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Presentation Wood used in Construction in Turkey

Presentation Wood used in Construction in Turkey. F or proHolz Austria Foreign Market Consulting Ltd. Şti. September 23, 20 10. Foreign Market Consulting www.fmconsulting.info. Target of the Stud y. Analys ing Tu rkish Mark e t f or Wood and

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Presentation Wood used in Construction in Turkey

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  1. PresentationWood used in Construction in Turkey For proHolz Austria Foreign Market Consulting Ltd. Şti. September23, 2010 Foreign Market Consulting www.fmconsulting.info

  2. Target of the Study Analysing Turkish Market for • Woodand • Wood productsFocus: Construction(carrying units, e.g.roof & houses) Foreign Market Consulting www.fmconsulting.info

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

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

  5. 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 www.fmconsulting.info

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

  7. World’s biggest economies Foreign Market Consulting www.fmconsulting.info

  8. Europe’s biggest economies Foreign Market Consulting www.fmconsulting.info

  9. Per capita income Turkey (USD) Foreign Market Consulting www.fmconsulting.info

  10. Forests in Turkey • Surface: 22 Mio ha • Forest: 28 %in Turkey • Per capita0,15 ha • Turkey is Nr. 7 in Europe in terms of forest areas • Forests are mostly in mountainous areas Foreign Market Consulting www.fmconsulting.info

  11. 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 www.fmconsulting.info

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

  13. Content A A Intro: The Turkish Wood Industry 2 Forestry in Turkey Foreign Market Consulting www.fmconsulting.info

  14. Responsible Institutions • Administration and management of forestry:General Directorate of Forestry (GDF) part ofMinistry 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 managementof GDF is also affiliated with: .Regional Forestry Directorates.Directorates of Forestry Management.Chief Management Offices Foreign Market Consulting www.fmconsulting.info

  15. Content A A Intro: The Turkish Wood Industry 3 Wood Industry Foreign Market Consulting www.fmconsulting.info

  16. Turkish Wood Industry • Turkish foresty products sector has reached per year 25 mio m3 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 www.fmconsulting.info

  17. 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 fiberboardindustry) 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 www.fmconsulting.info

  18. Foreign Market Consulting www.fmconsulting.info

  19. GDF Importer of Round Wood Private Producer of Round Wood Wood Processors/Carpenters Importer of Processed Wood Trader End-User Producer of Wood Products End User Export Market End User Local Market Supply Chain Foreign Market Consulting www.fmconsulting.info

  20. Wood Consumption - Overview Consumption from Roundwood25 – 27 Mio. m3 (foruse of Industrial & fuel wood) Industrial Wood 15-16 Mio. M3 Fuel Wood 10-11 Mio. M3 GDF PRODUCTION 10,0-11,0 IMPORTS 2,0-2,5 PRIVATE SECTOR 3,0-3,5 GDF PRODUCTION 4,5-5,0 OTHER 4,0-4,5 PRIVATE SECTOR 1,5-2,0 Source: Ministry of Environment and Forestry, GDF Foreign Market Consulting www.fmconsulting.info

  21. CURRENT WOOD SUPPLY – DEMAND IN TURKEY GDF WOOD PRODUCTION 16 – 17 Mio M3/YEAR INDUSTRIAL WOOD PRODUCTION 11 –11,5 Mio M3 FUEL WOOD PRODUCTION 5 – 5,5 Mio M3 PRIVATE SECTOR WOOD PRODUCTION 4,5 – 5,0 Mio M3/YEAR INDUSTRIAL WOOD PRODUCTION 3 – 3,5 Mio M3 FUEL WOOD PRODUCTION 1,5 – 2 Mio M3 WOOD CONSUMPTION 26 – 27 Mio M3/YEAR INDUSTRIAL WOOD CONSUMPTION 16 – 17 Mio M3 FUEL WOOD CONSUMPTION 10 – 11 Mio M3 IMPORT ROUND WOOD 2,0 – 2,5 Mio M3/YEAR INDUSTRIAL WOOD IMPORT 2 – 2,2 Mio M3 FUEL WOOD 0,2 – 0,5 Mio M3

