TCMB analysis of Turkish cement sector

This week, Nihat Ozdemir, chairman of the Board of Directors of the Turkish Cement Manufacturers' Association (TCMB), spoke on the priorities of the Turkish cement sector as well as looking back on 2018 and sharing his expectations for 2019.

Nihat Ozdemir noted that an increase in domestic sales took place in the Aegean region in 2018 and that exports improved significantly. "We have reached approximately 90Mta capacity within the 54 integrated plants operating throughout the country as of the end of 2018. Lauding the strength of the Turkish cement sector, being ranked fourth largest in the world and first in Europe in terms of exports, we are anticipating that exports will improve continuously," he said.

According to the data disclosed for the January-December 2018 period, approximately 10 per cent of the cement produced by TÇMB members was exported – mainly to the US, followed by Ghana and Israel. Turkish exports reached US$614m in 2018, representing a YoY increase of seven per cent in volumes and 16 per cent in terms of value. 

Mr Özdemir also signalled a positive start to 2019: "We began 2019 with a pleasing development that made us very content: exports in January increased by over 100 per cent in quantity basis and 85 per cent in value basis, according to customs data. We, as the cement sector, assumed responsibility within the 'all-out fight' against the inflation programme initiated by the Turkish Government and we will continue to make our best contributions."

He added that the TÇMB expected between 2-3 per cent growth in the cement sector in 2019, in parallel with the 2.7 per cent economic growth announced in the New Economic Programme.

Housing sales see 78% increase to non-Turkish nationals
In the 9M18 the construction expenditures of the public and private sectors reached TRY481bn (US$88.1bn), in current prices. A growth of 23 per cent in current prices was experienced. In 2018 housing sales recorded 1.37m units, a 2.4 per cent decrease on 2017. Furthermore, in the same period, there was a 78 per cent increase in housing sales to non-Turkish nationals. In line with such developments, the construction sector is expected to recover particularly in the 3Q19 and 4Q19.

Concrete initiatives
The TÇMB also made a case for an increase in the use of concrete for pavements, reporting that concrete pavements are 40 per cent more economic and having a 3-4 times longer life than asphalt pavements in rural roads. Underlining that concrete pavements and concrete barriers projects are a domestic solution for Turkey, Nihat Özdemir stated that concrete barriers also reduce accidents with fatalities by 90 per cent by preventing vehicles from crossing to the opposite lanes by dividing roads.

Mr Özdemir continued, "As specified in the 2018 Road Safety Report of the World Health Organization, the damage posed by traffic accidents in our country is TRY39bn per annum, according the data received from the World Bank. Concrete barriers will provide TRY8bn savings to our economy in addition to reducing the traffic accidents by 20 per cent."

Zero waste support
"Every year, 800,000t of industrial waste that cannot be recycled is disposed in our plants and a substantial contribution was provided to the protection of our environment. To increase our capacity by making amendments in the current public procurement legislation, the cement sector may be allowed to sign a contract with municipalities for extended periods (40-50 years)," claimed Mr Özdemir.

"By means of preventing the import of coal of nearly 3Mt with the use of the waste-derived fuel in the cement sector, our current deficit can be reduced by US$300m every year. This way, it is possible to reduce the amount of waste landfilled through this method to about 60 per cent," he added.

Mr Özdemir also said that: "In 2018, as cement sector, we are supporting the zero waste philosophy which is one of the most important initiatives in our country and is being implemented under the auspices of Mrs Emine Erdogan."

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