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EXECUTIVE SUMMARY


Manufacturing Industry of Paper and Paper Products
DEFINITION AND SCOPE
The manufacturing industry of paper and paper products is an industrial branch covering the stages from production of cellulose and wood pulp using various types of trees as well as small amounts of plants like jute, cannabis, and reed to transformation into paper of such intermediate products and waste paper which is another key raw materials made of recycled waste paper (also defined as scrap or old paper) through a range of mechanical and chemical processes. Since the sector is capital-, technology, and energy-oriented, it is included in the medium-heavy industrial branch category or classified as medium-low technology extensive. 3 sub-sectors are identified within the process from processing the raw material used in paper manufacturing to obtaining the end product. These are: Cellulose and Pulp called the primary fiber; Waste Paper (Scrap or old paper) called the secondary fiber; and Paper-Cardboard. Paper-cardboard is classified within two basic groups, namely the cultural and industrial papers, in the international literature. Pulp and Paper Manufacturing Industry corresponds to group no. 17 within the NACE.2 sector classifications.

DEVELOPMENT AND BASIC INDICATORS OF THE SECTOR
As of 2012 the number of enterprises operating in the manufacturing industry of paper and paper products is 2,201, employing 49,581 people. The production value of the manufacturing industry of paper and paper products in 2012 was 15.4 billion TL. Value added in the paper industry was realized as 3 billion TL in 2012. The paper industry saw a limited decrease in the number of enterprises over the last 7 years with increased employment. The production and added value rates also improved in the industry.

The manufacturing industry of paper and paper products in composed of seven sub-sector groups. These 7 sub-groups are pulp, paper and cardboard, corrugated paper and cardboard and products, paper household goods-sanitary materials-toiletry, paper stationary, wallpapers and other products from paper and cardboard.

In the manufacturing industry of paper and paper products, the sub-sector with the highest enterprise share is the corrugated paper and cardboard and products with 52.3 percent, which also has the highest share in production value at 49.4 percent. It also delivers the highest added value in the paper industry with 51 percent. The paper household goods-sanitary materials-toiletry, paper stationary, wallpapers and other products from paper and cardboard are two other sub sectors with the highest share in terms of basic indicators.

The share of number of enterprises during the period 2006-2012 in the paper industry in the overall manufacturing industry decreased from 0.72 percent to 0.65 percent. It share in employment increased from 1.55 percent in 2006 to 1.59 percent in 2012. Its share in the production value is increasing progressively. The share in production value rose from 1.83 percent to 2.05 percent in 2013. The share in the added value dnelivered increased from 1.96 percent in 2006 to 2.29 percent in 2012. The paper industry has an increasing share in investments. Its share increased from 2.14 percent in 2006 to 2.65 percent in 2012.

The production in the manufacturing industry of paper and paper products increased by 45.9 percent between 2006 and 2013, resulting in an industrial production growth over the average manufacturing industry production growth which rose by 32.4 percent during the same period.

Exports of the manufacturing industry of paper and paper products increased from 625 million dollars in 2006 to approximately 2 billion dollars in 2013 as the share of paper industry exports in the overall exports of Turkey increased from 0.73 percent to 1.29 percent.

Imports of the manufacturing industry of paper and paper products rose from 2 billion dollars in 2006 to 3.2 billion dollars in 2013, while its share in overall imports dropped from 1.46 percent to 1.26 percent.

In the manufacturing industry of paper and paper products, three sub sectors or product groups deliver higher export rates. In 2013 the cleaning and toilet papers and diapers recorded imports worth 1.2 billion dollars. The second highest export volume was delivered by paper and cardboard packaging products group. The exports in this sub group was 355 million dollars in 2013. The paper and cardboard export was 304 million dollars in 2013.

The biggest slice from the paper industry imports is taken by paper and cardboard. Paper and cardboard import has increased over the years reaching near 2 billion dollars in 2013. Other paper and cardboard products are the second most imported product group with 915 million dollars in 2013.

The export markets in the Turkish manufacturing industry of paper and paper products are diversified. The key markets for the sector include adjacent and neighboring countries, EU countries, Middle eastern and North and Central Asian countries.

The net foreign exchange earnings of the manufacturing industry of paper and paper products, measured by the difference between the export and import of end products, have been realizing deficit for years. Net foreign exchange deficit of the sector realized as $1.2bn in 2013. Manufacturing industry of paper and paper products has a growth structure replacing mainly the paper import. The reason behind the low export rates compared to the existing potential and capacity is the demand growth driven by the fast-growing domestic market. Production and sales to fulfill domestic demand limit exports but import is prevented which contributes to net foreign exchange earnings.

