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Presentation Wood used in Construction in Turkey For proHolz Austria Foreign Market Consulting Ltd. Şti. September 23, 2010 Foreign Market Consulting

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Presentation on theme: "Presentation Wood used in Construction in Turkey For proHolz Austria Foreign Market Consulting Ltd. Şti. September 23, 2010 Foreign Market Consulting"— Presentation transcript:

1 Presentation Wood used in Construction in Turkey For proHolz Austria Foreign Market Consulting Ltd. Şti. September 23, 2010 Foreign Market Consulting

2 2 Target of the Study Analysing Turkish Market for  Wood and  Wood products Focus: Construction (carrying units, e.g. roof & houses) Foreign Market Consulting

3 3 Intro: The Turkish Wood Industry B Wood used in construction in Turkey Content A Foreign Market Consulting

4 4 Intro: The Turkish Wood Industry Content A A 1 Forests in Turkey Foreign Market Consulting

5 5

6 6 What makes Turkey so Interesting? 72 Mio. people Europe’s youngest population -Avarage age 28,5 -65 % younger than 34 Highly motivated and driven workforce Close to Europe Strategic Position – Neighbouring countries Foreign Market Consulting

7 7 7 Turkey... ddd Turkey is the gateway between the eastern and western world.

8 8 World’s biggest economies Foreign Market Consulting

9 9 Europe’s biggest economies Foreign Market Consulting

10 10 Per capita income Turkey (USD) Foreign Market Consulting

11 11 Forests in Turkey Surface: 22 Mio ha Forest: 28 % in Turkey Per capita 0,15 ha Turkey is Nr. 7 in Europe in terms of forest areas Forests are mostly in mountainous areas Foreign Market Consulting

12 12 Forests in Turkey More than 9000 Plants 3000 endemic Most important trees: »Pine »Beech »Oak 99,8 % of forests is governed by government New legislation motivates privatisation Foreign Market Consulting

13 13 Forests in Turkey Yearly increase: 36,3 Mio M3 Total Value: 1.3 Bil M3 Total Forest Area : 22 Mio Ha. Yearly Increase in Total Productive Area : 26,8 Mio M3 Total Productive Area: 9,6 Mio Ha. Plantation: 16 Mio Ha. % 78 Coppice Forest: 6 Mio Ha. % 27 Plantation: 1,2 Bil M3 % 93 Coppice Forest: 0,1 Bil Ster % 7 Plantation: 8,0 Milyon Ha. % 83 Coppice Forest: 1,6 Milyon Ha. % 17 Plantation: 31,4 Milyon M3 % 86 Coppice Forest: 6,5 Milyon Ster % 14 Plantation: 23,0 Milyon M3 % 86 Coppice Forest: 5,1 Milyon Ster % 14 Coppice Forest: 6,7 Milyon Ster % 31 Yearly Eta : 16,3 Mio M3 Plantation: 11,3 Milyon M3 % 69 Foreign Market Consulting Source: Ministry of Environment and Forestry, GDF

14 14 Intro: The Turkish Wood Industry Content A A 2 Forestry in Turkey Foreign Market Consulting

15 15 Responsible Institutions Administration and management of forestry: General Directorate of Forestry (GDF) part of Ministry of Environment and Forestry (MEF) To supply the timber industry of GDF and the connected regional offices: Management and Marketing Unit Regional offices are in 81 cities in Turkey The management of GDF is also affiliated with:.Regional Forestry Directorates.Directorates of Forestry Management.Chief Management Offices Foreign Market Consulting

16 16 Intro: The Turkish Wood Industry Content A A 3 Wood Industry Foreign Market Consulting

17 17 Turkish Wood Industry Turkish foresty products sector has reached per year 25 mio m 3 raw material processing capacity, and an export level compatable with world markets’ technology and quality in furniture, particle board (chipboard), parquet packaging, pallete, etc., -except paper-, and has an important part in EU market. After the EU market has shrunk, Turkish forestry products’ export market share has risen in Asian regions especially in neighbouring countries. Foreign Market Consulting

