KKDİK (Registration, Evaluation, Authorisation and Restriction of Chemicals)

paintistanbul & Turkcoat 2018 Congress Scientific Board Chair Engin Çörüşlü shared valuable insights with us on KKDİK (Registration, Evaluation, Authorisation and Restriction of Chemicals Regulation), which aligns with REACH, an important matter for the paints and coatings and chemical industries. We conducted an engaging conversation with Çörüşlü, who also touched upon Turkey's position in the global paints industry, the sector's raw material procurement, and related challenges.

Could you briefly tell our readers about yourself, your education, and your professional background?

After graduating from Haydarpaşa High School, I studied chemical engineering. Later, I completed a master's degree and doctorate in physical chemistry. I spent most of my professional career working in the paints industry. Throughout nearly all of that time, I held technical positions. Before my doctorate, I worked for approximately 5 years at one of Turkey's leading paint companies, first as a research engineer and then as a research specialist. Subsequently, I returned to university to complete my doctorate. After that, I began working as a researcher at the company where I am currently employed. The company was initially called Kemipol, and later, following partnerships we established, it successively took the names Akzo Kemipol and AkzoNobel Kemipol. I currently serve as Deputy General Manager responsible for technology and quality at Kansai Altan, a company we can consider a sister company to AkzoNobel Kemipol.

Could you briefly inform our readers about Kansai Altan paint industry?

We are a paint production company with a capacity of 80,000 tons, located in an area of 100,000 m² in Izmir. At the same time, we produce approximately 78% of the polymer requirements, which is the main raw material for paint, in our polymer production facility with a capacity of 18,000 tons located in the same industrial zone. I believe we are a company with high technological expertise and research curiosity. We allocate resources to research and development activities well above what is typical in the paints industry.

May we learn your views on KKDİK, which aligns with the EU's REACH regulation?

Eleven years have passed since the EU's REACH regulation was published, and it entered into force six months after publication. It is useful for us to recall what REACH is and for what purpose it was implemented.

What was the purpose behind the EU publishing this regulation?

To put it very briefly, we can say it is to protect human and environmental health. Protect against what? Chemical substances. Some circles argued that this regulation had a commercial, even "nationalist" purpose—to create a high protective wall for the European chemical industry—but we now see that this is not correct. The registration and authorisation system provided for by the regulation applies not only to companies bringing chemical substances or mixtures into Europe from outside Europe, but equally to companies conducting production in Europe. Many companies from outside Europe can continue their sales if they comply with the rules laid out in the regulation. Compared to the situation before the regulation, there has been no significant cost difference for them relative to companies producing in Europe. Many companies from the Far East and the US continue to export chemical substances to Europe as they did before. In other words, companies not conducting production in Europe are not excluded from the European market through cost pressures. There are more than 100,000 substances supplied annually to the European market at quantities of 1 ton or more. However, before REACH entered into force, this number was estimated at 30,000. This difference alone is sufficient for us to understand the scale of chemical substance use and exposure. Regarding REACH, some criticism has been that exposure to chemical substances is greatly exaggerated by Europeans, that Europeans are overly sensitive about human and environmental health. I can say that these criticisms continue to this day. Allow me to open a parenthesis first: Technical colleagues working in the field of chemical substances, both domestically and internationally, generally do not like regulations; they tend to view regulations as activities-restricting, complicating, and largely unnecessary bureaucratic barriers (it is true that regulations complicate our work, since every new regulation typically means a new barrier). In other words, technical staff responsible for the design of chemical substances and their mixtures and the production processes believe that risks are unnecessarily exaggerated. I have rarely met a technical professional who has not complained about regulations, either abroad or domestically.

But how realistic is this understanding?

Before answering this, I want to mention a very important development in the sector. Technical colleagues certainly know that a new risk designation has been made for titanium dioxide. It appears that a risk designation along the lines that TiO2 inhalation may cause cancer will be made soon. Initially, a more serious risk designation was proposed, but the Risk Assessment Committee within ECHA somewhat softened the risk designation, yet even in this form, it has placed it in a much riskier position than before. We are awaiting the decision of the European Commission for finalisation. Let me give a more striking example extending from the past to the present. In paint used on interior walls of residences built in the early 20th century, lead carbonate was commonly used as a white pigment, and this continued until the 1950s. From that time onwards, TiO2 began to replace PbCO3, which was definitively established as toxic. Let us not forget that before 1950, the safe upper limit of Pb in human blood was above 800 ppm; today it is below 50 ppm. On the other hand, TiO2, which until recently was not associated with cancer, is now being given a warning that it may cause cancer through inhalation. As we can see, views on the effects of chemical substances on our health can change over time. Chemical substances we consider safe today may be understood over time to contain significant health risks. For this reason, I see it as necessary that chemical substances be kept under serious oversight. REACH aims to provide this. Our newly published and implemented KKDİK, since it is based on REACH, resembles REACH to a large extent. It entered into force in December 2017. Registrations are expected to begin in 2020 and be completed in 2023. Work similar to that in REACH must be conducted for material safety and risks. For example, if a company based in Turkey has submitted a file to the European Chemicals Agency for a product, it can translate this and submit it to Turkish authorities, and the same file will be considered valid here as well. There are respects in which KKDİK differs from REACH, but these are not in fundamental areas. I believe I have expressed my personal view; to reiterate, I find REACH very positive, KKDİK was necessary, and I find its implementation very welcome, and I believe it is an important step for environmental and human health in our country. I must warn you, however, that this is my personal view. The views of BOSAD and the companies it represents may not be in this direction, at least some of them.

