Sector Review: Polyurethane / Composite

Sector Assessment: Polyurethane / Composite

Barış Pakiş Composite Manufacturers Association Chairman

  2022 was a year spent managing crisis, marked by economic instability, difficulties in raw material supply, and logistics problems. Abnormal increases in raw material prices, particularly due to economic uncertainty in the final quarter of the year, made raw material procurement and production difficult. Today, as shipping becomes increasingly difficult and expensive, it negatively impacts composite material pricing, which creates difficulties in preference relative to alternative materials. The intensity of physical trade fairs held again after a long hiatus in the second half of the year, and the interest shown by neighbouring countries, indicate that composite sector exports can gain momentum if adaptation is achieved to Turkish lira uncertainty and high cost conditions. Composite pipe, raw material, and composite wind blade exports have exceeded USD 2 billion. The Turkish Composite Sector will continue to capture market share from products and raw materials that Europe sources from China, thanks to its proximity to Europe, timely and quality product supply. Throughout the year, our association held member meetings open to all sector representatives and provided briefings on current topics such as the EU Green Deal and carbon footprint, advanced recycling, and shared information on raw material and supply chain issues, thereby supporting the sector's growth efforts. While anticipating that 2023 will be difficult for our country and sector given the effects of the past year, we estimate that composite sector exports will gain momentum and push towards USD 3 billion in 2023. With the belief that strength is fed by challenge, by the end of 2023, the Turkish Composite Sector will continue to grow by adapting to the new order conditions.  

Cavidan Karaca CEO - Kimpur

In 2022, while pandemic restrictions were expected to ease or be lifted, which would positively affect sectors, a new period began with the Ukraine-Russia war that started in February and continues to this day. Rising energy and raw material prices created supply chain problems. The polyurethane sector was negatively affected by this situation like all other sectors, but as Kimpur, our contracted purchasing, alternative supplier sources, and product diversity—in short, our corporate agility—made 2022 a year in which, despite all difficulties, we achieved our targets, increased momentum in our stable growth, and continued our large-scale breakthroughs and investments. We conducted a successful public offering with sales of TRY 957 million on 28 April and the sale of 27.15% of our shares. We became the first polyurethane systems house to go public in Turkey. In line with our growth plans, in May 2022, to increase our capacity further, we took the first step towards commissioning our 2nd production facility in Turkey in Düzce. With our investment in Düzce Gümüşova Organized Industrial Zone, which will have annual capacity of 65,000 tons; we aim to reach 50,000 tons of polyurethane systems, 5,000 tons of green product range synthesized from PET waste recycling facility, and 10,000 tons of additional 'EVA granule raw material' production capacity with polyester polyol in the 2023-2024 period. This year we kept sustainability matters at our focus and conducted work to achieve our targets. I can list our main activities as follows. In March, we published our 2021 Sustainability Report prepared in accordance with GRI standards. We installed a solar power plant on the roof of our factory building in Gebze. Through this, we obtain approximately 20% of the energy required for our production from clean energy. We also made a solar power plant investment for our Düzce facility. With this investment, in addition to covering approximately 55% of our total electricity consumption, we aim to reduce carbon dioxide emissions by approximately 679 tons annually. With all our sustainability efforts to continuously improve our environmental performance, we earned the right to obtain our ISO 14001 Environmental Management System certificate. This year, in particular, by adding sustainable products derived from renewable sources that provide production efficiency to our portfolio, we provided sustainable solutions for our customers' product life cycles while contributing to the circular economy. We used polyester polyol obtained from PET waste in slipper manufacturing and produced the first elastic slipper using this method. While using graphene material obtained from automotive tires in our flexible systems used for automotive sound insulation and seat production, we synthesized high-functionality bio-based polyol and used this polyol in the production of our sandwich panel, cold room, and refrigerator systems. We accelerated our work towards the Defence Industry and laid the groundwork for many new collaborations. In line with our objectives to increase our activities regarding work in this field, we became members of SaSaD and SAHA Istanbul. This year we continued to increase and maintain our achievements. On the ISO 500 list, we rose 93 positions this year to rank 221st. On the Fortune 500 list, we rose 102 positions to rank 272nd. In the List of Turkey's Top 1,000 Exporters announced by the Turkish Exporters Council, we showed an increase of 71 positions this year. According to the Organized Industrial Zone's Stars Research, in 2021 we were the highest-selling company in Gebze Organized Industrial Zone. One of the achievements we were most proud of this year was being included in the 'Turkey's Best Employers' list determined according to our employees' satisfaction indicators. Within Kimpur's operationally excellent understanding inherent in our genes, with our agile organizational structure and our Smart Business Model that forms the foundation of Kimpur's success, we took measures against challenges we will face in the markets we serve, and we continue to do so. With our effective risk management, we become a reliable solution partner for our stakeholders. In 2023, we set our growth target in accordance with our business plan shared in public offering efforts—with our current and new product groups that we will add to our portfolio—as minimum 20% collaboration with new customers in both domestic and export markets. Last year we built the necessary infrastructure to increase our export portfolio. We aim for growth in Eastern Europe and Baltic countries with our affiliated company Kimpur Europe, which has 25,000 tons of capacity in Europe. We made the decision to establish companies in Germany and the UK. Through this, we plan to strengthen our presence in these regions, increase export organization and development. In 2023, we will continue our work to achieve the targets we have set in accordance with sustainable development goals and our priorities. As every year, this year we are increasing our R&D investments and developing projects to lead the sector by bringing innovative and sustainable products to market. We plan to implement our ongoing projects for improvements in the life cycle of our products and our defence industry work, which we accelerated in 2022, with the aim of reducing our environmental impacts, along with new projects we will carry out with collaborations we have laid the foundation for. With our competitive advantageous technologies, strong financial structure, innovations, and strategies, we aim to significantly increase our sales volume and export share in total sales in 2023 as well. Upon completion of our Düzce facility, we will increase our capacity above 200,000 tons. Through this, we aim to enter the top 10 in the world in our sector, solidify our position, increase our visibility and competitive power in global markets, and continue our profitable and sustainable growth. Progressing along this path with our sustainable growth strategies, we will continue to create an innovative and extraordinary solutions that touch every aspect of life by establishing a distinctive corporate structure in the sector. We hope that companies in our sector will also increase their sustainability efforts to reduce the impacts resulting from their production.  

