Coronavirus Outbreak Could Boost Export Figures

Haluk Erceber, elected for a second term as Chairman of the Board of the Turkish Chemical Manufacturers Association (TKSD), which represents one of Turkey's most important sectors, has announced the association's new vision document and future objectives. During his three-year term, Erceber's priority goals include increasing export figures and ensuring earthquake resilience for industry in seismically active regions. Erceber notes that the coronavirus outbreak first identified in China will have a positive effect on the sector by attracting more orders from EU countries and increasing export figures. While the chemical sector achieved USD 17.8 billion in exports as of 2019, import figures reached USD 36.3 billion. The Turkish Chemical Manufacturers Association TKSD continues with Haluk Erceber. Erceber, elected for a second term as Chairman of the TKSD Board, will serve for three years. Presenting the association's future goals for the new term, TKSD Chairman Haluk Erceber stressed that Turkish REACH (KKDİK) training and implementation activities will be completed in full compliance with Ministry of Environment and Urbanization standards, enabling integration with EU Chemical Industry and ECHA. He shared the following information about work accomplished to date: "At the TKSD General Assembly, we have renewed confidence for a second three-year term. Since 22 February 2018, with a harmonious board of directors, we have adopted the principle of becoming the leading NGO of the chemical sector and providing the highest level of service to our chemical industrialists while creating solutions to their problems. Our important objectives were to have Turkish chemical industry selected as a priority sector and to conduct work on aligning with EU Chemical Industry in terms of regulations, technology and scale, as well as addressing clustering deficiencies. By establishing a very close relationship with the EU Chemical Industry Council CEFIC, of which we are a member, we have ensured the immediate distribution of all reports related to world and EU chemical industry to our members. We collaborated with TSE on KDU and GBF training. By working closely with all ministries and NGOs, we have provided support to our industrialists and become the point of solution for problems. We have successfully launched and begun implementing CEFIC's Responsible Care Triple Responsibility revival project. Over the past two years, TKSD increased its membership by 22 percent. We wish to further increase this success and be the sector that makes the highest contribution to the country's economy. TKSD has succeeded in becoming the first point of contact for both domestic and foreign industrialists in the chemical sector."

New projects to increase revenue sources

Noting that sustainability will be an important goal for the chemical sector in the coming period, Erceber expressed his desire to prioritize support for sectoral development and added: "We will share with our industrialists the short and long-term measures to be taken to prevent production, which is the foundation of Turkey's economy, from being damaged by a potential earthquake, and we will conduct discussions with ministries for necessary financial support. Being closer to industrialists to provide greater contribution, increasing our membership numbers and reaching potential members are among our basic priorities. Within this scope, we have embarked on a new journey with the target of 100 members. We will support our industrialists by developing new projects to increase our revenue sources and providing new training and consultancy services in line with the sector's needs. In this context, we will establish stronger cooperation with other sectoral associations and confederations. In the new term, within the scope of the new version of Responsible Care developed by CEFIC, we are beginning facility inspections and training. We will provide technical consultancy services for improvements. Supporting raw material supply security and providing education and services related to developing chemical transportation and logistics are also among the new term's projects."

Coronavirus outbreak positive for the sector

While 44 percent of total exports by Turkish chemical industry are realized to EU member states, the unit price of sold products remaining below USD 1 continues to be a significant problem for the sector. According to Erceber, who was elected for a second term as TKSD Chairman, it is of great importance for the chemical industry to focus on new investments and work for specialty chemical exports. Noting that this will double the unit price, Erceber lists his new vision document objectives as follows: "The main reason for unit value being below USD 1 stems from our specialty chemical exports not being at the desired level. The coronavirus outbreak that emerged in China is positive for the sector. Particularly, we will receive more orders from EU countries and our export figures will increase. While the chemical sector achieved USD 17.8 billion in exports as of 2019, import figures stood at USD 36.3 billion. We account for 59 percent of the trade deficit. Production uses 75 percent imported raw materials. Fifty-five percent of raw materials come from China. However, following the coronavirus, we are seeing this import shift to other countries."

High-tech share should reach 10 percent

"Pointing out the need for new investments to increase the share of high-technology products in the chemical industry from 4 percent to 10 percent, Erceber explains his suggestions and future plans as follows: "We need to increase investments. Free trade agreements will negatively affect China's export figures as much as the coronavirus, and through this undesired adverse development we will be able to increase our chemical exports. The second factor affecting China is the introduction of carbon tax at the border in 2021. Turkey will experience fewer problems at this point, and the sector will increase export figures."

Customs update will provide advantages

"We are a very close country for travel and transportation to EU countries. Through this we can double our earnings. In the new period, China will attempt to sell products to the EU through Vietnam. We need to consider all of this. Short and long-term planning should be done to increase exports. Companies experiencing difficulties in the domestic market could turn to exports abroad. Without ignoring the contribution of cooperation, we need to develop our export position. The EU customs union update will have positive implications for Turkey and the sector. Following Brexit, we expect to conclude an FTA with the United Kingdom by the end of this year. We will gain tax and competitive advantages."

Chemical clusters should be established in locations suitable for ports, close to markets and major cities

"Over the next three-year period, we will further increase our proximity with the EU Chemical Industry Council CEFIC. An important goal of ours is the establishment of chemical clusters (CHEMPORT) in Turkey by the Ministry of Industry and Technology and the Ministry of Transport and Infrastructure in locations suitable for ports, close to markets and major cities, but away from earthquake risk, and their management under a landlord model. China today holds 36 percent of world chemical trade and owes this success to 66 mega chemical clusters it established over a 30-year period. For our industrialists, increasing exports, which today stand at USD 17.8 billion, and raising the average kg sales price of USD 0.9 through R&D and innovations are important objectives. We have fallen far behind for the petrochemical investments planned in the Ceyhan region. If competitive production is possible, investments must begin as soon as possible. We are aware that the chemical sector accounts for 59 percent of Turkey's total trade deficit. This ratio can only be reduced through technological investments in new specialty chemicals. To implement new investments, the Chemport specialty chemicals cluster must be established quickly.

Earthquake resilience must be achieved

"The earthquake issue is very important. USD 117 billion of exports come from the Marmara Region, and USD 85 billion of exports originate from Istanbul. Sixty-five percent of total USD 180 billion in exports comes from the Marmara Region. Measures to be taken for earthquake safety in industry include life safety, how the private sector will support the public, improvements and training to be conducted in facilities before earthquakes, and earthquake solidarity with members. One of our goals for the coming period is also achieving earthquake-safe chemical use and meeting EU standards."