AN OVERVIEW OF 2020
The Turkish economy was hit hard by the depreciation of the Turkish Lira and high inflation rates plaguing the economy since 2018 in addition to the Covid-19 pandemic and other global developments. However, effective measures were taken in the form of expansionary monetary policies and economic stimulus during the year. Leading indicators place Turkey’s economy among those few worldwide that are expected to end 2020 with positive growth.
The negative impact of the Covid-19 pandemic on the construction industry, one of main consumers of flat glass, was limited to the second quarter. Industry-specific assistance programs and low-interest credit support boosted the market consequently. Housing demand jumped in the second half of the year. The construction industry expanded by 1% for the first three quarters, thanks to a reinvigorated renovation market and ongoing large-scale projects.
In 2020, automotive sales fell by 24.3% year-on-year with a total of 11.9 million vehicles sold in the EU (26 countries), UK and EFTA markets. During the same period in Turkey, automotive sales rose 57.5% with a total of 610 thousand vehicles sold. With this performance, Turkey ranked sixth in the European automobile market for the year.
The white goods industry – a key sector of the Turkish economy due to its continuity, high added-value and export volume – recorded nearly the same production figures as the previous year. This solid performance was thanks to elevated demand in the second half of the year after overcoming the disruption in production caused by the Covid-19 crisis.
The European economy was battered by the pandemic in 2020. While the Eurozone economy contracted by an estimated 7-8% for the year, construction activity remained steady compared to the previous year.
In 2020, Russia’s economy is projected to shrink by 4% after expanding by 1.3% a year earlier. The Russian economy contracted by 2.7% in the first three quarters of this year.
The Middle East and Northern Africa economies were adversely affected by both the Covid-19 pandemic and lower petroleum prices. These regions are expected to only partially recover in 2021.
In India, flat glass consumption decreased by 20% for the year due to significant contraction in key sectors from the Covid-19 pandemic. In 2020, prolonged lockdowns and production stoppages caused glass production to fall by 15% in the country. However, India is a high potential market due to its favorable demographics and rising demand for value-added products. Strong future growth is projected in the Indian market.
ACHIEVEMENTS IN 2020 AND GOALS FOR THE FUTURE
A year marked by quickly adapting to the new normal, further diversifying international markets, retaining customers and recording strong sales…
In 2020, Şişecam Flat Glass was able to quickly adapt to the new normal of the supply chain. This ability allowed it to successfully navigate a very challenging year and minimize the impact of the pandemic on its operations, record higher sales and improve customer relations.
In Turkey, Şişecam Flat Glass continued efforts to further boost its service levels. The Company aimed to achieve customer satisfaction across the flat glass value chain and quickly respond to market needs by implementing brand building initiatives on digital platforms. Despite the domestic market conditions showing seasonality shifts, Şişecam Flat Glass was able to capitalize on its product diversity advantages in its target sectors. The Company also took appropriate actions related to sales terms and conditions.
In international markets, Şişecam Flat Glass operates with a qualified product portfolio tailored for customer needs, thanks to its high-capacity potential and widespread distribution network. Şişecam Flat Glass responded to changing market demands via market and customer diversification.
Despite the much-weakened economy in Europe and the severe impact of the Covid-19 pandemic, Şişecam Flat Glass boosted sales in that key market by taking proactive steps in the second half of the year. The Company’s leading production capacity position and high value-added product portfolio helped to increase sales in the European market despite the challenging conditions. Şişecam Flat Glass expanded its customer base and sales volume compared to the previous year with the product diversity and additional capacity provided by its second plant in Italy, Manfredonia.
Exports to Russia continued by balancing supply and demand. Current production capacity in Russia was managed optimally by considering the balance between the domestic market and export markets. Production in Russia reached the maximum level in the second half of 2020.
In the architectural glass market, Şişecam Flat Glass conducted its operations in the Middle East and North Africa by meeting the market’s needs for high value-added products and leveraging the benefits of its diversified product portfolio.
