Hamza Oduncu
Yurt Cimento / Coordinator
Would you tell us about the recent work and investments of Yurt Cimento?
Yurt Cimento has been continuously developing with efficiency investments since its establishment. Our work on efficiency and improvement continues with the principle that “It is always possible to get better”. As a result of the recent contraction in the Turkish domestic market, the increase in competition has caused the ‘cost’ element to come to the fore much more, and accordingly, cost optimizations have accelerated. In this direction, our efforts to increase our fuel diversity in domestic favor are continuing to reduce energy input costs. We have begun our digitization efforts, which will inevitably take its place in our future lives. We do not have a major investment in the process, but as a result of our ongoing productivity and improvement efforts, we are completing our investments.
The Turkish cement sector continues to grow despite the pandemic, making a significant contribution to the country’s economy. Could you assess the sector in general terms?
Being one of the locomotive sectors of development in Turkey, the Turkish cement sector ranks first in Europe and 5th and 6th in the world in terms of capacity. For 2020, clinker production capacity is 93 million tons and capacity utilization rate is 76%. Although approximately 31 million tons of cement and clinker exports have been realized, the capacity utilization rate is significantly lower than the past sector average of 90% due to the decline in domestic consumption. The Turkish cement sector returned to its 2010 level in terms of domestic consumption after the currency crisis in 2018. Although the pandemic period reduced economic activity in Turkey, as it did all over the world, the low interest rate environment created by the government to overcome the negative effects of the pandemic has revived the construction sector, so the Turkish cement sector has had a relatively good season. The increase of 22% in domestic consumption compared to the previous year could only carry the Turkish cement sector to 2016 levels, which was adversely affected by the economic crisis in the last 3-4 years and returned to 2010 consumption. The fact that majority of Turkish cement industry capacity is located close to the sea with export potential provides a great advantage for the sector. By using this advantage, the sector compensates for the decrease in domestic consumption during high exchange rate periods by exporting and can prevent the dramatic decrease in capacity utilization rate. In 2020, the total export of cement-clinker was around 31 million tons, and in return, 1.1 billion dollars of export revenue was obtained. Turkey’s overall exports decreased by 9.4% in 2020 compared to the previous year, while cement exports increased by 27% compared to the previous year. Growing in a way equivalent to Turkey’s economic growth, the Turkish cement sector in general has been differed negatively from this trend for the last 3 years, and the amount of domestic consumption in 2020 was 76% of the consumption in 2017, which is the highest consumption period in Turkey. Each additional capacity in the Turkish cement sector, which has reached capacity saturation, will reduce the already low capacity utilization rate by the additional capacity rate. Therefore, when we think about Turkey as a whole, additional capacities, investments that will remain idle capacity at the beginning of the work will be buried in the ground as dead investments.
If you make an assessment in international terms, how do you evaluate Turkey compared to other countries?
The Turkish cement sector is one of the most well-organized sectors in Turkey, which follows the technology closest, as well as a sector with high production capacity and an export advantage. The Turkish cement industry, which has the largest production capacity in Europe, ranks between the 4th and 6th in the world ranking and is among the top 3 in terms of exports. Being so well positioned in Europe and the world, The Turkish cement sector unfortunately has not been able to have a global player. In order to ensure the continuity of the Turkish cement sector, it must open and invest in other countries and create a global player. In recent years, the sector has been making investments, especially in Africa, and has been covering distance in terms of foreign expansion.
What kind of growth strategy do you have as a company? What do you pay attention to when creating your investment plans?
In the last 5-6 years, our production capacity has doubled with the new investments made in the region we operate, so we do not have a regional growth strategy. Due to the high capacity throughout Turkey, we are being cautious about growth. Foreign investments are more attractive to us, and from time to time we have initiatives at the point of evaluating opportunities. But so far we have not been able to reach a viable project. Economic stability is one of the issues we take into account when creating our investment plans. Yurt Cimento, a company with a high investment appetite, sustains its investments for vertical integration in the short run.
Yurt Cimento is also a very environmental-friendly company. What are the related measures you take both in the production facility and in the products?
As Yurt Cimento, environment is at the top of our priority issues. Having ISO 14001 Environmental Management System within the scope of Integrated Management Systems since 2015, our Factory closely follows environmental legislation and fully fulfills all its responsibilities. In addition to the goal of cost optimization, our research on the use of waste as an alternative fuel, which is extremely important in terms of social benefits, continues constantly. As of the region where our factory is located, the fact that rural settlement is larger than urban settlement makes waste management difficult in the region. But as I mentioned above, our waste management work is ongoing, and we are determined to make the relevant investments at the point where we find it cost efficient..
You are also pursuing serious policies in the field of energy. How is your general approach in this area?
Our work and investments in micro-level energy in the process line continue constantly. To that end, a “Productivity Recommendation System” has been established within the factory and suggestions from employees are evaluated and reasonable suggestions are applied and rewarded. Within the scope of renewable energy resources research, 2 MW capacity GES investment was commissioned in 2017. Our 5 MW GES investment for self-consumption continues and we plan to put it into use in 2021. Together with this investment, we will be able to cover 10% of our energy consumption from the GES investment, which is renewable energy
Qualified and trained personnel are one of the most important agenda items of the cement sector. What are the training related activities that you engage as Yurt Cimento?
For me, one of the most important problems of the Turkish cement sector is human resources. In recent years, both the decrease in the point of preference for the sector and the lack of appetite of companies to recruit and train new employees due to the contraction in the sector have caused problems with qualified employees trained in the sector. Since companies taking the path of least resistance are chasing ready-made employees, circulation has increased quite recently, this solution path does not go beyond a dressing treatment in a way and does not provide a permanent solution to the problem. I believe that in the name of a permanent solution, it is necessary to increase the attractiveness of working in the sector and invest more in human resources, and I also think that taking more initiatives in this regard will speed up the process. As Yurt Cimento, we have practice at the point of growing our own structure, not recruiting staff externally. Although we are a factory for 11 years, all of our staff up to the level of department manager consists of employees that we have trained in our own structure. In-service and on-the-job vocational and OHS trainings continue constantly, and in the same way, we attach importance to our non-factory vocational trainings and mid-level manager trainings.
What are your goals and strategies for the next period? How will Yurt Cimento grow in the coming period?
Our primary goal is to be a company that provides production continuity with respect to its environment, has taken a privileged position before our customers in terms of quality, logistics, technical support, and implements digitalization in all possible areas. With the awareness of increasing the quality of human resources, as the most important pillar of achieving this goal, investments will be made to improve training, working environment and conditions in order to create an employee mass who is curious, questioning, following technology and bringing their creativity to the forefront.