2016: 3.84% increase in plastic sector production, 6% in composite

In 2016, Turkey's plastic product production increased by 3.84 percent, reaching 9.09 million tons and a production value of 34.7 billion dollars. Last year's realization was 8.75 million tons. The stagnation caused by successive elections in 2015 allowed pending orders to be quickly put into effect at the beginning of this year, and in the first half of the year, sector growth data emerged at a relatively high rate, partly due to the strong production growth of sectors such as white goods, durable consumer goods, and automotive, and partly due to the base effect. However, the second half of the year; the July 15 coup attempt, terrorist incidents, etc., dragged down the high performance of the first half due to the decline in total demand. Despite this, the plastic industry is expected to show a growth increase of approximately 3.84 percent, surpassing Turkey's year-end GDP growth.

 

Exports (Thousand Tons/Million Dollars)	2015			2016
	Quantity	Value	($/Kg)	Quantity	% Quantity Change	Value	% Value Change	($/Kg)
Plastic Raw Material	687,8	932,9	1,36	698,0	1,5	858,9	-7,9	1,23
Plastic Product	1.575,4	4.337,6	2,75	1.550,6	-1,6	4.108,6	-5,3	2,65
Plastic and Rubber Processing Machines	N/A	131,4	N/A	N/A	N/A	146,1	11,2	N/A
Imports (Thousand Tons/Million Dollars)	2015			2016
	Quantity	Value	($/Kg)	Quantity	% Quantity Change	Value	% Value Change	($/Kg)
Plastic Raw Material	6.269,0	9.395,6	1,50	6.552,8	4,0	8.699,5	-7,4	1,33
Plastic Product	584,6	2.872,7	4,91	589,4	0,8	2.928,2	1,9	4,97
Plastic and Rubber Processing Machines	N/A	576,9	N/A	N/A	N/A	580,7	0,7	N/A

 

In 2016, plastic product exports decreased by 1.6 percent in tonnage and 5.3 percent in dollar terms.

In 2016, Turkey's plastic product exports decreased by 1.6 percent in terms of quantity and 5.3 percent in terms of value. On the raw material side, there was a 1.5 percent increase in quantity, while there was a 7.9 percent decrease in value. Exports of plastic processing machines, however, brought smiles this year. With the base effect created by last year's sharp decline and the activation of markets such as Iran and North Africa, a 11.2 percent increase in value was observed this year. While the parity effect of last year in exports seems to have weakened, it is understood that this year, besides cyclical factors, some structural problems have also slowed down our exports. The primary reasons behind this decline are; the global trade slowdown, followed by problems in neighboring countries, and the significant but overlooked decrease in export unit prices. Decreasing export unit prices have had a negative impact not only on the plastic industry but also on all our export goods.

Therefore, the bells have started ringing for the need for high value-added production. However, one of the most unfortunate issues where our sector wasted its energy this year was the closure of the Plastic Promotion Group without any activity. Due to the Ministry of Economy's project to reorganize the structure and operating methods of promotion groups and consolidate them under a single umbrella, all promotion groups are being closed, and a new regulation under the name of Turkey Promotion Group is planned. In the difficult period we are going through, the importance of exports for the country's economy is once again evident. For this reason, there is an absolute need for efforts aimed at developing our exports in terms of both value-added and total value.

 

6 percent growth expected in the composite sector in 2016

Over the next five years, the Turkish composite sector is expected to show stable growth, driven by factors such as the momentum in emerging economies and the continuous intensive increase in the use of composite materials in the automotive, commercial vehicles, wind energy, aerospace, and aviation sectors.

The growth of the composite sector generally outpaces global economic growth.  As of today, the Turkish composite material sector has reached a volume of 1.4 billion Euros and 265 thousand tons. The Turkish composite sector demonstrates a growth performance exceeding the growth rates of the European and global composite sectors. In previous years, the Turkish composite sector exhibited a growth performance between 8 and 12 percent. In 2016, the growth rate is estimated to be 6 percent.

The global composite sector is expected to reach a value of 80 billion Euros in the next five years, with an annual growth of 5 percent in terms of value. Value-based growth is expected to be 4 percent in North America and Europe, and 7 percent in Asia and the rest of the world.
The sector conducts approximately 250 Million Euros of direct exports annually. In 2017, if stability is regained in our region and the Middle East, and the economy revives in Europe, the export performance of composite manufacturers will increase.

We anticipate balancing factors to come into play in 2017

The year 2017 indicates that it will not be an easy year for forecasting, as uncertainties are expected to remain lively in the short and medium term for both the global economy and the Turkish economy. However, especially on the real sector side, some measures taken by the government in 2017 are expected to serve as a balancing function against pressures such as the global trade slowdown and cyclical risks.

External Factors:

1.    The weakening trend in global trade is among the main risks for 2017. Political uncertainties, the possibility of the USA implementing protectionist policies, the Brexit effect, the relative cooling in the Chinese economy, and the need for emerging economies to recover are creating a weakening effect on global trade.  
2.    Since Europe's growth is predicted to remain at a modest level in 2017, it is not expected to be a differentiating factor for our sector's exports in 2017.

Internal Factors:

1.    It is foreseen that domestic consumption will continue to be one of the main dynamics of sector growth in 2017, in line with the expectation that government measures aimed at keeping domestic consumption vibrant will continue.
2.    In parallel with the weakening risk appetite, currency volatility and high borrowing costs stand out as factors that will affect sector investments in 2017.  

In 2017, the components within the growth of the plastic sector are expected to be domestic demand-oriented, also supported by the supplying sectors. The investment and export sides are thought to enter a recovery phase for a while, thus not being able to assume a driving role in the short term. In this context, a growth of around 4 percent by the end of 2017 is considered an achievable target for the plastic sector.  

By the end of 2017, the country's exports are estimated to hold at the 150 billion dollar band, and plastic raw material and product exports are expected to exceed 5 billion dollars. Considering that oil prices do not tend to fall below 50 dollars, it is foreseen that the decline in our trade with countries dependent on oil revenues and among our export markets will end in 2017. Furthermore, export incentives are expected to be in play as a supportive element in substituting losses in certain markets with other markets.

With 2017, it is critically important that ongoing initiatives to restore the country's image and credibility continue without slowing down. Therefore, activities focused on promotion and building credibility are expected to increase in 2017 with the support of the government. Consequently, the activation of country and product promotion groups based on efficiency and effectiveness analyses will be important.