18 18 Turkish Wood Industry Even though the wood sector has had a stagnation at the beginning, it has been improving with mainly the board sector. Some firms in the biggest wood sub-sectors (particle and fiberboard industry) have suspended production, on the other hand some new investments are continuing. The wood packaging and pallet industries who got the hardest hit are also in their recovering stages. On the other hand there are still financial problems for example, in terms of getting credits and L/Cs. GDF has taken precautions to help the industry, realizing this problem ahead of time. Foreign Market Consulting

19 19 Foreign Market Consulting

20 20 Supply Chain Importer of Round Wood Wood Processors/Carpenters Private Producer of Round Wood GDF Trader End-User End User Local Market Producer of Wood Products Importer of Processed Wood End User Export Market Foreign Market Consulting

21 21 Wood Consumption - Overview Consumption from Roundwood 25 – 27 Mio. m3 (for use of Industrial & fuel wood) Foreign Market Consulting GDF PRODUCTION 10,0-11,0 PRIVATE SECTOR 3,0-3,5 IMPORTS 2,0-2,5 PRIVATE SECTOR 1,5-2,0 OTHER 4,0-4,5 GDF PRODUCTION 4,5-5,0 Industrial Wood 15-16 Mio. M 3 Fuel Wood 10-11 Mio. M 3 Source: Ministry of Environment and Forestry, GDF


23 23 GDF INDUSTRIAL WOOD PRODUCTION Years Mio M3 Foreign Market Consulting Source: Ministry of Environment and Forestry, GDF

24 24 GDF INDUSTRIAL WOOD SALES (1000 m³) Foreign Market Consulting Source: Ministry of Environment and Forestry, GDF

25 25 WOOD INDUSTRY CURRENT PRODUCT CAPACITY INDUSTRY BRANCH Facility (qty) Production Capacity 000m³/yr Amount of Production* 000m³/yr Particleboard 243.9722.950 Fibreboard 163.9372.500 Plywood or such like products 55300210 Sawlog/Veenerlog 1811090 Timber 10.000 6.100 * amount of production is the avarage of the last 3 years Foreign Market Consulting

26 26 PINE ROUND TIMBER LOG PRICES 2008-2010 PRODUCT TYPE2008 (TL/m 3 )2009 (TL/m 3 )2010 (TL/m 3 ) Pine RTL 3rd Class161140141 " " II.S.258244260 " " I.S.365330442 Fir RTL 3rd Class156139145 " " II.S.197167180 " " I.S.267197240 Beech RTL 3rd Class163156165 " " II.S.278261275 " " I.S.324306297 Oak RTL 3rd Class156138152 " " II.S.496485684 " " I.S.-631- Foreign Market Consulting Source: Ministry of Environment and Forestry, GDF

27 27 PRECAUTIONS TAKEN After the global crisis that started effecting Turkey from 3rd quarter of 2008 onward, the following precautionary measures have been put in effect for 2009 BY gdf, taking into account the forest products sector and the developments abroad sector. –Producing as per demand, and keeping no stocks, –Concentrating on selling uncut trees directly from the forest, –Giving priority to products that are high in demand in the market, –Regarding selling the forest products; 1-Reducing the downpayments from % 50 to % 20-40, 2-Raising the installment periods from 6 months to 9 months, 3-In terms of payments, raising the 30 day additional grace period to 90 days and offering 12 months of payment terms, 4-Reducing the late payments interest rates, 5-Giving additional time periods in selling assigned and uncut trees, 6-Getting a L/C from 3rd parties, for sales with installments, 7-Putting in effect, sales with 4 months of installments with no downpayment and no interest rate. Foreign Market Consulting

