Plastics News Europe - October 2019 - 6

MARKETS & BUSINESS

Tough times for Turkey?
The Turkish plastics market faces
tough times, but has strong
fundamentals for sustainable
prosperity, writes Paul Cochrane

T

he Turkish plastics manufacturing sector has grown exponentially over the past decade, but
growth has spluttered over the past
year due to the country's economic
downturn and currency depreciation
raising the cost of raw materials. Investment has also slowed, but manufacturers are optimistic the sector will
rebound, with exports remaining
strong.
Turkey has a plastics processing
capacity of around 10 million tonnes,
equivalent to 3% of global plastic
production, with the country the
world's sixth largest plastics manufacturer, and the second in Europe after
Germany, according to Barbaros
Demirci, a consultant to Türk Plastik
Sanayicileri Arastırma Gelistirme ve
Egitim Vak (PAGEV - Turkish Plastics
Industrialists' Foundation).
In 2018, the industry's turnover
reached USD36.5 billion, but output
quantities declined by 6%, and 5%
by value, according to Erol Türker,
brand manager for Ege Communication Consultancy in Istanbul, which
operates websites plastonline.com
and pnturkey.com.
In the first six months of 2019,
overall plastics production dropped
11%, from 5 million tonnes to 4.5
million tonnes, according to Türker.
Exports on the other hand increased
by 12% compared to the same period in 2018.
Exports for 2018 have been valued
at USD5.9 billion, with the European
Union (EU) the largest importer, commanding 13.6% of purchases, at
USD806 million, said Türker. Germany, Belgium, the Netherlands, France
and Italy are the top importers. So far
this year, sales to Germany have declined, but those to the UK and Iraq
have risen, with the neighbouring
Arab country Turkey's largest national
export market, with sales of USD207
million in 2019, according to Türker.
"We've lost some ground over the
last two years, mainly due to the loss
of purchasing power in the domestic
market, which created a surplus
among manufacturers. The devaluation of the Turkish Lira also had an
impact, especially for companies buying raw material in foreign currency,
but the sector is recovering slowly,"

GREETINGS FR
OM

TURKEY

said Burç Angan, executive board
member of Plastik Sanayicileri Dernegi (PAGDER, Turkish Plastics Industrialists' Association) to Plastics News
Europe.
Turkey has been experiencing an
economic downturn over the past
year. Its economy contracted by 1.5%
in April-June (2019) year-on-year, according to the Turkish Statistical Institute (TurkStat - Türkiye Istatistik Kurumu). Inflation is on the rise
(annualised rate 16.65% in July, said
TurkStat), while the Turkish Lira
dropped 47% in value against the US
dollar in the first eight months of
2018. Maybe unsurprisingly, imports
of plastics dropped from a high of 5
million tonnes in 2017 to 4.7 million
tonnes in 2018, with the value sliding
from EUR5.5 billion to EUR5.19 billion, according to ChemOrbis, an information provider on the plastics industry. In the first half of the year,
plastic raw material imports decreased by 8% year-on-year, according to PAGEV.

Increased costs
But some manufacturers are dependent on imports and they are suffering
increased costs, with 85% having to
import polymer, said Türker. Overall,
just 13% of the Turkish plastics sector's input needs are supplied locally,
according to PAGEV.
Due to the economic downturn,
polyethylene (PE) and polypropylene
(PP) production has declined over the
past 18 months. "After prices reached
an almost three-year-high in early
2018, they tracked a downward path
from the beginning of the second

6

half of last year to early 2019. Prices
are currently standing at a 10-year
low," at less than USD1,000 for HDPE
(high density polyethylene film) and
under USD1,100 for PPH Rafia, said
Esra Ersöz, manager of market information at ChemOrbis.
Plastic raw material production
was estimated at 507,000 tonnes in
the first six months of 2019, of which
LDPE (high density polyethylene) was
31%, HDPE 9%, PVC 15%, PP (polypropylene) 12%, PS (polystyrene)10%
and PET (polyethylene terephthalate)
23%, according to Türker.
The majority of Turkish plastics
production, at 40%, is destined for
packaging, catering to export demand but also local producers. Construction accounts for 22%, durable
goods 10%, agriculture 6%, textiles
4%, and automotive 4%, according
to ChemOrbis figures.
Turkey is one of the world's largest
textile and garment manufacturers,
with exports of textiles amounting to
USD10 billion and clothing exports
around USD17 billion in 2018, according to Istanbul Apparel Exporters'
Association (IHKIB - Istanbul Hazır Giyim ve Konfeksiyon ihracatçilari Birligi) figures, offering a solid sustainable
base of demand for exporters.
The plastics industry is a major
supplier to the country's USD31 billion automotive export industry, with
production having surged from
374,000 vehicle units in 2002, to
1.696 million units in 2017, with 1.3
million units exported, according to
Otomotiv Sanayii Dernegi (OSD, the

➡ Continued on page 8
OCTOBER 2019
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