Category: Business

  • New energy between Cold War foes Turkey, Russia

    New energy between Cold War foes Turkey, Russia

    TOKMAK

     

    AKKUYU, Turkey — Russia and Turkey, which were Cold War adversaries, are finding common ground on energy despite ongoing diplomatic disputes.

    Turkey has agreed to allow Russia’s South Stream gas pipeline to cross its territorial waters, and Russia is investing $20 billion to construct Turkey’s first nuclear power plant.

    The deals have been made even while Turkey criticizes Russian support for Syrian President Bashar Assad and Moscow fumes over a NATO early-warning radar system in Turkey.

    “These are countries that have been able to compartmentalize their differences,” said former Turkish diplomat Sinan Ulgen, chairman of the Center for Economics and Foreign Policy Studies in Istanbul (EDAM).

    “It has been a relationship driven by mutual economic gain.”

    Gas- and oil-producing giant Russia has enlisted Turkish support for its proposed South Stream pipeline to diversify its access points to European markets.

    One of the world’s fastest-growing economies, Turkey has significant energy needs. The majority Muslim nation’s energy demands will double by 2023, according to one projection.

    But Turkey cannot do it alone and has sought international partners to build, own and operate a nuclear plant.

    Only Russia has come forward and is constructing the Akkuyu nuclear power plant on the Mediterranean coast near the southern city of Mersin. The plant’s design calls for four 1,200-megawatt reactors scheduled to go on line in 2019.

    The $20 billion venture will be wholly financed by a subsidiary of Rosatom, Russia’s state-controlled nuclear energy corporation.

    Unprecedented cooperation

    The Russian firm has agreed to build, own and operate the plant for its entire productive life, with spent fuel sent to Russia for reprocessing. The deal represents an unprecedented level of cooperation between the former adversaries.

    “We are the nearest neighbors with Turkey, and we should trust each other,” said Rauf Kasumov, a spokesman for Akkuyu NGS, the Russian company that will own and operate the plant. “Logically, Turkey needs that. It’s one of the fastest-growing economies of the world, and they need it badly.”

    Questions linger about what would become of the core waste leftover from the plant, a perennial controversy whenever a reactor is to be built.

    “That is a decision to be done later between the Turkish republic and the Russian Federation,” Mr. Kasumov said.

    Under terms of the agreement signed in 2010, decommissioning will be funded by a cent-and-a-half levy on each kilowatt hour sold over the plant’s 60-year productive life span.

    Critics such as Erhan Kula, an economics professor of Bahcesehir University in Istanbul, say that relies on vague assumptions on what the long-term costs will be.

    “The most important thing [regarding] nuclear power is the decommissioning and storage of highly toxic waste,” Mr. Kula said. “There’s just a couple of sentences in the environmental assessment report, which is mind-boggling.”

    Mr. Kula said the 4,800 megawatts produced by the four reactors would provide only about 5 percent of Turkey’s energy needs and that the current grid is losing more than 14 percent to theft.

    “If we stop that, we don’t need nuclear power,” Mr. Kula said.

    However, A. Beril Tugrul, director of the Energy Institute at Istanbul Technical University, said Turkey’s energy needs are rising, and nuclear power, with all its risks, is an essential alternative to burning fossil fuels.

    “I think many of the problems [with decommissioning] can be solved — but maybe not,” Ms. Tugrul said. “But it’s not just nuclear power that has problems. All plants have huge problems with carbon dioxide and greenhouse gases.”

    Even EDAM’s study, which found that the agreement could work in Turkey’s favor, cautions that Ankara has failed to lay the groundwork for proper oversight of atomic energy.

    “Turkey is rushing toward nuclear power,” Mr. Ulgen said. “Turkey does not currently have the regulatory capacity to minimize the risks inherent in nuclear power.”

    Officials at the Turkish Ministry of Energy and Natural Resources did not respond to requests for comment.

    Turks fear nuclear power

    Turkish officials have been eyeing the Akkuyu site since the 1970s, but it has been only in recent years that the project has taken shape.

    Nuclear power in Turkey has generated little debate, though the most exhaustive study conducted shows broad public skepticism.

    Memories of the 1986 Chernobyl meltdown in Ukraine, which irradiated parts of Turkey’s Black Sea region, may help explain why 62.5 percent of the more than 2,400 people surveyed said they are opposed to nuclear power, making it the second-least popular choice after coal.

