BPF Mission Explores Turkey Market

With a population of 76.2 million and GDP growth of 5.3% Turkey is attempting to attract strong industrial investment leading to Volkswagon, Ford, Toyota and Nissan establishing plants.

‘Plast Eurasia’ in Istanbul a forum for accessing this growth potential is becoming one of the most important trade shows in the region, attracting over 1,000 exhibitors, over 50% being international.  Plast Eurasia 2007 held between December 5th-9th attracted a British Group for the first time, led by the British Plastics Federation and supported by Government Grants.  The 11 strong group including a number of veteran exporting companies from the BPF membership including Meech Anti-Static Eliminators, CR Clarke and Co, Mattec, Tinius Olsen, , London Metal Exchange, Silberline and Cinpres Gas Injection, together with non-members Sunwell and Symphony Environmental.

The British contingent had one of the largest pavilions at the show, since the German Pavilion (normally organised through the VDMA) took a year off due to the proximity to the K Show.

The 5 day show saw a steady stream of traffic throughout its duration, however, the last two days which fell over a weekend were, surprisingly, extraordinarily busy.UK companies reported large numbers of leads, appointments of new agents and machines sold off stands.   Trevor Pimm, Regional Sales Director (Europe) of Meech commented “The event was exceedingly well organised both by Tuyap, the show organiserand the BPF for the British Group.The networking was brilliant.   The fact that I managed to meet a committee president of Pagev (the Turkish plastics trade association) opened an awful lot of doors.  And we are confident that the future of Meech in Turkey is bright”.

Turkish government programmes to increase living standards is attracting foreign investment but some are mooting that the relaxation of the laws  against religious conservatism will act as a brake on economic development.  UK exhibitors were surprised at the high cost of living in Turkey, with such ‘luxury’ commodities as petrol being very expensive (around £1.20 a litre).Distribution costs are high in what is a very large country.   Wages in the country are still considerably lower than Western Europe with the average wage of a machinist at around £250 per month and a degree level chemical engineer earns around double that amount.  The market is now at a turning point and is becoming increasingly sophisticated.  Steve Forster of Eaton Williams commented “The market in Turkey is now starting to change from traditional cheap products, such as buckets and bowls  to the more sophisticated requirements of blue chip companies such as Ford, Nissan, VW  who, when they audit suppliers, are expecting to see firms producing with European/CE Marked equipment to a high level of quality.  Its an ideal time to enter the market if you have technical abilities and outstanding features.” This greater call for quality is leading to higher demands for both testing equipment (for both physical and chemical properties) and test house services.

The plastics market in Turkey is growing at a staggering rate.  Over the past 5 years the industry has registered an annual average growth rate amounting to 8% in production and imports, 13% in exports and 9% in domestic consumption.  The growth in the plastics industry has consistently doubled the average economic growth over this period – with an annual average of 17% across the plastics industry over the last 4 years. Not surprisingly the BPF itself ended the show with 55 strong enquiries for machinery and materials that it is passing onto member firms

However despite the rapid growth rates enjoyed by the Turkish plastics industry, the domestic plastics raw material production fails significantly to meet demand, with 80% of plastics raw material demand being met by imports.  Despite being light in terms of polymer and petrochemical production there is expertise in masterbatch and compound production, and a growing interest in recycling.  There are 34 masterbach companies in Turkey with larger companies including Clariant, Sisan, Aksoy, Vira and Gulsan.

In terms of plastics processing capacity, Turkey currently rates 6th in the EU after Spain, however Pagev (the Turkish Plastics Trade Body) have stated the aim is to become “at least third amongst EU countries by 2014”.   Of the 6000 companies that make up the Turkish Plastics market, only 113 have any foreign participation in ownership and 98% are SME’s.  Of the 6000 companies, 63% are plastic product manufacturers, 16% supply machinery and equipment and 12% are raw material manufacturers.

The industry currently employees around 200,000 people (10% more than the UK) and needs an additional 20,.000 employees each year to maintain growth, placing  a massive strain on the education infrastructures.  However the country does have a very young population with 25% of the country under 14 and judging by the sheer volume of students who attended the show on the final day the future of the industry could be in safe hands.

Despite the staggering growth rates in the market, the consumption of polymer per head still remains low, around 50kg per head – well below Western Europe.  This suggests the potential demand for plastics in Turkey is great.  As with the UK the packaging  sector dominates  plastics consumption and accounts for 40% of all plastics consumption. The poor quality of drinking water leading to a large demand for PET bottled water and a preference for semi-solid food  encourages demand for thermoformed packaging.

The construction industry in Turkey accounts for around 22% of plastics consumption, Government policies to adopt Western style mortgage systems in 2006 and to give financial assistance to low income groups has stimulated a construction boom in the residential market with the focus mainly on apartment blocks.  The Turkish window profile market is the third largest in Europe with some 80 companies extruding profile. Siding is also a sizable market with companies such a PAK, American Siding and the PIMAS Group being prominent players.

The Turkish plastics industry is ambitious one and driven by national pride.  The Trade Association, Pagev, is highly influential and professional.  The industry is depends very heavily on personal relationships, with face to face meetings being highly valued.  In a country where a  20km journey can take up to 2.5 hours at ‘rush hour’ this can  be an ordeal.

ENDS

For a full copy of the letter or further details on this press release please contact:

Philip Batten, British Plastics Federation, 6 Bath Place, Rivington Street, London, EC2A 3JE

Tel: 020 7457 5007

Email: [email protected]

Notes for editors

1) British Plastics Federation (BPF) is the UK trade association for the plastics industry – representing the whole supply chain including polymer producers, distributors, additives suppliers, machinery manufacturers, processors and recyclers.