Strategy of 10 steps set to reach $50 billion in exports

10-step strategy defined to reach USD 50 billion in exports

İKMİB, which leads the chemicals sector's export targets, has completed an important study in cooperation with A.T. Kearney to determine the roadmap for exports during 2017-2023.

The chemicals sector, which will close the year with approximately USD 15 billion in exports, set its export target for 2017 at USD 15.5 billion. On the other hand, for the sector to reach its 2023 target of USD 50 billion in exports, exports need to grow by 20 percent annually.

İKMİB announced its 10-step strategy to accelerate chemical exports based on the findings of this report.

Revision of the Customs Union agreement with the EU in Turkey's favour, securing raw material supply through new formulas, investment in specific speciality chemicals, sectoral clustering, and scale synergy in R&D are among these steps.

The chemicals sector, which is critical for Turkey's economy in many areas from plastics to cosmetics and rubber to paints and coatings, supplies raw materials and intermediate goods to nearly all sectors, thus holding the pulse of Turkish industry.

The chemicals sector, which increases its contribution to the national economy each year through production, exports and employment created, ranks among strategic sectors with its high potential for value creation.

The İKMİB "Turkey Chemicals Sector Export Growth Strategy Report", which sheds light on the state of the chemicals industry in Turkey and reveals its risks and opportunities, has drawn up a roadmap for the sector until 2023.

Under current conditions, chemicals need to achieve 20 percent annual export growth to meet its 2023 export target. Murat Akyüz, Chairman of İKMİB's Board of Directors, who explained the strategies that chemical exports should pursue based on the findings of the report prepared in cooperation with international consulting firm A.T. Kearney, emphasized that new formulas are needed to secure raw material supply, which is currently carried out largely through imports, and that investment in specific products is essential.

Underlining that the Customs Union Agreement with the EU, which works against Turkey, needs to be reviewed and that Turkey must also be a party to bilateral agreements, Murat Akyüz said: "The report, which analyses the current situation of the chemicals industry, presents the existing picture objectively.

When we evaluate the outputs of the report, we see that a strategy consisting of 10 steps is needed to reach the export figures we are targeting for the chemicals sector.

The Customs Union Agreement with the EU needs to be updated as soon as possible and Turkey must definitely become a party to bilateral FTA agreements that work against our exporters. Another important finding is that chemistry must review its existing production models and shift towards producing high value-added specialty chemicals.

High energy costs, which reduce our exporters' competitiveness, also need to be lowered. The chemicals sector's sectoral clustering need, which has never been resolved, surfaces once again. Moreover, the chemicals sector's dependence on imports for raw materials is gradually increasing.

Since new investments in petrochemicals do not appear possible in the near future, we need new formulas to secure raw material supply.

One of these formulas is for chemistry, with a foreign trade deficit reaching USD 40 billion, to secure input security through overseas purchases or partnerships. Creating scale synergy in R&D, increasing value-added, developing customer-specific products and commercialising innovation in export markets stand out as other strategies we need to pursue in the coming years."

Turkey Chemicals Sector Roadmap 2017 - 2023

1.Revision of the Customs Union agreement with the EU (Turkey should also be a party to bilateral agreements)

2.Focus on high value-added specific products

3.Reduction of energy costs, the largest burden on manufacturers

4.Establishment of sectoral clusters for competitiveness

5.Securing input safety and competitiveness

6.Improvement of the technological capability development ecosystem

7.Creation of scale synergy in R&D

8.Increase in value-added and improvement of services

9.Development of customer-focused business models

10. Maximisation of commercialisation of innovation in export markets