Turkey Posts Trade Surplus Despite Reliance on Imported Raw Materials for Production

Plastic Sector Growing 9% in 2017 Achieved USD 36.8 Billion in Production

Growth figures for the plastic sector in 2017, one of Turkey's most dynamic industrial branches, brought encouraging results. The sector achieved growth of 9%, exceeding expectations from the previous year. Demand from industrial branches such as automotive, white goods, construction and packaging reflected positively on the sector's growth figures. According to data disclosed by PAGEV, plastic product production increased by 9% in 2017, rising to USD 36.8 billion. With 2017 figures, the plastic sector continued as the world's 6th largest and Europe's 2nd largest producer. Turkish Plastic Manufacturers Research, Development and Education Foundation (PAGEV) disclosed its 2017 sector report highlighting developments in the plastic sector. According to this, plastic product production increased by 8.5% in volume in 2017 to 9.6 million tonnes, and by 9% in value to USD 36.8 billion. Plastic packaging led production, followed by plastic construction materials. Along with growth, machinery and equipment investments in the sector also increased, reaching USD 932 million. In the previous year, plastic exports were made to approximately 150 countries. Direct plastic sector exports increased by 5.6% in 2017 to USD 4 billion 340 million. Leading export destinations included Iraq, Germany, United Kingdom, Israel and France.  

We Consumed USD 35.6 Billion Worth of Plastic Products in 2017

Demand for plastic products in the Turkish market ran high in 2017. In the past year, 8.6 million tonnes of plastic products valued at USD 35.6 billion were consumed in the domestic market. Consumption increased by 8.9% in volume and 9.2% in value compared to 2016. Of the 8.6 million tonnes of plastic products consumed domestically in the past year, approximately 4 million 300 thousand tonnes were indirectly exported as semi-finished and finished products through exporting sectors such as automotive, packaging, construction and electronics.

Plastic Sector Awaits New Petrochemical Investments

Plastic raw material imports in 2017 increased by 9.9% in volume to 7.2 million tonnes compared to the previous year, and by 16.8% in value to USD 10.2 billion. In the same period, domestic raw material production remained at 1 million tonnes. President Recep Tayyip Erdoğan's announcement of an agreement on a USD 1 billion petrochemical investment between Sonatrach, Algeria's national energy company, and Rönesans and Bayegan in the Adana Yumurtalık Free Zone was welcomed by the sector, which is heavily dependent on raw material imports. Given that 2.1 million tonnes of polypropylene was imported in 2017, the petrochemical investment to be made in the Adana Yumurtalık Free Zone is important as it would account for approximately 25% of polypropylene imports.

While Deficit Grows in Raw Materials, Trade Surplus in Plastic Products Increased to USD 1.24 Billion

Due to insufficient domestic production, Turkey's plastic sector, which is 88% import-dependent in raw materials as of the end of 2017, shows a trade surplus position in plastic product foreign trade. In 2017, a trade surplus of USD 1.24 billion was achieved, increasing by 4.7%. TOBB Plastic Rubber Composite Industry Council and PAGEV Chairman Yavuz Eroğlu, in his evaluation of the sector's performance in 2017, noted that the sector managed to close the year with 9% growth despite all challenges and stated that they were optimistic for 2018. Yavuz Eroğlu, pointing out that despite increases in direct and indirect exports in the past year, the sector remained below its potential in export value-added, said: "Our plastic sector achieved USD 4.3 billion in direct exports in 2017. Although instability in our nearby geography, among our sector's important markets, negatively affected our exports, we compensated for this with the European market. Recovery in our region will have a positive impact on the sector's production and exports. The plastic sector also carries out significant indirect exports through exporting sectors such as automotive and white goods. Our direct and indirect exports reached USD 12 billion. Yet with high-value products, we are a sector that could reach well beyond these figures. We import plastic products at USD 4.99 and export at USD 2.66. In the past year, the plastic product sector was able to create USD 1.2 per kilogram in value-added in exports. We are having difficulty demonstrating the success of production in value-added," he said.