Turkish wood-based panel manufacturer Çamsan Ordu AS has completed a project worth some €75m (£63m) in Ordu, in the country’s north-eastern region.

Thanks to the investment, the company’s three production facilities are now running at full capacity, potentially manufacturing up to 600,000m3 of MDF per year.

“Çamsan Ordu has made a new investment of €75m during the pandemic period,” the company said in a statement released in late January 2022. It added that the company is now “stronger with its three factories on an area of 250,000m2 in Ordu”.

Hakan Poyraz, the owner and chairman of the management board of Çamsan Ordu, told local business daily Dünya that the ongoing pandemic has triggered a hike in the demand for the company’s products. The chief executive said that, owing to the unexpectedly positive performance of the furniture industry, the wood-based panels sector was also rapidly increasing its production.

For this reason, “in the next five years, our industry will increase [its sales] by 20%”, said Mr Poyraz. “I believe it will grow.

“We are proud to announce that our new MDF 3 production facility has started production at full capacity,” he added. “Despite the difficult conditions of the pandemic period, we continued to work by taking all precautions. And as we promised, we put our new production facility into operation,” he said.

EXPORT SALES TO RISE

Mr Poyraz said that the project, dubbed the MDF 3, is designed to further bolster the manufacturer’s position in its domestic market, but also abroad, strengthening Çamsan Ordu’s international brand recognition and expanding the company’s foreign sales.

The three facilities are expected to allow the Turkish manufacturer to increase its production by two-and-a-half times, and also triple the company’s export sales in the coming years.

The group says it is the largest producer of MDF in its domestic market, but also in the Middle East and the Balkan region, as well as being the fourth largest MDF manufacturer in Europe.

The manufacturing complex in Ordu includes a research and development facility, and it is fitted with solar energy installations that generate energy used to power Çamsan Ordu’s MDF production activities.

The latest investment was initiated in 2019 when Çamsan Ordu started to plan its expansion and subsequently signed a deal to order a complete MDF production line from German manufacturer Dieffenbacher.

NEW PRODUCTS

Data from Dieffenbacher indicates that the MDF production line for Çamsan Ordu has a capacity of 325,050m3 per year, allowing the Turkish company to manufacture boards with a thickness of between 2.5 and 30mm, and a width ranging between 2100 and 2500mm. Under the contract, Dieffenbacher began to install its gear at Çamsan Ordu’s premises in the summer of 2020.

Following the installation of the new production line, Çamsan Ordu aims to add new products to the company’s portfolio, including more variants and value-added products, Dieffenbacher said in the company’s official publication.

Unlike the existing facilities, the new line makes 8ft-wide boards that are highly sought after by lacquering companies, according to the German producer.

The continuous (CPS+) press Çamsan Ordu acquired from Dieffenbacher will enable it to significantly upgrade its manufacturing activities.

Çamsan Ordu says it is the first player from the country’s wood-based panel industry to operate a factory fitted with a CPS+ to produce MDF, and that the technology’s reliability will allow it to attract an even larger number of customers from the Turkish market.

The value of Çamsan Ordu’s production line order with Dieffenbacher was not disclosed.

ACCELERATING INFLATION RATE

Meanwhile, Çamsan Ordu’s international expansion plans come at a time when the country is struggling to keep its economy afloat, combating high inflation, as indicated by the latest available data. Figures released by the Turkish Statistical Institute (TurkStat) indicate that in January 2022, consumer prices increased by as much as 48.7% compared with the same month in 2021, reaching the highest level reported in the country since April 2002.

The Central Bank of the Republic of Turkey (CBRT) expects the country’s inflation rate to peak at 55% this May, and then begin to drop in the remaining seven months of 2022. The central bank’s forecast is that the end-2022 inflation rate will total 23.2%. However, it is yet to be seen whether these expectations are realistic.

At the same time, the Turkish gross domestic product (GDP) continues to grow. In late 2021, the country’s economic growth accelerated, as its economy increased by 7.4% year-on-year in the third quarter of last year, “resulting in a growth rate of 11.7% in the first three quarters of the year,” the Organisation for Economic Co-operation and Development (OECD) said in an analysis.

“2021 GDP growth will likely reach 10.5- 11%, beating our current 9.5% forecast [although the] recent currency shock and accompanying tighter financial conditions will likely weigh on the downside for 2022 growth,” the OECD continued.

UNCERTAIN ECONOMIC OUTLOOK

The positive results were largely down to Turkey’s foreign sales, as net “exports contribution remained parallel to the Q2, (exports gained momentum (+5.0pp) while imports recorded a negative growth (-1.8pp contribution),” according to the OECD.

On a less positive note, Turkey’s economic growth was expected to slow down to 3.3% in 2022, and 3.9% next year, as shown by data prepared by the OECD.

“Recent cuts in interest rates have put further pressures on inflation expectations, the exchange rate, real household incomes and external financing,” according to the analysis.

Set up in 1984, the Çamsan Ordu group is based in Ordu, a city with a population of about 200,000 inhabitants that is located on the Turkish Black Sea shore. The company says it was Turkey’s first MDF producer to carry out activities in the Middle East region and the Balkan countries.