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Turkey

The contraction in demand initiated by February’s earthquake extended into the third quarter, mirroring the trend of the previous three months. Several paper mills heavily impacted by the earthquake have navigated their way through operational disruptions, including mills operated by Kipas and by KMK which resumed operations in, respectively, July and September.

Modern Karton is initiating a new PM6 machine at Zonguldak. Adding to its machines in Çorlu, the company is planning to reach 2 million tons of annual production capacity by the first half of 2024. In the Sungurlu trade zone, meanwhile, SUN-KA embarked on an investment programme in August and is targeting a capacity of 150,000 tons with its new greyboard paper machine. At the same time, key player in the Turkish market Mondi opted in August to discontinue its corrugated box factory operations in Izmir Kemalpaşa.

Lila Kagit, with a tissue mill in Tekirdağ Çorlu, is gearing up to establish a new factory in Erzurum, with ambitions to launch a paper production machine to increase its capacity from 270,000 tons to 340,000 tons by 2026. Eczacıbaşı Holding, a pioneer in the Turkish tissue sector, has started up its fifth paper machine in Manisa, thus boosting the company’s annual capacity to 250,000 tons. Simultaneously, Gürsa in Kütahya has announced a new investment focusing on fluting production while Barem Ambalaj AS has stated that efforts are under way to install a paper machine at Konya Ereğli.

These developments mark a period of substantial investments and strategic shifts within the industry.

In the third quarter, paper mills - and particularly those specializing in the production of brown paper - struggled with constrained operations, functioning at a mere 70% capacity. A further complication has been inflation in Turkey, which has also led to a surge in lira-based recovered paper prices. Imports of recovered paper have continued unabated, driven by the fact that volumes harvested domestically are insufficient to meet demand.

Market forecasts for the fourth quarter largely mirror the patterns observed in the previous two quarters, suggesting a continuation of the trends and challenges faced by the industry.