Turkey’s “second top 500” – firms that rank among the country’s largest 501 to 1,000 firms – posted higher profitability last year than companies in the top 500, according to an annual report released Wednesday by the Istanbul Chamber of Industry, or İSO.
Although smaller companies typically have a harder time in economic crises, companies from the second top 500 outperformed the top 500 on the İSO list, increasing their efficiency capacity, decreasing their production costs and finding alternative markets for exports.
Thanks to measures undertaken in the last few years, the profitability of the second top 500 exceeded the top 500 companies for the first time in the last 10 years.
The midsize companies listed in the second top 500 increased their profits 29.1 percent during the first half of the year and recorded greater performance than the top 500 countries in terms of employment, exports and sales during the global crisis.
Members of the second 500 also increased their profits nearly four times in 2009 in comparison to 2008, İSO Chairman Tanıl Küçük said Wednesday during the press meeting to unveil the annual report.
The companies increased their total profit to 2 billion Turkish Liras over last year’s 489.5 million liras.
Oyak Kağıt Ambalaj, which operates in paper production and packaging, climbed to the top of the second list with 98.2 million liras in net sales. It was followed by SFC Entegre Orman Ürünleri Sanayi, which produces wood casings, plywood and medium density fiberboard, while Ozanteks Textile came in third place.
152 new companies
Some 152 new companies succeeded in assuming a place in the second top 500 list, although 51 of these fell from the top-500 list.
Only four public corporations succeeded in placing on the second 500 list; of these companies, only one, İSTON Beton Elemanları ve Hazır Beton Fabrikaları, a cement plant founded by the Istanbul Metropolitan Municipality, placed within the list’s top 50.
While the top 1,000 companies provided a total of 9.5 percent of Turkey’s gross domestic product, the companies on the second list provided only 0.9 of the country’s GDP.
The trends remained similar to 2008 in terms of both lists, Küçük said, adding that profitability increased in both groups as net sales, sales revenue and exports decreased.
While the top 500 countries’ net sales decreased by 14.9 percent, the second 500 companies’ shares decreased by just 2.4 percent. On the other hand, companies on the second list increased sales revenue 15.1 percent this year.
During the global crisis, the second 500 companies’ profits decreased by 26.5 percent in 2008, but the firms increased their total profit 29.1 percent in 2009.
The companies on the list showed significantly better performance considering the employment problems during the crisis period, according to Küçük.
The top 500 countries suffered a 5.1 percent decrease in employment last year while the second group suffered only a 1.4 percent decrease, according to the İSO.
Answering criticisms
Answering criticisms from Turkey’s prime minister about the way the top 500 companies’ results were evaluated last month, Istanbul Chamber of Industry, or İSO, chief Tanıl Küçük said it was important to highlight the successes of those in the “second top 500.”
“There is a great contribution from the government in this success,” Küçük said.
Prime Minister Recep Tayyip Erdoğan had accused business organizations of exaggerating the effects of the economic crisis despite growing profits.
The İSO is making evaluations on scientific calculations, Küçük said in an official letter sent to Turkish State Minister and Deputy Prime Minister Ali Babacan in order to overcome the “misunderstanding” between the İSO and the government.
Küçük said considerable achievements had been made in emerging from the global crisis, adding that there would be expectations for similar improvements in the coming years.
“We already talked about the positive signs while evaluating the second half of 2009 and the first half of 2010,” said Küçük. “During a crisis, pointing out some things lacking should also be quite acceptable.”
In order to prevent any “further misunderstanding” on the issue, he said, “We accept the fact that authorities might need some motivation during times of crisis.”
