Chemical industry in TURKEY

Automation & RoboticsIndustrySouth-East European INDUSTRIAL Мarket - issue 4/2013

Chemicals are indispensable to modern life and the development of the chemical industry has helped to elevate the standard of living, an indicator of the level of industrialization in a country.

Chemical industry products contribute significantly to growth in other industrial sectors. At the beginning of the 20th century there were a few chemical establishments, manufacturing soap, liquorice extract, valonia extract, etc, within the boundaries of the Ottoman Empire.

After the establishment of the Republic of Turkey till the 1950s, these chemical works passed through a process of corporation and production began in some fields such as explosives, medicine, agricultural chemicals, detergents, printing ink and textile dyes and involved the final stages only.

It was only after the 1950s, especially during the planned economy period, that the development of the chemical industry in Turkey accelerated. Between 1960 and 1980 economic policies were based on import substitution and public sector investments were directed to petrochemicals, fertilizers and basic organic and inorganic chemicals, the fields which required high investment, with low profitability whereas private sector and foreign investments were directed to pharmaceuticals, synthetic yarns, soaps and detergents.

In 1980 Turkey started to follow a new export-oriented economic policy. As a result of these successful policies, production and exports of the manufacturing sector boomed. The chemical industry, likewise, benefited from the new economic policy and showed an impressive increase both in production and exports.

Today, the Turkish chemical industry with its modern technology and diversified products is the key component of the industry and integrated into supply chain of national industries, especially, textiles and automotive sectors.

Turkey has been manufacturing chemicals for very long time, being a producer of many basic and intermediate chemicals and petrochemicals.

Turkish chemical production includes petrochemicals, inorganic and organic chemicals, fertilizers, paints, pharmaceuticals, soaps and detergents, synthetic fibers, essential oils, cosmetics and personal care products. 84 percent of production originates from the private sector.

The chemical industry employs 81.527 people and has about 3.999 companies manufacturing various chemicals. 2 % of the existing companies have more than 150 employees and the remainder have less than 20 employees. Most of the companies in the chemical industry, especially private sector companies, are located in Istanbul, Izmir, Kocaeli, Sakarya, Adana, Gaziantep and Ankara.

The Turkish chemical industry has developed significantly in terms of quality, productivity and protection of the environment, and is in the process of adopting the EU’s Technical Standards. In addition, the responsible care, the chemical industry’s trademarked non-compulsory initiative on environmental, health and safety issues, has been successfully implemented since 1992.
The Turkish chemical industry has competitive power because of various raw materials advantages.

Petrochemical sector
The Turkish petrochemicals industry has shown considerable growth since 1970. The dominant organization in the Turkish petrochemical sector is Petkim Petrokimya Holding which is a public company and under a privatisation scheme at present.

There are two petrochemical complexes, one is the Petkim-Aliaga complex in Izmir and the other one is the Tupras (Turkish Petroleum Refineries Corporation) - Korfez Petrochemical and Refinery in Kocaeli. In these two complexes a wide range of petrochemicals, all common plastics (HDPE, LDPE, PS, PVC, and PP), aromatics, ethylene glycol, phtallic anhydride, terephthalic acid, carbon black, synthetic rubber, acrylonitryl and caustic soda are produced.

The total production of these petrochemicals reaches about 2.9 million tons/year, and meets about 25 % of domestic demand.

Textile sector
Since the textile sector is a well-developed sector in Turkey, polymer production related to textiles and the production of textile chemicals have also developed simultaneously.

Large plants for the production of polyamide, polyester and acrylic fibers have been built and production has been directed to both the foreign markets as well as the domestic market. Almost all synthetic fibers are produced by the private sector and synthetic fiber production is around 850 000 tons/year.

Fertilizer industry
The fertilizer industry is one of the key industries for Turkey, which has vast agricultural potential. The first independent fertilizer plant commenced production in 1954 and heavy fertilizer investments were realized between the years 1960 - 1970.