In 2020, India halted economic activity and enforced strict lockdowns for 1.5 months during the pandemic. This situation negatively affected both the Indian economy and flat glass consumption. However, Şişecam continued its efforts in the Indian market to raise awareness about its global strength and quality product portfolio.
Flat glass manufacturers were forced to suspend production in the short- to medium-term due to lockdown restrictions taken to combat the Covid-19 pandemic. As a result, difficulties were experienced in meeting higher demand once restrictions were eased with demand occasionally outpacing supply. The price of flat glass products began to rise in the second half of 2020. Şişecam expects that strong demand in the markets will continue in the coming year. Supply-demand is projected to come into balance from the second half of 2021 onwards. Overall, Şişecam forecasts that market conditions will remain favorable in 2021. Sales of high value-added products are expected to maintain its upward trend to a varying degree in all markets.
By closely monitoring developments in renewable energy, Şişecam Flat Glass serves the photovoltaic glass market by delivering high-performance Anti-Reflective (AR) coated solar panel glass. In 2020, Şişecam increased its sales to this sector by 42% compared to the previous year.
Şişecam is a key supplier of automotive products to the European market. Its customer portfolio includes leading domestic and global companies. Şişecam Automotive took firm steps toward the future by applying for many projects in 2020.
New investments, new capacities
Şişecam is a global flat glass producer that enjoys rapid growth with strong brands and innovative solutions. While strengthening its position in markets in which it operates as a local manufacturer, Şişecam is committed to further bolstering its competitiveness in global markets with its customer-oriented approach and a continuously improved, ever-expanding portfolio of high value-added products.
Operating flat glass production facilities at four different locations across Turkey, Şişecam continues its capital investments under all economic conditions to maintain and further improve its sector leadership position. In October 2020, Şişecam commissioned its second flat glass production line equipped with advanced, Industry 4.0-ready technologies and featuring an annual capacity of 240 thousand tons at the Ankara Plant. With the newly commissioned furnace, the Ankara facility’s total annual production capacity climbed to 540 thousand tons. As a result, Şişecam’s Ankara Plant is one of the biggest flat glass production sites in Europe.
Şişecam reinforced its value chain by investing in production of laminated windshields at its Bulgaria plant during the year.
New product research studies
Şişecam developed the “Şişecam Temperable Solar Low-E Glass Neutral 63/29” for the triple silver product group. This innovative offering delivers the highest selectivity and maximum heat insulation for the architectural glass sector.
During the year, the “Şişecam Temperable Solar Low-E Glass Neutral 70/40 and Neutral 70/37” products were added to the product portfolio. These new additions are designed for use in projects such as residential housing, office centres, villas and retail stores that require transparency and low reflection properties in addition to maximum heat insulation and solar control.
Şişecam enriched the Solar Low-E product family by developing untempered equivalents with the same appearance and performance as the “Temperable Solar Low-E Glass Neutral 70/40, Neutral 70/37 and Neutral 62/44” products. These innovations were introduced in order to meet customer demands in target markets and evolving customer needs.
The “Şişecam Temperable Solar Low-E Glass Neutral 51/28” product provides effective heat insulation, optimum daylight admission and maximum solar control. In addition, the “Şişecam Temperable Solar Low-E Glass Neutral 43/28” product was developed and introduced to customers and business partners.
Şişecam also serves the energy sector with solar mirrors developed for CSP (Concentrated Solar Power) systems. In addition, an anti-reflective coating solution was developed in-house for use with solar panels.
In 2020, Şişecam completed the approval and certification process from the Turkish Ministry of Health for its special V-Block coating technology that is effective against bacteria and viruses. V-Block technology began to be used in products for the architecture, white goods and automotive sectors.
