Chemical Sector Shows Positive Performance

KPMG Türkiye examined sector performance in the first half of 2020. According to the chemicals sector assessment, Turkey's sector performance is showing a more positive trajectory than the global outlook. The sector, which suffered losses before the pandemic, is offsetting its deficit through medical, hygiene and cleaning products According to KPMG Türkiye's first half 2020 assessment, Turkey's chemicals sector, which supplies raw materials to 27 sectors, was affected by the sharp contraction in global trade during the pandemic. On the other hand, strong demand for medical, hygiene and cleaning products offset revenue losses in other products to a certain extent. Declining raw material prices provided sector players with some cost advantages. Hakan Demirelli, Oil and Gas Sector Leader at KPMG Türkiye, emphasized that the 2020 export target for the chemicals sector, which makes up 10 percent of exports, was 22 billion dollars at the beginning of the year, stating: "This level was 7 percent above the 2019 actual performance of 20.6 billion dollars.

During the outbreak, the target was adjusted to 20 billion dollars. While this level may be perceived as a contraction, it indicates a positive outlook when compared to the disruption experienced in the global economy," he said.

Demirelli, highlighting that the sector's export figures started to grow with the normalization process, said: "Exports that grew 21 percent on a monthly basis in June reached 8.6 billion dollars. On an annual basis, we are seeing 10 percent growth, which is one of the rare figures we can see nowadays. The importance of the normalization process's effect on the increase becomes clearer with the information that contraction in May was 17 percent. We believe this trend will move in parallel with the slowdown in industrial activity losing momentum." Referring to how the medical products and healthcare equipment sector that the chemicals sector supplies increased its effectiveness in both the domestic market and export markets with the outbreak, Demirelli said: "The increase in demand for critical healthcare products with the pandemic had a positive impact on exports. The fact that total medical product exports in the first six months nearly doubled compared to the same period last year, reaching 385 million dollars, is important in terms of revealing the export potential in this field. As a result, the sector, which suffered losses before the pandemic, is offsetting its deficit through medical, hygiene and cleaning products. We can say it is the best-performing sector overall."