• İbrahim Erdemoğlu, Chairman of the Board of Erdemoğlu Holding, remarked that they are conducting negotiations with national and international funds for the 25 billion dollars Yumurtalık refinery and integrated chemical plant, adding that Türkiye, in cooperation with regional countries, could become one of the world's largest integrated chemical industry centers.

• Erdemoğlu noted that they signed an agreement with Vitol last year for the Yumurtalık project, and that Qatari investors, as well as Saudi Arabian investors and Aramco, have shown interest in the project.

İbrahim Erdemoğlu, Chairman of the Board of Erdemoğlu Holding, said that they are in close contact with both national and international funds regarding the Yumurtalık refinery and integrated chemical plant, the group's largest project with an investment of 25 billion dollars. Erdemoğlu stated, "Türkiye has the opportunity to become the world's largest integrated chemical industry center in cooperation with other countries in the region."

İbrahim Erdemoğlu, Chairman of the Board of Erdemoğlu Holding, explained the group's goals and expectations regarding the refinery project in the Adana Yumurtalık region, which has been among the group's long-standing plans. Erdemoğlu stated that this investment is an important necessity for the country's economy, adding that the new geopolitical order also makes this investment essential in the region.

Erdemoğlu said that the investment, which will be approximately 25 billion dollars in size, could involve collaborations with both public funds and foreign investors, and that they have completed the preparations for the infrastructure for these collaborations at this stage.

Erdemoğlu, reminding that the US priority is to draw China into its own region, said, "There is a search for alternative production, especially in the petrochemical sector. If you cannot have other countries in this geography produce some of the products that China manufactures, you cannot create an alternative to China's production power. The number of countries that can fill this gap in this region, apart from Russia, is limited. Russia cannot position itself in that way in this conjuncture. The countries with that size are Iran, Türkiye, and Egypt. Due to the ongoing turmoil in Iran, it will take years for it to reach this level. The structure of Europe and the scale of the Balkans are not suitable for this. Production in Egypt is also not in a position to reach this capacity. Despite all its customs advantages, it cannot undergo industrial transformation. There is no region other than Türkiye that can fill this gap."

Erdemoğlu continued as follows:

"The idea of ​​a 25 billion dollars worth refinery in the Yumurtalık region stems from this. Today, Türkiye imports approximately 23 billion dollars worth of petrochemical products, according to last year's figures. If this region truly becomes a production hub, we estimate that the required production volume could reach 70-80 billion dollars in the future. This investment approach will also solve these problems. But will Türkiye do this alone? No. Türkiye will assume a leading and pioneering role in this region. A production and supply system will be established around Syria, Iraq, Jordan, and Egypt. Türkiye will form the center of this. It could be a composition where Syria, Iraq, Egypt, and Jordan produce goods for the middle-income group, while Türkiye produces higher value-added products. Since it's impossible to create an alternative to China with small-scale production, the creation of production blocks will be essential."

Why Yumurtalık?

Erdemoğlu explained that the Yumurtalık region has incredible logistical value and predicted that logistics will be the most important issue in the next 5-10 years. Erdemoğlu drew attention to the importance of the Ceyhan-Yumurtalık region as an energy hub where oil and gas pipelines in the Eastern Mediterranean, energy resources from Iraq, Azerbaijani oil, and hydrocarbons from various sources converge.

Erdemoğlu continued as follows:
"The state has another important initiative here. Behind our land in Yumurtalık, approximately 33 million square meters of chemical industry area has been allocated, a specialized chemical industry zone. We, as SASA, are interested in 10 million square meters of this area. We want to acquire one-third of it. SASA alone will not be enough. Many other investments will also be required. The Ministry of Industry has been conducting various studies here for about five years. There were ideas such as establishing an organized industrial structure, attracting investors, and relocating some industries from the Marmara region here. However, investors did not come because sufficient fundamental advantages to attract producers were not created in the region. Now, after SASA establishes its petrochemical investment and refinery here, the situation will change. Because the raw materials needed by chemical companies will be produced right next to them.
We believe that chemical companies will also come to this region in time. And what will be the result? Türkiye will become one of the largest production bases in the region and will be able to become an important chemical center in a wide geographical area encompassing Europe."

Vitol, Aramco, Qatari Investors

Erdemoğlu stated that the SASA project is important not only for them but also for the country's 10-20 year strategy, saying, "In our understanding, there is the country, there is the state, there is the nation. This is the main source of the strategy. It is a strategic project directly on a national scale. There are also developments supporting this. Firstly, the positive attitude of public funds in this regard. Secondly, the fact that the Ministry of Industry and the Ministry of Treasury and Finance have strengthened the support and incentive mechanisms for these investments. A significant part of these were realized this year. We also made an agreement with Vitol last year. In addition, there are other organizations that want to join the project with us. Previously, there was interest from the Qatari side. At one point, the Saudis and Aramco were also interested. Developments in the Gulf naturally affected these processes. But with public support and the participation of other partners in the project, it may be possible to bring forward the 10-15 year timeline we mentioned."

Erdemoğlu stated that the master plan for the 20-25 billion dollar investment has been ready for approximately four years, saying, "We have prepared what we will produce. We have determined which technology we will use. Everything is ready. The land is also ready. However, due to today's economic conditions, we will evaluate starting the project in the phase after partnerships or financial solutions are finalized."

"We need to establish a Chinese mindset"

"Let's assume Türkiye establishes such a hub in chemistry," said Erdemoğlu, continuing:

"Germany has chemical giants. Or there are similar centers elsewhere in the world. But the main issue for us is not what other countries are doing today. What we need to do is create a structure similar to the one China has established. It's very simple: Does oil come to Ceyhan? Yes, it does. When you build a refinery there, do you reduce transportation costs? Yes, you do. You significantly eliminate the freight problem. You produce the raw materials there. You also produce chemical products in the same region. You add a port next to it. And you export the product directly from there. It's not easy for European companies to compete in terms of cost against such an integrated structure. The same logic lies behind China's pursuit of economies of scale."

Source: Bloomberg HT