Today there are seven companies producing fertilizers exclusively: Tugsas, Igsas, Bagfas, Toros Gubre, Ege Gubre, Akdeniz Gubre and Gubre Fabrikalari which are all in the private sector.

The industry has a total production capacity of 5.8 million tons/year. AN 26, AS, DAP, TSP, urea and composed fertilizers comprise the largest share of fertilizer production. Turkey’s fertilizer production meets domestic demand and the surplus is exported.

Pharmaceuticals, soap and detergents, soda, chromium chemicals, boron chemicals, paints, sodium sulphate, fatty acids and rose oil are the other main areas of production of the chemical industry.

Pharmaceuticals industry
The pharmaceuticals industry has become one of the leading sectors of the chemical industry and accounts for approximately 10 % of the chemical industry’s production. Production trends of pharmaceuticals are closely related to domestic demand.

Turkish pharmaceutical companies manufacture a wide range of pharmaceutical products, mostly generic formulas. The number of pharmaceuticals on the market is 3100 if alternative posologies are included the number is 7200.

Domestic industry meets 90 % of the pharmaceutical demand but new pharmaceuticals, such as ones for cancer, vaccines and hormones are imported. The pharmaceuticals industry produces many active ingredients of pharmaceuticals, primarily antibiotics and analgesics, by using fermentation, extraction and synthesis methods.

The major characteristics of the pharmaceuticals raw materials industry are that mainly private companies invest in the sector and the existing production capacity can easily be shifted to various production lines.

 It is worth mentioning that the Afyon Alcaloids Factory produces 20% of the morphine consumed by pharmaceuticals industries all over the world.

Soap and detergent industry
The Turkish soap and detergent industry has shown very good performance in terms of quality, capacity and exports. There are many companies in the soap and detergent industry, about 15 of them being the major ones among these there are multinational groups which have worldwide reputations.

Since 1990 domestic and foreign investments in the Turkish cleaning products industry have increased considerably. As a consequence, detergent production capacity has reached 1.3 billion tons and soap production capacity has reached 550 thousand tons both have great export potential.

Since Turkey has a large variety of herbs and natural products, natural soap production is also widespread and done by small size local companies throughout Turkey. World famous "laurel soaps" are produced in large quantities in Mersin, Antakya and its surrounding regions.

 Turkey is also among the top producers of olives, therefore natural olive oil soaps are also manufactured and exported in large quantities

Production of cosmetics and personal care products
The consumption and production of cosmetics and personal care products are growing rapidly. The number of cosmetics and personal care products is increasing every year.

 Hair care has the largest share of the cosmetics and personal care products market in Turkey. Shampoos represented around 59 % of hair care products. Men’s grooming products, depilatories, bath and shower products especially bar soaps, lip and eye make-up, personal deodorants and antiperspirants, perfumes, cologne and other toilet waters, baby care products and dentifrices are the main products. Natural cosmetic production is on rise due to growing demand for these products.

Paints and Coatings
Parallel to the developments in Turkey’s construction, automotive and marine industries, the paints and coatings industry has also developed and has became one of the most dynamic sectors of the Turkish chemical industry.

 Today the industry produces about 800 000 tons/year of paints and coatings and is comprised of about 600 manufacturers, 20 of them being large-scale companies. In addition to meeting domestic demand, the Turkish paint sector has recently tended to export more.

The Turkish industrial coatings market continues to be a major success story as a host of manufacturing sectors demonstrate strong growth. Among them are the automotive, ACE, white goods and boat-building industries.

The automotive coatings sector is expected to grow at 8 percent per annum, reflecting a recent and ongoing wave of industry investment. This has also been anticipated by the coatings industry with major companies such as BASF and Kansai Paint taking steps to strengthen their positions in Turkey.

Turkey’s strong position in the manufacture of white goods and unique position for export markets provides good opportunities in the powder coatings sector. In addition to serving some 11 million households in Turkey, strong growth in western European export markets (particularly France and the UK) provides additional support for the sector.

