Can Turkey Become A Producer in the North America Market? PDF Print E-mail
2010-08-07 18:39:50
Namik Ekinci, President of Istanbul Iron and Steel Exporters? Association.
During 1980s, the Turkish iron and steel industry showed great progress, which paralleled the establishment of the electric arc furnace mills and developments in the economic structure. Today, with its integrated plants that have capacities ranging from 1 million tons up to 3 million tons and with 16 electrical arc furnaces whose capacities run from 400.000 tons up to 2 million tons, the iron & steel industry has become one of the most developed sectors of Turkey and makes a significant contribution to the Turkish economy. The Turkish Iron and Steel Industry has reached 11th in world steel production and is among the top three in Europe. Turkey’s share of the world’s crude steel production rose 1.9% and finished steel consumption rose to 360 kg per capita in 2007; this is expected to rise to 420 kg per capita in 2010. The Iron and Steel Industry is the third largest exporting sector in the Turkish economy and is becoming one of the major driving forces among Turkish total exports. Steel products are exported to more than 160 countries in the world. Namik Ekinci, President of Istanbul Iron and Steel Exporters’ Association. answered TURKOFAMERICA’s questions.

The iron and steel sector was one of the sectors that was living deep inside of the financial crisis which the U.S. mortgage crisis spread across whole world. Can you tell us about how you’re doing in the in post-crisis period?
Before the mortgage crisis, our most important markets were Dubai, Europe and America. As the crisis spread out of America to other countries, the building sector significantly slowed down, and this resulted in the halting or postponing of new projects. The construction material suppliers were severely affected by the contraction in the sector due to the very low demand for their products. As a result, the production was cut down and suspended for some periods by the producers. The iron and steel sector was the most affected of all, as it naturally relies on stocks. As the stocks with very high costs were sold off for very low prices, very huge losses occurred in the sector.

How have the experience of overcoming difficulties such as economic crises, the shrinkage of the market, increases in raw material prices, and anti-dumping investigations, made an impact on your future strategic plans?
Such incidents caused us to be more cautious and act more prudently; we kept our determination instead of backing down. About strategic planning, we will search for and cultivate new markets for export for the products for which we have a high production level, and we will also give more importance to calculating our costs and planning our pricing in order not to be subject to anti-dumping investigations. We will work with consulting companies to overcome the inherent and artificial obstacles present in our existing and potential export markets.
Turkey is among the world's 10 leading steel producer countries in the industry. Over the next 10 years, how will Turkey be transforming? While China, Brazil and India increase their share of the market, how will the other major players’ efforts affect Turkey?
Turkey is a country that supplies its raw material and most of the input for its manufacturing from the outside; however, at the same time it successfully exports most of its production. This position will be positively affected and our success furthered by the collaboration of the trade associations and organizations. Although China, Brazil and India have very high production levels, they will also need imported steel for their future development. As other countries continue their development plans as well, steel consumption will remain at significant levels. This will result in the installation of new facilities and modernization of the existing ones.

It’s known that certain Turkish product items in North American market have very strong following and that there are in demand. However Turkey still has some potential product groups to export to the U.S. market which aren’t available yet. What should be done to export these product groups?
The production levels should increase, production quality should be suitable to the requirements of the importing country and the export prices should be competitive compared to rivals. When these factors are met, these products will take their place in U.S. and world markets.
In 2009, the iron and steel wire rod, steel pipe, and steel scrap exports to the U.S. declined between 18 to 79 percent when compared to the previous year. By the end of 2010, what sort of figures should we expect?
In the year 2009, as for most steel products, there were sharp decreases both in quantity and value of wire rod and tube exports, compared to the year 2008. However, when we look at Turkey’s export to the U.S. in the first five months of 2010, we see a significant recovery, especially in the wire rod exports, as the export value of the first six months has already tripled the total export value of the year 2009.  For this reason, we believe that the deficit of the previous year will be easily covered by this year’s export value for this product. There is also a good amount of increase in tube exports in 2010; thus we expect that the total export value of tubes will exceed the previous year’s levels as well.

The industry’s total export was $19.3 billion in 2008. How much time will be needed to reach 2008’s figures?

The reason exports hit $19.3 billion dollars in 2008 was due to high unit prices. Now our export quantity is slightly higher compared with those years, but the total export value is lower due to low unit prices. In order to reach those previous levels, with the proviso that the effects of the world crisis are lessened, the existing facilities should operate at full capacity, new ones should be in a position to start production as soon as possible, and then prices should reach  the previous levels.  After that, $20 billion dollars in exports will be easily exceeded.

After a period of trading goods with the United States, can Turkey become a producer in the North America market? Do you believe Turkish companies have the ability, experience and knowledge to make this happen?
To be a producer in North America is a dream of most Turkish producers. We hope that these dreams will become real in the near future, because it is important not only to make investments in Turkey, but also to be present in the countries where there are markets with high demand and where production inputs are available.

Would you like to add anything?

Our association is undergoing a restructuring period and working on different areas concerning our sector. While our main objective is the increase of our exports, we also work on providing the necessary market information for structuring of the existing steel industry and new investments.
Last Updated ( 2010-08-07 18:42:29 )
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