ArcelorMittal stands firm in Turkish market
Posted by meb at July 2nd, 2008
The Turkish steel market is valuable for ArcelorMittal, Lakshmi Mittal, the company’s chief executive officer told business daily Referans Monday.
ArcelorMittal is aware of the Turkish steel sector’s growth potential, “therefore, we have no plans to sell the shares we own in Erdemir,” the chairman of the global steel giant told the Istanbul-based newspaper. ArcelorMittal had upped its stake in Ereğli Demir Çelik, Turkey’s biggest steelmaker also known as Erdemir, to slightly 24.9 percent from 13.62 percent in mid June.
In increasing its shares in Erdemir to 24.9 percent, ArcelorMittal is not seeking to have right of representation on the administrative board, said Mittal and added that the company currently is not looking to increase its shares in Erdemir to above 25 percent. Mittal did not want to comment on the Financial Times report speculating that “ArcelorMittal is getting ready to make a new offer to Erdemir within the next few years.”
“I do not want to comment on speculations. The truth is crystal clear. Turkey’s Armed Forces Pension Fund, or OYAK, owns the majority shares in Erdemir and it is not looking to sell. We respect that decision,” said Mittal
Reminded of Oyak Group CEO Coşkun Ulusoy’s “As long as I am here, I would not sell Erdemir even if they paid YTL 100 for an asset that is actually worth YTL 10” statement, “There is no offer from us anyways,” said Mittal.
The owner of the giant did not comment on whether Erdemir’s market value which has nearly reached $9.3 billion is normal amid the current market conditions. Erdemir’s shares added 67.62 percent value during the last year, where both global and domestic markets collapsed due to the global credit crisis.
Strategic importance:
Revealing ArcelorMittal’s other investment plans in the region, “Turkey has strategic importance [for those plans],” said Mittal.
Besides its investment in Erdemir, ArcelorMittal is also in a partnership with Borusan, one of Turkey’s leading steel producers. In 2007, ArcelorMittal, the world’s number one steel company, and Borusan had announced a 50/50 joint venture partnership, which would see a $500 million investment in the construction of a new hot strip mill in Turkey. “This also shows the importance we attach to Turkey,” said Mittal.
The mill, located next to ArcelorMittal and Borusan’s jointly operated Borçelik plant in Gemlik, on the Marmara Sea coast, is scheduled to come online in first half of 2010 with a capacity of 4.8 million tons. The new facility, which plans to employ 450 people, is foreseen to provide $3 billion turnover annually, once it begins to operate at full capacity.
source: Turkish Daily News
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