TURKISH CONSTRUCTION MATERIALS INDUSTRY & ELEVATOR
While Turkish construction materials are exported to dozens of countries, increase in demand can be clearly seen every year. Building material manufacturers get full marks across the world for their high-quality and performance properties.
Manufacturer companies pointing out that they aim to increase the current surplus they contribute to the country’s economy by exporting at a rate of 4 times higher than the import rate in the construction materials sector, state that the country’s export capacity can reach to all the continents, noting that the national production power is high enough for the whole geography where Turkey is located in terms of technological opportunities, infrastructure and human resource.
Turkish construction materials industry, ranking as in the top 10 across the world in export sector, is the third highest export sector after the automotive and textile in Turkey. With a rate of 22 billion dollars, Turkey’s construction materials export industry is almost equal to one third of the whole export rate of Turkey. The construction material industry exports to over 100 countries across the world. While the import rate exceeded 8 billion dollars in 2018, it was approximately 6 billion dollars in 2019.
Continuing the production thanks to the measures taken in these challenging times, Turkish construction material industry has proven again to be a reliably business partner in the global market.
We can see that the companies diversifying their sales channels in the construction materials industry in particular effectively and swiftly manage the shut-down and new markets. The most significant challenges while supplying the products were experienced at the ports, borders and the warehouses in the logistics section.
These problems were solved swiftly in the European market. Apart from this, the continuity of raw material supply has also become an area that needs to be managed sensitively. We can say that financial processes are managed with more precision than ever before. The supports provided by the state and financial institutions were utilized in the most efficient manner possible.
Construction material industrial production displayed a growth by 8.1 percent in the first quarter of 2020. Due to the conditions that occurred with the Covid-19 pandemic outbreak, the industrial production of construction materials fell by 24.1 percent in April and by 26.8 percent in May compared to the previous year. In June, the construction material industrial production rate increased by 27 percent compared to June last year. Entering into the foreign markets with the resumption of interrupted works in the production increase in June was quite effective.
Turkey is one of the world's largest 5 countries in the production of construction materials. Maintaining competitiveness and employment capacity of our construction material industry, which exported 50 million tons of construction materials worth 21.5 billion dollars in 2019, is also of crucial importance for our country's economy.
The industry, bearing strategic importance for Turkey, is among those that can bear the ability across the world and ranks in the top 10 in the world export rankings.
The construction material industry, of which export rate reached 21.5 billion dollars in 2019, is now the third highest export sector after automotive, textile and ready-made clothing. Almost one-third of Turkey's total exports in quantity, is fulfilled by construction materials industry.
The construction material industry still exports to over 100 countries across the world. While increasing the variety of countries and regions on the one hand, it is necessary to increase product variety by following global trends and prioritize the production of value added products on the other hand. This is the only way to stay advantageous over the competitors. Otherwise, even if the export increases in quantity, it will gradually decrease in unit value.
Undoubtedly, the construction industry and construction materials industry will turn to new areas for healthy living conditions in the upcoming period. Interest in sustainable, environmentally friendly and energy efficient products will increase even more, particularly in developed countries.
Managing the pandemic period with high success rate in terms of productivity and struggle, the industry is in the process of focusing on the future.
Turkey’s construction material industry is in a substantial development, with the developing, changing and raising of expectations. It possesses satisfactory production power not only for itself but also for the region it is in. Therefore, Turkey’s construction materials industry provides benefits to the economy by making exports three times than the import today. The goal of the industry is to reach an export level of 4 times than of imports in the 5 years after Covid-19 and to increase the current surplus we provide to our country. Because it has the potential in terms of technical, technological features, infrastructure and human resources.
As for the elevator industry, it has a slightly different structure than other construction material sub-sectors. The elevator industry offers one of the few products that are assembled on site. The mode of production also differs from the other sectors. Assembly works and manufacturing of a wide variety of components are performed by various companies. There are large assembly companies and small component manufacturers in the elevator industry across the world. In Turkey, on the contrary, mostly there are small assembly firms, and large-scale spare parts manufacturers. Therefore, the first thing that needs to be dealt is that assembly companies become stronger and branded, thus showing the customers that they become more sustainable by means of becoming a reputed enterprise. As a result, the customer would not wish to guess whether the company from which the product such as an elevator is bought will still be active in 3-5 years. We consider that there should be a brand in the elevator and escalator sector as in other sectors. The scale economy must be achieved for the development of the industry.
In many projects, both domestic and abroad, the Turkish construction industry is undersigning important projects. There are quite important elevator manufacturers in Turkey and they export their products all over the world for millions of dollars each year. Turkish brands are fulfilling very important things in capital cities of Europe.
While the domestic elevator industry export rate is equal to 146.453.524 Billion Dollars in the first eight months of 2019, it has gained an important momentum in foreign trade by realizing imports of 67.292.041 Billion Dollars.
According to Turkey’s ASFED's Elevator Sector Report, the average profitability rate of the elevator and escalator industry is 2 to 3 times above the world average. What is rather striking is that the average profitability rate of the elevator and escalator sector is either close or equal to the rate of very profitable sectors such as internet software, semiconductor equipment, recreation software, system and application software, computers and computer parts. In the elevator and escalator market, having a quite large share across the world, the biggest share with 70% is the world's giant 5 large-scale global brands.
Elevator Industry Data
According to the latest report published by the Ministry of Industry and Technology, the elevator industry export rate is equal to 165 million 619 thousand 906 dollars, while the total import value of the industry is equal to 146 million 754 thousand 384 dollars. The Turkish elevator sector with a foreign trade rate of 312 million 374 thousand 290 dollars in total, had a foreign trade surplus of 18 million 865 thousand 522 dollars.
Number of workplaces and Employment
The number of elevator assembly and elevator spare parts manufacturing companies, registered in Turkey, is 2 thousand 778. Additionally, the number of elevator assembly and elevator parts manufacturing companies that present an up-to-date annual operating schedule is 1967.
The number of people employed by the industry is 31975.
The number of companies that have been awarded a service qualification certificate (HYB) by the Turkish Standards Institute for maintenance and service in elevators is 2442.
Considering the field of activity of the Turkish elevator industry, it is thought that the industry has a turnover of approximately 1-1.5 billion dollars in terms of the number of assembly works completed on an annual basis, certification services, periodic control services, component production, maintenance and other related services.
Industry’s capacity utilization rate
Based on the 1967 elevator assembly companies (including elevator parts manufacturing companies), which are included in the industrial registry records of the Ministry of Industry and Technology within the scope of the Registry Law and which submitted an annual operating Schedule as deemed required, it has been observed that the capacity utilization rate (CUR) for the industry is 60% on average.
- Number of elevators established
In Turkey, approximately six hundred thousand units of elevator have been established and put into service. As of today, most of these elevators, which can be defined as both old and new, are still in use.
Strengths of Turkish Elevator Industry
- World class experience in all phases of spare parts and equipment production, installation and assembly, maintenance and repair services for new elevators in the industry of elevators and escalators
- Qualified personnel trained in the areas of production, assembly an maintenance
- Experience in export. Exporting the manufactured parts and equipment to approximately 100 countries
- Having a location close to Europe, Middle East, Africa and Russia markets
- Dynamism as borught in by many companies.
- Getting a share of the world market (the market value is equal to 60 billion dollars)
- Operating with high profitability rates
- Establishing a scale economy with large-scale companies – cost advantages
- Employment potential for high, medium and low qualified work force
- R&D potential
- Not being affected from the national economic fluctations by means of getting into the world market