New market trends in Turkish plastics packaging market
Turkey is a major exporter of plastic products. Turkish players in the sector are focused on adapting to new market trends and manufacturing capacities.
We are involved in F&B, personal care, and home care sectors. All three have seen positive growth, though F&B will have the highest demand in the future because of new regulations and trends in the market. The circular economy is shaping the F&B packaging sector. Today, packaging materials in the food sector contain PET and aluminum, which are not recyclable. Over time, all brand owners will change their packaging to polyethylene- or polypropylene-based products, known collectively as polyolefin structures. The goal for the future is to have a mono-layer or multi-layered structure composed of these two main polyolefin materials. Elif is a producer of mainly polyethylene, so this trend will provide us with a significant opportunity to take a further position in the near future in light of these regulations and the circular economy. Demographic characteristics shape the market dynamics/trends. Decreasing family member sizes in Europe and low purchasing power parity in the emerging markets lead the population to buy and consume small portions but more packaging material with different appeal and storage features. In 2019-2020, our investments in innovation will gain priority and intensity in all sectors in which we operate. In line with our goal of creating value for its customers, we are investing to create new alternative recyclable or reusable materials for the flexible packaging sector, based on polyethylene and polypropylene.
Sümer Plastik exports 30% of its products. The fastest-growing emerging markets are in Africa. Despite that rapid growth, we are focused on Western markets because our present technology is better suited there. The Turkish packaging industry has long served large, sophisticated markets. It has the right infrastructure to serve Western markets. In 2018, our sector exported 2.3 million tons of packaging to 180 countries. We do not export in large quantities to East Asia at the moment, though we will begin increasing our exports there in the middle to long term because it is now more suitable for our products. Western markets are conscious about the quality and environmental impact of their packaging products, so we have added many features in our product portfolio to meet these needs. Sustainability is key to our market strategy—both in the longevity of our customer relationships and the environmental impact of our products. Sümer Plastik’s sustainability policy has a proactive understanding that a combination of quality, R&D, continuous productivity improvement, and providing healthy products for society and the environment are keys to success. Turkey is the world’s second-largest importer of plastic raw material inputs after China. Our largest import partners are from Middle Eastern countries such as Iran and Saudi Arabia. We purchase from the West as well. The US will be a significant source of supply after the trade wars end.
Ravago established its business in Turkey in 1998 with a small business unit mainly active in distribution. In the following years, we established other distribution channels and, in 2004, we started a TPE production company called Enplast. Up until 2010, we took some big steps; however, due to the local and global crises in 2008, Turkey’s economy remained unstable for three to four years. Nonetheless, Ravago posted growth during every period of crisis because of the company’s service capability and financial structure. In 2010, we decided to diversify the company into construction plastics. Back then, Turkey was expecting a boom in construction, so we decided to buy several companies. One of those companies was an expandable polystyrene production (EPS) company in Izmir, with 75,000 tons of capacity. Today, its capacity is 200,000 tons. Moreover, we started focusing on other related coating and chemical activities. We did not want to stay in the petrochemical plastic area, so we looked at moving from being a leading plastics company to becoming an integrated petrochemicals company. Thus, we merged five companies under one roof in 2013, and our turnover has increased from around EUR250 million to EUR900 million. We are also looking at environmentally sustainable practices. This is a quickly evolving area for our sector. In only the last three years, the circular economy has refreshed again, with a stricter approach from the big producers.