By Kang Seung-woo
IZMIT, TURKEY ― POSCO broke ground Wednesday for its $350 million cold-rolled stainless steel plant in Izmit, Turkey in its efforts to become a leading stainless steel maker.
The plant, which is 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, last year in Bursa Province.
“The plant will be equipped with one of the best cutting-edge facilities in the world and is expected to stably produce solid cold-rolled stainless steel,” POSCO Chairman Chung Joon-yang said in 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 to improve its trade balance, as the production from the new plant will replace its imports.
Currently, the Pohang-based company, which can nearly produce 3 million tons of stainless steel, is sitting third in terms of annual production capacity behind Acerinox and Taiyuan Iron and Steel, which has an annual capacity of 3.4 million tons and 3 million tons, respectively.
The mill will be established within the Izmit industrial complex, about 100 kilometers east of Istanbul that features major infrastructure such as electricity, road and natural gas, 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 stainless mill, POSCO, the world’s third-largest steelmaker, expects to play a leading role in the Eurasian country’s domestic stainless market, which entirely relies on imports ― 210,000 tons in 2009 and 326,000 tons in 2010 ― and capitalize on Turkey’s geographic advantage to take on the demands from neighboring areas including the Middle-East, Eastern Europe, and Commonwealth of Independent States (CIS) region.
According to the steelmaker, Turkey has swiftly evolved into 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 the top three home appliance manufacturers in Europe, so there is strong demand for high-end stainless steel from them.
According to POSCO, Turkey and its neighboring nations are expected to fall shortest of supply of stainless steel in the world in 2015, with its supply likely to reach 40 million tons ― 90 million tons in lack 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 tons 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 the day, the POSCO Chairman said that he will broaden its 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.
ksw@koreatimes.co.kr
via POSCO building stainless steel plant in Turkey.