Blossoming Turkish-African ties result in $1B deal signed in Algeria

President Recep Tayyip Erdoğan's five-day, four-country west Africa tour has already started yielding concrete results for Turkey's economic ties with the continent.

Plans for a $1 billion petrochemical plant in the Yumurtalık district of Turkey's southern province Adana have been made by the Turkish Rönesans and Bayegan partnered with Algeria's national energy and chemical company.

The investment, which Erdoğan announced at the Turkey-Algeria Business Forum on Tuesday, generated excitement in Adana and in the business world.

Once complete, the facility will produce 450,000 tons of polypropylene per annum, keeping $550 million in the country.

Turkey, which pays about $2.2 billion to import polypropylene used in sectors like carpeting, packaging materials and furniture, will produce polypropylene from raw materials supplied by Algeria in this facility and prevent resources of about $550 million from leaving the Turkey annually.

The plant will be located on an area of 826,000 square meters, costing about $1 billion and providing employment opportunities to 250 people in the first stage.

The facility will reduce Turkey's external dependence in this field by 25 percent, and 450,000 tons of polypropylene will be produced per year.

The facility established in the Yumurtalık Free Zone, renowned for its proximity to port and transportation facilities as well as favorable climate and geographical conditions, will be up and running in approximately 30 months.

Burhan Kavak, the Adana province chairman of the Independent Industrialists and Businessmen's Association (MÜSİAD), said Erdoğan announced the good news from Algeria.

"We received happy and pleasing news on behalf of our region," Kavak said, pointing out that the investment will contribute primarily to the regional economy.

He underlined the importance of this investment, saying that Turkey consumes 2 million tons of polypropylene annually, of which 100,000 tons are produced by Petkim, while 1.9 million tons are imported.

"So, we have a serious deficit in this area. We are going to pull this down by 450,000 tons. There is a petrochemical league in the world," Kavak said, stressing that the realization of such an investment in Turkey indicates country's entry into petrochemical league.

"We will reduce our current account deficit with the investment and use our national and domestic products. We import 1.9 million tons from Israel. Gaziantep receives 1.5 million tons of the consumption of 2 million," he continued, suggesting that selection of this region was a good decision in this regard.

Kavak also added that the presence of a port in the region, the ease of transport, as well as the climate and geographical conditions made the Yumurtalık Free Zone perfect for the establishment of a petrochemical plant.

Highlighting that the investment will contribute to the Ceyhan Energy Specialization Industry Zone, Kavak said investments in the said zone will accelerate in this context and seriously reduce Turkey's external dependence on energy.

Meanwhile, Adana Chamber of Commerce Chairman Atila Menevşe also pointed to the importance of the investment for both Turkey and Adana.

"It is very important that a foreign investment of this volume is brought to our province, and that one of the important import items of our country will be produced in our region," Menevşe said.

Stating that Adana has become an energy base where Middle Eastern and Asian oil is transported to the world via pipe lines, he said petrochemical investments to be made in this region can shoulder not only the region, but also the country in the development thrust.

Adana Chamber of Industry Chairman Zeki Kıvanc also stated that the petrochemical plant will decrease the current account deficit and costs.

Kıvanç said the plant will pave the way for industrialists and entrepreneurs in terms of investments, increased production, exports and competitive power.

"As Adana's business leaders, we will provide the necessary contribution and support for the realization of the investment," he continued. "I hope that this investment will be the beginning of the petrochemical investments planned for the region in the near future. This investment will also be an important driving force for the Ceyhan Energy Specialization Industry Zone planned for our region."

Çukurova Young Businessmen's Association Chairman Ömer Faruk Sakarya also said this cooperation with Algeria will be a leading power for the investments in the region, suggesting that the industry in which high-tech products are manufactured should also be established here following the petrochemical plants.