Ekin Tükek General Manager - Flokser Kimya

As in all sectors, the polyurethane sector also experienced supply chain and global disruptions. Despite all these obstacles, we took the necessary actions, used resources most efficiently, and closed 2022 well. This year was a year in which positive developments occurred for us. Leading the positive developments that pleased us was our innovative factory investment in Tarsus. Recently, we received TRY 846 million in investment incentives from the Ministry of Industry and Technology regarding our new investment plan. The incentive we received was an important support for our investment and R&D work. At the same time, we implemented a 105,000 square meter storage center investment at our headquarters in Istanbul Hadımköy. Our facility, which we invested TRY 540 million in; will stand out as the first LEED-certified warehouse in the surrounding area. We signed contracts that will enable the use in the field of our ballistic polymer developed for the defence industry. We added new countries to our export market. We focused more this year on environmentally friendly, high value-added, sustainable products needed by the sector, and in this context, we continued our projects without slowing down. Our company, with our long-standing experience and internationally recognized production standards; operates in both domestic and international markets while holding all necessary quality certificates. Raw material savings, recycling, and innovative technologies are increasing in importance for the production sector with each passing day. We aim to reduce, through our technology-based projects, the recycling of waste generated from production processes, which is among the sector's important problems. As Flokser Kimya, to solve problems in this area and create a sustainable future, we try to set an example for the sector by developing environmentally friendly, nature-friendly, high value-added products. With our philosophy that we call the green transformation economy, we develop projects for recyclable, nature-friendly products and represent our country and sector in the best way. Within the framework of our sustainable projects we have developed, our priority will always be people and the environment. In 2023, in our service area, we will provide more quality service with our products that have low thermal conductivity, increase energy savings, and increased flame-retardant properties. At the same time, following developments in the automotive sector, to meet the rapidly increasing demand for bio-based polyurethane, we aim to increase our production capacity with our new investments. We also predict that 2023 will be a year in which domestic suppliers will come to the forefront in the chemical sector in general. To support Turkey's production power, industrial companies will seek solutions from domestic suppliers for raw material needs. We will continue to provide raw material support to our manufacturers in need of polyurethane, polyurea, and polyester, thereby continuing to contribute to our country's production power.