Economic recession is prevailing since the last quarter of 2014. The growth in global economy is expected to be slower in the upcoming period. Especially the growth estimates related to Euro zone have been decreased from 1,4 % to 1,2 %. It seems that all large economies, other than USA, are facing recession and low growth rate problems. Accordingly it is inevitable that there shall be a decline in world trade volume.
It is uncertain how Iraq, Syria and Ukraine issue, which is closely related to Turkey, shall develop in the upcoming period. It seems that reduction of the imports by Middle East countries, which is an important export market for Turkey, shall adversely affect our foreign trade. Besides that, let alone the growth but shrinkage is expected in Russia. And this shall likely have negative consequences in our market in terms of construction, energy trading and especially the country’s tourism.
The companies must take position with regard to all such expectations and developments. We, as the business world, are planning to continue our investments by acting cautiously in short run within the country and abroad and by focusing on maintaining the status quo rather than on an aggressive growth target. As usual, sustainable success is always very important for us. Realizing this shall be possible by taking measures for adapting to changing economic conditions in intense competitive environment and by foreseeing the emerging opportunities.
Reflection of the political developments both in the world and in our country is certainly very important. Another issue that shall be in the agenda in the next period within the country is how the resolution process, which becomes increasingly complicated, shall proceed. The developments before the eneral election to be held in June may deeply influence the election results. As the business world, we shall carefully follow - up the monetary policy decisions during this period. From short term point of view, we expect that it shall have negative effects on investments. We think that in terms of USD / TL rate, a certain increase shall be tested during the first months of the year and if there is too much increase it shall be the reason for a crises perception in the market.
Last year, unfortunately the fight against inflation did not yield the desired result. Thus although the CPI inflation target was 5 percent in 2014, it is realized at a level of 8,2 percent. One of the main reasons of it was the jump in the foreign exchange rates especially during the first months of the month. In addition, the negative effects of agricultural drought may also be considered an important reason. Whereas, the budget deficit in 2014 increased by 22,2 %, compared to the previous year, due to the negative impact of economic recession on tax collections and especially due to suppression of expenditures in December. Although the decline in oil prices has a positive impact on inflation and the current deficit, we do not know whether it shall continue for a long time or not. Therefore it seems that it shall be difficult to meet 4 % growth target anticipated for 2015.
Due to the volatility of the economic parameters in the World and in our country, is not easy to predict the investment and purchasing behaviors of the consumers. Furthermore, it is seen that in recent times there is excess supply in certain sectors in Turkey like construction, real estate and energy. I must say that this shall create great difficulties in cash flow for many companies. Taking decisions for investment upon considering the supply and demand equilibrium in the market is very important. Structurally, it is necessary to have a balanced model in economy. Healthy growth shall be mobilized by diversification of the internal market. But it may not be revived by real estate and infrastructure investments only but by supporting the manufacturing sectors.
We presume that the geopolitical tension and risks shall not decrease in 2015, but on the contrary, they shall continue more intensely compared to the past years and create more powerful influences on the economies. The course of the growth and inflation rates in foreign countries in the coming period and the attitudes and monetary policies to be developed by the Central Banks against them shall play an important role on the global markets.
As Nurol Group, while we were preparing our budgets under these assumptions, we estimated that the average inflation rate in 2015 shall be 8,1 %, USD/ TL parity shall be 2,37 and EUR / TL parity shall be 2,90. Furthermore, we considered the possibility of experiencing a contraction in public investment due to the reasons mentioned above. Regarding the foreign countries, we assumed that we shall continue our business development activities focused especially on Gulf countries and North Africa. NUROL HOLDING is currently carrying out activities mainly in construction and contracting sectors and in defense, manufacturing industry, real estate investment, energy, tourism, mining, finance, trade and service sectors with more than 40 subsidiaries, affiliates, branch offices and Project partnerships organized within the country and abroad. The size of the assets of our companies as the end of 2014 is6,8 billion TL , the total turnover is around 2,5 billion TL and the number of our employees is around fifteen thousand.
NUROL İNŞAAT (NUROL CONSTRUCTION) which is one of the leading companies of the Holding, has successfully completed many mega projects over a period of half a century within the country and abroad and included them among its references. Our Gebze - İzmir Highway (including İzmit Bay Suspension Bridge) project, which is one of the biggest Build - Operate Transfer model Infrastructure Investment of Turkey, has started in 2002 and the works are being carried out in non - stop manner. Along with the construction of section 4 of Gebze - Orhangazi Motorway, the construction of South Approach Viaduct consisting of 33.000 tons of steel production is being carried out together with our Nurol Çelik (Nurol Steel) company.
Ilısu Dam and HEPP Project, which we have started construction as the leader of the Consortium, has been completed at a rate of 80 % and it shall generate 4 billion kWh energy per annum with 1.200 MW capacity when completed.
The construction works are ongoing in our Ordu Peripheral Highway Project and there are 2 double tube tunnels with a total length of 5,3 km, 3 viaducts with a total length of 2 km, 5 bridges, 2 underpasses and 3 flyovers in 19,5 km long highway.
As NUROL İnşaat, our overseas activities are continuing in Gulf Region, Middle East and North Africa. Our wide range of project activities like infrastructure, motorways, dams, tunnels, housing complexes, stadiums, sports and industrial facilities are being successfully carried out in fifteen countries scattered to a wide geography from UAE, Saudi Arabia, Libya, Algeria, Morocco and Qatar up to Georgia, Poland, Russia, Turkmenistan, Uzbekistan, Iraq and Afghanistan.
We have formed Representation Offices and established offices in various countries of the world within the scope of our business development activities. Our regional representatives are following - up the relevant markets and immediately sending the information for assessment of the opportunities.
Nurol Makina, which is one of our oldest companies, is continuing to offer suitable system design and solutions to the users primarily in the field of domestic security and defense industries with its engineering experience based on long years, its ability to adopt to novelties and its increasing capabilities. It is planned that the overseas marketing activities shall increasingly continue in thecoming period for EJDER TOMA, EJDER YALÇIN 4X4, ILGAZ 4X4 armored vehicles that have a big market share in Turkey with their outstanding performance features. Accordingly, the turnover targets for 2015 have been increased approximately by two folds and an investment for an additional facility intended for capacity increase has been included in the program.
Our Nurol Teknoloji (Nurol Technology) company has taken successful steps in marketing the high technology products it has developed in line with the R & D works performed until the date. Almost all of the factory's production capacity shall be used together with the works to be contracted in the New Year and it is planned that the sales revenue shall increase by three folds compared to the previous year. We believe that 75 % of our turnover shall be the exports.
In addition to its existing portfolio, NGYO is creating a difference in its projects realized in Istanbul with the slogan “Investing in Life” and is continuing to offer different living alternatives to its users.
As Nurolbank, our target is to be the best investment bank in Turkey in compliance with the world standards, and to offer solutions suitable to the needs of our corporate customers by emphasizing that our products are financial based within the existing capital structure.
As of the date of its foundation until now, NUROL HOLDING is responsible from financial, administrative, fiscal and legal coordination of the group companies organized mainly in construction and contracting sectors and in the fields of defense industry, machinery, steel, energy,mining, aerospace, finance, REITs, business and tourism and it has established its organizational structure accordingly.
As usual, our goal is again to come to the forefront with our quality , to be the best in the sectors which we take place and to create the highest social and economic value. As Nurol Family I would like to thank for the contributions of mainly our valuable employees and our business partners, stakeholders and customers who were on our side during this process and I hope that 2015 will bring comfort and peace to the entire world.