Turkey: Poised at the gateway to success
Its tissue industry has come a long way in a decade, and is now ideally placed to take maximum advantage when crises to east and west subside
This is an intriguing time for Turkey and its tissue sector. As one of the ‘Next 11’ countries (Goldman Sachs has highlighted it as having a strong chance of becoming one of the largest global economies in the 21st century), its future outlook and potential for growth looks relatively assured. Just a decade ago its tissue market was fairly young and much smaller than today. In 2005, it produced around 160,000 tonnes of tissue products while paper consumption was underdeveloped and remained far below the average for the developed world. But the beginning of real growth was evident, with consumption of disposable products, for example, expected to grow around 5% annually between 2006 and 2010.
‘Demand for tissue products is forecast to increase annually by between 12 and 15%. This isn’t expected to slow down, and neither is Turkey’s robust economy.’
Since then, things have changed significantly. Demand for tissue products is forecast to increase annually by between 12 and 15%. This isn’t expected to slow down, and neither is Turkey’s robust economy. Figures released in April showed that GDP rose by 8.5% in 2011. Its growing population – estimated to be almost 75m – is becoming increasingly middle class and urbanised and requires more and more disposable tissue products. Turkey produced 462,000 tonnes of tissue products in 2011: it has the capacity to produce 600,000tpy but demand for only 370,000 tonnes of tissue products.
Investments have been made in the sector by companies not previously involved in tissue manufacture. And many tissue producers are investing in new machines or new mills, not just at home but also in neighbouring countries including Iran and Russia. One such company is Hayat Kimya, one of the three tissue producers TW visited for the Country Report.
And this is another significant string to Turkey’s bow. Its location, as a gateway between east and west, is a key selling point for the tissue sector as shown by the ambitious export aims of many of its producers, which eye expansion across both the Middle East and western and eastern Europe. This strategic geographic advantage allows the country to take advantage of linking the Black Sea with the Mediterranean, and it has also become a key hub for oil and natural gas pipelines from Asia to Europe.
However, its location hasn’t made it completely immune from the eurozone crisis as well as tensions in the Middle East, which have temporarily closed the door on the Turkish gateway. Inflation was 10.4% in March and the debt-laden eurozone remains under significant strain, with the crisis in Greece damaging trade with Turkey’s nearest European neighbour.
However, with its high levels of investment and clear plans for the future, the Turkish tissue manufacturer is poised to take advantage of opportunities in the near future, while guarding against the signs of overcapacity which are emerging. Turkey is still the gateway to the east, and how it has prepared to deal with the difficult issues facing both the east and the west could be seen as a test case that may be applied to the wider region.
Environmental certification is an important issue for the tissue industry, but as it has developed, we now have a mix of schemes and standards. There are too many, and the result is confusion. In TW’s Technical Theme Marketissues article, RISI’s Esko Uutela looks at whether certification – “which is helping rather than hurting the industry” – is just a marketing tool or a necessity. The time is right to simplify and strengthen the system with a unifying, universal scheme which will add greater authority to the standard.
TW also interviews Cascades Tissue Group’s president and chief executive Suzanne Blanchet. The company’s North Carolinabased site became Processed Chlorine Free (PCF) certified in 2003, and Blanchet explains how the process was achieved, and what environmental and cost savings have been made since its implementation. TW