REPUBLIC OF TÜRKİYE MINISTRY OF INDUSTRY AND TECHNOLOGY - CHEMICAL SECTOR REPORT (2020) (Part 5)

Turkchem 13 Jan 2021 63 6 dk okuma

TURKCHEM

1.15. Sector 2015–2023 Projection A study was conducted on Global and Sectoral Outlooks for Turkey's Export Strategy 2023. Through this study, numerical projections were prepared for the world economy, world trade, world export markets and sectors through 2023. In 2023; polymer demand, which was 4 million tonnes in 2012, is expected to reach 11 million tonnes with a 175% increase, fibre raw material demand of 690 thousand tonnes is expected to reach 742 thousand tonnes with an 8% increase, and rubber raw material demand of 216 thousand tonnes is expected to reach 603 thousand tonnes with a 179% increase. The chemical industry grew at an annual average of 5% on a global scale between 1997–2007 (in terms of total sales growth). During this period, average annual growth was 4% in the EU and NAFTA regions, 6% in Asia and 9% in the Middle East. For the period through 2020 (2006–2020 period), global growth in the chemical industry is projected at an annual average of 4.4%. Growth will be 3.7% in the EU, 3.2% in the NAFTA region, 5.9% in Asia and 7.5% in the Middle East. According to CEFIC's report published in April 2017, despite increasing chemical demand worldwide and the rising performance of the European Union chemical sector in environmental and energy efficiency, competitive pressure on the EU market is increasing. China is bringing the world chemical market under its influence and is planning a policy to elevate the development of the chemical industry to the next level. Although China's economic growth is slowing, it still retains the characteristics of being the most important emerging market for most global chemical companies. On the other hand, the European chemical sector is struggling in the face of a revival of American industry. Following experimental projection studies conducted by our Ministry's Industrial Analysis Department to analyse the future of the sector, it is expected that in 2020, exports of the chemicals and chemical products manufacturing sector in our country will be realised at levels of USD 8 billion. These assessments also included projections of export trends of the world's leading countries in the same sector and countries that could be export rivals of our country. In this context, the United States, particularly based on its performance shown after 2011, is expected to maintain its horizontal trend in chemical sector exports over the next 5 years, and China, based on its performance over the last 9 years, has the potential to reach USD 150 billion levels in sector exports over the next 5 years and is expected to hold significant share in sector exports together with the United States. World chemical sales are expected to reach EUR 6.3 trillion in 2030, and despite the slowing growth rate of the Chinese chemical sector, it is expected to continue growing and capture 44% of sales. The group of Other European Countries, which includes Turkey, is projected to increase its share in chemical sales by 0.6 percentage points to 3.3%. Figure 23. Chemical Sales 2030 Perspective .

SECTOR ANNUAL ASSESSMENT

2.1. Sector Production Index Assessment In the chemical sector, taking 2015 as the base year, the production index increased regularly, reaching a value of 122 in 2019. Figure 24. Chemical Industry Production Index (2015=100) Source: TÜİK (NACE –Rev.2 Code 20, 21, 22). Although the production index in the chemical sector has shown significant increase since 2013, when examined on a sub-sector basis, this increase largely originates from the 21-Manufacture of Basic Pharmaceutical Products and Pharmaceutical Preparations sector, while significant increases are not observed in the 20-Manufacture of Chemicals and Chemical Products and 22-Manufacture of Rubber and Plastic Products sectors. Source: TÜİK (NACE –Rev.2 Code 20, 21, 22). 2.2. Sector Capacity Utilisation Rate Assessment According to Central Bank data, the capacity utilisation rates of the chemical sector have been in parallel with manufacturing industry since 2014. In 2019, it decreased by 1.2 percentage points compared to the previous year to 73.3%. Figure 25. Capacity Utilisation Rates (%) Source: T.R. Central Bank (NACE –Rev.2 Code 20, 21, 22) 2.3. Sector Revenue Index Assessment In the chemical sector, the annual total revenue index has been increasing regularly since 2010. In 2019, the revenue index increased by 25% compared to the previous year, reaching 227.2. Figure 26. Revenue index (total) (2015=100) Source: TÜİK (NACE Rev.2 Code 20, 21, 22)

