The Effects of the Covid-19 Pandemic on the Plastics Industry

Dear Members of the Industry,

As you know, measures taken against the Coronavirus under the name of the Economic Stability Shield were announced recently. We would like to inform you about the impact of this pandemic on our sector and the conditions for benefiting from the implemented measures.

As the Covid-19 pandemic spread beyond China's borders and rapidly across the globe, a demand-driven decline began to be observed in the manufacturing industry. To assess the impact of the pandemic on the plastics sector, we can look at the most affected sub-sectors as follows:;

Automotive: Although it varies from sector to sector, it's safe to say that production has come to a standstill, particularly in the automotive industry. Automotive companies in Europe, the US, and other regions are deciding to halt production. So far, Volkswagen, Mercedes, BMW, Ford, Fiat Chrysler, Renault, and Toyota have suspended production at their European plants. The plastics industry, a major supplier to the automotive sector, has been significantly negatively impacted by this development. [Continue reading...] link Please follow.

PACKAGING: The packaging sector can be examined within two sub-sectors; while there has been a decline in the industrial packaging sector due to a slowdown in production, there has been an increase recently in the disposable packaging and film sector, which caters to the end consumer. [Continue reading...] link Please follow.

Medical: There has been a very rapid increase in demand for plastic products in the medical sector. All companies have started working at high capacity to meet the need for masks and gloves. [Continue reading...] link Please follow.

Other products: The durable goods, agricultural plastics, carpet, and textile sectors have been forced to reduce production due to order cancellations. [Continue reading...] link Please follow.

Machine: The machinery sector is going through difficult times due to both a decline in investment appetite and disruptions in the supply chain. [Continue reading...] link Please follow.

Raw materials: Due to the drop in demand following the pandemic, as well as the failure of Russia and OPEC to reach an agreement, oil barrel prices are expected to continue their downward trend for some time. [Continue reading...] link Please follow.

The main problems that emerged with the pandemic are:;

Disruption of the supply chain: The global supply chain has been severely disrupted since the pandemic spread from the Far East to Europe and the US. Companies are experiencing difficulties in both importing raw materials and intermediate inputs, as well as exporting finished products. As a result, there have been unusual price increases for certain products, or these products are unavailable from the market.

Order cancellations: Following a contraction in demand, order cancellations have begun to occur in export markets. Similar order cancellations are also taking place in the domestic market after the virus appeared and spread in our country. This development, which disrupts companies' production planning, is also causing a decrease in capacity utilization rates.

Increased collection risk: These developments have caused a deterioration in the financial structure of companies. Therefore, an increase in collection risk is anticipated in the coming period.

The government, evaluating these developments in the market, plans to prevent these negative effects with the Economic Stability Shield program. The key measures taken within the scope of the program are listed below.

• Social Security, VAT, withholding tax payments
• Bank loan repayment deferral
• Additional stocks accumulated by exporters
• Credit guarantee fund support
• Force majeure application in case of default
• Short Term Working Grant
• Compensatory working hours
• Rediscount loans

For detailed information about these support programs, link You can follow us or contact our association.

Best regards,

Murat INKUN
Secretary General

PAGDER Turkish Plastics Industrialists' Association
Wire: 444 20 85 | +90 216 629 29 14 | Fax: +90 216 629 22 35
Varyap Meridian A Block No:406, Ataşehir-Istanbul / Turkey