Global Cement speaks to Türkçimento’s CEO Volkan Bozay.
Global Cement (GC): Please could you introduce Türkçimento to our readers?
Volkan Bozay (VB): Türkçimento, founded in 1957, is a non-governmental association that represents 68 cement facilities in Türkiye - 52 of which are integrated and 16 of which are grinding plants. This means that Türkçimento is proud to represent 95% of the Turkish cement sector, which is the fifth largest globally and the leading producer in Europe.
Türkçimento successfully undertakes many responsibilities, including research and development services, education, international cooperation, certification, sectoral data collection, and collaboration with universities, NGOs, and other relevant institutions. Additionally, Türkçimento manages the international relations of the Turkish cement sector.
Its primary duties include advocating for solutions to the Turkish cement sector’s challenges with the government and providing public relations and communication services to the industry.
Türkçimento also acts as an information centre for the public sector and represents the industry both domestically and internationally.
Among its activities, Türkçimento organises training sessions to ensure the continuous development of industry professionals, as well as seminars, symposia and conferences. We keep our members informed about developments in the global cement, freight and fuel markets. Furthermore, we publish periodicals, books and brochures on cement and concrete. Our laboratories conduct fundamental and applied research for the sector. We offer solutions to issues faced by producers during the production process, while monitoring compliance with Turkish and international standards.
Finally, we organise the Türkçimento International Technical Seminar and Exhibition every two years, one of the most prestigious events in the industry. At our most recent event in 2022, we brought together global cement leaders with 629 participants and 224 companies. Soon, on 2 - 4 November 2024, we will once again bring the cement industry together with the theme of ‘Integration of Triple Transformation in the Cement Sector.’
GC: What were the main cement production trends in Türkiye in 2023?
VB: Türkiye produced 81.5Mt of cement in 2023, a rise of 10.5% year-on-year compared to 2022. The Mediterranean region was the leading area for cement production in Türkiye, followed by the Marmara and Central Anatolia regions. Approximately 50% of the total production took place in the Mediterranean and Marmara regions.
GC: What can you tell us about Türkiye’s cement production in 2024 so far?
VB: In the first quarter of 2024, the Turkish cement sector achieved growth of ~35% in terms of domestic consumption, aided by a low base in the same period of 2023. This growth continued at more ‘normal’ levels in the second quarter to give a 10% increase in production and a 17% increase in domestic sales during the first six months of 2024.
GC: Türkiye is a major cement exporter. What have been some of the recent trends in this area?
VB: In 2023, cement exports amounted to 15.7Mt, marking a 16% decrease compared to 18.7Mt in 2022. In 2023, clinker exports reached 4.0Mt, reflecting a significant 52% decline from 8.5Mt in 2022. Total exports in 2023 amounted to 19.7Mt, representing a 27% drop compared to 27.2Mt in 2022. The total export value in 2023 was US$1.26bn, an 18% decrease from US$1.55bn in 2022. The biggest cement export markets in 2023 were the US, Syria and Haiti.
More recently, the first half of 2024 saw a decline in cement exports, but an increase in clinker exports. Overall, total exports decreased by 3%, with cement exports declining by 13%. Clinker export volumes rose by 42%, although the total value decreased by 14%. The US remained the most significant market.
GC: What is Türkiye doing to reduce the environmental impact of its cement plants?
VB: In Türkçimento’s low-carbon production roadmap, which is based on ‘green transformation,’ the most critical issues for our sector include the use of alternative fuels and raw materials, low-clinker production, energy efficiency, and technological investments. Our members are highly sensitive to these matters and have been working on them for a long time. As outlined in our roadmap, these areas are of utmost importance to us as an industry. According to our calculations, we used 1.8Mt of alternative fuels in 2023, generating ~12% of our energy needs. Additionally, we used 6.2Mt of alternative raw materials in the same year.
Energy-efficient production is also crucial for reducing carbon emissions. To achieve energy efficiency, the sector is establishing waste heat recovery (WHR) plants to recover energy from the gas that would otherwise be emitted from the stack. Currently, 26 lines across 17 factories produce a total of 154.5MW of energy through equity-financed projects. This amount of energy is equivalent to the daily electricity consumption of approximately 618,000 households, or about 2.5 million people. Considering that energy accounts for around 80% of cement production costs, the environmental and economic benefits of the energy we produce through WHR are evident.
As highlighted in our 2023 Sustainability Report, our members are also sourcing energy from renewable sources, implementing energy efficiency practices and looking to integrate carbon capture, utilisation and storage (CCUS) technologies. To implement these measures, cement plants need to allocate resources for additional investment costs - for example feeding, storage, transportation - and operational expenses like production losses, increased specific heat requirements, additional maintenance costs, extra personnel, occupational health and safety measures, additional laboratories and measurements. They also need to manage certain technical risks, particularly those relating to fires and explosions.
Türkçimento member facilities have accelerated their environmental investments to comply with national regulatory changes and to meet additional obligations that may arise from potential carbon pricing steps. Environmental investments and expenditures have increased by approximately threefold year-on-year in Turkish Lira terms in recent years. These figures do not include renewable energy investments.
GC: Are there any threats to Turkish cement production?
VB: One of the biggest challenges facing the Turkish cement sector is continuously fluctuating energy costs. Global market price changes, coupled with increases in domestic exchange rates, have negatively impacted our industry.
On the demand side, the earthquake housing projects and urban transformation activities that started after the 2023 earthquake disaster have positively influenced our sales over the past 18 months. However, with rising interest rates and decreasing demand in the economy, we anticipate a slowdown in the construction and cement sectors in the near future.
At the same time, our cement exports are declining, which is expected to lead to a reduction in cement production. We also foresee that the carbon border adjustment mechanism (CBAM) being implemented by the EU - and similar changes elsewhere - will further impact our exports in the coming years. However, with the government’s disinflation-focused economic program and ‘green development’ model being implemented domestically, we expect to see positive effects from the second half of 2025 onwards. These factors could have a favourable impact on both the domestic and global fronts for our industry.
GC: You mentioned the EU’s CBAM in your previous answer. Can you expand a little more on the impact that you expect it to have in Türkiye?
VB: Currently, the share of the cement sector’s exports to the EU is around 16%, which is relatively low compared to other sectors. Before the CBAM is implemented in non-EU countries, exporters will likely try to compensate for the market losses they anticipate in the EU by increasing their exports to other countries. However, we expect the CBAM to be implemented in other countries in the near future too. If such measures are used as non-tariff barriers, they could negatively impact international trade.
The increased taxes and associated costs resulting from CBAM regulations will apply to all exporting countries. Therefore, we anticipate that the competitive advantage that Türkiye gained in supply chain processes and quality, especially after the Covid-19 pandemic, will continue to benefit us. However, it is essential to keep in mind the investment costs required to achieve the necessary transformation for low-carbon production, to ensure competitiveness and sustainability.
GC: How do you expect production to change during the rest of the 2020s?
VB: In the next five years, cement production is expected to continue to increase, albeit at a low rate. This will be due to a recovery in the Turkish economy and an increase in urban transformation projects, despite the expectations of a decline in exports, and with the expected increases in the domestic market. As the economy of Türkiye, a developing country, continues to grow, so too will its cement sector!
GC: Many thanks for your time today.
VB: You are very welcome indeed!
