INTERVIEW: Turkish Cement determined to lower carbon emissions

As pressure to achieve a zero-carbon economy takes center-stage globally, with customers demanding "greener" products, the global cement industry -- one of the main sectors set to be impacted by the change -- is striving to stay one step ahead.

S&P Global Commodity Insights interviewed Abdulhamit Akçay, the vice chairman of Turkish Cement, a semi-governmental association representing cement producers and exporters in Turkey, to discuss how the largest cement exporter in the world is tackling issues regarding sustainability, the EU's Carbon Border Adjustment Mechanism, inflation and competition.

Following is a Q&A lightly edited for clarity.

Commodity Insights: What steps is the Turkish cement industry taking to stay relevant after the EU’s CBAM kicks in?

Abdulhamit Akçay: Turkish Cement’s enhanced focus is on CBAM, and we are determined to lower carbon emissions as much as possible and the government is also involved. Many different steps will be needed to achieve this which will be taken in due time. CBAM is the main topic on the agenda for Turkish cement manufacturers. Turkish Cement has been making a lot of effort to abate carbon emissions and align with Europe in a couple of ways. We are trying carbon capture but that is not viable and is costly. We are looking at other ways like alternative fuels, renewable energy, sustainable raw materials. We are trying out waste heat recovery facilities to generate energy using heat from our kilns, as cement plants require significant electricity capacity.

Commodity Insights: There are indications that China is re-entering the cement and clinker export market and other competitors are also trying to gain ground. Is this a concern for the Turkish cement industry?

Akçay: I agree and admit there is competition, but Turkey has several strategies and upsides that will keep us a couple of steps forward. Pricing is not the only tool that you can use. Obviously, we are trying to remain competitive, but prices cannot overcome the domination of Turkish cement in particular markets that have different expectations in terms of quality and service. Turkey stands out geographically so lead times are shorter, safer shipments, all are important factors contributing to our position in the global markets. Our capacity, supply, and logistics are unparalleled compared with any country in the world.

Commodity Insights: How is the Turkish Cement industry dealing with inflationary pressures?

Akçay: The Turkish Lira is the strongest that it will ever be and there is a weak US dollar, which causes concerns for exports and exports are suffering. But we are determined to fight against inflation. However, for the time being, exchange rate pressure will continue, and we don’t expect any easing in economic policy and, as a result, don’t expect interest rates to be cut until the government sees a decrease in the inflation rate. So, we will feel the pressure next year as well.