Plastics Sector Recorded USD 19.4 Billion in Production

Plastic, among the sectors contributing most to Turkey's economy, maintained its growth performance in the first half of 2018. According to data from the Plastic Manufacturers Foundation (PAGEV), which monitors the sector through its published reports, plastic product manufacturing in the first six months of 2018 reached 5.1 million tonnes in volume, up 7.2% compared to the same period of the previous year, and 19.4 billion dollars in value, up 9.3%. In the first half of the year, plastic packaging claimed the largest share of plastic product manufacturing at 2.2 million tonnes, followed by plastic construction materials with 1.1 million tonnes of production. PAGEV's sector monitoring report forecast that plastic product manufacturing would reach approximately 10.1 million tonnes in volume and 38.8 billion dollars by end of 2018, with a 5% increase. However, it was noted that growth in the second half of the year was expected to come with lower profitability margins than the first half.

Sector Exports Forecast to Reach 4.7 Billion Dollars by End of 2018

The plastic sector maintained its strong export performance in the first half of 2018. Plastic product exports in the first half of 2018 reached 856,000 tonnes in volume, up 7.3% compared to the same period of the previous year, and 2.4 billion dollars in value, up 12.8%. The plastic sector, which exports its products to approximately 200 countries, had its highest exports to Iraq, Germany, the United Kingdom, Israel and France during this period. The sector is expected to achieve direct plastic product exports of 1.7 million tonnes in volume, up 4.8%, and 4.7 billion dollars in value, up 8.4%, by year end.

First Half Growth Came from Domestic Sales

In the first six months of 2018, plastic product domestic market consumption rose to 18.6 billion dollars in value, up 8.5% compared to the same period of the previous year, and 4.5 million tonnes in volume, up 7.1%. Of the 4.5 million tonnes of plastic product domestic consumption realized in the first six months, approximately 2 million tonnes was indirectly exported in the form of semi-finished and finished products through exporting sectors such as automotive, packaging, construction and electronics. The remaining 2.5 million tonnes was directly consumed by end users.

Sector Investments Continue Despite Negative Economic Indicators

In the first half of 2018, 526 million dollars in machinery and equipment investments were made in the plastic sector. Of the investments made in this period: 40% comprised presses and other machines, 19% injection molding machines, 17% components and parts, 16% extrusion machines, 6% thermoforming machines and 2% blow molding machines. Machinery and equipment investments in the sector are forecast to reach 1 billion dollars by year end, representing a 13% increase compared to 2017.

Plastic Products Trade Surplus Increasing

According to PAGEV data, 3.8 million tonnes and 5.7 billion dollars of plastic raw material imports were made in the first half of the year. Domestic raw material production during the same period remained at 507,000 tonnes. While the plastic sector, which has high raw material imports, showed a different picture in plastic products. The sector continued to generate a trade surplus in plastic products during this period. In the six-month period of 2018, the plastic product trade surplus increased by 8.3% in volume to 539,000 tonnes and by 29.6% in value to 793 million dollars compared to the same period of 2017. Assessing the plastic sector's first half performance, TOBB Plastics, Rubber and Composites Industry Council and PAGEV Chairman Yavuz Eroğlu said: "In the first half of 2018, despite all economic indicators showing fragility, our plastic sector continued to push production, export and investment figures upward, once again demonstrating how strong a sector we are. We have undoubtedly left behind a challenging six months that put pressure on our manufacturers. Had the negative economic conditions not occurred, our sector's growth figures would have been higher. The outlook ahead suggests that profitability ratios in our sector's second half figures will fall short of the first half. Additionally, there is a risk in the second half that the positive outlook, particularly in investments, could reverse. The plastic sector is working with all its strength to continue the employment it creates and its contribution to the economy despite these difficult conditions."