Number of people employed as part of R&D activities in the paper industry is 57 as of 2013. R&D employment in the paper industry is limited despite increasing after 2007 and has been falling since 2011. Cost of R&D activities has increased over the years, measuring at 5.1 million TL in 2013.

The number of patents granted in the paper industry increased from 2 in 2000 to 15 in 2012. Branding in the pulp and paper industry advances faster. The number of brand registrations increased from 299 in 2000 to 3,616 in 2013. Similarly, the number of industrial design registrations in the furniture industry increased from 28 in 2000 to 120 in 2013.

Paper manufacturing initiatives were taken before the Turkish Republican period but production facilities established in Izmir and Beykoz were shut down due to foreign production and trade competition. The first paper production started by SEKA, a public venture, in 1936 during the Republican period. After a long time of public monopoly in the paper sector, SEKA in was privatized in 2000 and exit the industry completely in 2006.

Turkish paper industry has today become a key and competitive sector especially for household and cleaning papers, paper-cardboard packaging products and corrugated cardboard production as well as printing and writing paper.

Per capita paper production is both a development indicator for the country and a growth potential indicator for the sector. The paper consumption per capita in Turkey was 73.8 kg in 2013 with significant potential for growth.

The paper production capacity in Turkey reached 3,817,500 tons in 2013. Corrugated cardboard held 48.3 percent (1,843,000 tons) of paper-cardboard production capacity in Turkey as of 2013 yearend. The second largest capacity is held by cardboard products with a share of 18.3 percent, followed by cleaning papers group with 16.6 percent in the third place.
Paper production in Turkey was 2,184,217 tons in 2007 which continued to increase over the subsequent years reaching 3,092,400 in 2013.
Paper consumption in Turkey expanded after 2002 reaching 5.66 million tons in 2013. In 2013 the largest consumption was seen in the corrugated cardboard group. The share of corrugated cardboard in total consumption was 40 percent with a volume of 2,261,136 tons, followed by writing paper with 1,204,143 tons.
Paper import has developed in parallel to the fast-growing paper consumption after 2002 in Turkey. 53.9 percent of the expanded domestic consumption is met by imports. Quantity-based import reached 3,051,653 tons in 2013. 963,711 tons of writing paper, 701,406 tons of corrugated cardboard, 488,175 tons of cardboard and 435,428 tons of newspaper and were imported in 2013.
Quantity-based export increased from 555,935 tons in 2009 to 941,087 tons in 2013. In 2013 cleaning paper export volume was 174,353 tons.
Turkey meets the pulp and scrap paper inputs used in paper production mainly with imports. In 2013 pulp and scrap paper import value rose to 645.1 million dollars.
The biggest production capacity and production was delivered in the corrugated cardboard in the Turkish paper industry. Majority of corrugated cardboard production is clustered and concentrated in the Marmara and Aegean regions. At the same time, small-medium scale manufacturing companies become widespread in almost every city. Besides new local players added to the sector, existing companies increase their production capacity and renew their production technologies on a continuous basis. Corrugated cardboard industry also attracts foreign international large manufacturers which enter the sector by acquiring Turkish firms or through partnerships. The sector experiences a tough competitiveness. Turkish corrugated cardboard industry has competitive power with their advanced production technology and product quality. It has the 6th largest capacity in Europe following Germany, Italy, France, the UK and Spain.

The second of three key production and export fields in the Turkish paper industry is cleaning paper industry. The Turkish cleaning paper industry has developed fast over the recent years. The production capacity increased significantly with the new investments by local and foreign companies in the sector. The 5th largest production capacity of Europe was achieved. Nevertheless, the rate of market potential realization remains below expectations. Demand for toilet paper is still under the potential. Therefore, a supply and capacity surplus is foreseen to be delivered with the conditions and newly-structured potential. The industry has become a key exporter with brands across adjacent and neighboring markets.

Another key sector among three key fields in the Turkish paper industry is the paper and cardboard packaging industry which has grown significantly over the recent years. The cardboard packaging product manufacturing volume increased from 362,000 tons in 2006 to 568,000 tons in 2013. Cardboard and paper and packaging production is concentrated mainly in the Marmara and Aegean region. The production capacity continues to increase with the new investments in the sector. The paper and cardboard packaging product demand increases as particularly the modern retail sector has expanded in the domestic market with improved number and sales of local and foreign durable and half-durable brands.

The Manufacturing Industry of Paper and Paper Products and the Position of Turkey
The global paper production capacity increased to 152.8 million tons for pulp and to 274 million tons as of 2013. Packaging and labeling papers among the capacity of paper and its products is the sub sector with the highest production capacity at 138.6 million tons followed by writing and printing papers in the second place with a production capacity of 76.9 million tons. Newspaper production capacity is 24.9 million tons with household and cleaning paper production capacity at 22.1 million tons.

