Turkish Petrochemical Industry - SEM · PDF fileWORLD & TURKISH DOMESTIC PETROCHEMICAL SECTOR...

October - 2011

Turkish Petrochemical Industry

AGENDA

COMPANY SNAPSHOTWORLD & TURKISH DOMESTIC PETROCHEMICAL SECTORTARGETS OF TURKISH INDUSTRYTRADE RELATIONS WITH D-8 COUNTRIESSUPPORTING PROGRAMS OF GOVERNMENT FOR TURKISH INDUSTRYSTRATEGIC PLANS & INVESTMENTS FOR PETROCHEMICAL INDUSTRY

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AGENDA

COMPANY SNAPSHOTWORLD & TURKISH DOMESTIC PETROCHEMICAL SECTORTARGETS OF TURKISH INDUSTRYTRADE RELATIONS WITH D-8 COUNTRİESSUPPORTING PROGRAMS OF GOVERNMENT FOR TURKISH INDUSTRYSTRATEGIC PLANS & INVESTMENTS FOR PETROCHEMICAL INDUSTRY

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Group Structure

SOCAR&Turcas Enerji A.Ş.

STEAS

PETKİM

Petrochemical Holding Co

STRAS

SOCAR&Turcas Rafineri A.SOTHER SUBSIDIARY

COMPANIES

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COMPANY SNAPSHOT

Company Overview

• Established in 1965/Second complex commissioned in 1985• The sole petrochemical producer in Turkey• 25% domestic market share and well positioned assets in

an ever growing market

• 15 main plants, 8 auxiliary units• Located in Aliağa near Izmir• Sits on a land of 19 mn sqm• Harbour, water dam, power generation unit (226 MW)• Adjacent to Tüpraş Aliağa Refinery

PETKİM

FACILITIES

MAIN FEEDSTOCKPRODUCTS

PRODUCTION

• Naphtha, LPG, • Main product goups: olefins, polyolefins, vinyl

chain, aromatics and other basic chemicals

• Gross production about 3 mllion tons a year• Capacity utilization rate (CUR) was about 98%

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AGENDA


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Source: Cefic Chemdata International, *Asia excluding China, Japan and India

Petrochemicals 25% 29%

WORLD & TURKISH DOMESTIC PETROCHEMICAL SECTOR

World chemicals sales : 1998: $ 1.2 trilyon 2008: $ 2.8 trilyon


Source: 2011 World Petrochemical Conference, CMAI8


• Increase on demand for petrochemicals after crisis

• Growth expectation with an annual rate of 5.5 %

between 2010-2015

• Floating and upward price of raw

materials/products

• Increasing feedstock costs caused depression of

margins

• Globally, especially Asia and growing markets are

driving forces

• Consolidation/rationalization of high cost,

inefficient capacities

• Political & economical uncertainties

Global Petrochemical Sector

* Source: BMI Industry View Q1 2011

• Strong demand on petrochemical products;

market reached to the condition as in the times

before crisis

• Strong growth domestically

(In 2010, market grew by 15 % compared to

previous year)

• Expectation for sector volume to rise over 8

billion $ by the end of 2011

Turkish Petrochemical Sector

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* Renewed gulf reemerges

(Gulf of Mexico)* New gulf (ME)

advantage is kept

Developed countries

tend to produce

value-added products

Middle East Market

Advantage goes towards

Asia

PETROCHEMICALS GLOBAL PERSPECTIVES

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Tupras

BLACK SEA

MEDITERRANEAN

IZMIR

ANKARA

REFINERIES AND PETROCHEMICAL INDUSTRIES IN TURKEY-LOCATIONS

Petrochemical Complex

AdvanSA/Artensa

Basic Ind.(Baser)

Aksa

TuprasPetkim

Fiber ProducerRefinery

Korteks

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Overview Plastic Processing in Turkey

Annual Production Capacity4th biggest country in Europe in 2004, with Spain

2010 : 6.1 million tons

Company Number ( Included Plastic Processing Machine ManufacturerCompany Number whit foreign Investor

6.000128

Employment (necessities 15.000 educated personnel each year) 200.000

Production value

Value added in economy

2009: 14.5 Billion $2010: 16.5 Billion $

2009: 5.8 Billion $2010: 6.6 Billion $

Plastics Production Value/GDP 3 %

Total Export -2010 (E) 8 Billion $

Number of Company in the biggest 1000th. 47

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COMPARISON OF PLASTICS PROCESSING CAPACITY(TURKEY & EUROPEAN COUNTRIES)

0

2

4

6

8

10

12

Mill

ion

Tons

Capacity 11 9.1 6 5.1 5.1 4.0

Germany Italy France Spain Turkey UK

�Turkey: With approx. 5 million tons plastics processing capacity, the

4th biggest country in Europe , with Spain.

