2021-2022 Paint Industry Assessment
Turkish paint industry; It is an extremely important sector that has achieved international standards with its production quality and capabilities and exports to many parts of the world. In addition to being the 5th largest paint producer in Europe, our country is advancing towards the goal of becoming an international sectoral power in its own region with its ever-increasing production and technological infrastructure. As the Turkish paint industry, we dominate approximately 2% of the 164 billion dollars global paint and coating market. There are nearly 20 largescale enterprises and many medium and small-scale
enterprises operating with world-class production and trade capabilities.
With the raw material supply and logistics problems experienced during the pandemic process, Turkey’s geopolitical position has become even more important for global markets. Turkish paint industry; Iraq, Uzbekistan, Iran, Russia and Egypt increased its exports in this process. When we look at the data of IKMIB (Istanbul Chemicals and Chemical Products Exporters’ Association), our industry, which exports to 168 countries, achieved 871 million dollars of export income in 2020. With an increase of more than 27% in 2021, our total sectoral exports exceeded 1.1 billion dollars.
Increasing public awareness of the environment and human health, technological developments and new regulations have brought along innovations and responsibilities for various product portfolios on human health and environment. In recent years, important developments have been made in the paint industry production, along with the process of harmonization with environmental regulations, in the fields of recovering and recycling.
The biggest obstacle in front of our industry, which has such a strong and high potential, is that we rely on imports of raw materials. While this situation causes our costs to increase, on the other hand, it has a negative impact on the added value that our sector will provide to the economy. The supply of raw materials is one of the most important elements that
binds the hands of our industrialists. In this sense, it is of great importance to plan and implement petrochemical facilities, which will provide solutions to the raw material needs of dozens of sectors, together with the paint industry, under the leadership of the state. Such facilities are huge facilities that require large investments. The petrochemical plants, which will offer raw materials to dozens of sectors, are not only important for our sector. It is also of great importance for the country’s economy. It will also prevent us from running billions of dollars in current account deficit in a year.
On the other hand, we face it as one of the main problems; The increase in financing costs of our companies that export and compete with other paint manufacturers in the world. Our competitors in the world can make investments by borrowing at much lower costs than our domestic producers. In order to strengthen the hand of our exporting industrialists
against their competitors, solutions for credit costs should be developed. Every step to be taken in terms of raw materials and financing is of great importance for our industrialists.
The effects of the pandemic will continue to wane this year. On the other hand, the Russia-Ukraine war will have a negative impact on the Turkish economy, which has intense commercial relations with both countries and is going through a difficult period at
home. The fluctuations in exchange rates and the increase in paint prices since last year lead to a decrease in consumption. I think there will be some shrinkage, especially in the construction paints market.
M. Akın Akçalı
The Association of Paint Industry (BOSAD)
President
After 2020, which was turbulent for the whole world, 2021 began as a year in which we predicted the start of normalization for the chemical industry. We aimed to return to our previous normal order with controlled socialization in both our private and business lives,
especially as the markets started to move after the Quarter 3 of 2020, we saw that production generally reached or approached full capacity. After this moderate weather, unfortunately, after the general problems such as the supply chain of the chemical sector, logistics and regional situations such as the Suez Channel, the post-brexit element crisis and the problems of the lack of raw materials resulting from these factors, a nervous and partially panic environment occurred not only in the chemical sector but also in a multisector.
After this decrease in supply, the increase in demand above the plans has made the company more focused on purchasing and production planning than on secret sales planning. As in many sectors that have not experienced such a global imbalance before (such as the chip crisis in the automobile), the demand in our sector could not be adequately responded to.
This imbalance in the supply-demand balance has created an inflationary environment all over the world and especially in our country as expected. Especially after the second half of 2021, after a very significant increase in main inputs such as energy and oil, our sector faced not only supply problem but also a situation of price balance. Being able to make costing and pricing due to the high external dependency rate of the chemistry secretariat became a very serious issue especially after the second half of 2021, and the exchange rate risks started to prevent healthy trade. On the other hand, the industry of chemicals continued to increase its trend in exports in recent years, and the sector, which closed 2021 with an export figure of approximately $25 billion, broke a very serious export record. Many manufacturers have tried to take export steps and find new markets in order to maintain the exchange rate risk balance between purchase / sale.
To summarize, I can say that we have had a year in which a supply market that develops differently from our expectations and cannot meet the increasing demand worldwide after the events and situations that trigger each other while being tried to be managed,
but significant profits occur in the balance sheets of almost all companies.
As UnivarSolutions, we managed to realize high-quality products for our customers in the sectors we serve in the most appropriate service conditions possible, despite these high supply problems, and we continued our healthy growth with the new sectors and new
suppliers we started to serve.
For 2022, our main parameter and control point will be demand in regard to our company. We do not think that performing only sales and profit analysis is a healthy management form for companies, that it is necessary to closely control the breakdowns such as the quantity sold, the number of customers, the number of industries serviced, the number of products sold to a customer compared to previous years and budget. In addition, especially the fragile foreign exchange situation in our country and the reflection of the compelling high interest and high inflation environment on demand should be closely monitored.
In order to become the leading raw material supply company of the country, we will be the reliable provider of our new projects, new suppliers and customers that we will announce in the coming days.
Halil Kuzucu
Head of Sales Management EMEA
CASE, Rubber & Plastic Additives
UnivarSolutions
Despite the negativities brought by the pandemic, we closed the year 2021 with a significant growth in foreign currency. In 2022, we want to maintain the same growth by continuing to improve ourselves in line with the criteria we have determined. As we celebrate our 35th anniversary, we are a company that shapes our industry and takes a place in the hearts of our customers with our pre-sales and after-sales service. We manage
Turkey’s most active field sales operation with our sales team of 16 people working in every region of Turkey.
Our industry has been experiencing difficulties especially in the last two years due to the problems in product supply and price increases. As in the previous year, we want to maintain the continuity in the product supply by being affected by the problems in the supply chain at a minimum level this year. We continue to offer our wide product portfolio in the paint and coating group to our customers. We are expanding our product portfolio by trying to stay at the optimum point in qualityprice balance. As of 2022, we started our cooperation with Nouryon and we started Bermocoll sales of the cellulose group in paint and construction chemicals. I believe that this cooperation will strengthen us and our
industry.
The chemical industry grew very rapidly in 2021, especially in the field of exports, and achieved an important success. In the new year, I think this success will continue, hoping that the impact of the pandemic will also decrease. If we can develop ourselves as a sector in areas with high added value, I think that this recent acceleration will bring sustainable growth and contribute to our country jumping the threshold. I wish 2022 to be a good year for our country and our industry. As Asil Kimya, we have been the power of our customers for 35 years and we will continue to be.
Ali Karamustafaoğlu
Sales Director
Asil Kimya
