Plastics Sector Posts Record Growth in First Quarter

Turkey's plastic sector, one of the most dynamic actors in the country's economy, continues to increase its contribution to the national economy. The Plastic Manufacturers Foundation (PAGEV), which monitors the pulse of Turkey's plastic sector through industry reports, announced its first quarter figures for 2018. According to PAGEV's report, the sector's plastic product output reached 3.5 million tonnes with a 48.7 percent increase compared to the first three months of 2017, and rose in value by 54.5 percent to USD 13.6 billion. Plastic packaging led production, followed by plastic construction materials.

Plastic Sector Continued to Increase its Share in First Quarter Exports

The Turkish plastic sector, which ranks among the industries contributing most to Turkey's exports, managed to increase its exports in the first quarter of the year by continuing the upward trend from 2017. The sector's first quarter plastic product exports reached 415 thousand tonnes with a 6.6 percent increase in volume compared to the same period in 2017, and rose by 14.5 percent in value to USD 1.2 billion. In this period, Germany, Iraq, Israel, the United Kingdom and France led the countries receiving exports.

Domestic Market Consumption in First Quarter Increased 53.9 Percent by Volume; 55.8 Percent by Value

Interest in plastic products was high in the domestic market during the first quarter of the year. In this period, plastic product consumption in the domestic market increased to USD 13.3 billion in value with a 55.8 percent rise compared to the same period of the previous year, and rose by 53.9 percent in volume to 3.2 million tonnes. Of the 3.2 million tonnes of plastic product domestic consumption realized in the first three months, approximately 1.6 million tonnes were indirectly exported as semi-finished and finished products through exporting sectors such as automotive, packaging, construction and electronics. The remaining 1.6 million tonnes was directly consumed by end users.

Investments in the Plastic Sector Continue at Full Speed

Machinery and equipment investments, one of the important indicators of the plastic sector's growth, also continued during this period. In the first quarter of the year, machinery and equipment investment reached USD 277 million. If investments continue at the same pace, machinery and equipment investment is expected to reach USD 1.108 billion by year-end and increase by 19 percent compared to 2017.

Foreign Trade Surplus in Plastic Products Increasing

The sector, which is dependent on imports for raw materials, made plastic raw material imports of 1 million 941 thousand tonnes and USD 2.892 billion in the first three months of the year. In the same period, domestic raw material production remained at 254 thousand tonnes. Although import-dependent for raw materials, the plastic sector presented the opposite picture in plastic products. The sector's tradition of recording a foreign trade surplus in plastic products continued during this period. In the first quarter of 2018, the plastic product foreign trade surplus increased by 4.7 percent in volume compared to the same period of 2017 to reach 260 thousand tonnes, and rose by 18.9 percent in value to USD 375 million. Evaluating the plastic sector's first quarter performance, TOBB Plastics, Rubber and Composites Industry Council and PAGEV Chairman Yavuz Eroğlu stated: "Although the difficulties faced by the global economy in recent years have caused a slowdown in the growth of our plastic sector, the upward trend continues. Our plastic sector grew by 9 percent last year with momentum exceeding expectations. In light of all the economic and political developments that have occurred, we set our growth target for 2018 as 5 percent as a sector. Developments that have occurred since the beginning of the year indicate that 2018 will not be an easy year for our industrialists. Particularly in recent times, increases in exchange rates are unfortunately affecting our sector negatively. This currency situation forces sector companies that sell on a foreign exchange basis to purchase raw materials and have low exports to face major risk. Nevertheless, our industrialists, who always contribute to production with determination, work with confidence towards reaching our targets. As will be understood from the first quarter data we shared through our sector monitoring report, our sector maintains its positive outlook. We made a rapid start to 2018 and achieved record growth of 54.5 percent compared to the same period last year. The high demand from sectors where plastics are used, such as automotive, packaging, construction and electronics in this period, attracted attention as an important development for Turkey's economy and industry. In terms of work that will contribute to this positive picture, we will continue our efforts with the same determination as we have done so far to fulfill all responsibilities incumbent upon us."