The global paper production shows limited growth with 153.9 million tons of pulp and 265.2 million tons of paper and paper products produced in 2013. Pulp production increased from 151.4 million tons in 2008 to 153.9 million tons in 2013 while paper and paper products production rose from 262.14 million tons in 2008 to 265.2 in 2013.

The highest production rate among paper and paper products is held by packaging and labeling papers. 119.1 million tons of packaging and labeling papers were produced in 2013 followed by writing and printing papers in the second place with a production volume of 91.3 million tons.

In the manufacturing industry of paper and paper products, the production of newspaper, writing and printing papers, household and cleaning papers as well as other paper and cardboard products reduced during the period between 2008 and 2013. The only sub sector with production growth was packaging and labeling papers.

As of 2013 the US ranks first in the world in pulp production with a production capacity of 55 million tons and a production of 49.4 million tons. Brazil and Japan rank second and third after the US with pulp production capacity and realization.

Sweden, Finland, Russia and Chile are important manufacturers with their trees and forest assets. Portugal, Germany, France and Spain are other key manufacturers in the EU.

As of 2013 China ranks first in pulp and paper products with a production capacity of 104 million tons and a production volume of 101 million tons, followed by the US with a production capacity of 80.2 million tons and a production volume of 73.7 million tons.

Japan and Germany follows China and the US with their production capacity and volume. Brazil, Finland, Canada, Sweden and Russia are among key manufacturers in the global paper industry with their rich tree and forest assets. Korea is also an important manufacturer despite limited resources.

According to forecasts about the production capacities in the global paper industry, it is estimated that the pulp production capacity of 152.8 million tons in 2013 will increase to 160.4 million tons in 2018 and that the paper and paper products manufacturing capacity of 274 million tons in 2013 will rose to 279.1 million tons in 2018.

The majority of the growth in the production capacity of paper and paper products will be caused by the production capacity growth for packaging and labeling papers. It is expected that production capacity will decrease for writing and printing papers, newspapers and other paper and cardboard products. The production capacity for household and cleaning papers will increase.

A 5.2 million ton increase is estimated in the global paper and paper products production capacity by 2018. No change will be experienced in the 15 countries with the largest scale in the production capacity over the next 5 years. Within this period a 1.2 million tons of shrinkage is expected in the production capacity of the UD with growth in the production capacity of China, Germany, Brazil, Russia, Mexico and France.

China is the biggest market in the global paper and paper products consumption. However, data for China is temporary. China is assumed to have consumed 91 million tons of paper in 2013, The US is the second largest market realizing a consumption volume of 68.8 million ton in 2013 with the consumption rate decreasing year by year. China and the US are followed by other large market including Germany, Italy, the UK, France. Russia became the 7th largest and Spain became the 8th largest in 2013. Turkey was the 9th largest consumption market with a consumption of 5.7 million ton in 2013.

The global paper industry export increased from 137.2 billion dollars in 2005 to 178.2 billion dollars in 2008. However, the sector export was negatively affected by the global crisis and it dropped to 153.3 billion dollars in 2009. Exports increased again over the next two years, reaching 189.8 billion dollars in 2011. In 2012 it reduced again to 180.8 billion dollars, which rose to 185.2 billion dollars again in 2013.

Accordingly, the share of paper industry export in the global goods export was 1.31 percent in 2005 and 1.24 percent in 2009 which dropped and was realized as 1.01 percent in 2013.

As of 2013 the highest export was delivered in the paper and cardboard group with 90.7 billion dollars, followed by other papers and cardboard products in the second place with 29.5 billion dollars . Cleaning and toilet papers and diapers recorded an export worth of 29.2 billion dollars, and paper and cardboard packaging products export was 21.7 billion dollars. Finally, paper stationary product export was realized as 10.4 billion dollars.
Germany was the country with the highest export rate with $24.19bn in 2013. The US ranks second with 17.22 billion dollars, followed by China (17.8 billion dollars), Sweden (11.17 billion dollars) and Finland (9.9 billion dollars). These first five countries are followed by Canada and Italy. Seven EU countries among the subsequent eight countries are also important exporters.

The US ranks first in the global paper industry import with 17.3 billion dollars. Germany is the second largest exporter which is followed by France and the UK before Italy, Canada, Belgium and the Netherlands. Developing countries Mexico, China, Russia and Poland have started to included in the largest import markets in the global paper industry. Turkey, following Spain and Japan, became the 15th largest importer with import worth of 3.17 billion dollars in 2013.

