2021-2022 Polyurethane and Composite Sector Review

Industry Professionals Assessed Polyurethane and Composites Sector in Putech & Composites Magazine

President, Composite Manufacturers Association - Barış Pakiş

2021 was a year marked by ongoing pandemic management, economic instability, raw material supply challenges and logistics problems. Abnormal increases in raw material prices, particularly due to uncertainties in the economic situation during the final quarter of the year, made raw material procurement and production difficult. Today, as transportation becomes increasingly difficult and expensive, the cost of composite materials rises, which creates complications in preference compared to alternative materials. The density of physical trade fairs conducted again in the second half of the year after a long hiatus, and the interest shown by neighbouring countries, indicate that if the sector can adapt to Turkish currency uncertainty and high cost conditions, exports can gain momentum. The Turkish Composites Sector will continue to capture market share from Chinese supplies to Europe, thanks to its proximity to Europe and timely, quality product supply. Throughout the year, our association held member meetings open to all sector participants, providing information on current topics such as the European Union Green Deal and carbon footprint, advanced recycling, and sharing on supply chain and raw material issues, thereby supporting the sector's growth efforts. Considering the effects of the previous year, I anticipate that 2022 will be challenging for our country and sector. With the belief that strength is nourished by adversity, I am confident that by the end of 2022, the Turkish Composites Sector will continue to grow by adapting to the new order conditions.

CEO, Kimpur - Cavidan Karaca

As one of Turkey's leading polyurethane systems manufacturers, Kimpur ranks among the world's major companies through technology and R&D investments. As a reliable business partner, with our annual production capacity of 120,000 tonnes and advanced technology manufacturing facilities, we enhanced our competitive strength based on operational excellence and the "Smart Business Model," and developed successful business collaborations with our customers operating in nearly all sectors in 2021. Unaffected by the pandemic and accompanying global supply problems experienced during 2019-2021, we achieved our targets by being preferred by our customers due to our strong, long-established supplier partnerships, strong position in our sector and high purchase volumes. We ranked 314th among Turkey's largest 500 industrial enterprises in 2020. In 2021, we achieved growth in line with our budgets. With our extensive product range, we exported to more than 45 countries targeting sectors such as footwear, automotive, construction and building, furniture, and heating-cooling. Our R&D activities continued rapidly in 2021. Our R&D Center launched dozens of products and designed special products that created performance differentiation for our customers. We intensified our focus on sustainability topics, which we prioritized as a holistic approach in 2020. We set our targets with the awareness that sustainable growth is impossible without creating value in environmental and social terms. We accelerated work on products that minimize environmental impacts in our production. We became a member of the Plastic Industry Initiative (İPG). We obtained our ISO 50001:2018 Energy Management System certificate. Based on ISO 14064 and ISO 14046 standards, we continued our activities in accordance with sustainability principles through Carbon and Water Footprint Calculation steps. We initiated infrastructure work for SA8000, a global standard for human rights management, and ISO 14001 Environmental Management System to continuously improve our environmental performance. We will soon publish our second sustainability report and present the details of our work in this context to all our stakeholders. As mentioned above, all these successes were backed by our commitment to sustainability principles, investments in R&D, innovation and technology, customer focus, technical support services and human resources policies structured proportionally with our goal of being a good employer. In this regard, following evaluations and analyses conducted by the Great Place to Work® Institute at global standards recently, we met the criteria of a great workplace with positive employee experience and high trust culture, and earned the Great Place to Work® Certified designation. In line with our business plans, we made the decision to invest in a second production facility in Turkey because we are pushing the limits of capacity utilization at our existing Gebze facility. We purchased and designed land in Düzce Gümüşova Organized Industrial Zone. With our Düzce investment, by 2022-2024 we will have reached a capacity to produce 50,000 tonnes more polyurethane systems. At this facility, we will also implement investments to increase our "green product range" work in parallel with a PET recycling facility and EVA granule raw material production targeting the footwear sector. Beyond our investments in Turkey, we will complete the Kimpur Europe entity, 75% Kimpur-owned, through cooperation with a ready-made production facility with 25,000 tonnes capacity in Latvia. As of 2022, we will pursue our targets from this location towards the Russian market to the east and European markets to the south. With 2 production facilities in Turkey and 1 in Latvia with a total capacity of 200,000 tonnes, as a major global manufacturer, we are confident of securing a strong position in global competition. At this point, to further strengthen our corporate and financial structure and increase our investments further, we are now going public. For this purpose, in October 2021 we applied to the Capital Markets Board with our draft prospectus. Despite receiving Capital Markets Board approval for the public offering, we are continuing our work to conduct our December public offering with our further strengthened year-end 2021 balance sheet as one of 2022's first major public offerings. On this growth journey, our priority is to grow in line with our sustainability principles and to create a corporate structure that sets us apart in the sector on this matter. With our 38 years of experience, we are proud of where we have reached on this journey that improves with each passing year.

