Government Upfront, Suppliers Upfront, Customers in 90 Days: How Is a Manufacturer Supposed to Survive?

The manufacturer at the centre of this article is not a small interest group operating at the margins of the economy.

According to TurkStat, sales from industrial production exceeded TRY 24 trillion in 2025. Manufacturing accounted for 16.8% of Türkiye's GDP in 2024. In April 2026, the sector employed approximately 4.449 million wage earners; in May 2026, manufacturing generated 94.5% of Türkiye's exports.

Yet this vast production machine is operating at a capacity utilisation rate of 74.5%. The Manufacturing PMI fell to 47.1 in June 2026, extending the deterioration in operating conditions to a 27th consecutive month. Manufacturing employment declined by nearly 123,000 people in one year.

In precisely this environment, the manufacturer pays for raw materials, energy, labour and taxes—and then waits to receive the money for the product already delivered.

What the customer calls a "payment term" is, for the manufacturer, working capital provided without compensation. Atradius' 2026 survey for Türkiye reports that 86% of companies experience customer payment delays, with more than one-third of invoices overdue.

According to the Central Bank of the Republic of Türkiye, the weighted average annual interest rate on TRY commercial loans stood at 53.29% on 3 July 2026. At that rate, financing TRY 1 million for 90 days costs approximately TRY 131,000 before taxes, commissions and bank-specific charges.

There are sales on paper. There is production on the factory floor. There may even be profit on the balance sheet.

But there is no cash in the bank.

Because the manufacturer is not merely producing goods. The manufacturer is also financing the state's collections, the supplier's cash, the bank's interest income and the customer's working capital.

Why Do You Still Insist on Manufacturing When You Could Grow Your Capital Through Interest Income?

Because you no longer have free capital to place in an interest-bearing account.

That capital has become a factory, machinery, tooling, inventory, permits, customers, skilled people and a supplier network built over many years. When you become a manufacturer, you do not merely establish a business; you build an ecosystem whose roots extend deep into everything around it.

That ecosystem is not built in a day—and it cannot be dismantled in a day.

In Türkiye, an industrialist rarely builds a factory with excess equity sitting idle in a bank account. The factory is built with loans, leasing, mortgages, personal guarantees and income expected to be earned in the future. Before selling the first product, the manufacturer is already indebted to the bank, the supplier and the state.

This is why leaving manufacturing is not as simple as withdrawing capital from a factory and placing it on deposit. The day the factory closes, a machine worth millions on the balance sheet is no longer an investment producing a profitable product. It is a second-hand machine waiting for a buyer.

The machine loses value. Tooling is worth only as much as the product it can still produce. Inventory is discounted. Skilled employees disperse. Customers find other suppliers. The ecosystem built over years begins to dissolve.

But the bank debt does not fall to a second-hand price.

The loan remains the same loan, the interest the same interest and the guarantee the same guarantee.

So the manufacturer does not always choose to continue producing. Sometimes production continues because leaving production is no longer possible. The wheel has to keep turning, because revenue stops the moment the factory stops—but the debt keeps accruing.

Maybe you are not insisting on manufacturing. Maybe you simply cannot afford to stop.

Hope Bankrupts the Manufacturer

My father has a powerful saying:

"Hope bankrupts the manufacturer."

"The customer will pay eventually."

"The next order will close the gap."

"Interest rates will fall soon."

"If we survive this period, we will finally breathe."

Manufacturers often carry on not because they fail to see the loss, but because they believe tomorrow will repair it. Hope, however, is not a financing model, a collection method or working capital.

One Manufacturer's Red Line Is Another's Sales Target

It is easy to say, "Payment terms must have a price."

But when you add the cost of a 90-day term to your price, another manufacturer may quote a lower price with 120 days to pay. When you reject the order, another factory—desperate to fill capacity or meet that month's loan instalment—will accept it.

The point at which one manufacturer says, "I cannot produce under these conditions," becomes the point at which another enters, saying, "As long as the wheels keep turning."

These firms function like strikebreakers in the market. There is no coordinated decision, yet the outcome is the same: manufacturers break one another's prices, payment terms and negotiating power. The buyer turns that fragmentation into leverage.

Every new low quotation strengthens the buyer's bargaining position. Eventually, the manufacturer who calculates the cost of finance appears expensive, while the one who ignores it appears competitive.

Yet there is not always a genuine cost advantage. One company may be rolling over bank debt. Another may be delaying supplier payments. Another may not be calculating profitability correctly. Another may be pushing today's loss into the future with a new order.

For a while, financial indiscipline can look like a competitive advantage.

As I argued in Profitability Is More Charismatic Than Revenue, revenue shows how much business a company conducts; profitability shows what that business actually leaves behind. Yet in today's market, the manufacturer who calculates profitability correctly risks looking expensive beside the competitor who does not.

Telling manufacturers simply to "defend their price" is therefore not a solution. The discipline of one manufacturer can become a punishment when set against the desperation of an entire market.

At company level, what can be done is less a solution than damage control: reduce dependence on a single customer, identify orders that consume cash, limit customer exposure and create a reason to be chosen beyond price. None of this happens overnight. But remaining completely interchangeable in the buyer's eyes becomes more expensive every day.

The real solution is to stop payment terms from being used as a weapon of destruction among manufacturers. The balance of power will not change while the cost of late payment is not automatically borne by the buyer, large buyers keep supplier financing outside their own balance sheets, and producer organisations make exports visible but leave payment practices in the dark.

In today's system, the buyer is not merely purchasing a product. The buyer is purchasing the desperation that sets manufacturers against one another.

A country begins to lose its manufacturing capability on the day its manufacturers lose the desire to produce.

Sources

• TurkStat — Annual Industrial Product Statistics, 2025
• TurkStat — Annual Gross Domestic Product, 2024
• TurkStat — Paid Employee Statistics, April 2026
• Ministry of Trade — Foreign Trade Data Bulletin, May 2026
• CBRT EVDS — TRY Commercial Loan Interest Rate
• CBRT — Manufacturing Capacity Utilisation Rate, June 2026
• Istanbul Chamber of Industry — Türkiye Manufacturing PMI, June 2026
• Atradius — B2B Payment Practices Trends in Türkiye, 2026

Editorial Note

Data and calculation distinction: The 90-day financing cost uses a simple day-count based on the CBRT's 53.29% annual commercial loan rate dated 3 July 2026. Taxes, commissions and firm-specific bank charges are excluded. The 90-day period is not claimed as the sector's average contractual term; it is an illustrative scenario combining contractual credit with the widespread payment delays reported by Atradius.