Turkey's Mersin to receive nearly $1B in petrochemical investment

Published 27.11.2018 23:44
Updated 28.11.2018 00:49

Istanbul-based CFS Petrochemicals is looking to invest in a polypropylene production plant in the Mediterranean coastal province Mersin as part of its investment incentive scheme introduced in April.

The CFS Petrochemicals polypropylene production facility is one of the 23 projects with an investment amount of TL 135 billion ($25.72 billion). The plant will see an estimated TL 5.3 billion in investments.

According to a presidential decree published on the Official Gazette, investment in polypropylene production will be supported by the government, in accordance with the Decision on the Granting of Project-Based Government Assistance to Investments.

The duration of the investment is six years, starting from Dec. 8, 2017. If the investment cannot be actualized within the prescribed period, the Ministry of Industry and Technology will grant an extension as much as half of this period.

The project is expected to create 1,000 jobs and the number of qualified personnel will be 20. At the end of the investment period, 500,000 tons of polypropylene will be produced annually.

The investment will be granted value-added tax (VAT) exemption, customs duty exemption, VAT return, corporate tax deduction (tax reduction rate 100 percent, investment contribution rate 85 percent, investment contribution use during investment period rate 100 percent), insurance premium employer share support (10 years without a maximum amount limit), income tax withholding support (10 years), qualified personnel support (a maximum of TL 1.2 million ), interest or profit share support (not exceeding TL 350 million for 10 years starting from loan usage date) and energy support (50 percent of energy consumption expenditures not exceeding TL 40 million for up to 10 years starting from the startup).

Qualified personnel support will be provided for five years, not exceeding 20 times the monthly gross amount of the minimum wage for each qualified personnel.

Interest support will be applied to loan repayments to be made as of the date when the redemption schedule is sent to the ministry. The ministry will pay 80 percent of the interest share or dividends paid for Turkish lira, foreign currency or foreign currency-indexed investment loans to be provided by one or more intermediary institutions up to 80 percent of the fixed investment amount.

In a bid to stabilize and foster economic growth through industrial production and increasing exports, Turkey introduced a TL 135 billion incentive certificate package in April to support the petrochemical, energy, metallurgy, health, manufacturing and agricultural industries.

The expansive incentive certificates do not distinguish between foreign and local investors. All investment projects will be treated equally under this scheme, raising the competitiveness of the Turkish incentives against other emerging markets, such as Mexico, India and Indonesia. From land allocation, various tax exemptions, support for staff insurance premiums and energy support for up to 10 years, the incentive package covers a vast area of investment expenditure items.

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