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Turkey

As previously reported, production levels decreased in the final quarter of 2022 owing to

low demand. As similar conditions prevaıled in the first quarter of the current year, production volumes declıned by a further 30%, resulting in a 30-40% fall in sales prices, while exports were on the verge of coming to a halt.

Apart from skyrocketing energy prices, escalating inflation resulted in an increase in all costs and made it a trying time for paper mills. Furthermore, the devastating earthquake that struck Turkey in February had a significant adverse impact on the economy and led to the closure of the Kahraman Maraş Paper Mill and Kipas Holding mills in the region owing to the damage incurred.

The steep drop in domestic recovered paper collection volumes also resulted in a decline in quality. As a result of the global decrease in recovered paper prices over this period, there has been a surge in imports.

In the first quarter, when production was low, worked stopped at Kartonsan’s duplex board facility owing to a strike; this continued until April when production was resumed. 

Companies which had earlier committed to paper and board investments have continued with them over this period. In addition, Barem Corrugated Box has initiated a fluting mill investment with an annual capacity of 300,000 tons at Eregli in the Turkish province of Konya.

Continuing its paper and board developments in the UK and Turkey, Eren Holding is rapidly proceeding with its PM6 investment at Zonguldak which will add 700,000 tons to the 1.3 million tons of production capacity at its existing factory in Çorlu. The aim of the investment is to increase company exports from around 15% to 40%. Start-up of operations is targeted for the second half of 2024.

Overall, expectatıons for the second quarter are no different than for the first three months of the year and so it will be a rough period for the Turkish paper sector.