ORLANDO, FLA. — Turkey's injection molding machinery makers were unprepared for an onslaught of Asian imports 15 years ago, and found themselves nearly drowned by a wave of globalization.
But the companies that survived now see some opportunities, behind exports and strong domestic market growth — they say Turkey currently has Europe's second-largest plastics processing sector.
A contingent of 36 Turkish companies came to NPE 2015 in Orlando to make a push into the North and South American markets.
That's twice as many companies from Turkey than came to NPE 2012, said Tamer Güven, a board member of the Ankara-based Turkish Machinery Group and general manager of Istanbul-based auxiliary equipment maker Inan Plastik Makinalari San. Tic. Ltd. Sti.
Turkey's machinery sector has had major ups and down. It did well in the 1990s, but had a very tough time in the decade after 2000, as imports from Asia captured much of the local market, executives said.
“We were so busy selling in the domestic market [in the 1990s] and trying to catch up with production that we couldn't see the coming threat from Asia,” said Burc Agnan, vice president of injection press maker Hurmak Plastik Otomotiv Makina Imalat San. ve Tic. A.S. “We couldn't invest enough in quality control, we couldn't keep the quality up and we couldn't expand our export markets.
“So when the Asians seized the domestic market we had nothing left,” he said. “Injection molding machine makers were the worst affected by this and we had a very bad period in our industry. Almost everyone went bankrupt.”
Agnan and others at NPE were painting an optimistic picture, behind solid growth in Turkey's plastics processing industry.
“We have a very big potential to grow back up,” he said. “In our region, we are the alternative manufacturers. … We have a steady increasing demand from surrounding regions, from North Africa, from Central Europe, even Western Europe are demanding machinery.”
Today the country has only two domestic manufacturers of injection molding machines, compared with 75 in the 1990s.
Globally, Turkey's not a big exporter. Its companies exported $142 million in plastics machinery worldwide in 2014, while it imported $641 million worth of plastics equipment, according to TMG statistics.
To put that in perspective, the United States exported $1.7 billion worth of plastics machinery in 2014, and imported $2.8 billion, TMG said.
But Turkish industry officials argue their exports and imports could grow quickly.
A big factor in their favor, they say, is a large domestic plastics processing industry that is expanding 10 percent a year. Turkey has gone from the fifth or sixth largest in Europe six years ago to the second biggest today, trailing Germany, said Ahmet Meric, sales and marketing manager at screw and barrel maker Enformak Plastic Technologies Co. in Istanbul, and a board member of the Turkish Plastics Industry Federation, or PAGEV.
Figures from other sources support that: In 2013, Turkey became the second-largest market in Europe for injection molding machines, measured by number of machines sold annually, and is projected in 2020 to remain in the top three, according to Austria's Engel Holdings GmbH, the world's largest maker of molding presses.
Other countries with large plastics processing industries, like Germany, Italy and Taiwan, have large machinery sectors, but Turkey does not, Agnan said.
“Turkey is not known very much for machinery. It's a very big barrier in front of us,” Agnan said.
TMG argues that Turkey's economic growth — averaging 5 percent a year from 2002 to 2012 and pushing per capita GDP for the country of 75 million people from $3,500 in 2002 to $10,971 in 2014 — will lift its plastics industry.
As well, Güven said Turkey's government has been giving a lot of support to the local machine tool sector, since it's a “foundation industry” that can be used to build other sectors, including plastics equipment.
“Turkey has a strong machine tool sector, it is stronger than plastics machinery,” he said. “The plastics machinery sector is new in Turkey, so if we compare to other machinery sectors, we have potential.”
TMG, which focuses on all of Turkish machinery makers, not just plastics, had chosen NPE 2015 as its first plastics show in the United States.
$100 billion goal
The group formed in 2007 with the goal of helping Turkey's machinery makers increase exports from $15 billion last year to $100 billion by 2023, which will be the 100th anniversary of the founding of the Republic of Turkey.
TMG is funded by the Turkish machinery industry, Güven said.
He said the Turkish plastics machinery firms that survived the last 15 years are in good shape, and hope to find a niche providing quality closer to European levels but at a significant price break.
Germany is Turkey's largest machinery export destination, accounting for 17 percent of exports of all types of machinery, which Güven said is evidence that Turkish companies can make equipment good enough to sell in Western Europe.
“Now there are fewer companies in Turkey but they are all strong, with research and development,” he said. “Now these firms can compare their machines to European machinery.”