Sector Assessment 2023

Sector Assessment 2023

Ali Karamustafaoğlu Sales Director Asil Kimya

We had a successful year at Asil Kimya and reached our targets. We continued our growth on a currency basis while expanding our product groups. Our sales team continues to grow as well. Our team comprises approximately 20 people including sales support and after-sales services. We continue our work regionally and by sector, and in 2022 we began serving our customers in new regions and new sectors. The year 2023 may display a more stagnant picture, particularly in the first two quarters of the year, due to both global instability and recession expectations as well as the electoral atmosphere in our country. However, due to our country's dynamics, our economy has the ability to react quickly to adverse conditions and recover rapidly. Therefore, I believe growth will continue in the second half of the year. In 2022, the chemical sector achieved a major success, surpassing the automotive sector in exports to reach first place. While congratulating all companies that contributed to this success, we should know that there is still much progress to be made. If we can invest more in high value-added areas, our success in this field will accelerate further and reach a sustainable position. As Asil Kimya, we continue to source new products in 2023. As a result of our cooperation with Nouryon, we will begin sourcing wetting agents and surfactants used in the paints sector under the Berol brand. We believe our products will receive significant interest in both quality and price in this area. Additionally, as a result of our work with Han Color, one of China's largest organic pigment suppliers, we will begin importing azo pigments. We have started direct imports of chlorinated paraffin, air-entraining agents, MBS and acrylic impact modifiers. We believe we will accelerate in this area during the year and reach significant tonnages. We are awaiting our first orders for castor oil and MOCA. We will become one of the important players in these product groups in the sector. One of our targets is to increase our infrastructure capacity. We will increase the capacity of our central warehouse in Tuzla and expand our covered area to 8,000 m² during the year. By increasing our operational strength, we will provide better service to our customers. In 2023, we plan to increase our sales on a currency basis by 40%. We have planned the necessary groundwork for this to happen. I wish for a new year where we, our sector, and our country can achieve our targets.  

Burcu Gezegen Özdemir General Manager Azelis Turkey

We can say that in 2022 global growth momentum slowed and a serious economic contraction occurred worldwide. In 2022, as companies in Turkey's chemical sector, we struggled with many issues such as cost increases, supply problems, exchange rate fluctuations, and the energy crisis caused by the Russia-Ukraine War. In 2023, we will likely face price fluctuations, demand variations, and uncertainties. As Azelis, amid challenging market conditions, we focus on three areas to continue providing top-level service to our customers and pursue healthy growth. The first is innovation. Formulation laboratories are the strongest initiative through which Azelis fulfills its "innovation through formulation" commitment. Within Azelis's global network of 60 laboratories, our technical teams in different countries develop innovative formulations, contributing to the growth of our suppliers and customers. In 2022, in our 4 application centers, including our CASE (paints, adhesives, sealants and elastomers) laboratory, we developed dozens of innovative formulations, conducted product performance tests, and organized technical training for our customers. In 2023, our technical consulting services will continue to expand. Second is sustainability. As Azelis, we hold the Platinum rating from ECOVADIS, a leading sustainability rating organization. In the assessment by Sustainanalytics, another respected ESG organization, we rank first among 178 distributors. In 2022, environmentally friendly and renewable chemicals, biochemistry and compounds continued to grow rapidly. We have serious targets to increase the proportion of sustainable products in our portfolio. We also consider ESG ratings in our new distribution agreements. For example, last year we signed an agreement with a global leader in sustainable performance minerals and added their products to our portfolio. Our third focus area is digitalization. Following our home care and personal care portals, we launched our CASE customer portal last month. On our digital platforms, our customers will find inspiration for new products, develop formulations in our e-lab using products from the Azelis portfolio, access technical documents, place orders, and request samples. Azelis continues to deploy new digital infrastructures within the company in areas such as innovation, training and development, and finance to work more efficiently and further increase service speed and quality.  

