11 Mayıs 2011 Çarşamba

Turkish steel firm eyes new investments in south

Local steel company Atakaş, which has sold its stake in the giant MMK Atakaş plant to Russia’s Magnitogorsk, is planning new investments in the southern province of Hatay. Speaking to the Hürriyet Daily News during a press briefing, Atakaş executive Cem Üstün says regional unrest is of no concern for Atakaş, as it has no serious competition in steel production
The MMK Atakaş plant in the southern province of Hatay aims to export 20 percent of its annual production.

The MMK Atakaş plant in the southern province of Hatay aims to export 20 percent of its annual production.
Turkish steel producer Atakaş plans a new investment with a total capacity of nearly 1 million tons of steel production per year in the southern province of Hatay on the İskenderun Gulf. The new facility will replace Atakaş’s existing production center in the same region.

“Atakaş is currently talking about acquiring land to make a new investment in steel,” said Çetin Mutluay, the public relations chief of the company, talking to the Hürriyet Daily News on the sidelines of a press conference held at the MMK Atakaş plant in Hatay. The company considers the southern province as “the rising steel industry hub of the region,” Mutluay said.

Last year, Turkey ranked as the 10th biggest steel producer in the world. In the first quarter of 2011, the nation produced 7.9 million tons of raw steel, corresponding to an annual increase of 31 percent, according to data from the Iron and Steel Producers' Association.

Atakaş and Russia’s Magnitogorsk, owned by billionaire Victor Rashnikov, made the biggest investment in iron and steel from a private sector company in Turkish history this year, putting $2.1 billion into the MMK Atakaş plant. Magnitogorsk, which initially owned half of the facility, announced that it had purchased the remaining shares from Atakaş for $485 million, a day after a March 9 ceremony.

Waiting for regulatory approval

Talking about the sale, Cem Üstün, Atakaş’s sales manager, said the deal had not yet been approved by Turkish regulators and approval was expected to be granted in November. Afterward, Magnitogorsk will assume control of 2.5 million tons of flat steel production capacity per annum and a seaport, which will also provide service to third parties. The port itself is capable of handling 12 million metric tons of iron and steel per year.

However, the two companies may still invest together, according to Üstün, who pointed out that 25,000 square meters of land owned by MMK Atakaş might be used for further investments. The plant is in the trial process and Üstün expects steel sales to start by next month.

According to the sales manager, ongoing political unrest in North Africa and the Middle East will not affect the company. “Iraq, Israel, Jordan and Syria are among the primary steel markets for MMK Atakaş,” he said. “Except Iran, there is no rival to our company in this region.” The company predicts it will sell one-fifth of its output to the Middle East.

“Turkey’s current need of flat steel is around 10 million tons,” Üstün said. “This figure will rise to 14 million tons by the year 2015.”

MMK Atakaş plans to increase production at its plant to also reach a full-rolled steel capacity of 2.5 million tons next year. Between 60 and 80 percent of the plant’s output will be sold to Turkish car and home appliances makers, Üstün predicted, as investments in these key sectors surge.


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