2.4. Chemical Sector Investment Incentive Certificate Statistics

The following are statistics related to investment incentive certificates arranged for the chemical sector in 2019 by our Ministry's Incentive Implementation and Foreign Capital Directorate General:

3. PRODUCTIVITY AND COMPETITIVENESS

3.1. Global Development Trends (Global Competitiveness Level) Parallel to the globalisation of production in all sectors, chemical industry production is also rapidly globalising. There are no countries producing without importing in the sector; the largest exporters in the sector are also the largest importers. In addition to the globalisation of chemical industry production, the axis of sector trade is shifting eastward. The People's Republic of China is particularly leading in this regard. The European Union has lost the leadership it held in world chemical trade to countries such as China, India, South Korea and Taiwan. If the economic crisis in the EU and the United States continues, this trend is expected to continue in the future. High-technology products have become one of the most important targets of the sector. Research and Development (R&D) and innovation have become very important to reach this technology. In the future, R&D and innovation will be the sector's greatest strength. Technologies that consume less energy, use less water, and produce less waste are expected to gain importance, as are products and research aimed at saving basic inputs such as energy, water and raw materials, which are viewed as future sources of conflict. Generally, the commercial lifespan of a chemical molecule is projected at approximately 10 years. This lifespan is constrained outside the commercial dimension in terms of human health and environmental protection. In addition to economically supplying raw materials and energy, their sustainability is also gaining importance. In the future, some raw materials may become impossible to supply despite their high prices. Shale gas, which places the United States in an advantageous position against the European Union in terms of energy, opens very broad horizons both in terms of energy and for obtaining methane, an important raw material for the chemical industry. Examining potential shale gas sources in Turkey and bringing them into production will provide relief for both the chemical and energy-intensive sectors. Another important area is chemical substances that can be derived from coal. In addition to being used as an energy source, coal contains important raw materials for the chemical industry. Coal-based chemical industry will also be a future with domestically sourced raw material sources. Today, chemical substances being compatible with the environment has gained considerable importance. In this regard, the term "green chemistry" comes to the fore.

Environmental risk management should be applied throughout all stages, from the design phase of environment-friendly products to their disposal after loss of product characteristics. Green chemicals and green chemistry:

Production of environment-friendly chemicals as replacements for existing harmful chemicals, biodegradable, non-harmful chemicals in the environment
Chemicals that increase energy efficiency and enable products to acquire more environmentally friendly characteristics,
Green production, production methods that produce less waste, efficient, environmentally-friendly production methods,
Products to be developed to eliminate environmental pollution, to obtain clean water,
Products that will enable less chemical use.

Worker Health, Technical Safety and Environmental Issues: These three important pillars, outside of humanitarian considerations, also constitute serious non-tariff barriers in international competition. Nowadays in international trade, tariff barriers have begun to slowly disappear, but these three important concepts have taken their place. Nanotechnology products are gaining importance as technologies that enable reduced chemical use. To ensure product diversification and develop chemicals suitable for different purposes, polymer chemistry comes to the fore. Technologies that will enable us to use coal as a raw material source and research on shale gas can be undertaken. Developments in these areas will increase the sector's competitiveness. Composite materials, particularly those using carbon fibres, are an area open to development. Composite materials are gaining importance as an alternative to steel and other metal products. The use of composites in the automotive sector is becoming an increasing trend in Europe. The biggest disadvantage of composite products in this area is that serial production of products manufactured using these materials is difficult. If economical production of these products is ensured, the use of carbon fibre and resins used in composite products will increase. The production of active pharmaceutical ingredients should be targeted. Plant sources that can be used as cosmetic and pharmaceutical raw materials in our country need to be utilised. *This report was prepared by the T.R. Ministry of Industry and Technology – Directorate General of Industry. REFERENCES