Negative Outlook in Plastics Sector Continues

The plastic processing machinery sector continues to show a negative picture. All indicators in the sector trended negative in 2019, from production to investment. According to PAGEV data; in the past year, the plastic processing machinery sector declined by 17 percent in production, 19 percent in exports, 33 percent in imports, 27 percent in domestic sales, and 27 percent in investments compared to the previous year. PAGEV Chairman Yavuz Eroğlu noted that the desired momentum was not achieved in machinery investments last year, one of the most important indicators in the development of the plastics sector, and emphasized that a recovery could materialize in the plastic processing machinery sector in 2020 in line with increased production. The Turkish Plastics Manufacturers Research, Development and Training Foundation (PAGEV) continues to present the outlook of Turkey's plastics sector through comprehensive reports it prepares. According to data in the Turkish Plastic Processing Machinery Sector Monitoring Report recently published by PAGEV; plastic processing machinery production declined 17 percent in 2019 compared to the previous year, falling to USD 507 million. This decline in machinery production was caused by the contraction that emerged in the plastics sector production during the first three quarters. However, between 2015-2018, plastic machinery production showed an average annual growth of 22 percent. In the past year, of total plastic processing machinery production; presses and other machinery accounted for 46 percent, components and parts 22 percent, extrusion machinery 15 percent, thermoforming machinery 9 percent, injection machinery 7 percent and blow molding machinery 1 percent.

Exports and imports declined

Plastic processing machinery exports, which showed an average annual increase of 22 percent between 2015-2018, declined 19 percent in 2019 compared to the previous year, falling to USD 197 million. The top five countries in exports were ranked as Russian Federation, India, Spain, Algeria and Germany.

Export unit price fell 6.5 percent

The average unit export price of plastic processing machinery and their components and parts was USD 10.1 per kilogram during the nine-month period of 2019, declining 6.5 percent compared to 2018. During this period, average export unit prices were 13 percent below average import prices. Plastic processing machinery imports also declined in 2019, falling to USD 421 million with a 33 percent decrease compared to 2018, reflecting the impact of declining production figures for plastic products. During this period, the countries with the highest imports were China, Germany, Italy, Japan and Austria. With the decline in imports, the sector's foreign trade deficit also decreased by 42 percent and amounted to USD 223 million.

Machinery and equipment investments fell 27 percent

In the past year, the plastics sector's machinery and equipment investments fell 27 percent compared to 2018, dropping to USD 730 million. It is expected that the increase momentum that began in the plastic products production sector in the last quarter of the year will have a positive impact on machinery and equipment investments in 2020. In 2019, presses and other machinery accounted for 47 percent of plastic machinery investments made in the sector, components and parts 17 percent, injection machinery 16 percent, extrusion machinery 14 percent, thermoforming machinery 4 percent and blow molding machinery 2 percent. PAGEV Chairman Yavuz Eroğlu said that the plastic machinery sector closed the year with contraction across all indicators, and that the sector's performance in 2020 would depend on the plastic products sector's production figures. Pointing out that a renewed upward trend in plastic products production began in the last quarter of last year, Eroğlu stated, "In 2020, parallel to the increase in our plastic products production, we expect to see a recovery in our plastic processing machinery sector. A figure as important as the contraction experienced in plastic processing machinery production and exports last year is the 27 percent decline in machinery and equipment investments made across the plastics sector compared to 2018. The sector made only USD 730 million in machinery investments last year. Machinery and equipment investments are among the most important indicators showing the current state of the sector and producers' future expectations. Therefore, we will continue to closely monitor investments made in the sector in 2020," he said.