MMK Metalurji President Yury Bodyaev: “Our presence in Turkey getting stronger with increasing amount of customers”

Wednesday, 19 October 2011 17:46:09 (GMT+3)   |  
       

On March 11 this year, Russian steelmaker Magnitogorsk Iron and Steel Works (MMK) was reported to be considering the acquisition of all shares of the joint venture MMK - Atakas Metalurji San. Tic ve Liman Isletmeciligi A.Ş. (MMK-Atakas) which it had established with Turkish investor Atakas Sirketler Grubu in 2007.

 

Accordingly, the process has been completed and, with the parties completing sales transaction as of today, all the shares have officially been transferred to MMK. MMK has increased its own stake to 100 percent by acquiring the other 50 percent shares of the joint venture under the agreement worth $485 million. With its Iskenderun and Gebze plants in Turkey, the company will continue to operate in Turkey under the name of MMK Metalurji Sanayi Ticaret ve Liman Isletmeciligi A.S. The company's President Mr. Yury Bodyaev has answered our questions and explained the company's new business structure, strategies for sales and their targets.

 

 

 

We would like to congratulate you on your new position. Could you tell our readers a few words about yourself?

My home town is Magnitogorsk. I was born and raised there. It was there I received my education and professional skills. Almost 30 years ago, after graduation from the Magnitogorsk Mining Institute, I came to work at Magnitogorsk Iron and Steel  Works. Looking back over my path from an apprentice to becoming general director of MMK, I have never regretted becoming a metallurgist. I have had to constantly improve my level of knowledge and my professional skills. With this in mind, I graduated from the Academy of National Agriculture and obtained my PhD. I am proud of my profession and happy for the support I have received from my family, colleagues and friends.

What is the general situation with production at MMK Metalurji - at both the Gebze and Iskenderun sites?

By the end of 2011, we should reach full production capacity, which is 2.3 million metric tons of finished products per year. For the next three years, we expect our facilities in Gebze and Iskenderun to be running at their maximum capacity. After January 2012, we intend to produce 200,000 metric tons of hot rolled products per month.

Being a Russian producer in Turkey, can you comment on the new business structure and management positions at MMK Metalurji?

After the closing of the deal, the company was renamed MMK METALÜRJİ SANAYİ TİCARET VE LİMAN İŞLETMECİLİĞİ A.Ş., and a new board of directors was elected to include chairman of OJSC MMK board of directors Viktor Rashnikov, general director of OJSC MMK Boris Dubrovski, and also myself. The new board has elected Victor Rasnikov  as its chairman and appointed me the CEO of MMK Metalurji.

As for the business structure, it has undergone a number of changes.  For example, we have introduced a new position of corporate consultant. A well-known Turkish professional was appointed to this position.

Additionally, we introduced the position of deputy general director for production. The purchasing and sales departments were strengthened as the company becomes more active in the market.

 

What kinds of changes may be experienced with the transfer of shares? Do you think there will be some obstacles due to operating without a Turkish partner?

We have a clear understanding as owners of MMK Metalurji that we still remain guests of the Turkish Republic. Therefore, in order to work effectively, we will cooperate with your countrymen at different levels. Over the last few years, we have developed strong and reliable connections with our respected Turkish colleagues. MMK Metalurji's clientele is on the increase, so we do not expect any problems.

With the new investments in the Turkish flat steel market, Turkey has turned into a net exporter of flat steel. What kind of sales strategy will you use for such a difficult market?

Our strategy is based on our competitive know-how. It is being developed by our marketing team. It is built on a number of factors; firstly, the annual demand for metal in Turkey is increasing by 7-10 percent, according to analysts. 

Secondly, there are good prospects for growth in the Middle East and Mediterranean countries. We have a strong competitive advantage here: we have built and actively use our own seaport in Iskenderun. By the way, it is the largest private port in Turkey. It is capable of accepting ships with deadweight of 100,000 tons. From a logistics perspective, this significantly increases our export opportunities as well as reduces the cost of transportation of the final product. Another advantage we have is that the MMK Metalurji complex is capable of directly producing hot thick plate (avoiding the slab phase) that is further rolled into cold products. This technology is implemented for the first time and it is much faster, cheaper and requires less power consumption.

What are your target sales markets?

If we talk about regions, it is Turkey, the Middle East and European countries in the Mediterranean basin. With regard to specific segments of the market, the most promising for us are the construction and piping industries, as well as manufacturers of household appliances or the so-called ‘white goods' sector.                                           

What share of MMK Metalurji's total output will be sold in Turkey?

We intend to sell up to 70 percent of the total output in the domestic market.

Do you have aggressive objectives in exports? Do you plan a change in the focus and/or volume of your export sales?

In my view, the political changes in the Middle East and North Africa and the instability of the European economy create certain difficulties for a business focusing on export to any of those regions. A flexible and balanced approach is essential here. I do not want to make any forecasts, but with regard to MMK Metalurji's exports (if production and sales are balanced) we will be able to implement the company's development strategy.

The EU, which has the largest share of the Turkish export market, has been experiencing a very difficult period. Which regions did you choose for exports?

We have chosen the Middle East and European countries in the Mediterranean.

We were informed about some plans about electricity production by MMK Metalurji. Do you have any comments to share on this issue?

We have considered such an opportunity in general; however, it is premature to discuss it now. We have certain production objectives which are our top priorities at the moment.

Will MMK Metalurji continue its investments in Turkey? What will be your first step after this period?

 

The current investment climate in Turkey is quite attractive. I recently heard a witty expression: Turkey isn't the last state in the West, it's the first state in the East.  Indeed, correctly noted! Therefore, it is not by accident that MMK, one of the leaders in the global steel industry, has entered the Turkish market. We hope that successful implementation of our investment project will serve as a good example for other international investors. We would be glad if our role as a ‘catalyzer' finds support with the government of the Republic of Turkey.

Regarding our investment plans, the main priority today is for MMK Metalurji to reach its full capacity and to ensure return on our investments.

How is the year 2011 going for MMK Metalurji? What will be the results of this year for the company in your opinion?

 

We view this year quite positively. We have implemented the first important phase of our plans - launched all the MMK Metalurji facilities in Turkey. We are currently working on reaching the full capacity to be able to finish this year on schedule.

 How do you expect the Turkish flat steel market to behave in 2012?

 

According to analysts' forecasts, in the next few years the annual demand for flat rolled products in Turkey will increase by approximately 7-10 percent. We believe that 2012 will confirm these forecasts.


Similar articles

Romania’s sole flats mill cuts HRC prices, raises HDG and PPGI prices

22 Mar | Flats and Slab

Flat steel prices in local Taiwanese market - week 12, 2024

21 Mar | Flats and Slab

US HRC prices still ticking downward, prices expected to bottom this month

15 Mar | Flats and Slab

Flat steel prices in local Taiwanese market - week 11, 2024

14 Mar | Flats and Slab

Baosteel keeps local HRC prices stable for April

12 Mar | Flats and Slab

US flats mills take primes down $60-$70/gt, announce HRC price increase

08 Mar | Flats and Slab

Flat steel prices in local Taiwanese market - week 10, 2024

07 Mar | Flats and Slab

US HRC, CRC and HDG coil prices maintain their downtrend

01 Mar | Flats and Slab

Flat steel prices in local Taiwanese market - week 9, 2024

29 Feb | Flats and Slab

Romanian flat steel prices stable despite slow trade

23 Feb | Flats and Slab