In a meeting held today, Turkish integrated steel producer
Erdemir's Chairman Recai Berber, CEO Kerim Dervisoglu and Isdemir General Manager Atamer Giyici announced financial results for the twelve-month period ended on December 31, 2004, and spoke about
Erdemir Group projects.
Mr. Berber disclosed that
Erdemir alone posted a net profit of $463 million, while the net profit of
Erdemir Group –
Erdemir, Isdemir, Celbor,
Erdemir Logistics,
Erdemir Steel Service Center, Erenco,
Erdemir Romania, and
Erdemir Mining– reached $589 million. The group recorded an operating profit of $631 million.
Erdemir produced 3'616'000 tons of steel products in 2004. Adding the 2'157'000 tons produced by Isdemir, the total
production of the group amounted to 5'773'000 tons.
Cold rolled steel
production in 2004 increased 16.7% from 2003, while hot rolled steel
production decreased 7.3%. Group officials attributed the reduction in hot rolled steel
production to their focusing on cold rolled products as they are more profitable, high in demand and value-added.
Mr. Berber also talked about various projects being undertaken by
Erdemir Group. He expressed that they will conduct investment programs to increase the annual capacity of
Erdemir to over 5 million tons. He then added that a $2 million-investment to convert Isdemir from a
longs producer into a
flats producer had been initiated.
Erdemir Group targets flat
production of 7 million tons by 2007, and 10 million tons by 2010. In line with
Erdemir's plans, such flat capacity will replace excessive long capacity in general.
Apart from capacity expansion plans,
Erdemir initiated several investment programs in 2004. In order to promote local mining,
Erdemir entered the sector through the acquisition of Div-Han.
Erdemir changed Div-Han's name into
Erdemir Madencilik San ve Tic AS.
Erdemir Madencilik currently supplies pellet to Isdemir and is working on projects to improve pellet quality. The mine aims to produce some 1.2 million tons of
iron ore annually. This investment holds great importance for the steel industry of
Turkey, especially at a time when raw material prices have peaked.
Moreover,
Erdemir established
Erdemir Logistics to improve service quality. The company initiated the “Train Ferry Project”, which connects
Erdemir to the national railways, in November 2004. In order to reduce transportation costs,
Erdemir also acquired Yarimca Porselen Sanayi ve Ticaret A.S and established
Erdemir Gaz Sanayi ve Ticaret A.S to supply natural gas more affordably.
Mr. Berber also revealed that in the light of rising raw material costs and
freight rates, price increases will probably start to show their impact starting in the second quarter.