“We can say that our investments in Green Transformation targets have increased even more with the ratification of Paris Agreement in our country. At the same time, we follow what is happening in the world in this regard and adapt developing technologies to our sector. I would like to underline that the first priority of the cement sector in 2023 will be this transformation process.”
TÜRKÇİMENTO Chairman of the Board Fatih Yücelik
How was 2022 for Turkish cement industry in general?
On the morning of February 6, we woke up to a major earthquake disaster, the epicenter of which was Kahramanmaraş Pazarcık and affected 10 cities mainly Kahramanmaraş, Gaziantep, Şanlıurfa, Diyarbakır, Adana, Adıyaman and Malatya. And the same day, we also experienced another earthquake, the epicenter of which was Elbistan which resulted in the same great disaster. First of all, we wish Allah’s mercy to our citizens who lost their lives in these earthquakes, condolences and patience to their relatives, and quick recovery to our injured citizens. For the last 3 years, we wish hope and good luck when we come to the end of the year, but at the beginning of the next year, we open our eyes with a disaster.
2022 was also spent struggling with the negative repercussions brought by the Ukraine-Russia war, which broke out while trying to heal the wounds of the pandemic period we have just experienced due to Covid19. We cannot consider 2022, in which we have experienced the heavy effects of these two negative situations on global commodity markets, as a productive year.
The cement production of our members, representing 94% of our industry, in the 10-month period of 2022, in the January-October period, decreased by 8.7% compared to the same period of the previous year and fell to 60.6 million tons. The official figures have not yet been announced, however, we can predict that there will be 74 million tons of cement production similar to 2021 at the end of the year. Domestic sales decreased by 12.5% to 44.2 million tons in the same 10-month period. About 26% of the cement produced in this period was exported.
As the cement sector, unlike many sectors in our country, we are a sector with an excess of supply due to our production capacity above the domestic market demand. As a matter of fact, due to insufficient demand in the domestic market, export has become a necessity, not a choice, for our members who have the capacity to export. Because the excess capacity of our sector is at the level of 32 million tons as of October, and we expected this figure to be 44 million tons by the end of 2022, when the official figures were announced.
According to the provisional data of the Exporters’ Associations, the total exports of the cement sector in 2022 increased by 23.5% compared to the previous year in terms of value and increased to 1 billion 547 million dollars. On the other hand, it is also remarkable that the total exports of cement and clinker decreased by 11.2% in 2022 compared to 2021 and decreased to 27.3 million tons when viewed on the basis of quantity. When we look at the reason for this decrease in quantity basis, we see that despite the 2.4% increase in cement exports, the export of clinker, which is the semi-finished state of cement before the grinding process, decreased by about 31%. We can state that the total exports of the sector in 2022 consist of 18.7 million tons of cement and 8.6 million tons of clinker.
While the sector exports cement mostly to the USA and the Middle East, our important markets in clinker exports were West African countries.
Which issues will come to the fore in the sector for 2023 and beyond?
The answer to this question might have been very different if it was asked before the earthquake disaster, the wounds of which are still green. Within the framework of our expectation that the conflict situation will be greatly dampened even if the Russia-Ukraine War does not end in 2023, we expect the demand for cement to increase, especially in these regions. Although the demand for cement will increase at this point, it should be emphasized once again that the damage caused by this war to our sector, especially in terms of energy costs, has caused all our producers to experience difficult days. Unfortunately, these difficult cost related conditions will affect both our production and investments in 2023.
In accordance with our country’s 2053 net zero emission target in order to reduce carbon emissions, our cement sector, as one of the leading solution partners of our country in the process of energy cost increases and “Green Development Revolution of Turkiye”, will rapidly continue to develop its works carried out and put into practice under the following titles;
- Alternative Fuel Use (refuse-derived fuel, treatment sludge, used tires, liquid fuel waste, agricultural and animal waste)
- Clinker and Raw Material Substitution (blast furnace slag, fly ash, pozzolana)
- Energy Efficiency (waste heat recovery)
- New Technologies (carbon storage and utilization, electrification, hydrogen use)
If we return to the destruction caused by the earthquake, I would like to emphasize again that unfortunately we cannot bring back the lives we have lost. However, it is urgently necessary to rebuild the destroyed houses and workplaces of our citizens who survived this disaster. For this reason, together with all our members, especially our member factories operating in the region, we are preparing a program to provide the needs of all buildings that have been demolished or have to be demolished due to severe damage.
What activities did you carry out as an association in 2022? What will be your studies in general for 2023 and beyond?
2022, the 65th anniversary of our Association, was very productive in terms of representing our sector. We started 2022 by visiting our respected leader Atatürk in Anıtkabir, and we continued to serve our sector in many issues and signed two major events.
