Building Materials - 2021 General Overview
Grow the core through network expansion and optimization
Building Materials Group is the preferred solution provider to all its customers through its R&D offerings, collaborations, customer oriented approach and close proximity to all customers through our strategic network.
We aim to grow and optimize our network further to create more value for all our stakeholders, increase profitability and enhance customer satisfaction in a sustainable fashion. As part of such network optimization strategy, Karçimsa grinding plant of Akçansa was divested in the last quarter of 2021.
Addition of the Buñol Plant to the network
In line with the Sabancı Group’s long‑term strategy of becoming a leading global player in the white cement industry, Sabancı Building Solutions B.V. was established in 2020, combining the financial strength of Sabancı Holding with Çimsa’s operational and technical competencies.
A major step forward in the globalization of the white cement business line was completed in July 2021 with completion of the acquisition of Europe’s largest white cement plant, Buñol, in Spain.
The Buñol plant is a key strategic acquisition for our group. It is situated in a strategic location, Spain, the largest and fast growing white cement market in the EU and one of the largest globally.
Together with this acquisition our group became the largest white cement player in the western hemisphere in terms of capacity. We are on our way to widen our geographic footprint, getting closer to our customers and becoming the number one choice of white cement users in all the regions including in the Central, South Americas and Europe.
Strong growth in both domestic and export markets with full capacity utilization
According to figures published by the Turkish Cement Association, domestic demand grew by 8% in 2021 after the vigorous 21% growth recorded in 2020. Notably, there was a 25% surge in consumption in the domestic market in the first half of 2021 with the support of the base effect.
Exports remained almost stable in 2021, again exceeding 30 million tons this year. However, the export breakdown shifted more from clinker to cement, boosting revenue generating in the Turkish cement sector. The US was the biggest importer of cement while West Africa was the main destination for clinker exporters.
Despite the rising energy costs due to global energy crisis and exchange rate volatility in Türkiye, our building materials companies managed to set themselves apart with solid efficiency improvements and utilization of alternative options in fuel and raw material usage while taking the advantage of their logistics network.
Breaking its own record in the history of the Turkish cement industry, our companies exported 7.1 million tons in 2021 thanks to the logistics advantages offered by their locations in Mersin, Çanakkale and Ambarlı.
Operating in key export markets with its effective distribution network and port management capabilities serving a long‑term customer portfolio, our building materials companies contributed to Türkiye’s trade balance with combined export revenues of TL 3.4 billion, up by 69% year on year in 2021. In particular, exports to the US market surged with our group well placed to reap the rewards of the growth in one of the largest and growing cement markets.
Moreover, our niche product Calcium Aluminate Cement reached 100% capacity utilization in 2021 by breaking its sales record and generated substantial FX income for our group.
A sustainability focused business model
Sustainability related solutions have been and will remain the focus of the Building Materials Group. In 2021, our Group companies exceeded their targets in raising their usage of alternative fuels, alternative raw materials and in decreasing their clinker usage ratio. In alternative fuel usage in particular, our group increased its usage of alternative fuels to an average of 16% of the total, consuming less fossil fuel in production. Moreover, the ongoing investments in our plants will pave the way for the ratio of alternative fuels in total fuel usage to exceed 25% in our companies in the coming years.
On the other hand, reducing our clinker ratio is a key part of our group’s decarbonization strategy. The “Clinker Saving” project was initiated in our group, saved over 200,000 tons of clinker in 2021.
Our companies increased their CDP score, upholding their leading position in Türkiye in terms of water usage and climate change with a focused strategic direction on being more environmentally friendly companies.
Value added products gain higher share in revenue
Our broad product portfolio of cement products ranges from ordinary Portland cement to low alkali cement and calcium aluminate cement. This broad cement portfolio puts us in the position of being one of only two groups in the world to produce all main types of cement.
In every product manufactured at our plants, our companies aim to create the most value-add to our customers. Accordingly, we have launched a new specialty calcium aluminate product, “DURO”, which serves to the needs of the steel industry, and we exported it for the first time.
Growth in adjacencies
The Post‑Merger Integration in Buñol acquisition was completed by the end of 2021. Quick wins were determined and realized immediately with the initiation of the process, paving the way for synergies with the Mersin and Eskişehir white cement plants. The full benefits of these synergies are planned to be captured in 2022 and beyond.
On the other hand, bringing together talent from various Sabancı Holding companies, our business development funnel programs, xTeams and xChallengers worked on several projects to explore adjacent areas for Building Materials in 2021. These studies focused on r more sustainable production and distribution processes and new generation sustainable building materials for the buildings of the future.
2022 and beyond: growing into a global sustainable building materials portfolio
The Building Materials SBU will be focusing on growing and transforming into a global sustainable building materials portfolio. Sustainability is the key component of the Building Materials SBU.
In alignment Sabancı Holding’s 2050 sustainability targets, our cement business has set out a CO2 roadmap which includes a variety of projects ranging from decreasing the clinker ratio by raising the use of alternative raw materials and realizing a substantial increase in the use of alternative fuels.
Our Building Materials Group companies will continue to prioritize high‑value‑added digital transformation projects to ramp up their use of alternative fuels in 2022. In this context, studies involving smart factory systems and cloud solutions have been progressing at speed to increase efficiency in energy usage.