High interest rates, financing bottlenecks, rising raw material costs, and postponed investments are dragging the plastics industry into a silent yet profound contraction. If industrial policies that protect production are not implemented, the risk of premature deindustrialization could become permanent.
The Turkish economy is undergoing a painful disinflation process trapped between high inflation, high interest rates, and suppressed exchange rates. However, the cost of this balancing act is increasingly falling heavily on the manufacturing front. What is happening in the industrial corridors is no longer a temporary slowdown; it is a hard-to-reverse risk that threatens production capacity, investment, and employment: premature deindustrialization. The warning voiced today that ‘Turkey is facing the risk of premature deindustrialization’ is the national-scale equivalent of the reality we have been experiencing in our factories in Denizli for months. The plastics and packaging industry is at the forefront of the areas where we see this picture most tangibly.
THE DANGEROUS WEDGE BETWEEN QUANTITY AND VALUE
Although our sector's figures in terms of value give the appearance of growth, physical production data says the exact opposite. In the first half of 2026, plastic product production increased by 5.5% in value terms to reach $23 billion, while it decreased by 4.1% in quantity terms, dropping to 4.99 million tons. Domestic market consumption also fell by 7% in the same period to 4.07 million tons. Behind the increase in value terms lies inflation and rising input costs rather than growth. This contraction is also reflected in capacity utilization. The average capacity utilization rate in the sector in the first half of 2026 fell to 73.9%, remaining 1.5 points below the same period of the previous year.
THE PARALYSIS OF OUR INVESTMENT WILL
The most important indicator of deindustrialization is how much the industrialist can invest in tomorrow. In an environment where access to finance becomes difficult and costs rise, new machinery investments are postponed. The fact that machinery investments in the plastics sector decreased by 18% in the first half of 2026, dropping to $562 million, is a tangible indicator of this loss of confidence. Today, our industrialists are trying to survive with their existing machinery park instead of creating new capacity. The cessation of investment not only slows down today's growth; it also weakens tomorrow's production power, competitiveness, and employment.
RAW MATERIAL EARTHQUAKE AND LOGISTICS FIRE
Turkey's 85% dependence on imports for plastic raw materials directly carries global crises into our production costs. Geopolitical and logistic risks, which escalated with the attacks launched by the US and Israel against Iran on February 28, 2026, led to shock increases in raw material prices. In the February-April 2026 period, ABS injection increased by 103.2% from $1,575 to $3,200, while PPH raffia increased by 97.5% from $1,220 to $2,410. In an environment where the manufacturer cannot foresee its costs, it is out of the question to talk about healthy production planning. Sectors to which we provide inputs, such as textiles, automotive, and white goods, are directly affected by this fracture.
THE SEVERE TEST WE EXPERIENCE IN DENİZLİ
We cannot think of Denizli separately from this storm. Our city is one of Turkey's top 10 production centers with 23 packaging manufacturers. However, our facilities declaring concordat or going bankrupt due to financing bottlenecks show the dimensions of the crisis. The process of our sector shifting abroad is not new; this search, which started with investments in Romania and Morocco in 2024, is turning into a serious production loss risk today in 2026 with Egypt's aggressive cost advantage. Eastern Europe's low-cost production is also squeezing us in our main markets. Every facility we lose rips capital, employment, and our production culture accumulated over generations out of this city.
WE MUST PROTECT PRODUCTION
Premature deindustrialization is no longer a theoretical debate; it is a tangible reality where production slows down and investments halt. To reverse this trend, additional import tariffs on raw material items where domestic production is insufficient must be lifted immediately, and industrialists must be enabled to compete with world prices. For manufacturers undertaking public tenders at fixed prices, this raw material shock must be accepted as a force majeure and price difference mechanisms must be put into operation. A model that consumes our production capacity while lowering inflation is not sustainable. What Turkey needs is a disinflation policy that does not sacrifice production and a decisive industrial policy that will enable industrialists to look to the future with confidence. Because if we lose production, we lose not only today, but also the Turkey of the future.
This content has been translated using artificial intelligence technology.