Plastic Sector Growth Rate Declining

PLASFED published the January-February performance of the plastics sector and its first estimates for the end of the year

PLASFED: Plastics sector growth rate is slowing down

PLASFED published its evaluation report containing the January-February 2014 performance and the first estimates for the end of 2014. The Report, which emphasized a slowdown in the sector's growth rate, stated that in the first two months of 2014, plastic products had a production value of 5.9 billion dollars and exports of 742 million dollars. In light of current trends, it was estimated that exports would decrease by 2.8 percent in value terms by the end of the year. If the same trend continues, production will continue to increase, but its rate will decline from an annual 17.1 percent to 2.6 percent.

PLASFED (Turkish Plastics Industrialists' Federation) announced that in 2014, the plastics sector would continue to grow, but a significant slowdown in the growth rate could occur. PLASFED, which provides regular and comprehensive data for the plastics sector, published its production and foreign trade performance for the January-February 2014 period, along with its first estimates for the entirety of 2014.

In the PLASFED evaluation report, it was announced that at the end of the first two months of the year, the production volume of plastic products reached 1 million 387 thousand tons, with a value of 5 billion 932 million dollars. The sector conducted 477 million dollars in imports and 742 million dollars in exports in value terms, realizing a foreign trade surplus of 266 million dollars. 92 percent of domestic demand was met by domestic producers.

The PLASFED report emphasized that while current data indicates a continuation of production increase, there is a significant slowdown in the rate of increase, as well as a decline in exports and the foreign trade surplus. It was reminded that the sector completed 2013 with a 17.1 percent increase in value terms for plastic products compared to the previous year. If the current trend continues, the production growth rate is estimated to be only 2.6 percent by the end of 2014.

Furthermore, in light of current trends, the report stated that there is a risk of a 1.5 percent decline in imports and a 2.8 percent decline in exports in value terms, and consequently, the foreign trade surplus is projected to decrease by 5.1 percent.

Aksoy: We hope for Europe's rapid recovery

Selçuk Aksoy, President of PLASFED, in his assessment of the year's initial data, pointed out that the recovery of developed country economies is crucial, especially for an increase in exports. Aksoy stated, "Turkey started 2014 with a series of negative developments, aside from political tensions, that closely concern the manufacturing industry and, of course, the plastics sector. Alongside the current account deficit, the upward trend in inflation, the Turkish Lira's inability to stabilize, the outflow trend of foreign portfolio investments in capital markets, and the increasing financing costs and interest rates linked to all these developments are causing a series of problems. Since our sector necessarily imports a high quantity of raw materials as they are not found in Turkey, exchange rate stability is very important for our pricing and exports. This means that the depreciation of the Turkish Lira does not fully provide us with the advantage that other sectors gain in exports relative to us.

Due to macroprudential measures, the slowdown in many sectors we supply, in addition to our products directly reaching consumers, will also affect us. We saw the first signs of this in the January-February performance. Of course, there are factors that can reverse this. Signs of strengthening economic growth in European countries, which are among our important export markets, are increasing. We hope for Europe's rapid recovery. For Turkey, we will continue our work and production aimed at solving our structural problems."

Raw material imports continue in high quantities

In PLASFED's assessment, at the end of the first two months of the year, 1 million 37 thousand tons of plastic raw material were imported in terms of quantity, while 140 thousand tons of raw material were produced domestically. 96 percent of domestic demand was met by imported raw materials.

Europe's second largest producer, the plastics sector is Turkey's 10th largest exporting sector

In PLASFED's assessment, information was also provided regarding the plastics sector's export power, which is not widely known by the public. It was pointed out that plastic products, which constitute Turkey's 10th largest exporting sector, account for 2 percent of total exports.

In PLASFED's assessment, it was stated that the sector made a total export of 917 million dollars in the January-February period, comprising both raw materials and finished products, and the indirect export amount, consisting of products supplied to other sectors and included in exportable goods, was 817 million dollars. If the same trend continues, direct exports are estimated to reach 5.5 billion dollars and indirect exports 4.9 billion dollars by the end of the year.
 

This content has been translated using artificial intelligence technology.