    “If they listened to what people say, they shouldn’t go nuclear. Turks are very scared of nuclear power,” Mr. Kula said.

    The survey was conducted in 2007, and the Fukushima Daiichi disaster in Japan last year has further sullied nuclear power’s reputation, he said.

    Organized opposition has been limited. The site is relatively undeveloped, but road access along the craggy cliffs that tower above the Mediterranean has been upgraded.

    This summer, a small tent encampment was erected in protest to raise awareness as grass-roots groups lodge legal challenges.

    Opposition groups — backed by the main opposition Republican People’s Party (CHP) — argue that the site is crisscrossed by active earthquake fault lines. Court challenges have been lodged against the site plan, but the government has not stopped construction.

    “We are going to both challenge the government and draw the public’s attention through direct action,” said Sabahat Aslan, one of the protest leaders at the encampment.

    Meanwhile, another site on the Black Sea coast has been identified for a second plant, but the Turkish government has been unable to find an international partner willing to build it.

    Turkey has been in talks with China, Canada, South Korea and Japan to replicate a deal similar to Russia‘s.

    Mr. Kasumov, the Akkuyu NGS representative, said it is unlikely that another country would be willing to invest as heavily as Russia has.

    “I really doubt that any other country would be in the position of financing the [build-own-operate] model. It’s pretty expensive,” he said.diplomat Sinan Ulgen, chairman of the Center for Economics and Foreign Policy Studies in Istanbul (EDAM).

    “It has been a relationship driven by mutual economic gain.”

    The Russian commitment to the project appears unshakable publicly, but the Turkish press has raised questions about Moscow’s willingness to spend vast sums as cost projections rise.

    The project’s future depends largely on the good will of the Russian government and its faith in Turkey as a strategic energy partner.

    “They really need to commit the $20 billion,” said Mr. Ulgen of EDAM, “and there is no clear penalty in the agreement if they don’t

    test leaders at the encampment.

    Meanwhile, another site on the Black Sea coast has been identified for a second plant, but the Turkish government has been unable to find an international partner willing to build it.

    Turkey has been in talks with China, Canada, South Korea and Japan to replicate a deal similar to Russia‘s.

    Mr. Kasumov, the Akkuyu NGS representative, said it is unlikely that another country would be willing to invest as heavily as Russia has.

    “I really doubt that any other country would be in the position of financing the [build-own-operate] model. It’s pretty expensive,” he said.diplomat Sinan Ulgen, chairman of the Center for Economics and Foreign Policy Studies in Istanbul (EDAM).

    “It has been a relationship driven by mutual economic gain.”

    The Russian commitment to the project appears unshakable publicly, but the Turkish press has raised questions about Moscow’s willingness to spend vast sums as cost projections rise.

    The project’s future depends largely on the good will of the Russian government and its faith in Turkey as a strategic energy partner.

    “They really need to commit the $20 billion,” said Mr. Ulgen of EDAM, “and there is no clear penalty in the agreement if they don’t.”

  • Vinci Seeks to Bid for Turkey Roads, Joining Autostrade, OHL

    Vinci Seeks to Bid for Turkey Roads, Joining Autostrade, OHL

    Vinci SA (DG), Europe’s biggest builder, Autostrade per l’Italia SpA and Obrascon Huarte Lain SA (OHL) of Spain are among companies that applied to get prequalification for a Turkish government auction for operating toll roads and Bosporus bridges.

    Vinci Concessions Holding AS, the French company’s Turkish unit, applied without a partner for the prequalification auction for which the deadline was today, the Ankara-based asset sale agency, known as OIB, said in an e-mailed statement. The auction is planned for later this year.

    Koc Holding AS (KCHOL), Turkey’s biggest business group, applied with partners UEM Group Berhad, a Kuala Lumpur-based highway operator owned by Khazanah Nasional Bhd, and Gozde Girisim Sermayesi Yatirim Ortakligi AS (GOZDE), a Turkish private-equity firm, the OIB said.

    The winner will get 25 years of operational rights for eight toll roads of about 2,000 kilometers (1,200 miles) and two crossings over the Bosporus, according to the terms. The government’s sale of toll highways is part of a privatization drive to pull in 12.5 billion liras ($6.87 billion) selling assets including electricity grids this year.

