Big things happened in 2018. Just like Trump’s “Make America Great Again”, increasing the tariffs on imported products to support the domestic manufacturing industry is the choice of many countries.
Turkey, Egypt and many other countries in the Middle East have also begun to impose tariffs on products from China. Taking vacuum cleaners as an example, the current import tariff for the whole machine/parts is 30% and the threshold is 55 dollars, which implies a direct cost rise of 16.5 US dollars. In this way, a large number of products with FOB price at about 20 US dollars is no way to enter the Turkish market.
When I went to Turkey last time, I found that some local brands (such as Fantom, Arzum) started to be produced in Turkish factories. Perhaps only high-end brands such as Arcelik are likely to be imported from China (compared to low-end products, tariffs on high-end products are better accepted).
Now let’s come to Turkish manufacturing giant Arcelik.
Arcelik belongs to the Turkish giant KOC Group, one of the world’s top 500. In the 2018 ranking, KOC Group ranked 435.
Founded in 1954 by Lutfu Doruk and Vehbi KOC, Arcelik began to produce washing machines and refrigerators and other white household appliances in 1959.
Ardem Cooking & Heating Appliances was acquired in 1999. In 2006, Beko was partly acquired and the merger of Arcelik and Beko was completed in 2009.
At present, it has more than 4,500 offices in more than 100 countries around the world. Currently, it is also known as one of four major household appliances groups together with Boss Group, Electrolux and Indesit.
Currently it has 11 brands:
Arcelik, Beko, Blomberg, Arctic, Grundig, Altus, Flavel, ElektraBregenz, Leisure, Dawlance, Defy. Among them Arcelik and Beko are the two most famous brands.
Some of Arcelik’s 2018 data are as follows:
In 2018, the sales amounted to TRY 20.8 billion (approximately 3.8 billion US dollars based on current exchange rate), and the net profit was TRY 845 million (about 157 million US dollars).
Sales from 2013 to 2017 almost doubled during the five-year period, from TRY 11.098 billion to TRY 20,841 million.
The proportion of sales in Turkey and the international market is about 4:6, TRY 8.15 billion and TRY 127.16 billion separately in 2017
Gross profit and net profit data for 2013-2017:
2017 sales: white household appliances 3.7 billion euros, consumer electronics 662 million euros, and others 694 million euros.
Regional sales in 2017: the Turkish market 1.974 billion euros, Europe 2.175 billion euros, and other regions 913 million euros.
In 2017, there were 28,103 employees worldwide, with 21,447 blue-collar workers and 6,656 white-collar workers.
The global network is as follows:
2017 raw materials purchase: the metal foil 41%, the plastic 49%, the aluminum 3%, the copper 5%, and the others 2%.
As to vacuum cleaner:
Launched Turkey’s first A+ vacuum cleaner (Turkey also implements European vacuum cleaner EU standard)
Launched the S 4990 first 4A vacuum cleaner
In the prospectus of LEXY(Kinglcean), Arcelik is its core client. Basically, most of Arcelik ‘s vacuum cleaners are made by Kinglcean.
Now that the Turkish market has begun to restrict imports made in China, will it affect these listed companies?
