Addressing the audience in the 51th General Assembly of the Turkish Cement Manufacturers’ Association (TCMB) at Ankara Bilkent Hotel, Adnan İğnebekçili, the chairman of the board of directors said: “We are expecting the demand for cement to shrink by 8-10% on the one hand and the installed clinker capacity to reach the level of 60 million tons with the new investments on the other hand this year. Our sector is facing a grave problem of excess capacity due to the stagnation in the domestic markets and the contraction in the export markets. In this context, the sector should focus more on foreign markets and try to maintain its profitability.

Adnan İğnebekçili, the chairman of the Board of Directors of TCMB, stated that the sector was going through a challenging and exhausting period due to the increasing costs of energy and decreasing demand in the year 2008 and made the following assessment:

“The cement sector grew approximately by 3% in the first quarter of the year 2008 and faced a trend of slowdown starting from the second quarter of the same year. With the impact of the global crisis, the sector shrunk in the third quarter. Thanks to the increase in exports, the cement production increased by 5,2% in the 9 month period, whereas the domestic sales decreased by 4,8%. The increase in cement production continued in the third quarter of the year and export grew by 72,4% in the period of 9 months. Although the shipments to the Russian market decreased in the second half of the year, there was an increase in exports into the Syrian market and the export is expected to exceed 10 million tons by the end of the year. On the other hand the domestic cement sales are expected to decrease by 3-4%.

İğnebekçili, emphasizing that according to Turkish Statistics Institute data the average price of cement per ton which used to be 120,37 TL in January 2008 decreased down to 89,99 TL in the same month of 2008, said: “There was a decrease in the annual price of cement by 25%. Considering the fact that the prices of fuel and energy, as the main items in production of cement, increased by more than 50%, a serious loss of profit margin is obviously inevitable for all the organizations in the sector”.

"The growth of sector depends on agreement with IMF and especially the revival of infrastructure investments”

İğnebekçili stated that global crisis emerged at the last quarter of 2008 affected both the developed and developing countries deeply and added that “our sector trying to survive previously by increasing exports against the shrinking internal market now entered into a tougher period as a result of significant demand reduction in foreign markets. The growth performance in construction sector in 2009 would be accelerated or suffer from a downfall trend depending on such factors as the reopening of investments allocations by the public, revival of investment trends of private sector, and maintenance of political and economic stability. Furthermore, reaching an agreement with IMF and the concrete steps to be taken by the government in the field of crisis management and thus reaching a growth in economy and the positive impact of foreign investments on foreign investors, the bright days might be on the horizon for our sector. Thus, it would be possible to maintain the growth rate slowly. Otherwise, economic constriction would be inevitable.”

Serious problem of excess capacity

Adnan İğnebekçili, the chairman of the board of directors of TCMB said: “We predict that the domestic demand for cement will shrink by 8-10 % in the year 2009. On the other hand, the installed clinker capacity is expected to reach the level of 60 million tons with the new investments this year. Our sector is facing a grave problem of excess capacity due to the stagnation in the domestic markets and the contraction in the export markets. In this context, the sector should focus more on foreign markets and try to maintain its profitability”.