Fırat Sağlam Country Manager Bühler Turkey

I can say that 2022 was a year of return to normalcy, referred to as the post-covid period for almost all sectors. For Bühler, it was a year to market and reap the results of our strategy thanks to the dozens of new technologies we developed as a result of our R&D and innovation work, which we continued without losing momentum and even accelerated during the pandemic. We surpassed pre-pandemic figures and reached our targets in almost every sector in which we are active. For Bühler Turkey specifically, we already passed through the pandemic years with growth far exceeding our targets and at a rapid pace. Turkish industrialists have a structure that does not hesitate in times of crisis, is bold and makes and implements decisions quickly. Within this structure, they prefer to work with trusted business partners with whom they have confidence in technology and service. This is precisely why, over the past 3 years, with correct strategy and investments in human resources, and by greatly expanding our local capabilities, we have brought Bühler Turkey to double-digit growth percentages. I see 2023 as a year of major projects and opportunities. Particularly in the EMEA region, there is a significant increase in potential as demand from European, Middle Eastern and African countries permanently shifts to our region from the Far East. On top of this, although the negative impacts are severe both from a humanitarian perspective and especially for the food sector commercially, there is also interest directed toward Turkey in the paints and chemicals sector specifically due to embargoes against Russia. Considering relatively normalized raw material supply chains and logistics costs, I believe Turkish manufacturers will achieve sustainable and lasting export growth in 2023. During this process, companies that invest in technology, can minimize production costs, and have efficient processes will differentiate themselves from "others." I foresee that structures dependent on the domestic market and preferring traditional methods will be absorbed by the sector. As Bühler Turkey, we are full of hope, excitement and energy. We have set very high targets for ourselves in every area this year and have no intention of losing this momentum. In the 3-month period of Q1 2023, we aim to achieve 60% of our annual total target. I hope we will grow and develop together.  

Mohamed Aish Coatings Additives MEA & Turkey Sales Director Evonik

2022 was again a stormy year for our industry and market. However, thanks to the launch of our new products and innovations we developed tailored specifically to our customers' needs, we overcame the difficulties experienced in the market and closed the year with growth in our product groups. Looking at it regionally, we can safely say that we benefited from our competitive advantage. To be able to provide solutions and products to our customers just in time, we strengthened our local inventories. In addition, our sales managers in Turkey, Ece Panayırcı and Duygu Özgün, maintained close communication with our customers and were supported by the technical team under the leadership of Alptekin Akgümüş in producing active and quick solutions. We do not expect all global challenges to be resolved in the short term, but despite this, we see that we have made a good start to 2023 with our customers' interest in our new products in our region. Our new TEGO® Therm product makes insulation coatings more efficient, AEROSIL® reduces energy consumption in paint production thanks to its easy dispersibility, our strong foam control TEGO® Foamex 11 is effectively used in low volatile organic compound (VOC) applications, and TEGO® Dispers 780 W is used as an effective dispersing agent for water-based printing inks and also compatible for food-contact systems. We continue to work on new and sustainable additives and develop more products for our customers. At the same time, Evonik's Paints and Coatings Additives division is making new investments to increase production capacity in this global era. In addition to product innovations, close communication with our customers will continue to be the main factor enabling our competitiveness in 2023. For this reason, we will continue to maintain our successes through the mutual close interest we establish with our customers, the customer-based advice of our sales team and technical team, and additionally through high efficiency and output we achieve at trade shows such as the European Coatings Show that will take place in the near future, and the COATINO® digital platform at the service of our customers 24/7.

