The Sixth of the TÜRKÇİMENTO Anatolia Meetings held in İzmir

14 Eylül 2022

We Are Experiencing A Period Of Energy Crisis    

At the Izmir stop of the Anatolian Meetings organized jointly by TÜRKÇİMENTO and the Dünya Newspaper, cement producers made warnings. Leading representatives of the cement sector highlighted the fact that cement production may face challenges in the forthcoming months due to the increasing energy costs because of the crisis being experienced.

The sixth of the TÜRKÇİMENTO Anatolian Meetings was held in İzmir. Within the scope of the event, the panel held at İzmir Entrepreneurship Center-İzQ took place under the moderation of Suat Özyaprak, President of Mena Communication Agency. Fatih Yücelik, Chairman of the Board of Directors of TÜRKÇİMENTO; Volkan Bozay, TÜRKÇİMENTO CEO; H. İbrahim Gökçüoğlu, Vice Chairman of the Board of Directors of EBSO; Cenker Mirzaoğlu, Çimentaş CEO and TÜRKÇİMENTO Board Member;  Gülant Candaş, Deputy Chairman of the Board of Directors of Batıçim and TÜRKÇİMENTO Board Member;  and Hakan Güldağ, Chairman of the Board of Directors of the Dünya Newspaper (NBE), attended the panel as the speakers.

In his speach at the panel, Fatih Yücelik, Chairman of the Board of Directors of TÜRKÇİMENTO, pointed out the fact that the cement sector is experiencing a difficult year and said, “Unfortunately, in the first half of 2022, cement production of TÜRKÇİMENTO members, which represent 94% of the sector, decreased by 10% year-on-year. Again in that period, domestic sales dropped by 14,5%, while cement exports increased by 6,5,% compared to the same period of the previous year. According to the data of the Turkish Exporters Assembly, in the first eight months of 2022, the total exports of the cement sector reached 1 billion 79 million dollars, with an increase of 29% on a value basis. Total export amount decreased by 5,4% to 19,6 million tons. 13 million tons of exports in question consisted of cement and 6,6 million tons consisted of clinker.”

Inviting attention to the fact that the Russia-Ukraine War that started in February posed negative impacts on the global scale and on Turkey, Yücelik said, “We are going through a crisis period that we have not seen for years in energy, which is the most important cost item of our industry. As of August 2022, an increase of approximately 321% in electricity prices, approximately 496% in imported coal prices, approximately 291% in petcoke prices, and approximately 168% in domestic coal prices took place on a TL basis year-on-year. The dollar exchange rate also increased by about 112% for the same period. If we consider the total increase of 998% in natural gas used in industry and 1330% increase in natural gas used in power plants in the last 1,5 years, alongside the foregoing increases, it will be understood more clearly in what kind of environment we industrialists are trying to carry out production. This increase in foreign currency rates and energy unit costs causes the share of energy costs in variable costs to still navigate around 85%.   

Expressing that he wanted to underline a point that is not known correctly by the public, on behalf of the sector, Yücelik said:  
 “We are offering almost the cheapest cement in the world to the Turkish market in spite of the energy crisis. Today, one liter of water is more expensive than one kilogram of cement produced at thousands of degrees going through countless processes.  

The cement sector has to implement significant technological changes in the forthcoming period. So despite all such challenges, we have to make investments.”  

Mentioning the 10 years ahead of the sector, Yücelik reminded that the number one agenda item of the world economy will be “climate crisis and the carbon market” in the upcoming years and said that, at this point, they, as TÜRKÇİMENTO, contribute to the members in priority issues. Yücelik said, “The first strategic step toward low-carbon cement production is that companies have a sustainability transformation program. A serious reduction in emissions and a full fight against climate change will be possible only with a comprehensive strategy that will be created throughout the country by taking into account the financing needs.   Right at this point, we think that it is strategically important to create green financing models specific to the cement sector, alongside government incentives and supports.”   


Stating that substantial investments are made in the sector in the fields of energy efficiency, biomass use, electricity generation from waste heat, and cement production with admixtures, Fatih Yücelik continued as follows:  “At this point, it appears that we need alternative energy sources. One of our solution suggestions for it is the import of alternative fuels containing biomass. By using 2,8 million tons of alternative raw materials and 1,5 million tons of alternative fuel in 2021, TÜRKÇİMENTO members ensured imported fuel savings thanks to alternative fuel equivalent to 740,000 tons of petroleum coke. Moreover, in electricity generation from waste heat, we have reached an installed capacity of 141,5 MW with waste heat recovery facilities installed in 16 plants and on 25 lines. Thanks to it, the electrical energy need, which corresponds to the daily consumption of 570 thousand households, is met only with the waste heat from the process. We will continue to provide a contribution on behalf of the sector to the determination of our country's 2053 net zero emission target and sustainable development policies.”  


