firms are no longer fostering the "operating alone" mentality, said Nurettin Özgenç, chairman of the SMEs Association, or KOBİDER. In order for the number of mergers to increase, a mechanism for the coordination of the companies is needed, he said. "Even if the firms want to unite, they are not able to do so due to a lack of knowledge. The incentive package will speed up the process. Should SMEs unite, they may benefit from government support much better."
The insufficient financial structure and problems in shifting to economies of scale constitute the most important problem for companies in Turkey, said Adnan Dalgakıran, chairman of the Central Anatolian Machinery and Accessories Exporters' Union. In case of company mergers, they will both become more global and be able to survive the crisis, he said.
Mergers are also on the agenda for the logistics sector, said Tamer Dinçşahin, chairman of International Transporters Association, or UND. The process is likely to speed up with government provided incentives, he said.
Companies operating in many sectors, including white goods, retail, catering, logistics and machinery, are seeking for acquisition or partnership opportunities.
This tendency to seek out acquisition or partnership grew more popular following an announcement from Finance Minister Kemal Unakıtan that the government would provide incentives to company mergers. According a model that is still in the making, there will be two different kinds of incentives for SMEs and small-scale enterprises.
The enterprises that collect less than 2 million Turkish Liras in annual turnover will be able to benefit more from these incentives in case of their merger. The planned incentive system will also feature tax exemption for one or two years.
Some 73 out of 130 companies operating in white goods supplier industry have decided to be involved in mergers or partnerships in order to survive the crisis. Meanwhile, representatives of the machinery industry, who established the Machinery Industry Sectoral Platform, is preparing for a joint advertising campaign to pep up the sector. In retail, smaller markets that are in distress have been gathering under the of sector’s bigger players. For example, CarrefourSa purchased 12 supermarkets from Pınar Marketçilik in the Black Sea city of Samsun, and the Kiler market chain is still in talks with some other small markets.
The outdoor consumption sector also aims to overcome the crisis with partnerships. Güney 2M said it planned partnerships with a few firms this year while Gıdaser, a subsidiary of Esas Holding, said it is open to new acquisitions and partnerships. The catering sector, on the other hand, will join kitchens with a "clustering" model.
Coordination the key
The firms are no longer fostering the "operating alone" mentality, said Nurettin Özgenç, chairman of the SMEs Association, or KOBİDER. In order for the number of mergers to increase, a mechanism for the coordination of the companies is needed, he said. "Even if the firms want to unite, they are not able to do so due to a lack of knowledge. The incentive package will speed up the process. Should SMEs unite, they may benefit from government support much better."
The insufficient financial structure and problems in shifting to economies of scale constitute the most important problem for companies in Turkey, said Adnan Dalgakıran, chairman of the Central Anatolian Machinery and Accessories Exporters' Union. In case of company mergers, they will both become more global and be able to survive the crisis, he said.
Mergers are also on the agenda for the logistics sector, said Tamer Dinçşahin, chairman of International Transporters Association, or UND. The process is likely to speed up with government provided incentives, he said.