How would you evaluate Turkey's position in the global paints industry over the last three years? What are your projections for Turkey's paints industry in 2018 and its development?

Significant developments are occurring worldwide in materials technologies. These are partly reflected in paint technologies. Innovations emerge primarily in aircraft and automotive original paints. There are also developments in other sectors, but their dynamics are weaker. The most important technological developments in automotive paints concern enhancing not only external durability, corrosion resistance, chemical resistance, and mechanical properties such as scratch and impact resistance expected of paint, but also visual properties. Additionally, demands relating to environmental and human health—such as reducing volatile organic compounds and removing hazardous substances from paint formulations—continue to remain on the agenda. Similar trends exist in the General Industrial Paints, Functional Coatings, and Protective Coatings areas. Providing better protection with a thinner paint film can be considered a general development direction. This is a preferred approach both from a cost perspective and for ease of application. In architectural paints, we see organic solvents being attempted to be completely removed from formulations. One of the fundamental objectives in this area is also to provide ease for the applicator. Regarding technological innovations, Turkey unfortunately is not yet where we would like to be. One reason for this is that a significant portion of raw materials used in the paints industry are not produced domestically. For instance, all pigments, the vast majority of monomers—main inputs for polymers—and a very large portion of additives and organic solvents are imported. Yet a significant part of material innovations are carried out by companies producing such chemicals. Technological innovations made in Turkey emerge most often in the polymer synthesis field. Paint companies that design and produce their own polymers have an advantage in this respect. This is particularly important for automotive original paints and industrial paints. Turkey holds a better position in terms of paint production volume. We are among the leading producers in Europe. Furthermore, there is still significant development potential in this area in our country. In terms of per capita paint consumption, we are at roughly half the European average (11 kg compared to 20 kg). We are still below the global average (17 kg). Consequently, the paints sector in Turkey will continue to grow and create employment. However, cyclical problems can also occur. For some time, a loss of momentum has been observed in the expected development in the architectural paints sector. In contrast, we see more pronounced growth in the automotive and industrial paints sectors, particularly due to paint demands from companies producing goods for export. Paint itself does not become an important export item. However, goods exports indirectly keep paint demand in the domestic market active.

Can you evaluate the current situation regarding raw material procurement in the sector? What types of problems are being experienced in this area, and how can these problems be solved?

Under the heading of raw material procurement, we can discuss many problems. Some of these are everyday problems stemming from procurement difficulties or short-term changes in supply-demand balance that sometimes arise. I do not wish to go into these. I am certainly not saying these are insignificant, but there are other important problems that affect the sector more deeply and have longer-term impacts. We can categorise these under several headings. Here I wish to focus on two of them. The first is a source problem. Raw materials are procured to a very large extent from abroad. Apart from ground natural minerals procured domestically and water, which are of relatively low added value, the quantity of raw materials produced domestically is very low. Polymer materials, which are the basic input of paint, are generally produced domestically, but practically all raw materials for these polymers—that is, monomers—are procured from abroad. Very few polyester raw materials can be procured domestically, but these too are not sold in TL; they are aligned with European market prices and are priced in EURO or USD. This is an important problem and can only be addressed through large-scale investments in the chemical sector. This is not easy; there are significant difficulties, but we cannot go into details here. Similarly, pigments and solvents are also procured to a very large extent from abroad, so we are dependent on the outside and our costs are realised on an EURO or USD basis. Yet we must conduct sales in the domestic market in TL. This creates many complex problems, and we cannot go into detail here, but I believe you can imagine the scale and complexity of these problems. The second is a balance problem. I am not certain how I should define this problem. I preferred to call it a balance problem; perhaps after I briefly explain it now, you can find a more apt term. Many companies supplying raw materials to the paints industry both have monopoly characteristics and have much larger business volumes compared to us. Our power against these companies is limited. Sometimes these companies can reflect their conditions harshly upon us, so there is generally no balance in our relationships with them. To solve these problems, we can consider resorting to methods such as joint material procurement against companies with monopoly characteristics and those exerting price pressure. I do not see a high probability of this being realised, but I do not believe there are other measures we can take domestically on this matter. Beyond the problems you have mentioned, may we ask your views on the situation of sector players? I touched on this somewhat above; a significant portion of our problems stem from dependence on external sources of raw materials and the imbalanced nature of the relationship between suppliers and customers, a position in which we find ourselves. The most effective action the paints sector can take is to be creative in product design and production technologies and processes. We can only increase the added value we provide through this approach. As long as all companies compete with products that are very similar to one another, it will be difficult for companies to gain competitiveness both domestically and internationally. This only leads to price wars; we are creating a wilderness of competition. Conversely, if we manage to be creative and innovative, if we can make our products sought after and demanded not only domestically but also internationally, we will achieve very significant progress.

Would you share the message you wish to convey to the sector with us?

Research and development must certainly be given high priority. Companies must focus not only on product innovations but also on manufacturing technologies and process design. In the manufacture of some product types, applications such as automation and Industry 4.0 can be implemented, and we can see ample opportunities in this area, particularly in architectural paint production. But this is not sufficient. Our companies must be able to demonstrate creativity beyond this. Education is another very important heading in this context. Through correctly determining and implementing education policies—both formal education, post-graduate education, and on-the-job training—we need to raise our workforce in the paints sector above its current level. We must become aware that when automation and 4.0 are implemented, the most important capital of companies will continue to be skilled labour, and that companies can only rise to the extent of the quality of the workforce they possess.