According to a statement by Turkey’s largest integrated steelmaker Erdemir Group, Erdemir Group CEO Ali Pandır made a presentation titled Turkish Steel Industry and Impact of Imports at StahlMarkt 2016 held in Dusseldorf on February 16-17, while he also spoke to Reuters news agency.
Commenting on Erdemir Group’s 2015 performance, Ali Pandır said that a capacity utilization rate above 90 percent, supported by the flexibility of being able to switch between long and flat steel production, enabled the company to achieve its expected EBITDA margin of 15-20 percent despite the pressure on finished steel prices. In 2015, Erdemir Group’s crude steel production amounted to 8.8 million mt, while the 2016 expectation for crude steel output volume stands at 8.7 million mt.
Mr. Pandır pointed out that Erdemir Group plans $1 million of investments in the period up to 2019 excluding acquisitions, adding that they are evaluating acquisition opportunities within the country to increase galvanizing capacity. He also said that the company intends to double its share of products for the automotive industry to 20 percent. Ali Pandır indicated that Erdemir Group is planning an investment to increase packaging steel capacity and said that they see opportunities in Iran, an important exporter of food products.
According to the Erdemir Group CEO, infrastructure projects such as the North Marmara highway and the third airport in Istanbul, as well as demand from automotive producers, contribute to the demand for Erdemir’s steel. He added that domestic demand will remain strong in 2016, though prices are expected to move on a stable trend.
Mr. Pandır underlined that the Turkish steel industry is being damaged by cheap imports from China and Russia whose options are limited because of trade barriers. He said that Iran is not a concern in terms of competition in the short term since the country’s steel mills are usually located in the country’s southern region which does not have a strong transportation network to Turkey. However, he warned that it is difficult to foresee what could happen in the long term.