Petrochemical World


The petrochemical industry uses petroleum and natural gas based feedstocks such as naphtha, LPG, gas oil to produce plastics, rubber and fiber raw materials and other intermediates which are consumed by several sectors such as packaging, electronics, automotive, construction, textile and agriculture.


The petrochemical industry has started to develop in the second half of the 20th century and has become one of the foundation stones of the modern economy in the last fifty years due to its extremely wide product range and application field. Thousand of petrochemical products utilized by consumers, became an indispensable part of human life and the developments in the petrochemical industry raised the living standard significantly.


The current market value of the petrochemical industry is about 500 billion dollars. This value equates to about 8% of world trade and about 30% of the total chemical market.


The petrochemical industry experiences cycles in prices and profitability parallel to the developments in the world economy and in conjunction with the movements in supply and demand. In these cycles, high profitable periods of 3-4 years followed by low profitable or unprofitable periods of 4-5 years.


In the world petrochemical sector, the low profitable period starting with the Asian crisis at the end of 1997 has been continuing. A new profitable period, which will start with a fundamental recovery in 2004 and will peak in 2005, is expected in the sector.


In recent years, structural changes are being carried out in the petrochemical industry. The companies try to increase their competitive positions and profit margins by means of narrowing, broadening or changing their fields of activities either individually or by merging with other companies.


Petrochemical industry is open to global competition and raw material, market and technological advantages play significant roles in this competition. For the new investments, certain regions having feedstock advantages and large/rapidly growing markets are being preferred by the petrochemical companies. In the next years, most of the new investments will be realized in the Middle East and Asia (particularly in China).


Olefins are the building blocks of many petrochemicals. The developments in the olefin markets reflect the general performance of the petrochemical industry.


Ethylene is the most important olefin and the largest produced basic petrochemical. High operating rates and profit margins are expected in the world ethylene market for the period 2004 - 2007.


The world ethylene demand is anticipated to reach from 98 million tons in 2003 to 116 million tons in 2010. Average annual growth rate of 4-4.5% is estimated for ethylene by 2010, and it is necessary to add over the period 4-5 million tons of new ethylene capacity per year just to keep up with growth.

The petrochemical industry that entered to Turkey in 1960?s has demonstrated a great development within a very short time. Petkim was established in 1965 to start and develop a petrochemical industry in the country.


The first petrochemical complex of Petkim was established at Yarımca and started up in 1970. Due to the rapidly growing domestic demand, Yarımca Complex had started to become insufficient to meet the increasing demand although the production capacities of most of the plants that exist in Yarımca Complex were expanded by 100 %. The second complex of Petkim was established at Aliağa by using optimum capacities and modern technologies of those days and started up in 1985.


Most of the plants in Yarımca Complex were closed in the period 1993-1995 because they had completed their economic lives and had lost their competitiveness. Petkim transferred Yarımca Complex with its 5 plants (SBR, CBR, CB, BDX, PS) in operating position to TÜPRAŞ Turkish Petroleum Refineries Corporation on November 1, 2001.


Petkim, as the sole producer of basic petrochemicals and the biggest producer of thermoplastics and intermediates, is the leader company of Turkish petrochemical industry. Apart from Petkim, the other petrochemical companies in Turkey are SASA (240 000 tons/year DMT),TÜPRAŞ (33 000 tons/year SBR, 20 000 tons/year CBR, 40 000 tons/year CB,33 000 tons/year BDX,27 000 tons/year PS) and Başer Petrokimya (40 000 tons/year PS).


The demand for petrochemical products in Turkey has been increasing faster than that of the developed countries and world average level. On the other hand, domestic supply does not increase at the same rate. In order to meet the rapidly growing demand, Petkim realizes expansion and modernization investments that increase its capacities significantly. However, these capacity increases are very insufficient to meet the rapidly growing domestic demand. The share of the domestic production in consumption has been decreasing rapidly, and the import of petrochemical products of Turkey has also been increasing rapidly. Petkim was able to meet only 30% of domestic petrochemicals demand in 2003. This situation negatively affects the competitive strength of Turkish petrochemical industry and causes the high added value of petrochemicals to remain abroad.


Turkish petrochemicals market is not saturated yet. While thermoplastics consumption in Turkey is around 29 kg per capita, this rate varies between 75-100 kg per capita in developed countries.


It is seen that Turkish petrochemical industry has a big potential for growth, having considered the factors such as the level of industrialization in Turkey, rapid population growth and developments in various industrial sectors.


The most significant advantage of Turkish petrochemical industry, despite the close proximity of feedstock rich countries with big petrochemical producers, is the level of domestic demand, which allows the establishment of production facilities in world scale capacities.


Because of these reasons, necessary investments for Turkish petrochemical industry should be realized immediately.