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
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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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
WORLD & TURKISH DOMESTIC PETROCHEMICAL SECTOR
Source: 2011 World Petrochemical Conference, CMAI8
WORLD & TURKISH DOMESTIC PETROCHEMICAL SECTOR
• 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
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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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
TARGETS OF TURKISH INDUSTRY
Source: TIM, 2023 Export Strategic Report
2008 2009 2010 2023
132102 114
500
Annually Average 12 % Export Increase(billion $)
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TARGETS OF TURKISH INDUSTRY
Source: TIM, 2023 Export Strategic Report
2008 20102009 2023
14.6 12.610.8
50.0
Chemistry IndustryExport, billion $(World 2023 forecast6.6 trillion $)
Annual Average Growth Rate
11.28.5 11.9
Turkish Chemistry Export Share in Total World Export
0.44 % 0.79 %
Türkiye, by its planned investments, foreseesthat it will have an export share of 0.79 % in World’s Total Export
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TARGETS OF TURKISH INDUSTRY
Source: TIM, 2023 Export Strategic Report 20
AGENDA
COMPANY SNAPSHOTWORLD & TURKISH DOMESTIC PETROCHEMICAL SECTORTARGETS OF TURKISH INDUSTRYTRADE RELATIONS WITH D-8 COUNTRİESSUPPORTING PROGRAMS OF GOVERNMENT FOR TURKISH INDUSTRYSTRATEGIC PLANS & INVESTMENTS FOR PETROCHEMICAL INDUSTRY
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Export & Import
(*) Annualized as of July 2010
(*) Source: TURKSTATChemicals (Billion USD) Plastics& Rubber (Billion USD)
Turkey İmport from D8 Countries
7%
93%
Turkey import from D8
D8 Other
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6% 5%8%
57%
11%
7% 6%
Brackdown of ImportPakistan
Nigeria
Malaysia
Iran
Indonesia
Egypt
BangladeshTotal : 185.5 billion US$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
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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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,
SUPPORTING PROGRAMS OF GOVERNMENT FOR TURKISH INDUSTRY
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
SUPPORTING PROGRAMS OF GOVERNMENT FOR TURKISH INDUSTRY
Source: Turkish Chemistry Sector and Strategic Action Plan Paper (2011-2015)
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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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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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STRATEGIC PLANS & INVESTMENTS FOR PETROCHEMICAL INDUSTRY
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
STRATEGIC PLANS & INVESTMENTS FOR PETROCHEMICAL INDUSTRY
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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
STRATEGIC PLANS & INVESTMENTS FOR PETROCHEMICAL INDUSTRY
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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
STRATEGIC PLANS & INVESTMENTS FOR PETROCHEMICAL INDUSTRY
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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
STRATEGIC PLANS & INVESTMENTS FOR PETROCHEMICAL INDUSTRY
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THANK YOU…