As part of new product development efforts for the automotive market, Şişecam developed a high performance windshield with athermic coating. This special coating eases the load on air conditioning and gains a defrosting function by providing heat and solar control for use on the laminated windshields of vehicles. Shipments commenced to customers during the year. Şişecam is also commercializing the Glass B Pillar products, which are preferred as a replacement for the plastic part used in the B pillar located between the front and rear door glass of vehicles. This product group provides aesthetic unity with the door glasses of the windshield products with Head-up Display that enables projection of selected navigation indicators to the windshield. Commercialization of the glass B-pillar product is at the final stages.
Currently, Şişecam is engaged in product development efforts to offer functional coatings, anti-reflective coatings for the architecture and energy sectors as well as mirrors, painted glasses and smart glass systems to meet industry demands. Enriching the product portfolio and providing innovative solutions to responding to the evolving needs of the industry are key objectives.
Efforts to develop production capabilities
Şişecam Flat Glass expands on-site quality, 5S and lean manufacturing method practices with the strategy of: “Do it right the first time and reduce loss at its source.” The “Lean 6 Sigma” approach is central to its core strategy of continuous improvement. In 2020, Şişecam Flat Glass continued its Lean 6 Sigma initiatives and achieved significant gains in resource utilization and production process efficiency.
During the year, Şişecam carried out optimization efforts to respond to highly variable customer demands in order to minimize the effects of the pandemic.
Required certification processes for different markets were completed to support more dynamic sales in foreign markets. Şişecam also completed registration of product performance calculators for its industrial customers.
Environmental Product Declaration (EPD)s, related to SDG 12 on Responsible Consumption and Production and pursuant to EN 15804, were prepared for Şişecam’s architectural glass products. These special products make a major contribution to the construction of sustainable green buildings. The EPDs were made available to stakeholders. Şişecam is the first company in the flat glass sector in Turkey to receive the EPD.
As a Sustainability Committee member of Turkey IMSAD (Association of Turkish Construction Material Producers), Şişecam also actively supports efforts related to the sustainability of the Turkish construction materials industry.
Şişecam Automotive is focused on improving the quality of its products and processes, adapting advanced quality control (inspection) systems, using unique robotic automation systems, developing new products and production methods, and meeting its corporate responsibilities related to occupational health and the environment. Significant progress has been recorded in these key areas in recent years.
Integrated promotion and communication activities
In parallel to the new requirements and ways of doing business which arose during the pandemic, almost any activity that was performed physically has now migrated to the digital platforms as part of the new normal.
A Covid-19 communication campaign was conducted focusing on the psychological and physiological benefits of using flat glass products and their positive effect on human health. As part of this campaign, creative works, announcements, banners, e-mail communications, printed materials, press bulletins and social media posts emphasized various areas of use of flat glass products. These communications were shared with a large target audience in nine different languages.
During the year, digital communication campaigns were conducted to bolster the brand image of Şişecam Flat Glass in target markets. These efforts also promoted and emphasized the benefits of Şişecam’s strategically important flat glass products. The digital campaigns were supplemented with traditional marketing communication tools. The first phase of the Italy campaign was completed at the end of 2020 and recorded more than 16 million views, reaching over 4 million individuals.
Şişecam Flat Glass effectively capitalizes on the speed and targeted access capabilities of social media. Communication campaigns are executed via 17 social media accounts which provide content in Turkish and English.
In 2020, a variety of social media platforms were actively used to improve brand awareness of Isıcam. These efforts aimed to strengthen the brand’s ties with end consumers and communicate benefits of products to users through viral videos – the hottest online trend of recent years. A series of viral videos called “Yaşayan Bilir (The Living Knows)” were broadcast during the year. Şişecam recorded more than 5 million views during this campaign.
Due to pandemic conditions, it was not possible to carry out promotional activities at fairs and exhibitions. Instead, Şişecam showcased its flat glass products as well as projects in which flat glass products and services were used on Archiexpo, a leading online architectural marketplace.
