Investment in Turkish cement plants

Investment in Turkish cement plants
Published: 05 June 2006

According to the data obtained from the Treasury Undersecretary in Ankara, incentive certificates for five complete investments were received for the Turkish cement sector in 2005, commitments of YTL 626.6m worth of investment and the employment of 846 people were made. A factory received incentive certificate for its replacement investment of YTL 4m.

In Turkey, where clinker capacity is still 42Mt and cement production capacity is 52.5Mt, growth in construction sector in recent period increased the cement investments.

When grinding facilities are considered, it is predicted that annual cement production capacity would reach 83.2Mt by 2010 with given incentives and investments. This will be 30.9Mt more than this year’s need with the most optimistic prediction. Though cement sector predicted 2006 growth as 6 percent or 8 percent, annual growth is expected to reach 25 per cent said one analyst.

Yılmaz Külcü, general director of ÇİMSA Cement Industry and Commerce under Sabancı Group, said that construction sector leaded many sectors from housing textile, wood and plastics sector, but that revival in the sector was different from region to region.

Külcü said that while price in the cement sector was determined by the supply and demand, and that increases in production costs affected the prices.

He added: ’’Cement is an energy-intense production so increases in energy costs in the world and in our country increases especially increases in transportation prices due to oil prices always increases cement costs.’’ Külcü stated that despite costs, price increases in cement were exaggerated and that there was no gap between domestic and foreign prices as claimed.

’’We predict that revival in the construction sector and branches related to this sector would continue for two years with the effect of elections to be held next year. When there are other investments cement prices would fall in  one or two  years because supply would be much more than demand.’’