In his speech at the panel, Volkan Bozay, TÜRKÇİMENTO CEO, talked about the stance of the cement sector in the search for a solution to the climate crisis experienced today. Bozay mentioned that the cement sector has processes that can be put into practice in transition to low carbon production by closely following the international climate and environmental policies and that the Low Carbon Cement Production Roadmap drawn up by TÜRKÇİMENTO touches very important points for some initiatives that will be beneficial to implement in the world and in Turkey. Mentioning also the costs of the investments required for carbon emission reduction practices, Bozay said, “It is obvious that we need national and international support also in this issue, as in the EU. In a system fully harmonious with the EU's emissions trading system, if the carbon price is 100 Euro/ton.CO2 , the total carbon cost of our sector will be 8,5 billion Euros in 2030.     

It is predicted that the carbon price in the EU will further increase in the forthcoming years. We can say that this cost increase will affect our industry and therefore the construction industry in an extremely negative way.”     

In his speech at the panel, H. İbrahim Gökçüoğlu, Vice Chairman of the Board of Directors of Aegean Region Chamber of Industry (EBSO), said that EBSO, which started with the identity of being Turkey's first and only regional chamber of industry today provides services with 5,500 members from 53 different sectors for the development of the city and industry of the region. Gökçüoğlu said, “While the exports in İzmir took place around the level of 14,8 billion dollars in 2021 with an annual increase of 27%; imports increased by 29% to 10,9 billion dollars. In this regard, İzmir is a clearly exporter city with a foreign trade surplus of 3,8 billion dollars in 2021, as an important advantage. Iit is the second most exporting province after Istanbul, realizing 6,5% of Turkey's total exports. İzmir is the second province after Istanbul, with a share of 11,4% of tax revenues in total collection.    

Emphasizing that inflation is one of the most important problems incurred  by production, Gökçüoğlu said, “If inflation climbs above 100 percent for two consecutive years, it is legally required to switch to inflation accounting in the balance sheets. Nevertheless, it is not implemented. Therefore, many companies are on the verge of technical bankruptcies with virtual profits and virtual taxes. This is not sustainable.” 

Taking the floor at the panel, Gülant Candaş, Deputy Chairman of the Batıçim Board of Directors, stated that the group, which is one of the oldest organizations in the Aegean Region, ffulfills over 45% of the sales in the Aegean Region. Emphasizing that they exert maximum efforts to use natural resources consciously in the productions carried out in the cement plants belonging to the group, Gülant Candaş, said, “Accordingly, we are taking important steps to reduce carbon emissions with an environment-friendly production model. We reduce the waste generated at the source and recover such waste, whenever possible, for the country's economy. We are providing firsts to Turkey with our R&D and innovation studies on cement, which forms the backbone of sectors such as transportation, construction, and port management.” 

Cenker Mirzaoğlu, Çimentaş CEO,  said that Çimentaş, the first cement plant of the Aegean Region, established in 1950, continues its global journey today as part of Italy-based Cementir Holding. Cenker Mirzaoğlu said, “In addition to energy and capital-intensive production conditions, our sector has special qualifications like high emissions and dependence on unique raw materials. For this reason, it is necessary to have at least a fifty-year perspective before making an investmment. We believe in sustainable growth and are constantly investing in it. The success of the works we have realized has carried us to the position of being one of the top three countries within the body of Cementir Holding.” Drawing attention to the fact that the plants in the cement sector operate 24/7, excluding annual maintenance downtimes, Mirzaoğlu warned as follows:

“Downtimes and power cuts in compulsory circumstances cause substantial damages and hardly-compensable situations.Hence, it is very important for us to ensure a stable production. Therefore, even the thought of a contraction in electricity supply or a restriction on exports can hit our business hard.    

Hakan Güldağ, Chairman of the Board of Directors of the Dünya Newspaper (NBE), stated that Turkey needs a planning organization as in the past and said, “We need to act on the basis of sectors. We can transform the cement, textile, and paper sectors.   

We can adapt traditional production in each of our sectors to new technology, which may maximize technology." Güldağ added that instead of presenting new projects through the circular economy and bringing the construction and industry sectors against each other, smart and green buildings must be brought to the agenda in line with the spirit of the time.