Companies around the world migrated their events, meetings and other activities to digital platforms in response to the Covid-19 pandemic. Şişecam pioneered this transformation in Turkey with its digital meetings called “Isıcam, Our Home” which were held specifically for Isıcam’s Authorized Manufacturers. Additionally, Şişecam met with frame production companies and members of MoneyBox Card Club via online showroom tours.
Şişecam aims to further the development of contemporary architecture. To this end, new relationships are established with recently opened architectural offices. In addition, Şişecam undertakes efforts to improve existing relations with prestigious well-established architectural firms.
Online events were held with about 11 thousand industry professionals in attendance, including architects, façade consult, façade firms and architecture students in India and several countries across Europe. During these events, Şişecam presented iconic projects that use Şişecam Flat Glass products. Numerous other presentations focused on relevant themes, such as exploring new areas of use for glass during a post-pandemic architectural world, selecting the right type of glass in architectural projects, discussing the use of glass in hospitals, schools and offices, and boosting health, happiness and productivity through daylight.
T Meetings bring architects, architecture students, designers and construction industry professionals together with inspiring, renowned architects under the tag line “The Transparent Face of Architecture.” This annual event, hosted by Şişecam Flat Glass each year since 2014, was held online for a global audience this year for the first time.
The Turkish architecture bulletin and web site “Şeffaf Bülten” began to be published in English under the name “Transparent Architecture.” Şişecam continues to distribute the Turkish bulletin to about 19 thousand architects. Distribution of the new English bulletin to 11 thousand international architects has begun on a monthly basis.
At an online event during the Istanbul Festival of Architecture, Şişecam presented “Reference Projects 2021” – the third book of the “Reference Projects” publication series. The latest version detailed more than 100 projects, including 29 abroad, that came to life with flat glass products.
During the year, Şişecam began to create BIM (Building Information Modelling) objects to develop smart elements of flat glass products. These objects were published on BIMObject, a commonly used global digital material library, as well as on the Şişecam corporate website.
Şişecam continues to publish online e-training programs via the Şişecam Academy website. E-training programs were translated into English, Russian, Bulgarian, Romanian and Italian and offered to global sales teams and customers.
In 2020, Şişecam added new offerings to its existing mobile applications, including “Isıcam Selection Wizard,” “Glass Acoustic,” “Performance Calculator,” “Glass Consultant” and “Glass Projects” – all available in multiple languages. As a result, Şişecam’s mobile user base expanded during the year. The “Coated Glass Detector” mobile application, which has the capability to determine the thickness of glass items and whether a piece of glass has a surface coating or not, is now available in Turkish and English.
As part of glass consultancy services, Şişecam held more than 2 thousand meetings with about 3 thousand sector stakeholders. These stakeholders included architects, front desk consultants, investors and contractors – decision-makers for projects in the Turkish and international markets. Şişecam performed 3,500 project-specific technical calculations and provided specification proposals. With this approach, Şişecam ensures that its products that add value to life are used in these projects.
In response to the pandemic, Şişecam moved training events that were formerly delivered in-person to students at Turkey’s leading universities, the country’s future decision-makers, to digital platforms as part of online programs. Technical field trip’ to Şişecam’s plants were replaced by product and production videos. Approximately 850 students participated in Şişecam’s various online training programs during the year.
Isıcam Systems MoneyBox Card Club continued to expand its membership network, which climbed to about 8,500 members in 2020. Şişecam carried out awareness programs and campaigns to direct PVC and aluminum frame producer firms to energy-efficient, high-quality Isıcam products.
Ten firms joined the Flat Glass and Mirror Processing Franchise System during the year. Şişecam set up this system in Turkey to improve the quality of the products and services offered to consumers and achieve business sustainability.
Şişecam implemented the Accreditation System in Turkey to further improve the quality of temperable coated glass processing and achieve business sustainability. Some 61 system-accredited dealers across 26 provinces provided services in 2020. The International Accreditation System was established to ensure common use of this type of glass in the project sales segment in international markets. Initially, Şişecam accredited processing firms from Europe, the Balkans, Middle East and India.
