As Mr Chung Joon yang chairman and CEO of Korea’s largest steelmaker Posco arrived at the groundbreaking ceremony for its stainless manufacturing facility his pride was evident. The plant, when completed in April 2013 will sprawl over 169,000 square meters and have the capacity to produce 200,000 tonnes of stainless steel annually.
Mr Chung said that the stainless steel plant which we will start building will be equipped with high tech facilities that will steadily churn out quality stainless cold rolled steel. About 300 guests attended the groundbreaking, including Mr Nihat Ergun Turkey’s Minister of Industry and Commerce, Mr Zafer Caglayan minister of economy and Mr Moon Jae do head of Korea’s Knowledge Economy Ministry’s global industrial cooperation bureau.
Operating a stainless cold rolling plant in the north western Turkish province of Kocaeli had long been one of Mr Chung’s goals. He saw it as helping Posco expand its presence, not only in the Asian market but also in Europe and the Middle East. The mill is a joint project with the Turkish conglomerate Kibar Holding and Daewoo International, the trading arm of the former Daewoo Group, which was purchased by Posco earlier this year.
Mr Chung said that we have been interested in Turkey for a very long time because a presence there could establish a bridgehead for us to enter the European Union market. Last year Turkey’s economy grew 9%. It has one of the highest growth rates this year among G-20 countries.
He said that the opportunity arose to clinch the project to invest in Turkey last year when the prime minister visited Korea. Erdogan was very eager to facilitate Posco’s investment in Izmit. Also, investing in Turkey would allow Posco to benefit from several tax benefits once Turkey becomes part of the EU which it is trying to do by 2013.
He added that even though Turkey has been in the spotlight recently as a locale for heavy industries such as steel and automobiles, its steel production has lagged. Even in 2015 stainless steel production in Turkey and its neighbours is expected to be about 430,000 tonnes about 900,000 tonne less than expected demand. Turkey is also one of the three leaders in Europe along with Italy and Germany in consumer electronics manufacturing.
Mr Chung said that steel production here at this plant will help Turkey replace its steel imports which will improve the country’s overall trade balance while also creating jobs. The joint USD 350 million investment is Posco’s second project in Turkey. It established the Posco and Turkey Nilufer Processing Center in an industrial complex in Nilufer last year.
He said that the Turkish government has verbally promised Posco a tax reduction. I was told that the government would work on reducing tax payments by 2% for us which would allow us to have a level playing field with European firms.
(Sourced from koreatimes.co.kr)