The first of these events was the 16th Technical Seminar and CEMINT 2022 event we held in Antalya on 24-28 October 2022. Our expert speakers from all over the world took part in the program, and we helped domestic and foreign companies that develop new technologies, services, systems and products for the cement industry to introduce their technologies to cement producers. We consider this program, which we have completed with the participation of 629 exhibitors, 224 companies and 93 stands, to be very important in terms of following the developments in the world. We also published a statement at the end of this seminar as a result of the interview on the energy panel we conducted.
Secondly, with our motivation for the widespread use of concrete roads in order to produce permanent economic solutions for our country and to provide public benefit, we, as TÜRKÇİMENTO, brought together the decision makers of our country and experts from Europe and America at the Concrete Roads Congress, which we organized for the second time this year and attended by 1300 people. Dear Minister Adil Karaismailoğlu also honored us by attending our congress.
Along with these, we held the 6th of our Anatolian Meetings event, which we started digitally during the pandemic period, in Izmir this year.
As TÜRKÇİMENTO Academy, we have completed the training and activity program we envisaged under 30 titles for 2022 as 45 activities with the needs that have developed throughout the year. In this way, in 2022, we organized a total of 575 hours of training and seminars, and a total of 1999 people attended these meetings.
We have organized these trainings under the titles of technical trainings, management systems, colleague meetings, subject-based events organized for universities and factory-based trainings, events with a wide participation in the sector. 852 of our sector officials were certified within the scope of the trainings.
As TÜRKÇİMENTO, we have continued our service to our sector uninterruptedly with our two economic enterprises, our R&D institute and our Quality Environment Board.
As Association, we will continue to add more to our activities in our 2023 targets. As a sector, we have been channeled to green transformation, especially since 2023.
We can say that our investments in Green Transformation targets have increased even more with the ratification of Paris Agreement in our country. At the same time, we follow what is happening in the world in this regard and adapt developing technologies to our sector. I would like to underline that the first priority of the cement sector in 2023 will be this transformation process.
It is possible to prevent the loss of life by acting with the awareness of responsibility and using the right materials in the structures
Unfortunately, on the morning of February 6, our entire country woke up to a major earthquake disaster and there are no words to describe our sadness for our loss. Immediately after this earthquake disaster, in which we suffered irreparable and indescribable losses, we delivered our aid to the region on the same day in cooperation with other NGOs. Together with the mobilization we have initiated internally with all our member factories, our assistance has been continuing uninterruptedly since the first day, whether it is food, water, blankets, heating and other basic necessities, machinery, equipment and trained manpower.
As the Board of Directors of the Association, we will continue to maintain our support with active coordination with our state. In addition to daily needs, we, as the Association, implemented our container city implementation plan in the region in cooperation with the Cement Industry Employers’ Union (ÇEİS) and started container installation. Thus, we will try to meet the need for temporary shelter in this way, even to some extent.
We have also launched a major mobilization as a sector for Hatay Airport, which was damaged in the earthquake and became unable to provide services. Çimko, Limak Çimento and Oyak Çimento established a large cooperation network for the supply of concrete used in the repair works of the damaged Hatay Airport. Gathering their means under the conditions of damaged aggregate, concrete facilities and work equipment with the access roads with high vehicle density due to the evacuation aid operations in the region, our members delivered uninterrupted products and services to the contractor company that undertook the repair.
When we put aside the severity of the earthquake disaster, all our citizens have the question in their minds; why the buildings collapsed despite the building regulation, which we proudly state is in accordance with European Union standards. The cement produced in our country is one of the highest quality and safe cements in the world, produced in accordance with the international standards applied by all developed countries, especially the European Union. The factories have already been designed to produce according to these standards, and as soon as you step out of it, you become unable to produce cement. However, if the building inspection is not sufficient, if the cement used in construction activities is not used by the applicators in the amount and manner in accordance with the legislation, the result will not change no matter how high quality the cement is and we will have to experience these pains again and again.
The fact that one of the two buildings standing side by side has completely collapsed while the other is standing intact shows that if the ground survey is carried out in accordance with the correct legislation, the building inspection is carried out in accordance with the legislation and the right amount of building material is used, the buildings will not be affected regardless of the severity of the earthquake. Unfortunately, the earthquake is our inevitable reality as a country. We have no power or control over it. However, it is possible to prevent the loss of life by acting with the awareness of responsibility and using the right materials in the structures.
In our country, the ‘quality and safety’ element should be a priority for both the builders and the residential areas. While constructing our buildings with this awareness, safe design and construction techniques should be applied and concrete quality should be taken into consideration. We recommend using building materials in accordance with the standards in construction works, consumers should definitely get information about the quality of building materials when buying housing.