Multi-dimensional product communication campaigns were carried out in India to boost awareness about value-added products in the market and expand the market share of such products. Loyalty campaigns were also conducted throughout the year for direct customers and targeted customer subgroups.
Şişecam reinforced its market position in Europe by transitioning to mid-iron flat glass production at two manufacturing facilities located in Northern and Southern Italy.
During the year, Şişecam entered into collaborations with IKEA and TEKFEN as part of its market development efforts. The Flotal E product, developed exclusively for IKEA, began to be ’sed in IKEA’s mirror products for the Turkish market as well as international markets. In conjunction with Tekfen, Şişecam undertook development of solar mirrors for the solar energy sector.
Şişecam supports awareness-raising activities in collaboration with flat glass sector associations as an active member. Via its membership with İZODER, Şişecam contributes to the TS 825 Standard on the Rules of Thermal Insulation in Buildings, revised under the coordination of the Ministry of Environment and Urbanization. With this effort, Şişecam aims to ensure that the U-window value specified in the applicable standard is revised to require use of energy-saving coated glass.
Şişecam Flat Glass contributed to developing definitions related to windows provided in the nZEB (Nearly-Zero Energy Buildings) guidance document as published by the Turkish Ministry of Environment and Urbanization. Standards have been adopted that require buildings to use triple glazing units with two panes coated to be certified as a nearly-zero energy building.
EXPECTATIONS AND OBJECTIVES FOR 2021
The impact of the Covid-19 pandemic continues to reverberate and intensify around the world. Şişecam Flat Glass quickly adapted to changing market conditions with a customer-oriented approach and product development operations to meet the needs of all stakeholders in the value chain. In 2021, Şişecam also aims to offer innovative solutions to demands from various sectors with its high production capacity and advanced production technologies. The strategic objective is to provide quick solutions with a proactive approach.
In recent years, Şişecam Flat Glass has steadily expanded its area of business activity with breakthroughs and innovations. Şişecam plans to capitalize on market opportunities as the sector evolves and utilize its existing facilities in the most effective way in line with industry developments in the coming year. Şişecam Flat Glass aims to effectively manage all of its business operations under an integrated structure across its operating regions. Şişecam is committed to offering innovative products to the markets that improve quality of life in line with its focus on achieving sustainable growth with value-added products.
Despite the many uncertainties caused by the pandemic, Şişecam continues to create value for Turkey. The state-of-the-art second flat glass line, commissioned in 2020 at the Ankara Plant with a production capacity of 240 thousand tons/year, is designed to further boost the plant’s capability to produce value-added products. The expanded facility will in turn bolster Şişecam’s leading position in the Turkish market.
Şişecam Flat Glass has strengthened its position in the European market with advances in its production and distribution channel capabilities thanks to recent breakthroughs. Şişecam aims to further enrich the value-added product portfolio offered to European markets and boost its market penetration in Europe.
Şişecam Flat Glass sees high growth potential and rising demand in India. As a result, Şişecam is considering new investments in that country. These investments would aim to boost Şişecam’s flat glass market share and enhance its competitiveness by improving its value-added product portfolio.
While closely monitoring technological and innovative developments in the industry, Şişecam Flat Glass will continue developing new products in 2021 in conjunction with Şişecam Research and Technological Development Department as well as joint projects with other cooperating institutions.
Offering innovative solutions with its strong brands, Şişecam Flat Glass plans to further invest in advanced technology infrastructure and R&D programs geared toward developing new products that add value to life. With these efforts, Şişecam aims to contribute to a sustainable future for the architecture, solar energy and automotive sectors.
As part of its operational excellence drive, Şişecam Flat Glass will also focus on cost-saving, 6 Sigma and energy-saving efforts in 2021.