POSCO Chairman Chung Joon-yang, center, poses with high-profile figures from the Turkish government, including Economy Minister Zafer Caglayan, left, and Minister of Science, Industry and Technology Nihat Ergun, right, during the groundbreaking ceremony for the company’s construction of a stainless steel plant in Izmit, Turkey, Wednesday. The plant, which is scheduled to be completed in April 2013, will have an annual capacity of 200,000 tons. (Credit Photo @ POSCO)
IZMIT, TURKEY _ POSCO broke ground Wednesday for its $350 million cold-rolled stainless steel plant in Izmit, Turkey as part of its efforts to become a leading stainless steel maker in the region.
The plant, scheduled to be completed in April 2013, will have an annual capacity of 200,000 tons. It is the steel giant’s second investment in Turkey, following the launch of its POSCO-Turkey Nilufer Processing Center (TNPC), a comprehensive auto steel processing center, in Bursa Province last year. “The plant will be equipped with one of the finest cutting-edge facilities in the world and is expected to stably produce solid cold-rolled stainless steel,” POSCO Chairman Chung Joon-yang said during the ground-breaking ceremony, where Turkey’s Minister of Science, Industry and Technology Nihat Ergun and Economy Minister Zafer Caglayan were present. The chairman also said that the building of the stainless steel plant will help Turkey improve its trade balance, as production from the new plant will replace its imports. Currently, the Pohang-based company, which can produce nearly 3 million tons of stainless steel, is sitting third in terms of annual production capacity behind Acerinox and Taiyuan Iron and Steel, which have annual capacities of 3.4 million and 3 million tons, respectively. The mill will be established within the Izmit industrial complex, about 100 kilometers east of Istanbul and its closeness to Derince Port will make it easy to bring in stainless hot-rolled plates, from Pohang Steelworks, necessary for the stainless cold-rolling mill. With the Turkey facility, POSCO expects to play a leading role in the Eurasian country’s domestic stainless market, which relies entirely on imports _ 210,000 tons in 2009 and 326,000 tons in 2010 _ and capitalize on Turkey’s geographic advantage to take on demands in neighboring areas including the Middle East, Eastern Europe, and the Commonwealth of Independent States (CIS). According to the steelmaker, Turkey has evolved swiftly into a heavy industry-centered mode, with global automakers like Renault, Fiat, Ford, Nissan and Honda clustering in the country. In addition, Turkey, along with Italy and Germany, is one of the top three home appliance manufacturers in Europe, so there is strong demand for high-end stainless steel. According to POSCO, Turkey and its neighboring nations are expected to lack a supply of stainless steel in 2015, with supply likely to reach 400,000 tons, about 1 million tons short of demand. This groundbreaking comes as POSCO’s aggressive push for value-added stainless steel is on full display. Last week, POSCO purchased shares of Southeast Asia’s largest stainless steel producer, Thainox Stainless, to boost its stake to 75 percent from 15 percent, while earlier this year, it expanded the capacity of its Chinese stainless steel joint venture, Zhangjiagang Pohang Stainless Steel (ZPSS), from 800,000 to 1 million tons per year. Over the past year, POSCO has also taken over Asia Stainless Corp. in Vietnam and Taihan ST Corp. in Korea. Earlier in the day, the POSCO chairman said that he will broaden the firm’s economic cooperation with Turkey. “We have set our sights on Turkey because of its steady economic growth,” Chung told reporters in a press conference after meeting Turkish President Abdullah Gul and Prime Minister Recep Tayyip Erdogan on Tuesday. According to him, POSCO and its affiliates will make efforts to enter the Turkish markets, while Turkey is considering giving supports, including tax benefits.