    Autostrade of Italy is bidding with Turkey’s Akfen Holding AS (AKFEN), Dogus Holding AS and Makyol Insaat Sanayi Turizm & Ticaret AS, the OIB said. OHL, based in Madrid, joined Istanbul-based partner Zorlu Holding AS in asking for prequalification.

    MV Holding AS, Nurol Insaat & Ticaret AS, Fernas Insaat AS, Kalyon Insaat Sanayi & Ticaret AS and Alsim Alarko Sanayi Tesisleri & Ticaret AS, a unit of Turkey’s Alarko Holding AS (ALARK), applied as the only group that doesn’t have a foreign partner, the OIB said.

    via Vinci Seeks to Bid for Turkey Roads, Joining Autostrade, OHL – Businessweek.

  • Carbon fiber update: Fiber sources gear up for expected increase in demand

    Carbon fiber update: Fiber sources gear up for expected increase in demand

    Currently, the market for carbon fiber composites is estimated at $10 billion (USD) globally, and observers expect that it could reach as high as $40 billion by 2022. Aspiring and established carbon fiber manufacturers and a variety of marketing partners are positioning themselves to meet the vastly increasing need for raw fiber and fibrous reinforcement products.

    The Dow Chemical Co. (Midland, Mich.), through its wholly owned subsidiary Dow Europe Holding BV, and carbon fiber producer Aksa Akrilik Kimya Sanayii A.Ş. (Istanbul, Turkey) announced in late June the formation of DowAksa Advanced Composites Holdings BV, a 50/50 joint venture (JV) to manufacture and commercialize carbon fiber and derivative products. Aksa and Dow had previously signed a definitive agreement to form the JV on Dec. 20, 2011. DowAksa will develop and globally market a broad range of products and provide technical service and support, with emphasis on industrial applications, including energy, transportation and infrastructure.

    Aksa’s carbon fiber has been produced since 2009 in its factory in Yalova, Turkey. The JV will expand on existing carbon fiber production assets in Yalova and will capture growth by creating a large-scale, integrated production capability for the manufacture and supply of advanced carbon fiber technologies.

    Aksa board chairman Mehmet Ali Berkman said, “Aksa took steps in 2011 in the carbon fiber sector to increase market share through investment in manufacturing capacity and productivity. With the formation of the joint venture, we are pleased that our carbon fiber technologies and production capabilities in Turkey will be essential to DowAksa’s future as a world leader in advanced carbon fiber and derivatives.”

    Elsewhere, Toho Tenax Co. Ltd. (Tokyo, Japan), the core company of the Teijin Group’s carbon fibers and composites business, announced on June 20 that it will develop and market carbon fiber fabrics for India’s composites industry in collaboration with Hindoostan Technical Fabrics Ltd. (Mumbai, India), a carbon and aramid textile manufacturer that is wholly owned by Hindoostan Mills Ltd., a major textile company in India and part of the Mumbai-based Thackersey Group. This will be the first time Toho Tenax has partnered with a textile manufacturer in India’s carbon fiber sector. Under the agreement, Toho Tenax will supply its proprietary Tenax carbon fiber to Hindoostan Technical Fabrics for weaving and processing. The two companies will jointly market the resulting fabrics to Indian manufacturers of composite materials and reinforced sheets that serve industrial segments, including transportation, aerospace and railway; wind power; sports and leisure; medical equipment; construction reinforcement and retrofitting; and electronics (i.e., computer and mobile phone housings).

    Already a supplier of chopped carbon fiber to India, Toho Tenax says India’s composites industry has recorded robust growth — about 20 percent per annum in the past five years. The company is preparing to meet the surging demand for intermediate-modulus material, including prepregs. “We believe that India’s carbon fiber composite industry is in its infancy and has substantial growth potential. Our collaboration with Toho Tenax, an industry leader in carbon fiber technology, will play a pivotal role in providing users with high-quality, customized and competitive carbon fiber fabrics with reliable supply and strong application support,” says Sudhir Thackersey, Hindoostan’s chairman.

    In other carbon news, Bloomberg reported on July 11 that Toray Industries Inc. (Tokyo, Japan), the world’s largest producer of carbon fiber, will seek as much as ¥70 billion ($895.5 million USD) in additional financing during this fiscal year (ending March 2013) to fund growing fiber manufacturing activities. This is up from ¥60 billion ($767.4 million) in the previous period, according to Mitsuharu Mano, the company’s finance general manager. Toray sold 10-year bonds valued at ¥20 billion ($255.86 million) on July 11 in its first offering of nonconvertible notes in nine years. Bloomberg reported that the demand for lightweight materials for use in automobiles and aircraft is expected to boost Toray’s annual sales to ¥2 trillion ($25.58 billion) in about three years. That, said the company, in May, was up 16 percent from the forecast for that period.