General Manager, Flokser Kimya - Ekin Tükek

We have left behind another year that we spent through the pandemic. The pandemic showed the entire world how important digitalization and keeping pace with the digital world are. We had already begun adapting to the digital world, but in this process we also increased our investments and fully integrated our business processes and meetings into the Digital World. By investing in SAP S4 Hana, we transitioned to a next-generation intelligent ERP system. Because of its maximum speed and easy integration with SAP solutions, performance in our business processes increased and our advanced database enabled faster access to real-time reports. Digitalization brought us new standards regarding business life. To keep pace with these standards and reach the speed of the digital world, we started work on "Robot systems." These developing robotic computer systems enable business processes to proceed faster and more reliably. As Flokser Kimya, we succeeded in reaching the targets we set in 2021. We continue on our path always with the sustainable innovation principle. With this mission, we have increased our 2022 targets. We have determined our new investments to be carried out domestically and abroad, and developed our plans in terms of developing and diversifying our products in different sectors. We have developed alternative plans for different scenarios. Evaluating all the possibilities offered by technology, we always aim for the next step.

President and CEO, Covestro Elastomers - Thomas Braig

The coronavirus pandemic was a real challenge for us. As Covestro Elastomers, faced with such an unprecedented global crisis, we did and continue to do everything in our power to support our customers worldwide, striving to be a reliable supplier even while the crisis continued. Our Covestro Elastomers production facilities continued operating and, despite the current situation, we work continuously to advance our research, maintain our production, deliver our products and provide our customers with the support they need. For Covestro, innovation is a core element of our strategy to support our customers' growth with higher-performance and more efficient products for a sustainable future. We particularly intensified our efforts to develop our new-generation circular economy solutions and were able to launch new products to meet market demand. Operating a production operation means relying on the reliable supply of quality products. The situation we experienced was a challenge for all of us and still is. With our Covestro employees, we did our best to ensure safe and continuous production for our customers and minimize the impact of the crisis. Our focus on safety—for example, by applying strict rules in the field, effectively managing shifts and work interfaces to prevent Covid-19 contamination and its effects on our employees and ultimately on the delivery of our products—was an important success factor. Another success factor was having secured our shipments with carrier companies with reliable and long-term relationships. The most important factor for our customers' daily activities is, of course, maintaining production processes. We utilize digital facilitating services as much as possible to handle emergencies remotely. For example, through a secure connection, we can provide remote access to any machine - so our technicians can monitor systems, diagnose problems and provide remote support at maximum speed and comfort, and also identify and order necessary spare parts in real time. Our technical center expert technicians were available for remote access to troubleshoot problems and helped resolve daily molding issues. We organized a series of web seminars launching innovative solutions and started many innovative projects in a virtual environment with our customers. For material handling applications, elastomers must exhibit extremely high mechanical strength and dynamic load capacity. Whether it is keeping an e-commerce logistics platform running 24/7 or contributing to the safety of the most exciting high-speed trains, Vulkollan® is always part of the solution. Vulkollan® has been one of the strongest and most renowned elastomers for decades. As part of a global trend, the mining industry is looking for new ideas to improve waste management and reduce its environmental impact. To this end, Covestro provides a high-performance solution that enables waste to be reintegrated into the production process. When materials produced using CO2 technology or bio-based raw materials are combined, these solutions have a more positive impact on the carbon footprint. Furthermore, when it comes to the metal mining industry, this industry can make a greater contribution to the circular economy because it can promote e-mobility or wind energy. Covestro has developed a Desmodur® PU system based on a raw material using CO2 technology called Triturn®: products processed with these materials contain a certain level of carbon dioxide as a chemical raw material. They can replace some previously used fossil-based raw materials and therefore have a positive effect on the carbon footprint. Finally, this solution enables manufacturers to produce parts with overall performance exceeding the previous material solution. At the Utech Europe exhibition, Covestro was recognized for this innovation: we exhibited a bend restrictor containing material based on CO2 technology that won the CASE award. This offshore wind farm component prevents undersea cables connected to offshore wind turbines from being damaged by excessive bending. We are very pleased with this award because we believe in this innovative technology. Covestro is committed to being fully circular for a sustainable future. We are advancing to transform our system portfolio with alternative and renewable raw materials, expand the use of renewable energy, broaden our offering in recycling solutions and enhance sustainability with higher-performance and more efficient solutions for diverse applications. Beyond this focus, our main objective is to be a reliable supplier of quality solutions for our customers. This is especially important because supply chain disruptions and product availability are expected to remain a significant challenge throughout 2022. These are times when collaboration and customer focus become even more important.