28 28 EVALUATING 2009 Due to economic stagnation, like for other countries, 2009 was also a difficult year for Turkey in terms of the sector for forestry products. Precautionary measures have been put in effect immeadiately by the GDF, considering the economic trends and the sector. With GDF’s precautionary measures, inspite of the strict banking regulations, all possible improvements have been accomplished, especially, providing raw materials without down payment and with long payment terms. These changes have also benefited the employment in this sector and functioned as a socio- economic tool. On the other hand, current sales going up 1mio m3 more, compared to last year’s sales, has significantly reduced last year’s stocks, and enabled continiuity of 2010 production, creating an opportunity to provide fresh products to the market. The ambiguity in the raw material imports in 2009 has positively effected the sales. The drop in prices around the world has also effected Turkey and the income from timber sales has become about the same as last year’s.This is an expected development as per the predictions in 2009. Foreign Market Consulting

29 29 WOOD SECTOR’S CURRENT CAPACITY STATUS Sub-sector Number of Facility Current Capacity 1000 m 3 /yr Production 2008 1000 m 3 /yr Continious Investments Particle Board 243,9723,181 2.2 mio M3 Bolu, İzmit, Adana, Isparta Fiberboard163,9382,226 1.5 mio M3 Bursa, Afyon, Antalya Plywood55250 111 Veneerlog18107,119 m296 Sawnwood and Parquet1000010,0006,260 Foreign Market Consulting Source: Ministry of Environment and Forestry, GDF

30 30 INTERNATIONAL TRADE In 2009, even though both exports and imports have gone down in general, imports of wood products dropped by %37, yet exports dropped by %4,7 only. The drop in furniture imports and exports is very minimal compared to the general picture. When round wood imports dropped by %25, another raw material chip-wood and processed wood leftovers rose by % 6. As a result, inspite of the drop of 428 mio USD in imports of all wood products, exports dropping only by 22 mio USD has created a very important advantage. Foreign Market Consulting

31 31 IMPORT AND EXPORT OF FOREST PRODUCTS PRODUCT GROUP IMPORT % EXPORT % 2008 1000m 3 2009 1000m 3 2008 1000m 3 2009 1000m 3 Industrial wood 1.239929-25516220 Burning wood, particle and left overs 1.4531.5436145315436 Total wood and wood products 1.159731-37535509-5 Furniture 1.114787-291.8911.588-16 General 201.964140.775-30132.027102.165-23 Source: TUIK (Turkey’s Statistics Association) Foreign Market Consulting

32 32 Imports (Unit: 1000USD) 20022003200420052006200720082009 440710151011 Cedar 2830845928 0 440710151012 Black Pine (Pinus nigra Arn) 00020241290 440710151013 Pine 5702935982301896526650 440710151014 Fir 033854691394700 440710151015 Spruce 28414686742.6197041.1440 440710151019 Other with needle leaves 064503853000 440710159000 Other with needle leaves, emerized 242553414180501.018 440710310000 Pricea abiest karst Ispuce and silver cypress 5818628741558647011.017 440710330000 Pinus sylvestris pinegrated 511.722.2984.1295.076.85.4931.855 440710380000 Other with needle leaves, grated 01351519213482.268675 440710930000 Yellow Pine (Pinus sylvestris) 3.654.07211.02918.67942.61747.97759.35591.198 440710981000 Cedrus-cut/chipped/grated 431861904180198 440710989011 Black Pine (Pinus nigra Arn) -cut/chipped/grated 09132681221410 440710989012 Pine - cut/chipped/grated 2.8715491.8362.8666.1173.594.4570 440710989013 Fir - cut/chipped/grated 53751.4561.7162.72.0584.6520 440710989014 Spruce -cut/chipped/grated 65911831.0962.8862.58.0210 440710989019 Other with needle leaves -cut/chipped/grated 281061753706182221600 440910181000 Chipped other wooden sticks and betten from needle leaf trees 707434660453602 440910182000 Emerized other wooden sticks and betten from needle leaf trees 009243509280 440910183000 Needle leaf trees cut as long sticks 00008000 440910184000 Other wooden sticks and batten from needle leaf trees 93831571293991412848 440910189000 Chipped pieces from shaped needle leaf trees 1081253025941.0922.1632.713858 441890100000 Glued and laminated timber 1451183392991.0681.1431.9831.795 Foreign Market Consulting

