PAGDER'S CHAIRMAN GULSUN: Plastics Industry Focuses on Exports and Inventory in 2019

Tarih : 2020-04-09

PAGDER'S CHAIRMAN GULSUN: Plastics Industry Focuses on Exports and Inventory in 2019

Evaluating the sectoral developments for the end of this year and 2020, PAGDER's Chairman Selcuk Gulsun stated that the plastics industry grew by 3.9% in 2019 with exports and make-to-stock production.

Plastics Industry Expected to Grow by 3.9% at the End of the Year

Remarking that the industry contracting by 6% in 2018 achieved increased production again in 2019, Gulsun said, “We see that the 3.9% growth across the industry that we expect to be achieved this year relies on exports and make-to-stock production. Gulsun stated that the plastics industry could only begin to recover from the exchange rate shock, which became more severe especially in the second half of 2018, in the last two quarters of 2019, and said, “Although the year-end production for 2019 is still below the level achieved in 2017 or in the first half of 2018, we have managed to survive the bottom level observed in the second half of 2018. In this context, production is expected to close the year by a 3.9% increase in quantity compared to 2018. As for the size of the industry, a 3.1% decline is expected in value. This is caused by the decreasing raw material prices resulting from the decline in oil prices.”

 

Plastics Industry Focuses on Exports and Inventory in 2019

“We expect plastic exports to increase by 1.2% by the end of the year. Additionally, the highest increase in our export items took place regarding the export of plastic raw materials and semi-finished products with 7.5%. Especially, we observe that the plastic recycling industry exports these items as granules after the scrap imports. It is noteworthy that this group of exports has a visibly increased share in the exports of raw materials and semi-finished items”, said Gulsun who continued his statements.

Remarking that make-to-stock production depends on the level of raw materials hitting rock bottom for the first time in the last decade, Selcuk Gulsun said, “The attempt to compensate the contraction in production from stocks in 2018 was also effective in this stock change”. 

 

Vulnerability Continues in 2020

Listing his anticipations for 2020, PAGDER's Chairman Gulsun stressed that power struggles, such as trade wars, which fuel the instability in international economy and politics may continue. On the other hand, the other anticipation is that the slow growth in the EU, Chinese, Japanese, etc. economies that may affect other economic zones is likely to continue apart from the world loan requirements getting stricter.

Additionally, Selcuk Gulsun said, “In 2020, it can be expected that the suppressive vulnerable economic climate resulting from international relations may continue with potential impacts on the Turkish economy. However, it can be expected that vulnerabilities and sensitivities will continue due to the national perception of risk in the international plan, regardless of the improvement in CDS premiums achieved to the relatively limited extent. Finally, it can be predicted that the vulnerability in consumption and investments will continue in 2020 against relative improvements on the production side.”

 

New Challenges Posed to the Plastics Industry in 2020

PAGDER's Chairman stated that the plastics industry might continue to be affected especially by the instability of global conditions in 2020, while the continued contraction of certain industries, such as automotive, white goods and construction, may continue to act on the plastics industry adversely. Gulsun listed the challenges as follows: “Exports might stop being the main driving force behind the sectoral growth in 2020. It is particularly anticipated that the contraction in world trade and the slow growth in EU markets may affect the industry's exports. The lack of appetite for investment is another noticeable factor that may restrain growth. The stagnation in investments may continue throughout 2020. In addition, a strong growth increase driven by domestic demand for 2020 is not deemed probable considering the consumption expenditures put under restraint and the contraction of leading sectors, regardless of interest rate cuts. Especially under these conditions, it is estimated that the plastics industry will grow by 3% depending on the variability and uncertainties in 2020. Industry 4.0, composite technologies, recycling and bioplastics will remain to be included in the agenda of 2020”.

 

Remedy: Increased Productivity

Underlining that the Turkish economy and industries should already orientate themselves towards productivity for medium-term plans, even if not short-term, under the current circumstances, PAGDER's Chairman Selcuk Gulsun said, “It might come in useful to keep corporate-structural reforms on the agenda. Short- and medium-term plans may need to be put into operation, especially for enticing new international capitals. Within the scope of the productivity agenda, on the other hand, technology can be considered an aspect of this agenda. It may be necessary to focus on technology that will enhance our productivity. Again, one of the most important aspects of the productivity agenda can be considered labor productivity. We may need educational reform for this. Additionally, increasing the efficiency of our investments may bring some benefits. We may need to focus on the answers to questions «Which industries have clustering strategies and master plans? Can we make accurate and effective investments with limited resources?»