The depreciation of the Turkish lira; in other words, the imbalance in exchange rates; is compelling Turkish publishers to take measures to the extent they could suspend their activities.
Prior to the recent disparity in exchange rates, the changes made in the examination system in 2017 returned as a substantial loss in the educational publishing sector that had had a large share in the overall publishing sector in Turkey and the industry suffered a loss of 560 million dollars in book sales.
From spring 2018 onward, there has been a noticeable slowdown in book sales. The publishing sector in Turkey incurs multiple problems triggered by the instability in exchange rates.
The first of such setbacks is paper shortage. All book papers used in Turkey are imported. All inputs (paper, ink, printing machines, and royalties, etc.) in the production in the publishing sector are directly linked to foreign currency. For a very concise example, 11th of October 2017, the eve of the 2018 Frankfurt Book Fair, one USD was 3.70 TL and one EURO was 4.33 TL. On the eve of the 2018 Frankfurt Book Fair, one USD is moving toward the level of 6-6.50 TL while one EURO has become 7-7,5 TL! When it comes to the prices of paper, the primary input of publishers, they increased by 15-20% globally since the beginning of the year and the increase in exchange rates in Turkey in July and August added to it, whereby giving birth to the skyrocketing in paper costs up to 80%. Many of our members say they will begin to run out of paper stock as of November, the date of the Istanbul Book Fair, the largest publishing event in Turkey. In short, Turkey’s publishers are experiencing serious problems both in finding paper to print books and in buying paper due to the increase in the exchange rates.
Another drawback is the changes in distribution companies in Turkey. The handover and restructuring of one of the largest chain stores in the country brought along losses in book sales. Due to the circumstances experienced, publishers are subject to difficulties in collecting their receivables from their customers. In the sector, the regular maturity period of repayment was 120 days, while it is presently up to 180-210 days, which in turn inflicts direct negative impacts on the cash flow in the publishing activity. It also causes a number of consequences ranging from inability to meet input costs to late payments of royalties.
Another industry-specific situation that needs to be included in all the foregoing is that one of the largest suppliers in publishing has requested bankruptcy. Highly significant amount of receivables expected by the publishing sector from that one of the largest suppliers of the country, who filed an application for concordat in court in July, is now at severe risks. Inability of publishers to collect their receivables in a timely manner has posed inconveniences on the cashflow.
Finally, of course, the most important direct result of the increase in the exchange rates is that the royalties paid abroad have come to be impayable for many publishers now. When the advance amounts are fixed in foreign currency, there become increases up to 80% in TL equivalents in the payments that become due and payable.
Numerous publishers have already stated that they could not make due and/or overdue advance and royalty payments and started to demand annulment of agreements. To prevent such cases, we, as Turkish publishers, consider that the international book publishing community as well as local and foreign copyright agencies should act in mutual understanding and we encourage such attitude. We inform the international publishing community that if many Turkish publishers cannot configure their remaining payments arising from existing contracts, they might be compelled to terminate those contracts in the forthcoming period.
Unfortunately, the contracts to be entered into in the upcoming period are also vulnerable to the foreign exchange imbalance. 30-35% of the books published in our country are constituted by translated ones concerning cultural areas. Already several publishers have announced that they would turn their attention from the translations to the works of Turkish writers. This situation both weakens our international cultural dialogue and also undermines our literary richness and scientific knowledge accumulation.
As Turkish Publishers Association, we do our best to represent the will of publishers to continue publishing activity even in these difficult economic circumstances our country is going through. As we continue to work under the conditions in question by not letting the Turkish publishing sector leave off the international levels of publishing, we urge all parties of the international publishing community, authors, publishers, and agencies to be sensitive to these conditions and be in solidarity with the Turkish publishers. For the continuation of our cultural exchange and dialogue, it is vital that you know the conditions under which we operate and that you evaluate the offers or demands coming from us within this period accordingly. We know we will overcome these days with solidarity and thank you very much in advance for your support.
Turkish Publishers Association
3 October 2018