New Tender Regulation to Put Pressure on Manufacturers

As of 1 January 2025, a new regulation requires documentation of domestic raw material usage to obtain a "domestic product certificate". Ömer Karadeniz, Chairman of the Board of the Plastics Manufacturers Federation (PLASFED), has warned that this arrangement could create serious difficulties for domestic producers.

As of 1 January 2025, a new regulation introduces a mandatory requirement to document the use of domestic raw materials in order to obtain a "domestic product certificate". Ömer Karadeniz, Chairman of the Board of the Plastics Manufacturers Federation, stated that applying this condition in sectors dependent on imports for raw materials could harm manufacturers and cause disruptions in public services, calling for the regulation to be reviewed.

Under the new regulation, companies wishing to participate in public tenders will no longer be required merely to produce in Turkey; they will also need to document that the raw materials used in their production are domestic. PLASFED Chairman Karadeniz stressed that this condition is not applicable especially in the plastics sector, stating: "The plastics sector is 85 percent dependent on imports for raw materials. In fact, in some engineering plastics this figure reaches 100 percent. For this reason, the domestic production requirement could seriously strain our sector."

Emphasizing that the bulk of raw materials used in the plastics industry are imported,
Karadeniz made the following remarks on the matter: "The domestic production rate in engineering plastics is negligible. Even Petkim, Turkey's largest player in the petrochemicals sector, can only meet 10-15 percent of the sector's needs. Moreover, major producers struggle to work with Petkim due to supply lead times and delivery problems. Under these conditions, requiring companies to prove the use of domestic raw materials could seriously restrict Turkish manufacturers' access to many tenders, including public ones."

"Policies aligned with industry realities are essential"
Karadeniz noted that while the regulation was prepared in good faith, it could harm manufacturers if not adapted to reflect sector realities in implementation. The PLASFED chairman stated that the "essentials" section of the regulation has not yet been clarified, explaining that consultations and discussions with relevant ministries are ongoing.

Drawing attention to how making it harder for manufacturers to participate in public procurement could negatively affect production capacity and employment, Karadeniz said: "Policies that promote domestic production are certainly important, but these incentives must be implemented taking into account real market conditions and production infrastructure. The requirement to prove that a domestic producer's raw materials are also domestic could, due to insufficient raw material production in our country, become a factor that makes production even more difficult."

"Risk of disadvantage in practice"
Providing an example of the impact of the new regulation, Karadeniz issued the following warning:
"A municipality may open a public tender to purchase toys or puzzle-type products for orphaned children. A company engaged in domestic production may be unable to participate in this tender due to the origin of the raw materials used in the product it produces. This could cause disruptions in public services and harm manufacturers."

The PLASFED chairman said the federation will continue to draw attention to the problems facing the sector, present solution proposals, and work in cooperation with relevant institutions.