Chemical Industry Calls for Sector- and Company-Specific Incentives

Reaching USD 1.6 billion in exports in October, the chemical industry maintains its position as Turkey's second-largest exporting sector and is seeking sector- and company-specific incentives to scale up both in terms of investment and revenue. The sector is expected to close 2018 with 8.5 percent growth in the domestic market and USD 17 billion in exports. Within the framework of the International Chemistry Fairs TURKCHEM, a panel titled 'Problems, Solution Proposals and Opportunities in the Chemical Sector' was held at Istanbul Fair Center. The panel featured speakers including Murat Akyüz, TIM Sector Council Member; Haluk Erceber, Chairman of the Turkish Chemical Manufacturers Association (TKSD); Andre Yanço, CEO of MetroHM Turkey; Prof. Dr. Serdar S. Çelebi, TOBB – Chemical Industry Board Advisor and Faculty Member of Maltepe University Engineering and Natural Sciences Faculty; and Tayfun Koçak, Chairman of the Board of the Turkish Mineral Oil and Petroleum Products Manufacturers Association (MAPESAD). The panel discussed the chemical sector's 2018 performance evaluation, problems and solution proposals.

"One of the chemical sector's biggest problems is land investment"

TIM Sector Council Member Murat Akyüz noted that the chemical sector lacks investment facilities in Turkey in terms of raw materials. Akyüz emphasized that despite Turkey being a price-setting country in the global market, it does not hold the same position in production. He pointed out that exports to the EU have increased due to shrinking markets in neighboring countries, but stressed the need to expand closer to America and Far East countries. Akyüz stated: "One of the biggest problems of the chemical sector is land investment. Unfortunately, with the capital you have, you invest in land and concrete. When you then seek financing for what comes next, banks value land where you have invested USD 10 million at USD 3 million. First, these lands should be priced reasonably and a sector-specific, company-specific incentive system should be created in Turkey."

"We can close the gap between imports and exports through domestic and national projects"

Haluk Erceber, Chairman of the Turkish Chemical Manufacturers Association (TKSD), provided information that despite economic challenges faced globally and in Turkey during the year, the chemical sector will close 2018 with 8.5 percent growth in the domestic market, and stated that the external market export growth rate will be 15 percent. Erceber added that export figures are expected to reach USD 17 billion at year-end, and the chemical sector's share in the foreign trade deficit is expected to reach USD 24.2 billion. Emphasizing that the gap between imports and exports can be closed through domestic and national projects, Erceber stated: "The sector uses 70 percent imported raw materials. In this sense, we are dependent on abroad. Unfortunately, one of the sector's biggest problems is the inability to scale up. We must scale up both in terms of investment and revenue. A significant slowdown has occurred in large-scale investments. Exports are increasing but we have not yet been able to increase product diversity. We need to increase this. Today, the chemical industry feeds 30 different sectors and is open to growth." Chairman Erceber also emphasized that trade fairs like TURKCHEM should be held more frequently in terms of promoting the sector abroad.

"As an Industry 4.0 sector, we benefited positively from the recent currency decline"

Prof. Dr. Serdar S. Çelebi, TOBB – Chemical Industry Board Advisor and Faculty Member of Maltepe University Engineering and Natural Sciences Faculty, speaking at the 'Problems, Solution Proposals and Opportunities in the Chemical Sector' Panel held within the framework of the International Chemistry Fairs TURKCHEM, stated that as an Industry 4.0 sector they have benefited positively from the currency decline experienced in the last 15 days. Çelebi stated: "In terms of employment, we must be balanced in automation. Industry 4.0, to be honest, will not bring much added value for SMEs and employment. There is merit in people working in factories currently. This is my view. Yes, Industry 4.0 is essential for large-scale companies, but we should not forget the employment aspect."

"We need know-how"

Andre Yanço, CEO of MetroHM Turkey, addressing the Industry 4.0 topic, stated: "We are monitoring not so much how much we have implemented 4.0 in the chemical sector, but how quality control is conducted. We have implemented many automation technologies in production, but automations monitoring chemical parameters are not as widespread as we thought. Production is fine, but how far we have progressed in the control aspect is a question mark. We need know-how. Know-how also needs incentives."

"Purchasing in foreign currency and selling in Turkish lira is a significant problem for the sector"

Tayfun Koçak, Chairman of the Board of the Turkish Mineral Oil and Petroleum Products Manufacturers Association, noted that their sector grew 7 percent in 2018 compared to the previous year. Koçak pointed out that they are required to obtain licenses for mineral oil, which brings quality to their sector, and emphasized that they have been a sector showing growth over the last 20 years. Stating that the sector has been affected by American sanctions against Iran, Koçak underlined that purchasing in foreign currency and selling in Turkish lira is a significant problem for the sector.

"The Chemical Sector Convenes at TURKCHEM International Chemistry Industry Fairs in Istanbul"

The chemical industry, which reached USD 1.6 billion in exports in October and maintains its position as Turkey's second-largest exporting sector, convened at the International Chemistry Industry Fairs TURKCHEM, organized in 3 main categories: ChemShow Eurasia, ChemLab Eurasia and ChemTech Eurasia. Cengiz Yaman, General Manager of Artkim Exhibitions, providing information about the fair held at Istanbul Fair Center between 8-10 November, stated: "We organize TURKCHEM fairs every 2 years. It is the largest chemistry fair in the EMEA Region (Europe, Middle East and Africa). Over 700 companies and company representatives from 60 countries participate in this fair. At the same time, we expect over 12,000 visitors from 70 countries. We expect visitors mainly from the Middle East, Iran, North African countries, Turkic republics and Balkan countries. We are organizing the 8th edition of the fair this year. It has established itself as the most important chemistry event in the sector and region. Raw material imports in Turkey are generally made from abroad. There is not much production in Turkey. For this reason, companies coming from abroad can meet with end-user companies here to find chemicals and raw material technologies."