In 2018, as Akkök Holding, we experienced an indescribable sadness for the loss of our Chairman, Mr. Ali Raif Dinçkök. We have lost a visionary businessman, an inspiring leader. As an industrialist who loved his country very much, he invested back in this country what he had gained and had put his signature on many successes. We will miss him very much and we will continue to invest in the future of our country from where he left.
With Mr. Trump’s coming to power in the United States, there have been substantial changes in global politics and economy. The measures taken to limit imports from China, incentives to direct the investments of US multinationals back to the US, interest rate hikes and the strengthening the US dollar, withdrawal from the nuclear agreement with Iran and trade measures were events that came into prominence. Especially the political and military developments in Syria, the struggle of the USA and Russia to establish supremacy in this country and the civil war caused millions of refugees to come to our country resulting in a major economic impact. The Al-Bab and Afrin operations, which were carried out to prevent the opening up of a corridor throughout our southern border, were completed successfully. The S-400 missile purchase agreement with Russia and the pastor Brunson incident on top of all these tensions have seriously affected our relations with the United States.
On the other hand, the Brexit within the E.U. and especially the request made by the US to no longer cover the bulk of the military spending of the NATO has also created tension in relations with Europe.
Because of the geopolitical position of our country, we have been seriously affected by all these developments both politically and economically.
Our country, which has been in a phase of rapid growth for a long time until the beginning of 2018, faced the rapid depreciation of the Turkish Lira against the US Dollar and the Euro and interest hikes in August. The economic problems we had left behind over the last 15 years have once again surfaced to become the most important item on the agenda.
Both global developments and economic fluctuations in our country affected all sectors without exception. We have, with urgency put into place various measures with regard to the shrinking domestic and foreign markets due to the rising borrowing and raw material costs. We realized a 20% reduction in production on August 16, 2018 and a second 20% on 26 September 2018 in our factory where we have been operating at full capacity for many years. We managed to get out of the general economic crisis with the least loss and rapidly by controlling our expenses and thanks to the rational management of our inventories, receivables and debts. Exports in our total sales reached 46% and contributed significantly to our income and balance sheet with the rising exchange rate.
Our total turnover rose by 28% to TL 3.5 billion. In spite of all the unfavorable conditions, we recorded a profit before interest, tax and depreciation of TL 552 million.
We secured the top prize for the 3rd consecutive time at the 9th Corporate Governance Awards, organized by the Association of Corporate Governance of Turkey, by leaving behind once again the 46 companies located in the Corporate Governance Index of the Borsa Istanbul. We raised our Corporate Governance Rating from 9.63 to 9.70. With this award, the practices that we have implemented in the fields of fairness, transparency, accountability and responsibility have been recognized. The recognition of our steady and successful efforts throughout the year encouraged us to do better. We raised this year’s rating with the aim of increasing the number of female members in the board of directors. At Aksa Acrylic we believe that a better world will be possible with the active participation of women in every field of life, especially in the business world.
We are taking steps to ensure gender equality in business life and to raise the productivity of women in the workforce. This year, we were awarded with the Equal Opportunity Model certificate, which was developed by KAGİDER with the technical support of the World Bank and the consultancy of the Sabancı University Gender Equality Forum. With this respect, we have committed to the full and transparent implementation of our procedures.
2018 saw the continuation of investments in DowAksa , a joint venture of our company. Turkey is one of eight countries in the world in the production of Carbon Fiber, a very strategic product in aviation, aerospace, defense, automotive, energy and infrastructure investments, while DowAksa is the sole producer in Turkey. Among the customers of DowAksa are TAI Aviation Industry and Vestas, the world’s largest wind energy producer. With its advanced technology, our company will continue to create more added value for the Turkish economy by multiplying its investments in the coming years.
We will remember 2018 with the political and economic developments that the world and our country faced. From an economic perspective, 2018 can be considered as one of the four biggest economic contractions Turkey has faced in the last fifty years. Nevertheless, Aksa Acrylic has maintained its respectable position in the world and its leading status in the sector thanks to the swift measures taken by our government, as well as the quick implementation of necessary measures by our Company.
With strong ethical values, a vision for social responsibility and transparency, Aksa adds to the economic strength of Turkey with exports today to over 300 customers in more than 50 countries in 5 continents. I would like to thank our valued employees that are the architects of this success, our loyal customers and our business partners, whom we try to be worthy of their trust. I wish a fruitful year for all of us.
Mehmet Ali Berkman
Chairman of the Board of Directors