With a new statement made, Cement Industry Employers’ Association (CEIS) evaluated
the situation of the sector under the influence of the ongoing pandemic and made statements about cement pricing policies.
In the statement he made, CEIS Chairman Suat Çalbıyık emphasized that the biggest motivation of the cement sector is their contribution to the development of Turkey. Stating that that they continue this contribution during the pandemic process, the chairman stressed that the sector is working nonstop for Turkey’s bright tomorrow and does not avoid sac rifice.
We attach importance to inter-sectoral solidarity
Emphasizing that they attach great importance to solidarity with all sectors that work together in order to achieve Turkey’s economic goals, Çalbıyık said: “As the cement sector, we are building our entire strategy on supporting the production of our stakeholders. In the sector, we have not compromised this attitude even in periods when we are subjected to great price pressures caused by high cost increases. In 2018 and 2019, the Turkish cement sector was subjected to price pressure from the simultaneous rise of production costs, both in its shrinking domestic market and in its growing exports. Almost half of the cost components of the cement sector consist of fuel and electricity costs. In 2017-19, petroleum coke prices increased by 45 percent, imported coal prices by 34 percent and electricity unit costs by 76 percent*. On the other hand, employment costs also increased by 32% in the same period. Despite all these increases, according to TUIK data, domestic cement prices declined by 8.1 percent in the relevant period. Furthermore, compared to the main operating profitability of our member companies dealt in BIST for 2017-2019, it was also found that profitability as a sector declined by about 70%.”
Although we had difficulty in the pandemic, we did not suspend production.
Stating that the pandemic, which took hold of the whole world, affected the cement sector along with many different sectors, Çalbıyık said, “In the sector, it was very difficult for us to be excluded from the scope of force majeure in which many of our stakeholders are included. Notwithstanding, we continued to produce with our factories spread across 7 regions of Turkey and to bring the most affordable cement in the world together with our stakeholders and our people. In this way, we have made a great contribution to the continuity of the construction sector, which is an important value for our country. As can be seen in the “Impact of Cement and Ready- Mixed Concrete Price Increases on Building Cost” report prepared by METU for TCMB in February 2019, the share of cement in the entire cost of a first-class structure ranges from 2.7% to 3.2%. We hope that we will all reap the fruits of the years-long sacrifice of the sector, and we want to underline that we will continue to do our best for the continuity of our sector and its associated sectors.”
Incentives are essential for local players on global level
Contributing greatly to the Turkish economy, our sector needs to focus on its branded on-site production strategy and becoming a local player in the global market in order to maintain its strength in foreign markets. Although we are subject to great price pressures due to high cost increases, we believe that it is essential to attract local players globally in international competition. As a sector, we care very much about the incentive mechanisms that will be provided by our state in this regard.
* The figures show the sum of the Market Clearing Price (PTF), Renewable Energy Resources Support Mechanism (YEKDEM) and the coefficient (KBK) unit costs determined by the Board (EMR A) by years.