Turkey: Engineering Rönesans, Sonatrach to Invest 1.2 Billion Dollars for New Petrochemical Plant
Rönesans has collaborated with Sonatrach to construct a 450,000 tonnes polypropylene production plant in the Ceyhan Mega Petrochemistry Industry Zone. The project is considered to be the first investment in the region and aims at reducing the national deficit by 450 to 500 million dollars.
Turkey – The contract for the development of the ‘Polypropylene Production Facility’, a joint investment by Rönesans Holding and Algerian national energy company Sonatrach, was signed by Rönesans Holding President Dr. Erman Ilıcak and Sonatrach CEO Abdelmoumen Ould Kaddour on November 28 in a ceremony. The facility, which will have an annual production capacity of 450,000 tonnes, will be built in the Ceyhan Mega Petrochemistry Industry Zone with an estimated completion date in 2023.
Set to reduce national deficit by 450 to 500 million dollars
Speaking at the signing ceremony, Dr. Erman Ilıcak said: “Turkey currently imports polypropylene, a raw material used in the production of plastics. The country imports 2.2 million tonnes of polypropylene, 2.6 million tonnes of polyethylene and 1.5 million tonnes of PVC per year, which corresponds to 3 to 4 per cent of total global consumption, and 90 per cent of Turkey’s raw material need in this sector. Today, we have set on a new path to close this deficit. We are taking giant strides forward. This investment will reduce Turkey’s national deficit by 450 to 500 million dollars each year.”
A new hub of employment for the entire region
The reason for choosing Ceyhan, Adana as the location of the investment was its proximity to Gaziantep, which is among the world’s top consumers of polypropylene, explained Dr. Ilıcak. “We are carrying out this petrochemical investment, which was originally announced by the President in February during his visit to Algeria, in partnership with Sonatrach which is a close friend of Turkey in the region.
The facility we develop together will feature an annual production capacity of 450,000 tonnes. It will create 2,000 to 2,500 jobs during the construction phase, which will begin in 2019 and end in around 36 months. And we estimate that the investment amount will be 1,2 billion dollars. We will officially enter into operation in 2023, which is an important year for our country. Starting from that date, the polypropylene production plant will provide an employment opportunity to 500-600 people including the Adana region.”
Sonatrach CEO A. Ould Kaddour stated that the investment will create a synergy between the two countries and said, “Turkey and Algeria have very deep and historical bonds. We also have strong economic bonds. We launched several investments together. I believe that the polypropylene production plant which we will establish in partnership with Rönesans Holding will further contribute to these strong bonds and will create a synergy.”
30 per cent of the foreign trade deficit is related to petro chemical import
Polypropylene which will be produced at the plant is among the raw materials imported by Turkey. According to the information provided by the Industry and Trade Minister Mustafa Varank, Turkey spent 38 billion dollars for import in the chemical industry in 2017. Last year, the foreign trade deficit was solely due to the petrochemical industry and amounted to 13 billion dollars. This amount corresponds to 30 per cent of the foreign trade deficit in the manufacturing industry.
Turkey imported more than 2 million metric tonnes of polypropylene in 2017. With this investment, it plans to substitute 25 per cent of the polypropylene import of Turkey. In addition to this, it is estimated that the investment will provide an annual contribution of 450-500 million dollars in closing the deficit. As a critical substance in the plastic industry, polypropylene is used in almost every area from agriculture to the defense industry, automotive to construction, and consumer products to the pharmaceuticals and health sector.