The marine paint market continues to flourish as Turkey’s ship-, boat- and yacht-building activity continues to grow. Turkey has been gaining ground in the construction of mega-yachts, while the ship repair aspect has been growing because of Turkey’s position as the gateway to the Middle East.

Soda, Chrome, Boron
Turkey has the largest soda factory in the Middle East with a total capacity of 750 000 tons/year. In addition to light and dense soda ash, refined sodium bicarbonate and sodium silicate are produced at the Mersin plant.

An extremely rich trona (natural soda ash) deposit was found near Ankara, at Beypazari and at present Turkey has substantial export potential for soda ash. Soda Sanayii A.S., a private company under the Sisecam Group, is the main producer of soda and chrome.

 The company has an annual production capacity of over 1.5 million tons of soda (including the capacity of its subsidiaries), 70 thousand tons of sodium bichromate, and around 250 thousand tons of chrome.

Another important player is Eti Soda A.S., owned by Ciner group, which utilizes an extremely rich trona (natural soda ash) reserve found near Ankara, at Beypazari. It is globally the second largest reserve after a reserve in Wyoming, United States.

The factory started its operations in March 2009 with an annual production capacity of 1 million tons. A new substantial trona reserve has recently been found near Ankara-Kazan. The aggregate natural reserves at Beypazari and Kazan are estimated at around 836 million tons.

Being among the top five countries supplying chrome ore to world markets, Turkey produces and exports some of the most important chrome chemicals and derivatives such as sodium bichromate, basic chrome sulfate, chromic acid and chrome oxide.

Turkey also enjoys a comparative advantage in boron chemicals (borax decahydrate, borax pentahydrate, boric acid and sodium perborate) due to the size of her reserves, the quality of minerals and proximity to consumer markets.

Around 72 percent of the world’s boron reserves are in Turkey. Boron products are inputs for the agriculture, detergent and soaps, ceramics, insulation fiberglass, timber preservation, flame retardants, nuclear power plants, cosmetics and medicine, metallurgy, and many other industries.

Eti Maden Isletmeleri Genel Mudurlugu is the dominant producer of boron minerals and boron chemicals and the sole-exclusive exporter of boron chemicals. Turkey has developed a substantial capacity and production of sodium sulphate. In sodium sulphate production, Turkey is second largest in Europe and sixth in the world.

Medicinal and aromatic plants
Owing to Turkey’s climatic and ecological conditions, many medicinal and aromatic plants are cultivated or gathered from nature. Turkey is one of the most important rose oil exporters in the world market.

The majority of these exports originate from the Isparta region. Laurel oil, thymus oil, lavander oil and origanium oil are also produced in Turkey. In conjunction with recent industrial growth in Turkey, the consumption and production of many other chemicals are growing rapidly and the number of chemicals produced is increasing every year.

The recent developments in textile and leather chemicals are also worth mentioning and many small and medium size companies have recently started to operate in these two sectors. In the Turkish chemical industry, there are about 314 companies with foreign investment. The Turkish chemical industry has a share of 13 % of total foreign capital in Turkey.

Turkey’s chemical industry exports are increasing steadily. In 2009 the chemical industry was one of the important exporting sectors among total industrial exports. The value of chemical exports was about US 5,2 billion in 2009, or about 5,7 % of the total exports in Turkey.

Major export products of the Turkish chemical industry were processed plastic products such as tubes, pipes & hoses & fittings with an export value of US 1.461 million in 2009. The second major export product was soaps, detergents and cosmetics with an export value of US 1.030 million.

Other major product groups were inorganic chemicals (US 610 million) and medicament mixturesнput in dosage (US 473 million).

Turkey is exporting all these chemicals to about 180 countries throughout the world. Major destinations for chemicals were Iraq, Russian Federation, Germany, Azerbaijan, Italy, Iran and China.

Source: IGEME - Export Promotion Center of Turkey, Investment Support and Promotion Agency of Turkey
Photos: Eti Maden Isletmeleri Genel Mudurlugu