Turkish paper and cardboard industry holds 1.37 percent of the global paper production capacity with a production capacity of 3.82 million tons in 2013. Turkish paper and cardboard industry delivered 1.17 percent of the global paper production with a production volume of 3.09 million tons in 2013. Turkey became the 9th biggest country in global paper and cardboard consumption with a paper and cardboard consumption of 5.66 million tons in 2013. Turkey's share in the global paper industry exports is 1.06 percent with export worth of $1.96bn in 2013. Turkish paper industry export has been able to increase its share in the global paper industry export progressively. It has increased its share in the global exports by 0.57 points.
Main Competitive Factors and Developments
The main competitive factors of paper industry are evaluated based on the classification of seven rings composing the value chain.
Turkish paper industry has limited facilities with respect to raw material and input supply compared to its competitors and is greatly foreign-dependent. Turkey lacks sufficient forest assets and the existing forest assets are not sufficient to supply the necessary amount of cellulose wood. Woods supplied are highly expensive. Encased wood import is forbidden for paper production. The use rate of waste paper as the main material for cardboard, paperboard and corrugated cardboard production and side material for paper production is around 45 percent in Turkey. On the other hand. average waste paper use rate reached 71.7 percent in 2013 in the EU countries.

Among overall production costs in the paper industry the share of energy costs is between 20-25 percent. When Turkey is compared with competitor countries, energy costs are very high in Turkey which negatively affects the competitive power of paper industry.

Scales have two main trends in the Turkish paper industry. There are many small scale firms in the sector. The share of companies with up to 99 employees in the number of enterprises is 95.9 percent with a 32.9 percent share in turnovers. A total of 102 companies employing 100 people or more in the sector have 67.1 percent of the sector turnover. The sector is clustered on a global level with scales growing continuously for competition. In Turkey, however, there are a few companies with scale economy.

The US, Italy, Germany, Japan and South Korea are countries guiding production technology in the paper industry and ensuring development in paper machines. Turkey depends on foreign resources in the production technology in paper industry.

There are many factors imposing additional pressure on production costs and affecting competitive power negatively in the Turkish paper industry. The price for wood eligible for paper production varies between 70-80 USD/ton while such price changes between 20-30 USD/ton in the world. Foreign-dependency for cellulose and chemicals increases costs besides increased foreign exchange rates. The 6 percent RUSF imposed on forward import of cellulose and other side materials increases costs.

Turkish paper industry is foreign-dependent in production technology resulting in limited R&D activities for production technologies. Similarly, research infrastructure, research engineers and university-industry collaboration are also limited. The sector conducts mainly activities for product development purposes.

Turkey has a significant advantage in terms of its domestic market size and the current level of paper consumption. However, the domestic market potentials of competitor countries like China, India, Russia, Brazil, Ukraine and Poland are also strong. The geographic position of Turkey near new and emerging markets brings a key competitive advantage. The advantage of its geographic position combined with the domestic market attracts foreign manufacturers to Turkey.

Investment loans, credit guarantees, purchaser loans, export insurances and similar transactions are limited and more costly compared to competitors.



Paper Industry Swot Analysis and Considerations
Strengths of the Sector
Waste paper recycling capacity becoming more widespread in raw material and input supply as well as increased knowledge with technology used in this field. Production capacity and high production technology applied in the production of paper-cardboard packaging products, corrugated cardboard products and cleaning paper. High product quality especially in cardboard, corrugated cardboard and cleaning papers thanks to technology activities, product development and quality with innovative and eco-friendly production. Emerging domestic market thanks to strong image and high penetration with the Turkish paper industry products in marketing and sales in adjacent and neighboring countries.
Weaknesses of the Sector
Foreign-dependency in cellulose which is the main raw material in the supply of raw material and input, failure to use forest assets properly ad lack of industrial forestry. Foreign-dependency in production technologies, high cellulose and waste paper costs, high energy costs and intensity of small scale production capacity. Limited R&D activities due to foreign-dependency in technological activities, product development and quality, and production technology. Emerging investment and financing needs due to high investment costs, fast technological developments in news investments within financial indicators. Problems encountered by SMEs in accessing financing. Qualified workforce gap in human resources. Unfair competition led by cheap and low quality imported products and unregistered products due to insufficient auditing in imports and domestic market under market and sector conditions. Lack of investment incentives required to encourage new investments.

Opportunities in the Sector

Production shift in Europe to new countries outside the Union and Turkey stepping up as a key production location. Contribution of compliance with the U in technological activities and waste paper and packaging. Ongoing low consumption per capita in marketing and sales; increased export using paper packaging, improved Turkish goods image in adjacent and neighboring countries, young population of Turkey and ability of Turkish entrepreneurs to act in a flexible and fast way.