    “Aggressive capital spending is at the center of our current business plan,” Mano said in a Bloomberg interview. “We need money to fund expansion of facilities.” In April, Toray began a three-year, ¥350 billion ($4.47 billion) capital spending plan aimed at boosting sales of carbon fiber and its mainstay synthetic fiber.

    One day earlier, SGL Group – The Carbon Co. (Wiesbaden, Germany) reported that it had completed the acquisition of an additional 10.8 percent stake in the Portuguese company Fisipe (Fibras Sintéticas de Portugal SA, Lisbon, Portugal) from the previous shareholder, Quimifértil, and as a result, it now holds a 97 percent stake in the company. The transaction was approved by the Portuguese securities commission. In April 2012, SGL acquired an 86 percent stake in Fisipe from the previous major shareholder, Negofor. With this transaction, SGL Group is expanding its production network to ensure an adequate supply of raw materials for carbon fiber production. This will include an additional production facility for precursors.

    Some textile fiber production lines at the Fisipe site will be converted into precursor lines and gradually expanded. At the same time, the facility will continue to manufacture and sell acrylic fibers for special textile and technical applications.

    via Carbon fiber update: Fiber sources gear up for expected increase in demand : CompositesWorld.

  • Investing In: What’s the Risk for Investors of Turkey Going Islamist?

    Investing In: What’s the Risk for Investors of Turkey Going Islamist?

    By: Deborah Caldwell

    Senior Editor, Enterprise

    Turkey is as complex as a Byzantine mosaic or a potent Turkish coffee. Straddling Europe, Asia and the Middle East, it’s a Muslim country with ancient Christian roots — but founded as a modern nation in 1923 by a militant secularist, Mustafa Kemal Ataturk. For decades an economic backwater, it’s now the fastest-growing economy in Europe.

    Turkey Mosque  Getty Images
    Turkey Mosque
    Getty Images

    That economic success was achieved by an Islamist-leaning government that has managed successfully to meld the conservative religious devotion of the masses with the economic interests of the secular elite.

    But what if Turkey, propelled by its majority of populist conservative Muslims, were to adopt a more extreme version of Islam? Syria, its neighbor to the south, is disintegrating — abetted according to some reports by rebels connected to Al Qaeda. Some of those rebels may be drifting across the border into Turkey. And there are rumors that Prime Minister Recep Tayyip Erdogan has intestinal cancer; with no clear successor to his decade-old leadership, his ruling Justice and Development (AKP) party could splinter and give rise to a more extremist Islamic rule.

    Yet experts say Turkey is so much improved economically from a decade ago that there is little chance its people would risk that prosperity — and relations with the West — to adopt an extremist Islamic state.

    That is not to say, however, that Turkey isn’t dealing with a precarious religious situation. “The society is going more conservative,” said Ebru Erdem, political science professor at the University of California at Riverside. “It’s been going on since the 1990s, and that is still in progress.”

    Erdem said Turks who don’t fast during the holy month of Ramadan, for instance, or who drink alcohol, face ostracism. And last spring the AKP ignited a debate about the morality of abortion and C-sections, two issues Erdem said had never before caused so much as a flicker on the Turkish radar screen.

    “They are not like the Islamist parties of before,” Erdem said. “They come from the same traditions, but they said they have taken off that shirt and they present themselves as a ‘liberal’ political party.”

    Erdem and other Turkey experts liken the religious dynamic in Turkey to none other than the U.S., comparing the AKP to the most conservative Christians of the Republican Party.

    “They are modeling on the Americans,” Erdem said. For instance, she said, the government has gradually begun regulating alcohol sales. “They say it’s not good for you, and they give the example of the U.S. Bible Belt, where you can’t buy alcohol on Sundays.”

    via Investing In: What’s the Risk for Investors of Turkey Going Islamist?  – US Business News – CNBC.

  • GE Completes Sustainable Wind Energy Farm in Turkey

    GE Completes Sustainable Wind Energy Farm in Turkey

    General Electric and Gama Holding have completed its second wind farm project in Turkey. General Electric is the biggest maker of wind turbines in the U.S. The company recently surpassed 2 GW of installed capacity worldwide.

