The economic crisis closing in during last months and related surge in the exchange rates has affected the publishing industry as it did all other business. Following the privatization and subsequent closure of the SEKA (Turkish Cellulose and Paper Mills – A State owned enterprise privatized in 2004) paper mills, the industry became dependent on the imported paper input. The publishing business now, if not intervened, faces the threat of collapse. Many newspapers increased their prices, cancelled their supplementaries while the local papers are facing the threat of closedown as soon as the stocks run out.
The media business and the publishing industry are among the most affected sectors due to the exchange rate surge and the economic crisis. The industry became dependent on imports after the SEKA mills were privatized and hence has been significantly vulnerable to exchange rate surges.
The repercussions were firstly seen when the newspaper Habertürk stopped publishing and 350 publishing employees were vacated. Following the ordeal, Sözcü cancelled its supplementary while other dailies such as Dünya, Cumhuriyet, Sözcü, Birgün, Yeni Asya and Aydınlık newspapers had to increase the price. Milli Gazete on the other hand reduced the page numbers and the local papers are now in danger of closing down.
IMPORTS AND THE INCREASE IN EXCHANGE RATES
How did it come to this? The media business and the publishing industry are at the top of the list of industries most affected by the increases in the exchange rates and the economic crisis. In the last few weeks, many newspapers either increased their price or reduced their number of pages due to the excessive increase in the exchange rates. The number of local papers deciding not to publish on weekends is also on the rise. Some publishing houses ceased to edit and print books.
After the SEKA mills were closed following the 2004 privatizations, the publishing industry has been procuring paper input mostly from China. However, following the closure of the Chinese paper mills, the media business fell into great difficulty. National and local papers found themselves in a situation where they cannot find paper even with direct cash payments. In addition to the difficulties in procurement, the excessive increases in the exchange rates caused the newspaper prices to rise incrementally. Besides the paper input, the prices of the press mould and dye, constituting the most significant cost items for the business has risen considerably due to the increases in the exchange rates. That led the newspapers into a tight corner.
60 PER CENT INCREASE IN COSTS
The increase in costs amounting to 60 per cent in imported inputs such as paper, dye and glue has led some periodicals to suspend publishing while forcing the newspapers to either raise price or reduce number of pages. It is worrisome that unless the exchange rate increases are checked or the 18% VAT is rolled back, many newspapers and periodicals will completely cease publishing and publishing houses will not be able to continue to print books.
IT HAS ALSO AFFECTED THE MINISTRY OF EDUCATION
While the printing and publishing industry dependent on the imported paper input is struggling to survive, it is asserted that the situation has also started to affect the ministry of education. It is claimed that the public schools haven’t yet received some of the text books that are supposed to be provided by the ministry for free distribution, that the books have not been printed and many would be provided only in digital versions. Book publishers are also struggling due to the exchange rates.
ÇAKIRÖZER: THE SOLUTION IS THE DOMESTIC PAPER PRODUCTION
Journalist and the RPP (Republican People’s Party) MP from Eskişehir, Utku Çakırözer, who is preparing to propose a parliamentary motion regarding the problems the press, media industry, publishing and printing houses face in the wake of the economic crisis, answered Halagazeteciyiz.net’s questions. Utku Çakırözer said, “reading books and papers should not be a luxury, they are necessities. If the paper crisis continues, the state of people being unable to read books, journals and papers will plunge the country into darkness” and warned that, “newspapers and publishing houses will soon be obsolete, some papers will consider leaving the business, publishing houses will reduce number of prints.” Çakırözer also suggested coordinated act of ministries, infrastructure investments for domestic paper production, supports for the press and publishing industry and suspension of the insurance premium payments as a few emergency solutions to the problem.
THE PRICE OF PAPER FOR NEWSPRINT HAS RISEN MORE THAN 100 PER CENT IN SIX MONTHS
The president of the Union of Journalists of Turkey (TGS) Gökhan Durmuş stated that the price of the paper for newsprint had risen more than 100 per cent in six months. Durmuş reminded that six months ago the newspapers had been paying 2,660 Turkish Liras for a ton of paper costing 700 US dollars and said that today the cost is 850 US dollars per ton, which amounted to 5,525 Turkish Liras. Durmuş explained that, “the price of the most important input of the industry has risen more than 100 per cent compared to its level six months ago, due to both the increase in the dollar price of paper and the exchange rate surge. These figures are for cash payments. If you want to buy on credit, say for a term of three to four months, you have to add an extra four percent to this amount. If you consider the fact that one ton of paper allows only for a print of 14 thousand it will be easier to understand the economic distress the newspapers are in.” Durmuş pointing out the fact that many of the Anatolian local papers were failing to pay the wages and the insurance premiums of their employees, emphasized that the price tariff on the official announcements, nearly the only source of revenue for the local papers was very low and that they would not be able to bear the pressures of the crisis for long.
Durmuş stated that the circumstances with the publishing houses were similar. He explained that while six months ago the price of the enzo paper used in book publishing had been 900 US dollars per ton, amounting to 3,420 Turkish Liras, now it was 1,150 US dollars equaling to 7,475 Turkish Liras. Durmuş mentioned that the publishing houses were unable to print books and also fulfill their obligations arising from copyright agreements in foreign exchange.
‘VAT BE ROLLED BACK TO ZERO’
Gökhan Durmuş asserted that the Union of Journalists proposed a solution package under three chapters: “The VAT on the newspaper paper should be rolled back to zero; Press Ad Agency’s (BİK) ad and announcement fees should be risen; the government should subsidize 40 per cent of newspapers’ annual paper demand on a non-discriminatory basis.” Durmuş stated that such practices were common in European countries and reminded that those policies had been in effect also in Turkey through SEKA’s pricing practices in the past. He also said that, “if the government take steps in these three directions the industry will manage to get over this crisis, otherwise further closedowns will mark the day.”
‘THE SOLUTION IS THE DOMESTIC PRODUCTION’
The local newspaper owners support the RPP’s and the TGS’s suggestions and ask these suggestions to be put in effect immediately. The publisher of the Artvin’in Sesi newspaper (Artvin’s Voice), Okan Sezgin, stated that the newspaper’s paper stock would be depleted in two months and that he could not foresee the difficulties ahead.
Sezgin told Halagazeteciyiz.net that, “We did not expect the price of paper rise that much. We are trying to sustain the paper despite the tough conditions we are in. At this rate there will be nothing left of local newspapering. The situation demands immediate resolution. I knew SEKA’s Giresun paper mill very well. If SEKA were here today, the extent of the difficulties we are facing would not be that severe. The solution is still in domestic paper production. Furthermore, the VAT rate on paper should be rolled back to zero and the fees on ad and announcements should be risen equally. There is also the problem of transportation costs. The fact that Artvin being at a remote location doubles the transportation costs. Authorities should immediately do what they have to and prevent hundreds of newspapers like us to go out of business.”
Translation: Benan Eres