Threats to the Sector

Raw materials from trees and forest that remain to be used on a limited basis due to current forest regulations regarding raw material and input supply with high costs for resources available, exported waste paper and price fluctuations in raw materials (caused b fluctuations in foreign exchange rates due to foreign-dependency). Lack of investment for cellulose production which is the key input in production with 100 percent foreign-dependency. Continued high energy prices caused by foreign-dependency in energy. Consistently limited R&D activities in technology-related operations. Digitalization and reduced paper consumption in marketing and sales release industry. High competitive power created by the Northern Europe countries and Russia with high production capacity-low raw materials and energy prices. Continued low profitability in financial indicator (applicable across the industry). Unmet need of qualified workforce within human resources or lack of sufficient planning. Failure to prevent low quality imports from Far East countries under market and sector conditions, failure to use proper quality standard in the domestic market resulting limited amount of waste and recycled paper.



SECTOR STRATEGIES AND POLICIES
13 strategic targets were set for the paper industry mainly based on the value chain of the sector under the topic of strategies and policies. There are 3 strategic targets for raw material and inputs; 3 for production; 1 for technological activities; 2 for marketing & sales; 1 for financing and financial structure; 1 for human resources; and 2 for market and sector conditions.


  1. Establish and operate industrial forests,

  2. Include cellulose production in the scope of strategic products,

  3. Improve waste paper collection and recycling,

  4. Reduce costs for paper raw materials supplied locally,

  5. Cancel, or reduce the rate of, RUSF imposed on forward raw materials or intermediate input imports,

  6. Reduce energy costs,

  7. Enhance technological activities,

  8. Diversify markets and products to increase exports,

  9. Reinforce health- and eco-friendly product concept to increase local consumption,

  10. Improve investment incentives and provide financing opportunities,

  11. Raise qualified human resources and workforce,

  12. Implement standards to increase the use and quality of paper products,

  13. Ensure active import and domestic market monitoring.

Printing Industry
Printing industry is an important and old industrial sector originated from traditional printing activities. The industrial revolution took place after significant developments in the printing history transformed the sector from a business of small scale printing businesses to a printing industry where large scale companies operate. Printing industry today supports globalization by accelerating information circulation and increases convergence between countries and societies. The printing industry renews itself and adapt to change on a continuous basis under new conditions created by the information society and technology and especially based on its digital trends. As an industrial branch the printing industry involves in economic activities and makes social contributions. The printing industry constitutes the group no.18 within NACE.2 sector classification in the printing industry, defined under "Printing and Reproduction of Recorded Media”).
SECTOR DEVELOPMENT AND BASIC ECONOMIC INDICATORS
The number of companies operating in the printing industry increased to 12,927 in 2012 from 12,187 in 2006, as the number of active companies increased. The number of paid employees, indicator of employment, reached 53,217 in 2012 from 39.899 in 2006. The production value and added value has also been growing nominally. The investments trend continues in the printing sector.

The sub group of other printing activities has the highest share at 87.9% in the printing industry in terms of the number of enterprises as well as the highest share in terms of production value at 85.0%. The sub group of other printing activities has also the highest added value of 82.9% in the printing industry with the highest investment share at 91.6%.

The share of enterprise number in the overall manufacturing industry remained the same during the period 2006-2012. Its share in employment, however, increased to 1.70% in 2012 from 1.68% in 2006, and its share in production dropped from 1.09% in 2006 to 0.93% in 2012. Its share in the added value decreased from 1.23% in 2006 to 1.18% in 2012. The printing industry realized 1.08% of investments in the overall manufacturing industry and realized 0.94% of the investments in 2012.

Production in printing industry increased by 58.4% between 2005 and 2013, achieving growth above the average manufacturing industry production growth which increased by 32.4% during the same period. During the period 2005-2013 other printing activities and service before printing and publishing achieved significant production growth. While production growth was limited in newspaper printing activities, the production dropped in bookbinding and reproduction of recorded media.

Productivity in printing industry measured per capita production increased by 42.6 percent during the period 2005-2013. During the period 2005-2013, except for the newspaper printing business sub sector, all other four sub sector delivered increased productivity with the highest increase achieved by the sub sector services before printing and publishing and other printing businesses.

Exports in the printing industry increased from 49.5 million dollars in 2005 to 94.7 million dollars in 2013 with the share of printing industry in Turkey's overall exports remaining almost the same at 0.06%. Printing industry import worth of 138 million dollars in 2005 rose to 176.8 million dollars in 2013 with its share in the overall imports decreasing from 0.12% to 0.07%. The highest export in the printing industry was delivered by the sub sector groups of Books, Brochures, Booklets and Similar Press products which also has the highest share in the printing industry imports.

Despite limited exports, the export markets of Turkish printing industry are diversified. The key markets for the sector include adjacent and neighboring countries as well as the EU countries.