CHINA : 37

INDIA : 12

BRAZIL : 5.4MILLION TONS/YEAR

Sector Vision: To Be The Biggest In Europe

AGENDA


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Biggest World Economies With Respect to Purchase Power IndexGDP, Tril. Dolar, 2009

THE WORLD

Source: IMF, World Economic Outlook, October 2010

TürkiyeWorld’s 16. biggest economy

WORLD & TURKISH DOMESTIC PETROCHEMICAL SECTOREUROPE

TürkiyeEurope’s 6. biggest economy

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Country GDP: rate and per capita

Turkey is expected to be the fastest growing economy of the OECD members during 2011-2017, with an annual average growth rate of 6.7 percent.

Source: OECD Economic Outlook No: 86

Criterion 2009 2013 2018 2023

Türkiye's Rank Among World Economies 17 15 12 10

Export Share in GDP (%) 16.5 % 17.5 % 22. 0 % 25. 0 %

Export to Import Ratio (%) 72.5 % 65% 75% 80%

Import (billion $) 140 245 378 625

Export (billion $) 102 160 284 500

Annual Export Growth Rate (%) -22.6 % 11.5 % 12.0 % 12.0 %

Türkiye's Share in Total World's Export (%) 0.84 % 1.0 % 1.15 % 1.5 %

TARGETS OF TURKISH INDUSTRY

Source: TIM, 2023 Export Strategic Report 17


Source: TIM, 2023 Export Strategic Report

2008 2009 2010 2023

132102 114

500

Annually Average 12 % Export Increase(billion $)

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Source: TIM, 2023 Export Strategic Report

2008 20102009 2023

14.6 12.610.8

50.0

Chemistry IndustryExport, billion $(World 2023 forecast6.6 trillion $)

Annual Average Growth Rate

11.28.5 11.9

Turkish Chemistry Export Share in Total World Export

0.44 % 0.79 %

Türkiye, by its planned investments, foreseesthat it will have an export share of 0.79 % in World’s Total Export

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Source: TIM, 2023 Export Strategic Report 20

AGENDA


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Export & Import

(*) Annualized as of July 2010

(*) Source: TURKSTATChemicals (Billion USD) Plastics& Rubber (Billion USD)

Turkey İmport from D8 Countries

7%

93%

Turkey import from D8

D8 Other

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6% 5%8%

57%

11%

7% 6%

Brackdown of ImportPakistan

Nigeria

Malaysia

Iran

Indonesia

Egypt

BangladeshTotal : 185.5 billion US$D8 Countries :12.3 billion US$

Source: ITC

5,66

94%

Turkey Export to D8

D8 Other

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4%4%3%

47%

4%

35%

3%

Brackdown of ExportPakistan

Nigeria

Malaysia

Iran

Indonesia

Egypt

BangladeshTotal : 114 billion US$D8 Countries :5.96 billion US$

Turkey Export to D8 Countries

Source: ITC

Chemicals Imports

11%

89%

Turkey Chemical importfrom D8

Chemicals

Other

25

43%

23%

12%

8%

5%5% 4%

39 Plastics

40 Rubber

39 Miscellaneouschemical28 Inorganic chemicals,

31 Fertilizers

29 Organic chemicals

Others

Breakdown of Chemicals import

Total : 28.4 billion US$D8 Countries :1.4 billion US$

Source: ITC

12%

88%

Turkey Chemical exportto D8

Chemicals

Other

26

35%

13%13%

8%

7%6%

6%5% 7%

39 Plastics

40 Rubber

28 Inorganic chemicals,

32 Tanning, dyeing ,pigments etc

29 Organic chemicals

39 Miscellaneous chemicalproducts

33 Essential oils, perfumes,

34 Soaps, lubricants, waxes,

Others

Breakdown of Chemicals Export

Total : 10.0 billion US$D8 Countries : 0.72 billion US$

Chemicals Exports

Source: ITC

Trade Balance by Products Between D-8 and Turkey

Product code Product labelTrade Balance between D-8 and Turkey

2008 2009 2010TOTAL All products 6.757.099 708.788 6.363.659'39 Plastics and articles thereof 184.530 96.164 351.855'40 Rubber and articles thereof 159.163 96.582 228.626'38 Miscellaneous chemical products 44.975 31.411 129.304'31 Fertilizers 15.240 40.858 60.134'28 Inorganic chemicals, 34.386 9.577 26.223'29 Organic chemicals -10.928 -19.222 17.948'37 Photographic or cinematographic goods -531 3.739 3.388'30 Pharmaceutical products 203 2.840 -2.687'36 Explosives, pyrotechnics, matches, etc 1.084 13.460 -2.932'35 Albuminoids, modified starches, glues, enzymes -2.559 -7.996 -9.623'34 Soaps, lubricants, waxes, candles, -18.200 -11.577 -29.411'33 Essential oils, perfumes, cosmetics, toileteries -22.328 -24.386 -40.724'32 Tanning, dyeing extracts, tannins, pigments etc -31.853 -36.831 -47.057TOTAL All Chemicals mineral oil excepted 353.182 194.619 685.044

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Product code Product labelTrade Balance between D-8 and Turkey

2008 2009 2010

'3901 Polymers of ethylene, HDPE,LDPE 118.193 116.307 225.595'3907 Polyether,PET 22.193 47.825 144.849'3902 Polymers of propylene 56.204 24.549 82.472'3904 Polymers of vinyl chloride 110.797 53.815 68.050'3903 Polymers of styrene 580 663 7.478

