Interview with Mr Kenan Yavuz

Face2Face
Mr Kenan Yavuz
Mr Kenan Yavuz
General Manager
Petkim Petrochemical Holding A.S.
Petkim Petrochemical Holding A.S.

In 1962, Petkim Petrochemical Holding A.S. was established investing a capital of 250 million TL with an aim to establish Petrochem industry in Turkey. Presently, Petkim is one of the leading petrochemical companies in Turkey with its harbour, water dam, electricity production facility and waste incineration facility that serve other industrial sectors. Petkim, as the sole producer of basic petrochemicals and the biggest producer of thermoplastics and intermediates, is the significant company of Turkish petrochemical industry contributing largely towards Turkish economy. Petkim that possess a great potential for growth, experienced personnel, developed infrastructure and strong financial structure, increased 20 % of its production capacity with an investment of 400 million USD between 2003 and 2007. At the same period it also augured 140 % of its revenue to 1,870 million USD and increased 180 % of export to 360 million USD. Mr Kenan Yavuz is the General Manager at Petkim. He is a graduate in Business Administration from Ankara Economical and Commercial Sciences Academy, and an MBA from Istanbul University, 1984. He earned his second MBA degree from Yeditepe University in 1998 on 'Total Quality in the Social Structure of Turkish Community'. In 1985, Mr Yavuz was first employed as a financial analyst, as well as budget and planning Chief in MAKO Electrical Industry & Business Corp., a subsidiary of Koc Holding and Italian Fiat Group’s Magneti Marelli. During the span 1985 to 2004 he worked as Manager of several departments of MAKO, and was member of the Steering Committee- the top decision maker unit in the organization and Chairman of the Networking Committee responsible for the reorganization of distribution network, enhancement of market share and surveillance of competition. From 2003 to 2004, he served as member of the Auditing Committee of Bursagaz Natural Gas Corp - a privatized public enterprise. Mr Yavuz was appointed to the Board Member of Petkim Petrochemical Holding Corp in March 2004. Since May 2004, on privatization of Petkim, Mr Yavuz assumed the responsibilities as GM of Petkim. Mr Yavuz has also authored several articles published in leading newspapers and magazines. He earned accolade of 'Professional Manager of the Year' in 2004 by a daily newspaper Dunya Gazetesi. He has been board member in numerous non governmental organizations too. Speaking exclusively with Face2Face team, Mr Kenan Yavuz pain

Petkim came to being in 1962, with the rationale of establishing petrochem industry in Turkey. How has this venture carved its niche in global petrochem industry, and worked in the benefit of Turkey’s economy so far?

The petrochemical industry has started to develop in the second half of the 20th century and become one of the essentials in economy in a short time due to usage, durability, price advantages and versatility of its products, which can substitute various natural raw materials.

The idea of establishing a petrochemical industry in Turkey was adopted in 1962, which was the beginning of the First Five Year Development Plan period. Turkey began to work in this sector in 1965. The country, imports oil, ensures its processing, petroleum chemistry, integration of power engineering and logistics, increases competitiveness and pursues the purpose to ensure the industrialization of Turkey. From this point of view Petkim is one of five important projects in the history of industrialization of Turkey.

Company met 70-80 percent of the demand of the country during its establishment. However, due to investments constraints, its present market share has come to 25 percent. The demand for petrochemical products in Turkey has been increasing faster than that of the developed countries and world average level. The ratio between demand growth rate of petrochemical industry and GNP growth rate is almost two times more than that of the world average level in our country. It is seen that Turkish petrochemical industry has a big potential for growth, having considered the factors such as the level of industrialization in Turkey, rapid population growth and developments in various industrial sectors. Thermoplastics consumption rate is 13-15% in the last 4-5 years.

Over past five years nearly $500 mm of capacity increase and modernization type investments was realized and production capacity increased by 20 percent. However, these capacity increases were very insufficient to meet the rapidly growing domestic demand. The share of the domestic production in consumption has been decreasing rapidly, and the import of petrochemical products of Turkey has also been increasing rapidly.

In 2008 the total volume of sale of Petkim reached $2bln. The total petrochemical market of Turkey is evaluated at $7-8bln. The market will grow yearly and it will reach $13-14bln in 2015 and will become one of the largest markets of the Europe. So Petkim should increase its capacity minimum by twice in order to reach 40% domestic market share in 2015.

Petrochemicals are the vital upstream industry for our textile sector. How do you notice current moves in global petrochem industry? How would you relate demand of petrochemicals in Turkey, in particular within textile arena?

The petrochemicals business is the upstream supplier of raw materials for the synthetic fiber and textile industry. A stable supply of raw materials has been essential for the steady growth of the synthetic fiber and textile business. The financial crisis which started in the US is now become global and was impacting the real economy including the petrochemicals sector. This crisis is likely to result in excess capacity in many industries including the petrochemical industry and will lead to consolidation, reduced product demand, softer pricing and lower profitability.

The textile sector is bleeding from the global crisis also. In Turkey, textile industry competitiveness power is directly related with strategic factors like electricity price, raw material price. An increase in raw material price decreases the sectors power. And also narrowing market is an important problem for us. For example Sönmez Tekstil which is one of our important customers closed its production plant. Like Sönmez, there are lots of examples. Nowadays lots of producers in textile industry narrowing its production capacity or changing their industry or goes to the other countries who give them different opportunities to invest. This affects our business negatively. I think there will be a weaker demand in domestic market in near future so this will be really a disadvantage for our business.

What is total market size of Olefin & textile intermediates, and your company’s share in it?

Olefin & Polyolefins (LDPE+HDPE+PP+PVC) as Petkim portfolio, market size in Turkey is 2.577.000 tons and market share of Petkim is 22 % in 2008.

For the Textile intermediates (ACN+MEG+PTA) market size in Turkey is 629.000 tons, market share of Petkim is 23 % in 2008.

Published on: 16/02/2009

DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.

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