33 33 DEVELOPMENTS in FOREST PRODUCTS MARKET It is understood that the stagnation will continue until the production and exports in Forest products get into an increasing trend.It is understood that the stagnation will continue until the production and exports in Forest products get into an increasing trend. Dependently on other sectors, there has been a decrease in use of wood in packaging and pallet industries.Dependently on other sectors, there has been a decrease in use of wood in packaging and pallet industries. Inspite of the decreasing trend in exports to EU countries, the exports to Asian region has been adding a momentum to the sector in Turkey.Inspite of the decreasing trend in exports to EU countries, the exports to Asian region has been adding a momentum to the sector in Turkey. Foreign Market Consulting

34 34 GDF’s POLICIES AND STRATEGIES Producing according to the market demand, Rational costs and efficiency in production, selling from forests without cutting. Optimisation in selling forest products, standardisation. bringing in products other than timber to the economy, Creating a socio-economic benefit to the forest communities. Foreign Market Consulting

35 35 GDF’s 2010 PRODUCTION MARKETING TARGETS Taking into account the Forest Products Market, year 2010 has been planned as 11 mio M 3 industrial wood 6,5 mio ster burning wood. €305 mio production cost for the production activities, and total of €440 mio contribution will be given to forest villagers in the programme of year 2010. The forest products sales revenue for 2010 has been set in the budget as €180mio 2010. Taking into account the developments and the state of the Forest Products Sector in domestic and iternational markets, the targets for production will be revisable during the year. Turkey’s potential for non-wood products will be evaluated as best as possible, and GDF’s efforts will continue to include them into the economy. Foreign Market Consulting

36 36 DEVELOPMENTS IN WOOD INDUSTRY IN TURKEY When global crisis has also effected Turkish economy, including the construction sector, Turkish forestry has continued to grow. (Growth in agriculture and forestry: 3,2%). Wood sector has recovered from this period with small damage, and even though manufacturing industry production index went down on avarage by 10%, wood industry production index went up by 1,1%. Foreign Market Consulting

37 37 Wood in Construction in Turkey Contents C B Construction Industry 1 Foreign Market Consulting

38 38 Construction industry overview Leading Industry, after food and textile. Growth rate: 8 % in 1 st quarter 2010, 21.9 % in 2 nd quarter 2010. GDP Growth Rate Construction Sector’s Growth Rate 2008 Ist Quarter % 7.0-% 3.1 2009 Ist Quarter-%14.5-%18.6 2010 Ist Quarter %11.7 % 8.0 Gov’t Investments in Construction (Jan-Jun 2010): €7,300 mio Private Investments in Construction (Jan-Jun 2010): €15,000 mio GDP (Jan-Jun 2010): €256,000 mio Foreign Market Consulting

39 39 Construction industry overview 2009/I2009/II2009/III2009/IV20092010/I2010/II2010 1st Half Value (€1000) 4,665,1734,724,7004,324,6914,586,44118,301,0204,787,1236,075,10410,862,227 Growth Rate%/yr -18.5-20.9-18.2-6.4-16.18.321.915.1 Growth Rate% - (compared to previous period) Share in GDP% Foreign Market Consulting Source: TUIK (Turkey’s Statistics Association)

40 40 Construction industry overview Foreign Market Consulting USE OF PURPOSE 2010 / I2009 / 1 Change (%) Buildings in Total Number of Buildings52,64748,5568.4 Area (m2)63,700,80051,555,14723.6 Value (€)36,177,590,13027,663,432,64830.8 Number of Apartments322,030249,37329.1 Residential Buildings in Total Number of Buildings44,57240,6109.8 Area (m2)47,467,00637,651,56026.1 Value (€)27,046,667,91920,296,897,19633.1 Number of Apartments318,151247,86228.4 Other Buildings Number of Buildings8,0757,9461.6 Area (m2)16,233,79413,903,58716.8 Value (€)9,130,922,2117,366,535,45224 Number of Apartments3,8791,511156.7 Source: YEM – Yapı Endüstri Merkezi (Association of Construction Industry Center)

