Buoyant coating market seen to bring 10 pct growth for Dow

Growing demand fueled by an ever-evolving customer consciousness has enticed some of the world’s largest firms to part with their capital for specific investments in Turkey, setting the stage for a unique economic bounce in the past decade.
US Dow Coating Materials is one of these businesses taking the opportunity to get a stronger foothold in Turkey’s buoyant coating markets. Currently the fourth largest in Europe, the Turkish coating market is also one of the biggest manufacturers, boasting around 1 million tons of annual production. There are 20 large size and 400 small and medium size (SME) producers in the Turkish coating market. Dow is partnered with one of these large Turkish-owned firms, Polisan, and it had also acquired the Turkey part of American Rohm and Haas in 2009, increasing the number of its manufacturing facilities to four.
As he underlines an increasing demand for high quality, sustainable end-products across the country, Dow Coating Materials Global Vice President Guillermo Novo tells Sunday’s Zaman that the company expects between 5 to 10 percent growth in Turkey this year over 2011. The company has set its top priority to grow their business in Turkish markets where Novo says, “Competition is hot and a fast market adaptation to the latest developments propels firms to step in with state-of-the art technology.” A dynamic, young population replaces products relatively faster, leaving providers the only option to adapt with diversified, innovative products to survive in this market. Dow puts Turkey in its Eastern Europe and Middle East market section. “What we bring in Turkey is not old technology -- it is state of the art technology,” he says, adding the company develops products and adopts them to local needs.
As he underlines that Turkey is one of the few coating markets to stand out with strong, sustainable growth, he says the company is committed to seeing an even better performance in the country in the years to follow. “Ongoing fluctuations and uncertainties in global markets have adversely impacted our business in different parts of the world, but Turkey is one of the few examples where we have the least concerns for future growth.”
Focus on R&D but minor action
Novo says they encourage partners to improve their research and development capacity, but the firm has not yet decided to establish an R&D center in the country. He notes there is remarkable growth potential for innovation in Turkish markets and that Dow enjoys the partners’ commitment to this end. Establishment of new R&D facilities is critical for sustainable improvement in most industries in Turkey, while the country has made modest progress to encourage foreign investors to install R&D facilities. “There is space for innovation growth in Turkey for our business. … We need to centralize in the market a little more with some extra infrastructure investment.” Noting that the company has labs in the US and China, Novo says partners in Turkey also develop their technical ability, investing in their laboratories. One prominent factor to fuel further growth in Turkey, Novo argues, is that the market has not reached maturity yet. “The distribution channels are still evolving; they are not well-established yet. The movement of innovation is relatively much faster, and people want better quality, environment-friendly and sustainable coatings products. And this is not solely İstanbul or Ankara; it spreads to the rest of the country, utilizing word of mouth.”
Construction has the largest share, around 60 percent, in Turkish coating markets followed by industry, and Dow also focuses on the sale of water-based products for architectural use in Turkey. He says they would provide raw materials for Turkish production from a planned plant in Saudi Arabia starting from the beginning of 2013.
According to Novo, they have considered production capacity expansion to increase Turkey plants’ capabilities to diversify products. Recalling that the company runs 37 plants in 30 countries, he says they make their plans for the long term and that the firm could adapt itself to short term swings in Turkish markets. The company official says the company tends to build its capabilities around certain hubs, and Turkey is one of these centers. “From manufacturing capacity, customer confidence and a technical competency point of view Turkey is a very critical center, and we believe it will be very well positioned over the next few decades compared to most parts of the world.” Novo says the Turkish markets’ advantage is its flexible position for growing together with surrounding markets.