  22. GDF INDUSTRIAL WOOD PRODUCTION Mio M3 Years Source: Ministry of Environment and Forestry, GDF Foreign Market Consulting www.fmconsulting.info

  23. GDF INDUSTRIAL WOOD SALES (1000 m³) Source: Ministry of Environment and Forestry, GDF Foreign Market Consulting www.fmconsulting.info

  24. WOOD INDUSTRY CURRENT PRODUCT CAPACITY Foreign Market Consulting www.fmconsulting.info

  25. PINE ROUND TIMBER LOG PRICES 2008-2010 Source: Ministry of Environment and Forestry, GDF Foreign Market Consulting www.fmconsulting.info

  26. 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 www.fmconsulting.info

  27. 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 www.fmconsulting.info

  28. WOOD SECTOR’S CURRENT CAPACITY STATUS Source: Ministry of Environment and Forestry, GDF Foreign Market Consulting www.fmconsulting.info

  29. 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 www.fmconsulting.info

  30. IMPORT AND EXPORT OF FOREST PRODUCTS Foreign Market Consulting www.fmconsulting.info

  31. Foreign Market Consulting www.fmconsulting.info

  32. 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. • 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. Foreign Market Consulting www.fmconsulting.info

  33. 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 www.fmconsulting.info

  34. GDF’s 2010 PRODUCTION MARKETING TARGETS • Taking into account the Forest Products Market, year 2010 has been planned as 11 mio M3 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 www.fmconsulting.info

  35. 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 www.fmconsulting.info

  36. Contents C B Wood in Construction in Turkey 1 Construction Industry Foreign Market Consulting www.fmconsulting.info

  37. Construction industry overview • Leading Industry, after food and textile. • Growth rate: 8 %in 1st quarter 2010, 21.9 %in 2nd 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 www.fmconsulting.info

  38. Construction industry overview 2009/I 2009/II 2009/III 2009/IV 2009 2010/I 2010/II 2010 1st Half Value (€1000) 4,665,173 4,724,700 4,324,691 4,586,441 18,301,020 4,787,123 6,075,104 10,862,227 Growth Rate%/yr -18.5 -20.9 -18.2 -6.4 -16.1 8.3 21.9 15.1 Growth Rate% -16.9 0.7 3.1 8.4 - -3.9 13.5 - (compared to previous period) Share in GDP% 5.8 5.3 4.6 5.3 5.2 5.6 5.8 5.7 Source: TUIK (Turkey’s Statistics Association) Foreign Market Consulting www.fmconsulting.info

  39. Construction industry overview Source: YEM – Yapı Endüstri Merkezi (Association of Construction Industry Center) Foreign Market Consulting www.fmconsulting.info

  40. Materials Used in Construction • Main: ConcreteandSteel • Wood: In small amounts (mainly doors, windows, floors, roofs) in dimensions5X10and/or10X10 cm • Small yet growing market for constructive timber use (residential - commercial) Foreign Market Consulting www.fmconsulting.info

  41. Inhalt B B Wood in Construction Sector in Turkey 2 Carrying Applications in Turkey Foreign Market Consulting www.fmconsulting.info

  42. Wood as Carrying Material • 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 Foreign Market Consulting www.fmconsulting.info

  43. Inhalt B B Wood in constructive purposes in Constructions 3 Actors Foreign Market Consulting www.fmconsulting.info

  44. Main Actors • Biggest companies in Wood construction: • Saral İnşaat • Konkur • Yaprak (Aktürk) Foreign Market Consulting www.fmconsulting.info

  45. Main Actors: Construction companies • STF • TOKI (gov’t) • Enka • Doğuş • Yeşil • Dumankaya • Akasya • Simpaş Foreign Market Consulting www.fmconsulting.info

  46. Main Actors: Importers • 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. Foreign Market Consulting www.fmconsulting.info

  47. Main Actors: Associations • 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 Foreign Market Consulting www.fmconsulting.info

  48. Main Actors: Decision Makers - Lobbying • 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) Foreign Market Consulting www.fmconsulting.info

  49. 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 www.fmconsulting.info

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