The first stage of the refinery to be established in an area of 10 million square meters in the Yumurtalık region by SASA, which has been producing raw materials in the fields of healthcare, textiles, automotive and packaging for half a century at its facility in Adana inside the body of Erdemoğlu Holding, will be the port. The company will build a PP (Polypropylene) plant in the second stage. The other phases of the investment will consist of refineries and aromatic chemicals and other chemicals that Turkey needs. The cost of investment, previously estimated at approximately 12 billion USD, has been revised to a minimum of 20 billion USD due to global price increases.
Erdemoğlu Holding and SASA board member Mehmet Şeker made a statement to WORLD representative Adana, Selçuk Altun, about their completed, ongoing and planned investments. Indicating that they completed the first investment in fiber with a capacity of 1,050 tons/day within the scope of the investment movement that began at SASA’s facilities on the Adana-Mersin highway, and started the operation of 1,000 tons/day poy and 900 tons/day pet installation of chips, Şeker said, we will likely put the PTA investment into operation in the sixth month of 2023. As PTA is our raw material, we will replace what we buy from outside.”
Emphasizing that the annual production of 1.4 million tons of polyester products will increase significantly in a few years, Mehmet Şeker said: “Instead of the old facilities we demolished; let’s build a fiber, a chip and then a poy plant. Together with these, SASA’s production will increase to 2.2 million tons by the end of 2024. In addition, we will produce 1.6 million tons of raw material, namely PTA.” Noting that 1.2 million tonnes of the 1.6 million tonnes of PTA they will produce will be used by themselves, and the rest will be used to meet Turkey’s needs, Şeker noted that the current consumption of PTA in the country is of about 1 million tons and which is totally imported.
“We will not transfer existing facilities to Yumurtalık”
Mehmet Şeker, who provided information about the investments they were planning in the Yumurtalık district of Adana; “We bought an area of approximately 4 million and 58 thousand square meters in the region. In addition, the land purchases we have made from citizens continue and will be about 10 million square meters in total. Purchase jobs take a year to complete. If everything goes normally, we will start work in the sixth and seventh months of next year.” Stating that they are working with companies on a global scale on engineering and financing, Şeker said: “First of all, we need to build a port there and this will be our first step. As a second step, we are considering a PP (Polypropylene) plant. So we plan to produce refineries and aromatic chemicals and other chemicals that the country needs.”
Noting that SASA’s existing facilities will continue to operate, Mehmet Şeker said: “We have not transferred the facility here to Yumurtalık, we continue to use it. We just built the fiber factory, poyu, chips, we are just making the PTA. We will be making new fiber, new chips and new poy here again. On the other hand, in Yumurtalık, there will be larger and more comprehensive investments, there should be a port, rail and road connection, as there will be high tonnage production. On the one hand, there will be a refinery, the chemicals produced by the refinery, and on the other hand, there will be a PP plant with an annual capacity of 2.5 million tons, the capacity of our PTA unit that we will establish there will be 2.5 million of tons. With this, the egg production capacity will be very high,” he said.
“We need to review our costing”
Explaining that they will review the cost of the Yumurtalık investment due to economic fluctuations in the world, Mehmet Şeker said: “The 12 billion dollar cost that we planned in the first place has reached around 20 billion dollars. We said that we would finish the PTA at 650 million dollars, it would end up at 1.1 billion dollars at the point we’re at. In a place where the price of everything is going up, it’s a little difficult to say something like I can do as much or as much. However, we are working on funding, I don’t think we will have a big problem. We have meetings with big financiers and companies from all over the world, we can partner, we can use loans, we can develop other formulas, we are open to that subject, we are meeting with everyone who comes, we meet with about 7-8 world famous companies yet.”
“Five-year development plans were good”
Recalling that the country’s priority needs were taken into account during the five-year period of Turkey’s development plan, Şeker defended the following views: “What do we need? These facilities should be encouraged and built. Giving everyone incentives for animal husbandry, yarn factories, carpet factories is neither logical nor correct. It is necessary to reduce imports and increase exports. The best example of this is China, which has been doing this for years. We still buy raw materials from abroad, we buy German, English and French machines, we buy natural gas from Russia for electricity and we generate electricity in cycle plants. Everything is external. It’s very difficult for a country like this to develop, grow and get a share of the growth. We need to overcome this misfortune, we need to make new investments very quickly and reduce external dependence”.
“Turkey imports 81 cents for 1 dollar export”
Expressing that Turkey imported 81 cents to be able to export 1 dollar, Şeker said, “There is 19 cents left, including taxes, electricity and labor. The Chinese have reduced that to less than 40 cents, so most of the money stays in their own country. So they don’t have problems with inflation, they don’t have problems with the rise or fall of foreign currency, so they don’t have economic problems. We need to be on a project that can overcome all that. But unfortunately, I can’t see such an organization at the moment. ”
“The recovery of the economy in the world will reach 2025”
Expressing that there is a problem in the supply of raw materials in the world due to the problems in China, Mehmet Şeker said: “Due to COVID-19, there was a problem in loading and in ports. The logistical cost has increased a lot, there has been some relaxation in the last few days. There is a contraction in the markets, there is an inflation problem in many countries of the world. This year, world average inflation appears to be 7-8%. There was an abnormal rise in raw material prices, there was an increase in logistics, the sourcing business got a little difficult,” he said. Şeker expressed the following view of the world’s economic problems: “There is both a war in Europe and an economic problem throughout the world. Inflation added to that, and people’s purchasing power declined. Just like at the end of this year, in the last quarter, people act a little more cautiously, the volume of trade decreases, which shrinks the industry and the world economy. In 2023, I predict that there will be an economic recession across the world. To get rid of these problems, it is important to stop the war between Ukraine and Russia. COVID is over, its effect has waned across the world. The complete extinction of that will strengthen production a little more, but it will take 2025 for the world to take a step forward economically, for economies to recover and the volume of trade to increase. To be prepared for this, we first get rid of supply problems and logistical costs by producing our own raw materials.”
“Investing in the stock market is investing in the country’s industry”
Mehmet Şeker said: “After all, the stock market is an area of investment. You invest your savings in an industrial company, you grow as it grows, you profit as it profits. It is not like other investment instruments, it contributes both to the country’s economy and to the economy of individuals. On this occasion, you get the opportunity to get to know the country’s industry and production. In this aspect, I worry about the Stock Exchange. I see investing in the stock market as an investment made by the people of the country in their own country, in their own industry and in their own future.”
“Polyester production and demand are increasing worldwide”
Noting that if they had started investing in Yumurtalık three or four years ago, Turkey would have become the polyester base of a very large geography, Şeker made the following assessment: “If we were not late, this region would be completely covered in this region, from North Africa, Russia, Europe and India, we would be polyester based. Country-wise, we’re behind schedule on resetting the current account deficit, but we’re not in the mood to sit back and cry. Let’s start from today, how can we save the next five years, let’s pursue it. As the consumption and demand for polyester is rapidly increasing in the world, polyester will exist in all areas of life because it is a recyclable product and does not harm human health. Therefore, the need will increase. As long as consumption increases, we will have to produce.” Drawing attention to the fact that the chemical industry in Turkey is ‘very dependent’ on abroad, Şeker said: “We don’t produce much in the field of chemistry. We buy almost all the fertilizers and aromatic chemicals used in agriculture from abroad. The chemical industry comprises the largest item of imports.