Insight

A review and preview of the global fastener industry

A wide cross section of global fastener business leaders have contributed their retrospective of 2015 and thoughts on the prospects and challenges for 2016. We asked them to consider not just economic and financial issues but also technology drivers for the fastener industry and to identify priorities for the upcoming year. Here is NORM Group's article:

NORM Group
Fatih Uysal, chairman

Fasteners are one of the elements required to be an industrial society and are essential for many industries. The fastener sector will exist as long as the world goes round, but in Turkey it does not receive the required attention it deserves, resulting in some of the difficulties in the sector continuing.

The fastener sector is one of the biggest developing sectors in our country – with volumes increasing every year. Turkey is now the third biggest European manufacturer of fasteners after Germany and Italy, and takes its place among the ‘Top Ten’ global manufacturers. The aim is to become one of the top two European manufacturers – which is shown by the investment in Turkey of approximately 200 manufacturing facilities.

The sector, having expanded the export market, exports to 180 countries led by Germany, France and the UK. The young population of Turkey, its dynamic economy, developing industry, and the fact that a large part of the raw material need is covered by local production, are considered as a great opportunity for the sector. However, the surcharges i.e. expensive electricity, lack of qualified personnel and high interest rates, as well as difficulties like narrow space for investments and high land prices, are stepping in front of the sector. Furthermore, an additional tax of 25% collected on tooling imported from abroad has negative effects on the sector in Turkey.

Compared to the high R&D investments of fastener companies in Europe, the R&D investments in this sector for our country are as low as almost not to exist, which prevents the development of the sector. Primarily it is required to solve the import raw material problem, which is the most important issue of the sector of fasteners. It is also necessary to encourage domestic manufacturing of qualified steel manufactured in vacuum media suitable for hot and cold forging. Production of raw materials for the manufacture of fasteners by local manufacturers will ensure lowering of costs and increase in exports.

Our government must take precautions to protect local manufacturers from imports. To train the qualified personnel needed by the sector, it is required to provide lessons at vocational high schools regarding fastener manufacturing methods or to open branches regarding this subject. Similar practices are required for the mechanical engineering departments at the universities. In this sense, we have launched our education unit in Salihli to support the NORM Group.

2015 was a year in which all manufacturers increased their output, particularly for the European automotive sector. We also followed this trend. At the beginning of the year it was unforeseeable for us that the US Dollar and euro exchange rate will be equalised, however this turned to an opportunity for us, through which we can increase our sales with US Dollars.

In Turkey there are over 100 manufacturing companies occupied in the fasteners sector, and the companies are strongly focused on their export figures. It is a huge success that, within five years, the 2009 export level of US$147 million has more than doubled to US$309 million. The export target for 2023 is defined as US$1 billion.

The NORM Group, having completed our facilities for manufacturing nuts in Salihli, is committed to developing efficient projects in the global sale of nuts. Furthermore, besides passenger and commercial vehicles, 2015 was the year NORM started providing many more parts for the heavy-duty vehicles manufacturing.

The entire world is entering 2016 with many difficulties. It will be a challenging year for all vehicle manufacturers regarding exhaust emission rules. On the other side, electrical vehicle manufacturing will gain acceleration in the whole world. In the meantime, R&D aimed at the reduction of weight will accelerate.

The fact that a Fastener Fair will be organised in Istanbul in March is a gain for the fasteners sector, as all the leading companies of the sector will meet in Turkey. We believe that the target of all companies in Turkey is to open up new markets. The US Dollar focused markets will be particularly attractive.

Regardless, we can say that the sector’s future is bright. Common opinion of sector’s specialists is that special and quality products will stand out.