Emergence of Turkish printing sector as an industry started in 1950s using the typo technology of that time. The second stage in the development of Turkish printing industry began during mid-1960s with the introduction of offset technology. Between 1970 and 1985, two main trends were determinant in the Turkish printing industry. One of them was the widespread use of offset technology and the second trend was the transfer of high-capacity old (typo technology) machines to developing countries from developed countries where offset technology started to e used as a result of the accelerated technological change. Starting from 1985 the Turkish printing & publishing industry entered the third important and new development phase. Transition to this new development stage also started based on the technology. An extensive transition period began from typo to offset technology. During 2000s technological progress and innovations once again stepped in to determine the development in the Turkish printing industry. The traditional printing businesses has been swiftly replaced by computer-aided, digital printing businesses with the technological progress taking place in the areas of IT as well as electronic and digital printing. Accordingly, companies in the printing industry also experience a remarkable transformation.


The turnover volume of printing industry was calculated 6.7 billion TL in 2013. Other printing activities constitutes the most important sub market in the printing industry with its turnover volume, followed by newspaper printing activities. The printing industry has three key sub markets: newspaper, magazine and book printing, packaging prints and other printed products.
In 2013 the number newspapers and magazines published on a national, regional and local basis was 3,100 and 4,058, respectively. The circulation of newspapers and magazines in 2013 was 2.29 billion and 165.4 million, respectively.
The number of books in 2013 was 42,655 with number of editions at 330 million. The book market covers not only books printed and published by taking an ISBN number but also the schoolbooks printed, or have printed, and distributed by the National Education Ministry for free. 206 million schoolbooks were distributed in the education period of 2013-2014.
The size of book market in Turkey reached 2.3 billion dollars in 2013. According to data from Turkish Book Market Report by Turkish Union of Publishers, schoolbooks constitute the biggest sub market with 1.2 billion dollars. Cultural publishing has reached a volume of 900 million dollars. Academic books and imported books have a market volume of 85 million dollars and 150 million dollars, respectively.
One of the biggest sub markets in the printing industry is the packaging printing market. The printing industry has really close relations with the packaging industry. Paper-cardboard and corrugated cardboard packaging products, a key product group for printing activities, recorded 2.4 million tons of production in 2013. The production in the plastic packaging products with an export-oriented growth achieved a volume of 2.5 million tons in 2013.
The total import of printing and bookbinding machinery and parts in the printing industry was realized as 277.1 million dollars in 2013. The most imported two items were offset machines and other machines and auxiliary machined including digital equipment.
The volume of ink used in the printing industry is a key indicator for the sectoral development trend. In 2013 ink import increased to 14,548 tons with 152.4 million dollars. Color ink import in 2013 was realized as 10,953 tons with 106.2 million dollars.
Foreign-dependency continues with respect to paper and ink, the two important raw materials used for production in the industry. Newspaper production, a key business for the sector, dropped to very low levels with increase in the production of pulp and coated paper. However, it is still not possible to fulfill the entire usage demand in the sector. Ink import growth in the sector has accelerated over the last 5 years. Especially, the increase in color ink other than the black one is striking.

Printing Industry in the World and the Position of Turkey
Printing industry businesses are subject to important developments and changes especially depending on the technological developments on a global scale. The business volume of the global printing industry is expected to reach 880.9 billion dollars in 2014.

The business volume in the global printing industry is estimated to grow fast with the contribution of improved global economy following 2014. In parallel to this estimated growth, the business volume of the global printing industry is foreseen to reach 980 billion dollars by 2018.

Significant developments take place also among the printing businesses constituting the business volume of global printing industry. Commercial printing business include printing of products e.g. books and magazines, guides and handbooks, catalogues, advertising prints, brochures, technical documents, printed educational materials, cards, business cards as well as commercial and valuable papers, which has the largest share in the global printing industry with a decreasing share in the overall business volume. Newspaper printing as the traditional printing business sustains its volume after a drop following 2008 with its share decreasing in the overall business volume of the global printing industry.

Packaging and label prints are the fastest-growing and fast-moving printing business with increased share among the global printing industry businesses. The share of prints at workplaces or for workplaces as well as other prints drops on a limited and progressive basis in the global printing industry business volume. Prints at or for workplaces include reproduction prints, photocopy prints, jet prints, mail prints, in-house prints and other prints.


In the global printing market, while the business volume in developed countries remains steady, growth in the global business volume comes from developing countries. The North America region, covering mainly the US, and Canada and Mexico, and Western Europe experienced a serious shrinkage in the business volume after 2008. During period until 2018 limited growth is expected in the North America region with sustained shrinkage in Western Europe. An absolute growth is experienced in the printing industry business volume in Asia, South America and Eastern Europe region as well as part of the Middle East and Africa regions where developing countries are dominant, with increased share in the global printing industry business volume. Especially in Asia where China and India are located, a fast growth is experienced which is estimated to continue in the future. South America and Central and eastern Europe regions will also continue to grow.

