PTR had the opportunity to present at CWIEME (Coil Winding Expo) last week in Istanbul, Turkey. The exhibition took place from November 2-4 and covered the latest advancements in materials, manufacturing processes, and system integration for motors and transformers industries.
Given its potential in terms of labor force and advantage of geostrategic location, Turkey is an ideal manufacturing hub for European, African and Middle Eastern markets. However, with new trends like Industrial connectivity, online asset monitoring, and E-Vehicle penetration, Turkish manufacturers seem to be one step behind and are trying to catch up with the technological advancements seen in Europe.
Turkish motor manufacturers need to invest in R&D to supply EV market:
E-vehicles are one of the hottest topics for the motor industry at the moment. Development of new cooling technologies and magnetic materials are major R&D topics under consideration for EV industry. Local players operating in conventional automobile industry have started to develop hardware related R&D to be able to supply to E-Vehicle markets. However, a lot still needs to be done when it comes to production of complete systems and monitoring solutions in this industry. Moving forward, Turkish motor manufacturers need to take following steps to withstand the fierce competition from EU and Chinese players, especially in E-Vehicle market:
1. Optimization of labor force for better results
2. Increased focus on R&D around mega-trends
3. Strengthening of academia and industry partnerships to develop local talent
4. Enhanced focus on spare parts production for E-Vehicle industry
Electrical steel demand still not high enough to warrant local production:
Under the transformers topic, PTR focused on following suppliers: Grain Oriented Electrical Steel (GOES) for transformers, On-load tap changers (OLTC), Transformer Cores and Online Asset Health Monitoring systems (AHM) for transformers. GOES is currently imported in Turkey from manufacturing hubs like Russia, China and South Korea. The relatively “small” amount electrical steel consumed in the country is still not enough to warrant investment in a local manufacturing facility. At the moment, steel imported from Russia and China gets hit with 6% import duties whereas no duties are applied on steel imported from South Korea.
Growth in Turkish transformers market, strong competition in EMEA expected:
From transformer market perspective, as explained by our Principal Analyst Saqib Saeed in his presentation, Turkish transmission system is expected to go through strengthening process because of renewable capacity additions consequently manufacturing capacity utilization is also expected to increase. This was evident from our discussion with transformer component/material providers who reported slight growth in the orders placed for the next quarters. Moving forward, transformer export business of Turkish manufacturers might face challenges. PTR believes that Chinese investments in African T&D infrastructure and the penetration of Chinese EPCs in GCC energy market will hamper the business opportunities in the Middle-East and Africa region.
Overall, Turkish manufacturers will get a strong competition against other low-cost manufacturing hubs like India and China in the future. There is a strong opportunity for Turkish manufacturers to capitalize on mega-trends like E-vehicle Penetration and Distributed Energy Generation. However, this would require more investments and subsidies in R&D, and smart business development strategies so Turkish manufacturers can strengthen and then enhance their position as supply hub in the future.