Contraction in cement industry to continue
Güncelleme Tarihi:
Hürriyet Daily News
Oluşturulma Tarihi: Nisan 11, 2009 00:00
ISTANBUL - Contraction in the Turkish cement industry is predicted to continue next year, and falling cement prices will not increase for at least five years, said the director of one of the sector’s prominent firms.
The global economic crisis has hit most construction and related industries. The construction sector narrowed 7.6 percent while the cement sector faced a 4.4 percent contraction last year in Turkey, said Celal Çağlar, chairman of Oyak Cement Group.
This year, Oyak Cement Group predicts it will face a 15 drop percent in profits and a 9 percent decrease in turnover, as well as a 5 percent downsizing in the domestic market.
The group sold 5.8 million tons of cement in Turkey and 2.4 million tons abroad in 2008, a 4 percent drop in its domestic sales and a 50 percent increase in its exports.
"We were expecting the downsizing in the domestic sales, but are surprised by the increase in the exports," Çağlar said Friday at a press conference. The increase in export sales did not please the producers since the price of cement fell in both the local and external markets, he said.
Sensitive to price changes
As the cement sector is highly sensitive to price changes, Çağlar said the company should be using its full capacity to compensate for the drop in prices, but it cannot do so. Because of that, the firm is expecting a 10 to 15 percent decrease in profits, he said.
In Turkey, total cement sales in the domestic market were 40.6 million tons in 2008, an amount that is predicted to drop to 38.5 million tons this year.
Cement exports, however, which climbed from 6.6 million tons in 2007 to 10.5 million tons in 2008, are expected to rise to 12 million tons in 2009. Çağlar said there is an increase in the supply and a decrease in the demand for cement, which puts the sector in a more critical position regardless of the global crisis.
He said Oyak was neither pessimistic nor optimistic, but realistic about the future of the sector. The firm’s four cement factories always rank in the sector’s top five companies in Turkey, he said. The firm is not considering new investment to increase future capacity at its current factories in Adana, Bolu, Mardin and Ünye, but it is open to growing through purchasing new companies in Turkey or in Europe. The group had a liquid position when the crisis started to affect the country, he said.
Despite the crisis, Çağlar said the firm has not and will not lay off employees. It will overcome the crisis by maximizing efficiency, and using its coal stocks "just-in-time," he said.
This year, Oyak Cement Group predicts it will face a 15 drop percent in profits and a 9 percent decrease in turnover, as well as a 5 percent downsizing in the domestic market.
The group sold 5.8 million tons of cement in Turkey and 2.4 million tons abroad in 2008, a 4 percent drop in its domestic sales and a 50 percent increase in its exports.
"We were expecting the downsizing in the domestic sales, but are surprised by the increase in the exports," Çağlar said Friday at a press conference. The increase in export sales did not please the producers since the price of cement fell in both the local and external markets, he said.
Sensitive to price changes
As the cement sector is highly sensitive to price changes, Çağlar said the company should be using its full capacity to compensate for the drop in prices, but it cannot do so. Because of that, the firm is expecting a 10 to 15 percent decrease in profits, he said.
In Turkey, total cement sales in the domestic market were 40.6 million tons in 2008, an amount that is predicted to drop to 38.5 million tons this year.
Cement exports, however, which climbed from 6.6 million tons in 2007 to 10.5 million tons in 2008, are expected to rise to 12 million tons in 2009. Çağlar said there is an increase in the supply and a decrease in the demand for cement, which puts the sector in a more critical position regardless of the global crisis.
He said Oyak was neither pessimistic nor optimistic, but realistic about the future of the sector. The firm’s four cement factories always rank in the sector’s top five companies in Turkey, he said. The firm is not considering new investment to increase future capacity at its current factories in Adana, Bolu, Mardin and Ünye, but it is open to growing through purchasing new companies in Turkey or in Europe. The group had a liquid position when the crisis started to affect the country, he said.
Despite the crisis, Çağlar said the firm has not and will not lay off employees. It will overcome the crisis by maximizing efficiency, and using its coal stocks "just-in-time," he said.