The fast developments and progress in printing technologies in the global printing market lead to changes in print types. The share of offset prints in the overall print types decreases. The volume of gravure prints remains steady with decreasing share in overall. Inkjet, electrophotography and flexo prints among the print types show fast growth.

The digital revolution has a significant impact on the publishing sector. Publishers had to turn into multimedia companies as a result of the digital revolution. They now offers services to their customers not only through printed products but on digital and electronic platforms. Internet and smart phone application has become important channels and publishing firms has stated hybrid publishing combining digital and printed editions. Newspaper and magazines will not survive in printed forms in the future and will have to be positioned in electronic-digital channels e.g. web, tablets, smart phones, videos and web TV.

Among business in the global printing industry packaging and label prints is the only fast-growing sector which will globally guide the printing industry in the next period. This trend in the packaging and label prints makes the packaging and label printing business more global which increases competition in the growing area.

Exports of the global printing industry increased to 50.6 billion dollars in 2011 but dropped again in 2012 and 2013 and saw 43.7 billion dollars in 2013. The share of printing industry exports in the overall global exports dropped after 2005 and was 0.2% in 2013.

The US became the biggest exporter in 2013 with 5.6 billion dollars. Germany ranks second with 5.5 billion dollars. These two countries are followed by Singapore (4.53 billion dollars), the UK (4.2 billion dollars) and China (3.7 billion dollars). The leader of global printing industry imports is the US with 4.4 billion dollars. Canada ranks second with 3 billion dollars followed by the UK as the third largest importer with 2.6 billion dollars. These countries are followed by Germany and France. China has become the sixth largest importer in a short time. Kazakhstan and Russia are highlighted as two fast-growing markets.



Main Competitive Factors and Developments

The Turkish printing industry prefers quality products as intermediate inputs using quality intermediate inputs in the majority of the industry. Therefore the industry gains competitive power. However, all intermediate inputs are imported and foreign-dependent.

Turkish printing industry utilizes the most advanced technology in production with a modern machinery park, which provides competitive advantage. However, Turkey depends on foreign resources in production technology. While countries with production technology uses technological developments to create competitive advantage in terms of high added value, productivity, product diversity, and innovation, Turkey holes the role of a viewer and adapter in using technologies.

Turkey has an advantage compared to developed countries and a disadvantage compared to developing countries in terms of production costs. Turkey implements many regulations, indirect tax deductions, funds, etc. which impose additional costs in areas like energy, workforce, taxes, imports (RUSF), environment, and work life.

There are many small scale companies in the sector with clustering on a global sense and increasing scales for competition. In Turkey, however, there are a few companies with scale economy.

The printing quality in Turkey is improved and increased. An important competitive power is provided through printing quality. Nevertheless, increased printing quality depends on foreign developments due to foreign-dependency in terms of production technology, intermediate inputs and papers.

Innovation capacity is very important in the printing industry to follow fast-changing production processes and technology as well as evolving customer demands. Turkish printing industry is observed to produce mainly traditional, cost and price oriented products with a focus on cost-price competition rather than innovation.

The customer demand in the domestic market of the sector has not been director towards innovative and high value-added products, resulting in limited number of companies transitioning to this area. In competitive countries the capacity for high value-added products based on innovation in developed countries with production technology increased competitive power.

Turkish printing industry has an important advantage in terms of domestic market volume but competitive countries like China, India, Brazil, Mexico, Russia and Poland have also a strong domestic market potential. In terms of geographic position, the Turkish printing industry has another advantage as it is close to countries with potential for development, but this advantage must be leveraged more effectively like Poland and Czech Republic which use their proximity to Europe to achieve their target of being the production hub for the Union.

The existing qualified and experienced human resource and workforce in the Turkish printing industry provides an important competitive advantage. However, the need for qualified and mom-qualified workforce increases in the printing industry which has turned into a technology and information extensive, computer, web and digitally based structure.