    The 10 MW project Karadag farm in Izmir in the Aegeon region went online this month with four 2.5 MW turbines. Like many other countries, Turkey is trying to increase the share of sustainable renewable power in its energy mix and has set a goal of 30 percent for 2023. The developing nation’s electricity demand grows at a rate of six percent per year, according to official estimates.

    “Our partnership with GAMA reinforces our commitment to investing in and building our presence in the global renewable energy market,” said Andrew Marsden, managing director, Europe at GE Energy Financial Services.

    Turkey is a strategic growth area for GE and the company has been investing in that country for more than 60 years. With six facilities and over 600 employees, GE today powers nearly 25 percent of Turkey’s electricity needs.

    Earlier in March, GE and Gama inaugurated the 22.5 MW Sares wind farm and together the operations will generate enough electricity to power 59,000 average Turkish homes and prevent 80,000 tons of greenhouse gas emissions a year.

    Wind power is seen by many as one of the best bets to achieve a sustainable energy future. It is the most popular source of renewable electricity. At the end of the 20122, wind-powered generators achieve the record figure nameplate capacity of 238 GW, which was 41 GW more than the previous year. The World Wind Energy Association says that wind power has the capacity to generate 430 TWh per year, or 2.5 percent of the global electricity usage.

    Image credit: GE

    via GE Completes Sustainable Wind Energy Farm in Turkey | Corporate Social Responsibility.

  • The spectacular rise and fall of Asil Nadir

    The spectacular rise and fall of Asil Nadir

    Asil Nadir turned Polly Peck into a shareholders dream, until the company collapsed amid accusations of fraud

     

    Jason Rodrigues

    guardian.co.uk, Wednesday 22 August 2012 14.01 BST

    Asil Nadir director of Po 008

    Asil Nadir, director of Polly Peck.

    Asil Nadir, director of Polly Peck, during the company’s heyday. Photograph: Tony Mcgrath/Picture library

    Though not entirely a rags to riches story, a young Asil Nadir once sold newspapers on the streets of Northern Cyprus before moving to Istanbul to study economics at university. During his college days, he supported himself by performing with his band, The Asils.

    On graduating in 1963, Nadir moved to London’s east end, a journey his family had already made from Cyprus. Before long, Asil made his mark in the rag trade as chairman of garment firm Wearwell, before turning the loss-making ladies fashion group Polly Peck into a business empire.

    Polly Peck sold Published in the Guardian on 14 February 1980, click on image for full story

    He added packaging, electronics and fresh produce companies to the Polly Peck conglomerate, which later became listed as a FTSE 100 company.

    Polly Peck’s rapid growth saw its value rise to £2 billion, making City traders fall in love with it during the boom times of the 1980s, some in the Square Mile calling it “wonder stock”. By 1990, Nadir was in the Sunday Times rich list, and a generous donor to Margaret Thatcher’s Conservative government.

    Polly Peck shares Published in the Guardian on 25 October 1990, click on image for full story

    Then in August 1990, in a move that baffled the city, Nadir tried to buy up Polly Peck shares from investors, only to retreat from this position days later. It was too late: Nadir had spooked the market and Polly Peck’s shares plunged. The value of Nadir’s personal holding was rumoured to have dropped by more than £160m.

    Worse was to come, when trading in Polly Peck was suspended and Nadir was quizzed by the Serious Fraud Office. When Polly Peck was forced into liquidation in October 1990, its creditors were owed £1.3bn.

    PP fraud Published in the Guardian on 21 September 1990, click on image for full story

    Nadir, who has always denied the 66 charges of false accounting and theft made against him, was alleged to have secretly transferred £34m out of the company, leading to its collapse.

    In 1993, just days before he was due to face charges, Nadir was driven to an airfield near London, boarded a waiting business jet and fled to his native Northern Cyprus – which has no extradition treaty with Britain.

    In 2010, having evaded the British courts for nearly 20 years, Nadir flew back to the UK, and declared himself delighted at the prospect of finally standing trial and “clearing his name”.

    At his trial at the Old Bailey in 2012, Asil Nadir was found guilty of 10 charges involving the theft of millions of pounds from his Polly Peck empire.

    The jury found him not guilty on three counts – all similar theft offences.

     

    via The spectacular rise and fall of Asil Nadir | From the Guardian | guardian.co.uk.