Investment of $4.1B to meet 20 percent of polypropylene imports

At the fore of the world's petrochemical import list, Turkey is set to reduce imports with a TL 135 billion ($33.25 billion) incentive package recently announced by President Recep Tayyip Erdo?an to be provided for 23 projects and 19 companies. Supported by the Project-Based Incentive System, CFS Petrokimya will produce polypropylene in Adana through an investment of TL 4.11 billion.

The company will set up production in the Energy Specialized Industrial Zone in Yumurtal?k, Adana, and build its own port nearby. Planning to produce 500,000 tons per year, the company will employ 1,000 people and meet 20 percent of Turkey's polypropylene imports, according to a report in Turkish Dünya daily.CFS Petrokimya's co-founder and board member, Albert ?zmizrahi, said ever since they entered this business, they have witnessed a snowballing deficit in Turkey.

"Only Petkim is established in Turkey. Other than that, regardless of the petrochemical statistics, Turkey ranks in the top five in imports in the industry's entire product groups," ?zmizrahi said, highlighting that they come second in the world in their field of investment, right after China.

Pointing to an annual current account deficit of between $2.5 billion and $3 billion, which may vary due to variability, he said this figure has grown by 10 percent since 2004. "According to official records we reached around 450,000 to 500,000 tons of imports in 2004. In 2017, we imported 2.2 million tons," he recalled."At that point, we realized that every country sold their products to Turkey and prepared their production according to the Turkish market," ?zmizrahi said, noting that they thought about investing with this much deficit and use in question. Describing the investment process, he recalled that while they were discussing the investment, the incentive package was announced by the prime minister. "We started doing research. There had been some attempts in Turkey to establish such a facility, but they had stalled. They had problems with raw materials, but now the world has overcome that problem," ?zmizrahi said.

Stating that the U.S.'s entry into the market was also effective in this regard, opening up the supply of raw materials, ?zmizrahi said they conducted a feasibility study after they learned they could supply raw materials. "We came together with one of the world's leading petrochemical reporting companies and prepared a joint project for four months," he continued. "When we saw the outcome, we realized that it could work. After finding the raw materials, the current account deficit and the frequency of use in Turkey showed that this was doable."

?zmizrahi said the project requires an investment of $1.2 billion. "We will add equity capital as well. Apart from that, we will also turn to project financing. We are currently working on it. The consortium is most likely to happen. We are in contact with the banks both at home and abroad. We have a little more distance to cover," he concluded.

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