Arkoz Madencilik A.Ş.
General Manager of Ağrı Cement Factory
Dr. Cengiz Çelik
While the export figures of the sector are increasing, sales in the domestic market are also decreasing. It is obvious that the sector provides added value to our country. What strategies do you follow to increase your sales in the domestic market? Also, what are your expectations from 2020 at the point of increasing export?
When we look at cement and clinker export statistics according to TIM data, it is seen that while our sector’s clinker or cement export was at 13 million tons level in 2018, it increased to 23 million levels in 2019. As a result, our sector provided our country an export revenue of 610 million dollars for 2018 and 879 million dollars for 2019. Despite this increase, when we examine the cement manufacturing growth rates (TURKSTAT data), 48% growth was observed at the beginning of 2018, growth remained minus throughout 2019 and as of December 2019, there was a huge decrease compared to the previous year. In other words, although our exports increased with great momentum, the decrease in the domestic market had a negative impact on the cement production growth rates. All these data show how effective the domestic cement demand is.
As Arkoz Madencilik A.Ş. Ağrı Cement Factory, when we began operations in 2018, this contraction has occurred within our expectations with the contribution of Turkey Cement Manufacturers Association considering the data of our sector. Various strategies and activities have been carried out and continued to be carried out by both TÇMB and us to increase our sales in the domestic market. In this context, the International Congress of Concrete Roads, the first of which was held in Ankara this year, reveals how important concrete roads are for our country. The fact that local resources of bitumen required for asphalt are very low and thus they are imported and also the advantages of concrete in road rehabilitation and initial construction costs when compared to the asphalt; provided the encouragement for our country to be directed to concrete road and the “Concrete Roads Technical Specification” was prepared by our General Directorate of Highways. Besides, our road connecting our factory to the D100 highway was constructed by our company with Cylindrical Compacted Concrete road in order to be an example and all private and local organizations in the region were invited to this road construction work. We hope that all components of our country will initiate sensitive and necessary concrete road investments. In addition, permeable concrete work has been initiated by us, and various activities have been held to provide parking lots, underpasses, bicycle paths and pedestrian walkways with this highly environmentally friendly concrete type and information has been provided to public institutions and private institutions.
We are of the opinion that the employment and decrease in credit interest rates that we have created in the real estate sector especially in the region will have a positive effect.
As of January 2020, the Cement Manufacturing growth rate has increased by 23% for the first month (TURKSTAT). We anticipate that the growth rates we mentioned in our sector will continue to grow as in January. Under normal conditions, we predicted that domestic market sales would increase by 25% in 2020 compared to
2019. Of course, these evaluations will differ on a regional basis. For example, our region has shown a smaller contraction in domestic sales in 2019 compared to other regions. Turkey’s cement industry in general has evolved in parallel with the growth in the construction branch. Positive developments in the construction sector will be increased by decreasing the interest rates in the domestic market and will increase the cement domestic sales. These expectations may change due to health issues spreading around the world since December 2019.
What is the position of Turkey in the cement sector compared to other countries in the world? Could you compare Turkey with other world states on a sectoral basis?
Turkey has a very important place in our sector in terms of global cement consumption and production. As expressed by Tamer SAKA, Chairman of the Board of TÇMB; USA has become a huge market for Turkey in exports for the last 2-3 years. Our sector will continue to be one of the most important countries in the world cement industry as long as its first priority is quality and sustainability. Turkey is at the forefront among the most respected cement manufacturers in the world.
We are the most exporting country in the cement industry in Europe, and we are always in the top 5 list of countries exporting cement in the world. China, which is the largest cement producer in particular, is decreasing its production day by day due to consolidation and is expected to take its place as an importer. Turkey’s cement industry which employs about 19,000 people in 70 factories is the most important exporting country. When we examine the reports of the cement, glass, ceramic and soil products exporters’ union, we can easily access this data. Health problems (pandemic) experienced worldwide recently will also be reflected in the cement industry. Our first priority here is human health worldwide.
Concepts such as R&D, digitalization and innovation are among the most important concepts in the business world all over the world. Can the cement sector adapt to the trends of the business world? How is the industry at the point of digitization?
It is possible to define the concepts of innovation and R&D, which are very closely related to each other, as introducing new and improved outputs or developing existing outputs and processes using a systematic study and scientific methods. The fact that similar production technologies can be used by manufacturers from
different parts of the world together with globalization has enabled consumers to access products with similar features at more affordable prices. This situation has made competition all over the world more intense. The increasing intensity of competition between microscale enterprises and macro-scale countries and the desire to gain competitive advantage directs producers towards activities that will make a difference in their products and processes. Combined with the concepts of digitalization and innovation – R&D; the innovative products will bring affordable costs and ultimately the principle of being competitive. In our opinion, these are the most important concepts of the cement industry as in all sectors.
Although the cement world is different from other sectors in the business world, it should comply with the trends of the business world. It should update. We can easily say yes to this question. We believe that our sector can adequately perceive the concept, which is called complete digitalization, with its technological developments, lower energy consumption, more environmentally friendly and free from human power. This is among the most indispensable concepts within our industry as in every sector. In this context, Turkish cement sector are paying the necessary efforts both in coordination with the Association of Producers and independently on a company basis. In this transformation, it would be more correct to call the cement industry a pioneer rather than a fit. At this point, we think like that. In this context, as a company, we take important steps by establishing the Arkoz Academy unit, and work in the fields of R&D, Education, Culture and Art. Three projects were launched in 2019. Different projects are carried out in 2020. Other companies in our sector also carry out important activities in R&D units on these issues and are constantly renewed.
We are almost about to leave the first quarter of 2020 behind. What are your forecasts and expectations for 2020?
If we look at the statistical data we mentioned in the first part, we have a hopeful year. Unfortunately, since the beginning of 2020, although the developments in the world have created question marks, our expectations are positive. We can encounter quite different tables in the first 6 months and the second six months, and we think that these tables will always progress positively.