Emre Özkurt
Calderys Turkey, Sales Manager
How was the year 2019 for your company in consideration of your sector and Turkey in particular?
We lived through a difficult year and left it behind. It was a year in which economic and political surges encountered, and when it was hard to find a stable business environment, and because of not being able to predict the future, certain projects were postponed to future.
Our country was also naturally affected from the economic recession encountered all over the world. As is known by all, automotive, textile, tourism, and construction sectors, as the dynamo of Turkish economy, accelerate positively when economy is doing well, but decrease much more when economy shrinks. Construction sector continues to grow globally in the long term. However, qualms in global growth in the short term cause to increases of risks in construction sector across the world. While protective policies in the global trade damage the confidence of financial markets and economic decision makers, they cause postponement of decisions in construction expenditures, in particular, for housings. Concurrently, such uncertainties and increasing short-term risks cause postponements of infrastructure investments of governments. Although the construction sector maintained its growth tendency in 2018, unfortunately we may speak of a fracture in 2019.
Challenges encountered by the construction sector in economies of the developed countries in terms of the growth thereof are structural as result of the level of maturity attained by these countries. On the other hand, such difficulties in the economies of developing countries, such as our country, are pertinent to temporal effects. Fragility in global commodity prices, volatilities in financial markets, and much slower growth rates in the developed countries with which they have trade relations, all such factors restrict the construction sectors of the economies in the developing countries. In summary, construction sectors of the developing economies, such as in Turkey, have high growth potentials, but encounter shortterm difficulties from time to time due to the effects arising from uncertainties and risks in the developed countries’ economies.
As I expressed earlier, even though questionable, the construction sector in Turkey is the driving force in growth of the country besides being a leading indicator in terms of overall economy. It contributed substantially to the national economic growth both directly and indirectly. Up and down moves in the construction sector are realized in higher ratios and earlier than the national economy, and becomes prominent in Turkey as one of the sectors mostly susceptible to fluctuations in general economy.
As Calderys, we also displayed a performance in 2019, directly proportional to the situations of the sectors we serve. In the iron and steel, aluminum, and energy sectors we serve, there was a more stable situation comparing to the cement sector. It was not a year that we fully achieved our targets, but tried to do our best under the circumstances. The cement production described as the leading indicator for the construction sector was reduced by 24,78% in the first 10-month period of 2019 based on the data published by Turkish Cement Manufacturers’ Association. The final official figures for 2019 are not disclosed yet; however, I estimate a positive acceleration in the least in the last two-month period and accordingly, a small reduction in that difference. In 2019, the utilization ratio of clinker production capacity for 53 integrated cement factories across Turkey was only at the level of around 59%. The capacity utilization ratio in the past 15 years was never this much low. I surely think that it was due to attaining certain level of saturation in the market capacity besides shrinkage in economy. Accordingly, it directly caused reduction in the amounts of refractor consumption at factories, and monolithic refractor consumption was reduced by up to 35% in the cement industry.
What are the developments of your company in this year, such as investments, new products, launchings, etc.?
As Calderys, we pursue continuous developments and improvements in line with the sectoral requirements. Calderys’ products are known in the market with the high quality and performance thereof. We have products of various classes to fulfill specific needs to be used in the cement industry; in addition to such products, we put on the market UniverCEM® series in 2019 for fulfilling more than one requirement of the sector at the same time. UniverCEM® series concretes are a material that is both gunning and casting, and may be used for works of plastering and patching when necessary. With this product, we provided an economical solution to our customers, allowing utilization by means of different application methods in varying unites for general purposes and easier inventory management. Our product was utilized at various factories all the year round, and yielded successful results. In addition, according to the importance we place on education and training, we tried to relay our knowledge and experience to our stakeholders in the sector and to increase the consciousness of proper utilization and technical capability of refractory products.
In general, what are your expectations in 2020? What are your targets and general strategies for this year?
Although economy commentators do not give rather bright remarks and scenarios for 2020, I hope to live through a much better year than 2019 if we achieve the growth estimates declared by some official institutions. I believe that it is not proper to think of or plan a long year as badly as expected without starting to put a fight on field. We are aware that in 2020, we will not have a great year leaving all economical and political issues behind; however, I hope that the point we ended up at the end of 2019 is at least the final point, and will start improving by adding up thereto.
I expect it generally will be a year of company mergers or acquisitions and we will witness the same in particular with refractory companies. I think that Turkish companies will go into some partnerships with foreign ones and do some foreign acquisitions or continue their investments as part of the contracts executed in the past years. It is known that foreign enterprises are interested in such a large market as Turkey, and intend to have acquisitions or make direct investments therein. As Calderys, we also intend to make such investments for many years and plan to make them when the time and conditions are ripe.
When the national economy prospers in general aspects it would positively affect the building
sector as well. It is obvious that there is a linear relation, regardless of positive or negative, between the general economic growth and the growth of building sector in Turkey in the last two decades. Therefore, we expect that if the national economy grows to the certain estimated extent, building sector will grow, and accordingly, cement plants will utilize more of their production capacities. The World Bank, IMF, and OECD announced their growth expectations regarding Turkish economy for 2020 as 3%. Although this rate seems not sufficient for development of building sector, I think it will start a positive acceleration.
What sectoral developments do you expect this year?
Turkish cement industry ended the year 2019 with 53 plants already in operations and 3 plants
in the stage of building and commissioning. In 2020, we will have 56 integrated cement plants in operation following the commissioning the recently built ones and a clinker capacity of approximately 100 million tons. Our cement industry will increase the ratio of waste utilization in close future as in the developed countries, and the plants will transform almost into waste disposal facilities of the cities they are located. Surely, as such ratio of waste utilization as fuel increases, it will be necessary to do works of preparing wastes for usage, complete any modifications required for burning wastes in furnaces more productively, and on our part, utilize refractories suitable for such purpose.
As Calderys, we believe to maintain our experiences in our country successfully, such experience acquired from our customers in Europe, which already burn wastes regularly at such ratios up to 100%. We will be exerting our efforts on transmitting our capability of hassle-free waste burning to our stakeholders as to reduce our carbon footprints resulting from fossil fuels by increasing waste utilization and to become cement plants much more environmental friendly.
Company mergers and acquisitions across the year 2020 that I mentioned will also be in refractory sector, and we will witness some developments during this year about the M&A.