Source: ITC

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Global foreign direct investment (FDI)

FDI flows, by region and economy (2010)(Millions of dollars) FDI Inflows FDI outflowsWorld 1.243.671 1.323.337Devoloped economies 601.906 935.190Devoloping economies 573.568 327.564

D8 Total 50.609 20.279Egypt 6.386 1.176Nigeria 6.099 923Turkey 9.071 1.780Bangladesh 913 15Pakistan 2.116 46Iran 3.617 346Endonesia 13.304 2.664Malaysia 9.103 13.329

FDI stock, by region and economy, 2010 (Millions of dollars) FDI inward stockWorld 19.140.603Devoloped economies 12.501.569Devoloping economies 5.951.203

D8 Total 593.355Egypt 73.095Nigeria 60.327Turkey 181.901Bangladesh 6.072Pakistan 21.494Iran 27.600Endonesia 121.527Malaysia 101.339

The World Investment Report 2011

AGENDA


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SUPPORTING PROGRAMS OF GOVERNMENT FOR TURKISH INDUSTRY

• The New Incentive Regulation– The new investment regulation was enforcement in 2009– Regulation was revised in 2011

• Input Supply Strategy in Chemical Industry – Coordinated by Ministry of Economy– Aim: Support to increase basic raw material production

• Document of Strategy and Action Plan in Turkish Chemical Industry– Coordinated by Ministry of Science Industry and Technology– Aim: Become a center in invest in Turkey, by producing high

value-added products,


Document of Strategy and Action Plan in Turkish Chemical Industry

Clustering should be supported and widespread

Special Chemical Industry Zones should be established on coastal regions

By the end of 2012, export share should be increased from 10% to 15%

Domestic production is planned to be supported in Public Tenders

Chemistry downstream sectors competitive with world should be determined

Source: Turkish Chemistry Sector and Strategic Action Plan Paper (2011-2015)31

Research & Development for Domestic Raw Material Source Based Production

Production of special and value-added products should be promoted

New technoparks should be built wherein chemistry sector has a predominance

Prior investment fields should be determined about petrochemicals

Chemistry Sector Development Commission should be established

Supports should be provided to direct foreign investments within frame of Incentive Regulation


Source: Turkish Chemistry Sector and Strategic Action Plan Paper (2011-2015)

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AGENDA


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PETKİM LAND• WIDE PRODUCT RANGE• VALUE-ADDED SPEACIAL/FINE CHEMICALS• CLUSTER MODEL (PETKİM “VALUE-SITE”)

ENERGY GENERATION

LOGISTICS & TRADE

UPSTREAM

SOCAR&TURCAS AEGEAN REFINERY

(STAR)

DOWNSTREAM

4 MAIN GROWTH

STRATEGIES

SOCAR&Turcas Group targets to be the biggest power generation and production facility by realizing Petkim “Value Site” Cluster Project within frame of Refinery-

Petrochemical-Energy-Logistics Integration on Petkim Peninsula

STRATEGIC PLANS & INVESTMENTS FOR PETROCHEMICAL INDUSTRY

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25 new potential productsPPPVCHDPEPSLDPEPETACNLDPEPTAMEGCARBON BLACKSBR

ABSPA2- ETHYL HEXANOLLABTDICBRPOLYCARBONATESPROPYLENE GLYCOLMALEIC ANHYDRIDEISO-PROPANOLACRYLIC ACIDACRYLATESPOLYETHER ALCOHOLS(POLYOL)

With respect to market survey and import amounts, 25 potential new productsare prioritized;

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Import Data for the chosen 25 products

(2010 year prices)

Amount: 5 000 000 tons7 250 000 000 $

Imports if any other investmentsare not realized

Amount: 7 750 000 tons11 500 000 000 $

Annually average 5.5 % growth


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Türkiye’s import amount will significantly be decreased by the planned capacity expansion and new plant investments till 2023

With foreseen increasing capacity of sellable products, Türkiye’s import amount will decrease from 7 mn. tons/yr. to

approximately 4 mn. tons/yr. as of 2023

Drop about 3 mn tons/yr. of Türkiye’s import amount


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Even though in case “Naphtha Cracker” producing ethylene with a

capacity of 2,700,000 tons/year is established by the year 2020, Türkiye

will still need nearly 1,300,000 tons/year propylene

So, Türkiye Petrochemical Industry should focus on “on- purpose”

propylene production and make plan


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FOR AN EFFICIENT CLUSTERING;

World scale production,

Vertical integration with refinery for basic raw materials production,

Integrated structure with downstream sectors as automative, packaging, construction and other chemistry related downstream areas,

A synergetic structure equipped with its energy/utility supply, warehouse/logistics capabilities and various service companies,

An infrastructure with at least 3 different types of transportations (sea, river, road,railway, pipeline, etc…),

A big potential for manpower,

PLUG&PLAY management system is an attractive model for investors.

PETKİM CLUSTER MODEL & JURONG ISLAND


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THANK YOU…

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