Osman Yıldız General Manager Günkem

First of all, our condolences to all our nation… We are at the point where words run out. It is very difficult to close the wounds that have opened, but as the Turkish people, we always believe and hope that we will do everything we can with unity and solidarity. At Günkem, we continue our successes in 2023 from where we left off, with all our strength. Just as we determinedly and resolutely reached the targets we set in 2022, we will reach our targets in 2023 with the same determination and resolve. The raw material supply difficulties we faced in 2022, the increase in logistics costs, and the problems brought about by the Covid-19 process forced the entire sector to take serious measures. I believe we successfully carried through the process thanks to the advantages provided by our country's strategic location and the accelerating pace of exports. During this period, without standing still, with the new product portfolios we developed, we gained different sales volumes for the paints, coatings and construction sectors we serve. While observing growth in our export volume, we strengthened the growth infrastructure in our domestic market volume through projects tailored to country conditions. We continue to monitor the impact of the energy crisis in Europe on the sector and are expanding our measures accordingly. While expanding our domestic market targets, we successfully completed our export targets for 2022. We have already set our targets for 2023 and aim to achieve these targets with the dedication and working capacity within our means. My confidence in the raw materials sector in Turkey is complete, and I have no doubt that despite all the difficulties that 2023 will bring, we will all complete this year with all our strength and successfully.

Yiğit Genç Paints and Construction Chemicals Division Manager IMCD Turkey

In 2022, raw material supply problems, changing price policies, extended lead times, rising logistics costs and energy uncertainty marked the year. However, despite all difficulties, the paints and construction chemicals sector successfully closed the year by offsetting the contraction in the domestic market with increases in exports. At IMCD Turkey, we completed the year with a performance above the previous year thanks to our increased sales volume and revenue in paints and construction chemicals. Within our product portfolio consisting of specialty chemicals, the paints, construction and coatings sectors hold great importance. Particularly with the pandemic period, the growth in domestic demand and exports had a positive effect on the sector. Our country, due to its location, also plays a bridge role for neighboring countries. However, thanks to construction-sector-focused economic approaches, the sector maintains a structure that remains continuously vibrant and dynamic. As IMCD Turkey, I believe we demonstrated our confidence in the sector and our country with the laboratory we opened at the beginning of 2018 among distributor companies. We proudly say that we were the first company to open a laboratory in this area. We continue to serve market needs with our global technical network and our experts in Turkey. 2023 is filled with uncertainties for both our country and the world. Nevertheless, due to our country's strategic position, we expect it to be a year when the bridge role between neighboring countries and Europe becomes even more important. Particularly, the incentives given to the construction sector and new projects increase our expectations from 2023 in the paints and construction chemicals area. As in previous years, in the coming year we will continue to be by our customers' side in our paints and construction chemicals solutions with an approach that considers changing market dynamics, consumer demands and needs.

Halil Kuzucu EMEA Sales Manager CASE, Rubber and Plastic Additives Univar Solutions

The Turkish economy recorded strong growth of 11.5% above expectations in 2021 in a high demand-low supply imbalance and high inflationary environment. The Russia-Ukraine War that began in the first quarter of 2022, the energy, raw material and logistics crises affecting the entire world, and the increase in domestic macroeconomic and financial difficulties that slowed growth meant lower growth was expected for 2022. The changing trends in the European market following Turkey's internal dynamics and the resulting export demands in the first six months helped manufacturers achieve good results despite all adversities. On the other hand, the second half of the year was a period in which domestic market demand declined, energy prices in Europe increased by 150%, China continued strict Covid measures, and following the affected global markets due to declining domestic demand, price realizations occurred and competition turned into an intense trade struggle. Financial difficulties in accessing credit, once again demonstrated the importance of inventory management, accounts receivable collection capabilities, and consequently working capital management for businesses. The chemical sector closed 2022 as a leader with USD 33.5 billion in exports. I can convey that our paints and construction chemicals sector made good use of this export opportunity and passed the test well, particularly by properly evaluating export demands from neighboring countries and trying to keep liquidity under control. We foresee a 2023 in which we will return to pre-pandemic conditions, competition will increase further, we need to be continuously present in the market to control demand, and we need to integrate our new suppliers quickly and healthily. Of course, to realize this forecast, well-coordinated monetary and fiscal policies that will stabilize the economy in the short term and redirect attention to realizing Turkey's medium-term growth potential will be needed. As UnivarSolutions, our confidence in Turkey's internal dynamics and strong demand is always at the highest level, as evidenced both in the significant operational investments we make to improve our service quality and in our strong local company acquisition activities that align with our company's vision to continue our inorganic growth.