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English
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oda_PartialOrCompleteSuspensionOrImposssibilityOfOperationsAbstract|
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oda_UpdateAnnouncementFlag|
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Hayır (No)
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Hayır (No)
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oda_DateOfThePreviousNotificationAboutTheSameSubject|
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-
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oda_DelayedAnnouncementFlag|
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Hayır (No)
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oda_NatureOfSituationOccured|
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Discontinuation of the DMT production and continuation of the production of chips and fiber using the new and modern PTA production technology.
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oda_InformationAboutOperationsSupendedOrBecameImpossible|
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DMT production
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oda_ReasonOfSuspensionOrImpossibilityOfOperations|
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The DMT production line, which was built in the 1980s and has completed its economic life, is not capable of providing the performance and efficiency provided by new developing technologies anymore and also causes higher costs compared to new technology production methods. DMT production is an almost completely abandoned practice all over the world due to excessive cost and high-risk production. Since the cost factor is becoming increasingly important in the global polyester industry, where competition is very strong, taking the economic interests and benefits of the company into account, it is considered as a necessity to discontinue DMT production and continue production using a completely new, modern and more economical PTA production technology in line with the Company's profitability and performance targets.
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oda_DecisionDateOfAuthorizedBodyIfExits|
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Board of Directors Resolution dated 26 January 2024
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oda_ValidityDateOfSuspensionOrImpossibilityOfOperations|
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26 January 2024
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oda_EffectOfSuspensionOrImpossibilityOfOperationsOnTotalProductionOfCompany|
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SASA's production of polyester is divided into two types: DMT-based and PTA-based. Currently, within the total installed polymerization capacity of 1,365,000 tons/year, the DMT-based part is 280,000 tons/year. Due to its high cost, DMT production has decreased continuously in recent years: The share of DMT production amount in the Company's total production amount was 19% in 2021, 13% in 2022, and 9% in 2023. DMT produced by SASA has been used primarily in internal production: 94% of the amount of DMT produced in 2021, 88% in 2022, and 70% in 2023 was transferred to the production of chips and fiber. The share of DMT sold as raw material in the total sales amount remained at incredibly low rates: The share of DMT sold as raw material in the total amount of products sold was 1% in 2021, 2% in 2022, and 3% in 2023. The share of chips and fiber produced using DMT in SASA's total production amount has also gradually decreased due to excessive costs: The share of DMT-based final products in the Company's total production amount was realized as 20% in 2021, 14% in 2022 and 9% in 2023. After the termination of DMT production, production loss resulting from the closure of the DMT plant will be compensated by increasing the amount of PTA-based production.
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oda_EffectOfSuspensionOrImpossibilityOfOperationsOnTotalSalesOfCompany|
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As mentioned above, a significant part of the DMT produced is used in internal production, therefore the share of direct DMT sales in the total turnover is quite low : The share of DMT sold as raw material in total turnover was 0.9% in 2021, 1.3% in 2022 and 3.4% in 2023. As mentioned before, due to its excessive cost, the share of chips and fiber produced using DMT in SASA's total turnover has decreased in recent years: The share of DMT-based final products in the Company's total turnover was 20% in 2021, 15% in 2022 and 9% in 2023. In 2023, PTA-based alternative products were introduced to customers who purchased DMT-based products, and positive feedback was received. In this context, after the termination of DMT production, it is expected that PTA-based products can be sold as an alternative to DMT-based products, and therefore there will be no significant decrease in turnover, and all necessary economic measures are taken by the Company.
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oda_ShareOfPartiallySuspendedOperationsInTotalProductionAndSalesOfCompany|
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-
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oda_NumberOfPersonnelWhoseEmploymentContractsWereOrWillBeTerminated|
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Currently, 151 employees are working on the DMT production line; 131 of them will be reassigned to other production lines, and the employment contracts of 20 employees will be terminated.
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oda_TotalAmountOfSeveranceAndTerminationPaysThatWasOrWillBePaid|
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A total of 2.1 million TL severance and notice pay will be made to 20 employees whose employment contracts are to be terminated.
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oda_PrecautionsTookIntoConsiderationByCompanyManagement|
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It is being taken actions to increase the capacity of our PTA-based production plants and the sales of PTA-based products instead of DMT-based products.
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oda_ConditionsRequiredForGoingIntoOperationAgain|
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-
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oda_ExpectedDateToBeginOperations|
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-
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oda_EffectsOnContinuityAssumptionOfCompany|
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No effect is expected.
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oda_ExplanationSection|
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oda_AdditionalExplanationTextBlock|
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After the earthquakes and aftershocks experienced since 06.02.2023, maintenance and strengthening works were carried out in the buildings of the DMT production line between 22.02.2023 and 17.04.2023, and the plant was recommissioned and has continued its production uninterrupted so far. As a result of detailed examinations and evaluations as of January 2024; it has been determined that the DMT production line, which was built in the 1980s, has completed its economic life, and it has been decided to close the DMT production plant in line with the profitability and performance targets, taking into account the interests and benefits of the Company.
DMT production is an almost abandoned practice all over the world due to excessive cost and high-risk production. As a matter of fact, the DMT production plant within our Company, with its forty-year-old technology, is not capable of providing the performance and efficiency provided by new developing technologies anymore and also creates higher costs compared to new technology production methods. Since the cost factor is becoming increasingly important in the global polyester industry, where competition is very strong, taking the economic interests and benefits of the company into account, it is considered as a necessity to discontinue DMT production and continue production using a completely new, modern and more economical PTA production technology.
The impact of the closure of the DMT production line on the Company's total production and sales is explained in detail in the table above, including previous year figures.
In the event of any discrepancy between the Turkish and English versions of this disclosure statement, the original Turkish version shall prevail. SASA disclaims all warranties and makes no representations about the accuracy or completeness of the English translation and assumes no liability for any errors, omissions or inaccuracies that may arise from use of this translation.
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