Over the last decade the healthy operation of the market has been ruined due to uncontrolled free entries and careless/unplanned investments made in the printing industry, moving far away from a fair and ethical competitive environment.
Investments made in the industry without forecasting demand resulted in unproductive-excess capacity. Recent capacities are used for existing similar processes and work has started to be undertaken without considering the cost due to unproductive capacities which ruins the competitive environment in the sector with sharp price competition.
SWOT Analysis and Evaluations
Strengths of the Sector
Existence of a high technology machinery park in production and utilization of this machinery park in production. Long years of production knowledge and experience. Existence of modern production facilities. Capacity available for producing high quality products in technological activities. Turkish printing industry produced products with the same quality to its competitors. However this has to be encouraged across the sector. Adaptation to innovations and application capability are among the industrial strengths. Technological developments are closely monitored and innovations are applied in a short time with a dynamic structure. In this sense, the development is sustained. Another strength of the industry is the proximity to emerging domestic markets and markets with high development potential in marketing and sales.

Weaknesses of the Sector

Foreign-dependency for raw materials and inputs, ink, block, roll, and printing chemicals as well as in paper and cardboard products involved in printing processes. Foreign-dependency in production technology, unregistered production and small scale-based structure are among weaknesses. Failure to develop products with sufficient added value in technology activities. Foreign-dependency in production technology and cost-price oriented demand structure of domestic market limit development of value-added products. In marketing and sales, weaknesses are domestic market dominated by purchaser; cost-price oriented competition and unfair competition. An excessive price competition is experienced due to market dominated by purchasers. Therefore extensive price cuts are experienced as part of the cost-price competition. Unregistered production concentrated in some sub printing business results in a serious unfair competition. Low profitability in the competitive environment created by market condition in financing and financial structure. Low profitability due to price competition emerged in the market against increased costs resulting from high cost structure. Lack of sufficient investment incentives for the printing industry clustered in developed regions. Qualified and non-qualified workforce gap in human resources, lack of sufficient qualified workforce to be employed.


Opportunities in the Sector

Increased competitive power opportunities with fast technological developments in production and production shift to new countries in Europe. Turkish printing industry follows technological developments closely and tries to leverage the most of this opportunity by adapting and implementing. Printing industry with advanced technology and production capacity in Europe shifts production to countries with ideal investment and production conditions due to high costs. Turkish printing industry must be leveraged at maximum. Innovation opportunities in products, services and processes in technological activities as well as new employment opportunities created by shared printing/internet/social media applications. Export opportunities in marketing and sales as well as the potential in packaging/labeling prints with increased export in Turkey, young population and emerging domestic market. Exports has a fast development potential. Adjacent and neighboring markets has a serious expansion potential. There are opportunities in the long term targets of export and retail sectors as the fastest-growing business field as well as in the sub sector of packaging products with fast growth potential. As for human resources, emerging domestic market opportunities supported by young population and urbanization, increased individual income.



Threats to the Sector

Unfair competition and resulting damaged product image and risk for damage to consumer health due to use of poor quality and non-standard products as raw material and inputs as well as paper and intermediate inputs. Another threat is the foreign-dependency for inputs. Shrinkage in traditional printing businesses as a result of technological developments and digitalization in production. Excess capacity ,n printing industry. Disruptive impact of excess capacity on the market. Limited R&D infrastructure in technological activities, lack of sufficient eco-system, failure of market demand to drive R&D activities and resulting limited research and product development activities. reduced press and visual demand in the market within marketing and sales. Competitive pressure from China, Southern East Asia and Africa countries with reduced production costs and product prices. Shrunken market in commercial printing and publishing. Additional burdens increasing costs in financing and financial structure continues to pose a threat. High energy costs, burdens on workforce, deductions and taxes, RUSF practices, communication taxes, etc. Reduced demand for vocational high schools in human resources and vocational high school graduates without desire to work in the sector. The master-apprentice relationship formed in the past of the sector does not provide human resource anymore. Demand for high schools offering professional training is reduced. Those who took professional training do not want to work in the sector. As part of market and sector conditions; the industry included in dangerous professions regulation, the additional burdens created by the regulations introduced by the recent law on health and safety at work, and pirate publishing activities due to poor protection of intellectual property rights. Workforce and employment is deterred due to green card, unemployment insurance and social benefits in work life.



SECTOR STRATEGIES AND POLICIES
13 strategic targets were set for the printing industry mainly based on the value chain of the sector under the topic of strategies and policies. There are 2 strategic targets for raw material and inputs; 4 for production; 2 for technological activities; 1 for marketing & sales; 1 for human resources; and 2 for market and sector conditions.


  1. Increase local input facilities

  2. Increase effectiveness in foreign input supply

  3. Production capacity inventory and investment monitoring with new entries

  4. Develop collaborations and partnerships with European manufacturers in every Field

  5. Reduce energy costs

  6. Improve workforce regulations

  7. Produce high value-added products

  8. Establish test laboratory and certification

  9. Focus on, and increase, export

  10. Improve investment incentives

  11. Raise, and attract to the sector, qualified human resources and workforce

  12. Prevent unregistered activities

  13. Facilitate a healthy competitive environment


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