41 41 Materials Used in Construction Main: Concrete and Steel Wood: In small amounts (mainly doors, windows, floors, roofs) in dimensions 5X10 and/or 10X10 cm Small yet growing market for constructive timber use (residential - commercial) Foreign Market Consulting

42 42 Wood in Construction Sector in Turkey Inhalt B B Carrying Applications in Turkey 2 Foreign Market Consulting

43 43 Traditional: 80 – 90 % of all roof constructions with wood has dimensions of: 5x10 and 10x10 cm New: Wood in wall covering and for carrying construction is growing. Reason: earthquake in 1999 emphasized usage of timber Wood as Carrying Material Foreign Market Consulting

44 44 Wood in constructive purposes in Constructions Inhalt B B Actors 3 Foreign Market Consulting

45 45 Biggest companies in Wood construction: –Saral İnşaat –Konkur –Yaprak (Aktürk) Main Actors Foreign Market Consulting

46 46 STF TOKI (gov’t) Enka Doğuş Yeşil Dumankaya Akasya Simpaş Main Actors: Construction companies Foreign Market Consulting

47 47 Number of Importers: 50+ 25 main actors, mostly in Gebze (Izmit) and Gemlik (Bursa) Main Importers: Taciroğlu, Alanyalı, Kuruoğlu, Şanlıoğlu, Pelit Aslan, Yüceller, Akçalar, Sağlamlar, Üçorman, Koyuncuoğlu, Şişman Dış Tic., Geredeliler, Macitler, Gözütoklar, Tokurlar, Alpeks. Main Actors: Importers Foreign Market Consulting

48 48 National Timber Association (UAB) Members: Planners, Architects, Engeneers, Academicians. Other Associations are: Association of Turkish Freelance Architects (TSMD) The Chamber of Turkish Architects (CAT) Union of Chambers of Engineers and Architects (UCTEA) The Chamber of Civil Engineers of Turkey Turkish Wooden Products Importers and Industrialists (TORID) Members : Importers, Traders Main Actors: Associations Foreign Market Consulting

49 49 Ministery of Public Works (Bayındırlık Bakanlığı) Construction Division (to have wood standards included in its book, to open tenders) Ministry of Environment and Forestry (MEF) Main Actors: Decision Makers - Lobbying Foreign Market Consulting

50 50 Overview It is predicted that wood construction would increase in long term but not in short term, due to lack of: educated end users (consumers); experts in associations, big companies, and universities (e.g. there are no engineers who know the statics of wood). Wrong perceptions need to be corrected -such as; wood is not good, it is too expensive, it spoils or dries fast. There are no government incentives, tenders promoting wood constructions (except some touristic, historical buildings and public areas such as parks). There are no wood construction regulations (imar yönetmeliği) Foreign investors could donate attractive buildings to big municipalities to promote wood constructions. Associations need to unite and act together to influence main decision makers in government offices as well as main constructions companies such as TOKI. Foreign Market Consulting

51 51 Newsletter Subscribe to our free, complimentary Foreign Market Consulting Newsletter, in English or German to get news every month on Turkey’s economical and political developments. Subscriptions to: Foreign Market Consulting

52 52 Foreign Market Consulting Ltd. Sti. İnci Turan Jocelyn Business Development Manager Telefon: +90-212-36 38 515 Fax: +90-212-36 38 515 Mail: Adresse:Sümer Korusu Evleri Kasimpati Sok. Nr. 25 TR-34457 Tarabya-Istanbul - Turkey Internet: Foreign Market Consulting

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