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Deceuninck expanding in Turkey

By: Richard Higgs
EUROPEAN PLASTICS NEWS

March 25, 2014

Deceuninck Group, the European vinyl profile extruder, plans to invest around 20 million euros ($27.6 million) to expand its manufacturing operations in Turkey over the next two years.

The group, which has seen steady sales growth in Turkey, despite national political crises there, will construct a new profiles plant with a capacity in the city of Izmir which will replace its existing Egepen Deceuninck plant in the city.

Deceuninck says it was prompted to invest in the new facility at this time because its current Izmir unit with a capacity of 50,000 metric tons per year has become too small for future expansion in the Turkish market. The new plant will be able to handle an additional 15,000 metric tons.

The company, based in Hooglede, Belgium, has made Turkey its export hub, feeding new emerging markets in Asia, Africa and Latin America. In 2012, it launched a warehouse in India and recently opened another in Santiago, Chile.   

Deceuninck expects to complete the move to the new plant in Menemen near Izmir by the end of next year. The vacated plant buildings will then be put up for sale, a spokesman told EPN.

Deceuninck estimates the warehouse and foiling manufacturing section of the new plant will be finished in 2014 with its extrusion and compounding sections to be completed in 2015.

The Belgian group operates a second smaller plant in Turkey at Kocaeli. It manufactures Deceuninck’s Winsa brand window system and opened in 2007.

In Turkey, Deceuninck states, it has made a good start to 2014 although it expects the weak Turkish lira to continue to weigh on its revenues and earnings in the region.

In 2013 Turkish sales represented 23 percent of the group’s world sales, with Western Europe representing 33 percent, Central and Eastern Europe 30 percent and North America 14 percent.   

Deceuninck reported it cut its debt and doubled its net profit in 2013 to 8.4 million euros ($11.5 million) “in spite of the challenging economic environment.” This resulted from stable volumes, strict working capital management and cost control, the group’s CEO Tom Debusschere said.

At the same time Deceuninck saw its overall sales dip 3.7 percent to 536.5 million euros ($740.2 million) with European construction markets depressed after a harsh winter. Even so, stable volumes resulted from growth in the U.S., Germany, Italy and England as well as Turkey and the emerging markets, said the group.