In May this year, Bodal Chemical, India which is amongst the world’s largest manufacturer and exporter of dyes intermediate, dyestuff and sulphuric acid announced plans to acquire an 80% stake in Sener Bova Kimya Tekstil Sanayi Ve Ticaret Ltd., which is involved in involved in marketing, purchase and sale of various dyestuff and other chemicals in Turkey and the surrounding countries.
The Turkish chemical industry, with its modern technology and diversified products, is a crucial component of the countries manufacturing industry and is playing one of the most important roles in the development of the national economy.
Turkey has been manufacturing chemicals since a very long time and is a leading producer of many basic and intermediate chemicals and petrochemicals like inorganic and organic chemicals, polymers, plastics products, soap and detergents, soda, chromium chemicals, boron chemicals, sodium sulphate & fatty acids. Turkey is among one of the leading countries in the world that has boron, chrome & soda ash reserves. Turkey has one of the largest soda factories in the Middle East.
We look at how some of the integrated sectors are helping in the development of the chemical industry:
- Construction industry: The country is undertaking various urban transformation projects, making the construction industry, one of the fastest-growing end-user markets for the chemical industry.
- Textile Industry: The textile sector is well-developed in Turkey. The production of polymer & other textile chemicals have also developed simultaneously.
- Fertilizer industry: The fertilizer industry supports sizeable agricultural production, which helps in more production of Nitrogen, Potash & other chemicals related to agriculture.
- Other important industries are pharmaceuticals, automotive, paints & coatings sectors which are also playing a significant role in the growth of the chemical industry in Turkey.
Turkey is the 2nd largest net importer of petrochemicals in the world after China. Petrochemical products consumption and export-oriented business offer ample opportunities for local and foreign investors. Most of the companies related to chemical industries are located in Istanbul, Izmir, Kocaeli, Sakarya, Adana, Gaziantep, and Ankara. These are the hotspots for investors who want to set up their base in the country.
As per IMF in 2018, Turkey was the 13th largest economy of the world and 5th largest in the European Union. A promising economy with a bright future has the potential to become one of the fastest-growing economies among the OECD members in the coming years.
We highlight below opportunities for investors in specific sub-sectors:
- Plastics sector: Plastics is a very important sector in Turkey’s chemicals industry, which accounts for around 3% of global plastics production. Turkey is 2nd largest producer of plastics in Europe and the 7th largest producer globally
- Paint Sector: Turkey ranks as the 5th largest paint producer in Europe and offers various opportunities for investors.
- Soap and Detergents: The Turkish soap related industry has shown excellent performance in terms of quality, capacity, and exports with various international companies setting up their facilities in the country.
- Polymers: Polymers & textile chemicals have grown substantially with the setting up of large plants to produce polyamide, polyester, and acrylic fibers for foreign & domestic markets. The private sectors produce almost all synthetic fibres and creates significant opportunity for investors.
- Chrome ore : Turkey is among the top five countries supplying chrome ore to the world. Turkey produces and exports some of the most important chrome chemicals and derivatives such as sodium bichromate, basic chrome sulphate, chromic acid, and chrome oxide.
Turkey is an attractive investment location for chemical companies with its robust market growth fueled by end-user markets. Chemical giants such as BASF, AkzoNobel, Henkel, Bayer, Evonik Industries, Linde, Kansai Paint, and Dow have been manufacturing in Turkey. The majority of FDI inflows in Turkey into the chemical-related have originated from the Netherlands, Germany, China, UAE, USA, Japan, Denmark, Saudi Arabia, Russia
Select foreign investments in chemical sector in Turkey:
- Metito, a smart water management systems maker, has acquired majority shares of Turkish chemistry company Info Group.
- Huafon Group of China, which manufactures and sells polyurethane products, has opened a subsidiary in Turkey.
- Leading specialty chemicals company IMCD Group has opened a coatings laboratory in Istanbul, Turkey,
- Firmenich, a Switzerland-based developer of fragrances, flavorings and specialty chemicals, has opened a new research facility in Istanbul, Turkey
- AkzoNobel, has invested $2.3m to set up a paint manufacturing facility in the Kocaeli region of Turkey
- Adhesives manufacturer Lohmann Tapes has set up a new 3100 sq m manufacturing facility in Gebze, Turkey.