A treasury-backed loan guarantee for the production of yachts measuring 24 meters in length and longer is expected to lead to a boom in the yachting sector, which has been facing difficulty in exports due to the current loan practice that stipulates a deposit payment. The loan guarantee, which has been formally announced in the Official Gazette, is expected to result in three-fold growth in the sector. Exports in the yachting industry, which were $280 million in 2014, are expected to exceed $1 billion within the next two years.
Dünya Yachts CEO Sedat Ergün said that the industry has been waiting for this incentive for the past two years, adding that 80 percent of all yachts produced in Turkey are exported. According to Ergün, after a foreign company orders a yacht, it pays 20 percent of the cost in advance and asks for a guarantee in return. While the yachting sector has the technical infrastructure to carry out these transactions, some yacht companies cannot finalize contracts with buyers because of the inadequacy of capital and balance sheets, and therefore cannot carry out exports, Ergün said. Underlining that this incentive removes a major obstacle facing the yachting industry, Ergün said exports in the sector, which were $280 million in 2014, are expected to reach $300 million by the end of the year, $600 million in 2016 and $1 billion in 2017.
Stressing that the attitude of private banks is very important in this process, Ergün said that the Netherlands, Germany and Italy are at the top of the global yachting industry because banks in these countries work on a project-to-project basis and do not create troubles for yacht manufactures regarding treasury-backed loans.
However, Ergün added that the yachting industry is not well recognized in Turkey and that Turkish banks work on a guarantee-secured basis. Despite treasury incentives, if banks continue to provide loans for these companies in accordance to their balance sheets, this incentive will not help much, he said.
