We spoke with Zafer Atabey, Borusan Boru CEO, about the current outlook in the pipe industry, the impact of global protectionist policies, and the company's growth and sustainability strategies.
Borusan Boru assesses its 2026 outlook
Borusan Boru, a Borusan Group company, maintained its strong performance in the first half of 2026 in an environment shaped by the varying impacts of global protectionist policies across different regions and business segments, geopolitical risks, and differing demand conditions across segments. The company aims to continue creating value for its stakeholders throughout the remainder of the year with its business model based on value-added products and a diversified production network. While strengthening its revenue visibility in the Infrastructure and Project segment with an order backlog extending into 2028, the company has revised its revenue and profitability expectations for the full year of 2026 upwards, supported by the expected acceleration in deliveries in the second half, a favorable demand and pricing environment for energy pipes, and the increasing contribution of efficiency initiatives. Commenting on the company's performance, Borusan Boru CEO Zafer Atabey said, “We completed the first half of 2026 with a strong performance in an environment of heightened uncertainty. We owe this result to our geographically diversified production network, balanced portfolio and business model focused on value-added products. Challenging periods reveal the difference made by a well-structured organization. We are aware of the issues that will challenge our industry in the coming period. Nevertheless, our order backlog extending into 2028 strengthens our revenue visibility, while our diversified business model provides us with flexibility amid changing market conditions. In the second half, we expect our deliveries to accelerate, the favorable demand and pricing environment in the energy pipe market to continue, and our efficiency initiatives to make a stronger contribution to our performance; accordingly, we have revised our revenue and profitability expectations upwards. Ours is a long-term business; we measure success not by the results of a single period, but by the lasting value we create for our stakeholders.”
How has 2026 been for the pipe industry? What are your expectations for the remainder of the year?
In the first half of 2026, our industry went through a period in which demand varied by region and cost predictability became a determining factor in competition. In such an environment, the market in which you operate and the products with which you position yourself have become more important than ever. Our geographically diversified operational network and value-added product-focused portfolio were the factors that differentiated us during this period.
In the first half, our sales volume increased by three percent year on year to 603,000 mt, while our revenues rose by 26 percent compared to the same period of the previous year to $977 million and our net profit increased by 166 percent to $40 million. Our EBITDA margin improved by 2.3 percentage points to 9.2 percent.
The main driver of our growth in the first half was our Infrastructure and Project segment, which accounts for the largest share of our revenues. We carried out our deliveries in line with our planned schedule and doubled our segment revenues with the contribution of agreements signed in previous periods. Geographically, we generated 89 percent of our revenues from global markets, with the US accounting for approximately 79 percent. The position we have established in the US through our local production infrastructure and long-standing customer relationships continues to be the main driver of our growth.
We are aware of the issues that will challenge our industry during the remainder of the year; the demand outlook in Europe, trade protection measures and carbon regulations will be determining factors. Nevertheless, our order backlog extending into 2028 strengthens our revenue visibility, while our diversified business model provides us with flexibility amid changing market conditions. In the second half, we expect our deliveries to accelerate, the favorable demand and pricing environment in the energy pipe market to continue, and our efficiency initiatives to make a stronger contribution to our performance. Accordingly, we have revised our revenue and EBITDA margin expectations upwards.
What can you tell us about demand and competition in Türkiye?
The domestic steel pipe market is experiencing intense competition due to macroeconomic tightening measures and relatively subdued activity in the construction and infrastructure sectors. Demand in the domestic market is primarily concentrated on high-quality industrial pipes and special projects.
Our strategy in response to intense price competition in the domestic market is to offer high value-added solutions tailored to customer needs rather than standard products. We support our position as a high-quality and leading brand with our role as a reliable solutions partner with high customer satisfaction.
The most important step we have taken in Türkiye during this period is the strategic transformation of our production structure. We are consolidating our Halkalı and Bursa plants under one roof at our Gemlik campus. The process progressed as planned in the first half, and throughout this period we continued our production activities and customer deliveries without interruption. Carrying out a transformation of this scale without disrupting operations is not easy, and our team is successfully managing the process.
Türkiye is much more than a market for Borusan Boru. This is where the company was founded and where it developed its production culture and engineering expertise. This experience is behind our global operations extending from the US to Europe today, and we will continue to invest in Türkiye.
How do you assess the price trend? How do you evaluate the impact of raw material costs, particularly hot rolled coil, on pipe producers?
Fluctuations in raw material prices are inherent in this business. We focus on structuring our business model in a way that provides as much predictability as possible in our costs and on maintaining cost discipline under all circumstances.
For our project-based business, we fix raw material prices at the beginning of each project. When entering into a long-term project, we establish the cost structure from the outset, thereby limiting the impact of market fluctuations on our operations throughout the duration of the project. Considering the weight of our Infrastructure and Project segment in our revenues, the importance of this approach becomes even clearer.
Operating production facilities across different regions also provides us with various advantages. We are not directly exposed to price fluctuations or supply issues in a single market, and we can also diversify our supplier base. We benefit from the flexibility provided by working with different suppliers in different regions.
Of course, cost pressure does not come solely from raw materials. In recent years, rising labor costs have become a significant source of pressure for producers, particularly in Türkiye. We offset this pressure through our efficiency initiatives. Our efforts to improve capacity utilization and production costs at our plants, along with our investments in automation and robotics on our existing lines, play a critical role in this regard. We expect the contribution of these initiatives to become more pronounced in the coming period.
What can you tell us about the impact of both higher US tariffs and the EU's new quota regime, which took effect in July, on the Turkish pipe industry?
The increasing prevalence of protectionist policies in global trade is reshaping the competitive dynamics of the steel industry. The European Union's new safeguard measures and quota regulations are also among the developments we are closely monitoring from the perspective of our industry.
At Borusan Boru, we anticipated this transformation years ago and structured our global production network accordingly. Today, we operate as a local producer in the US through Borusan Pipe U.S. and Borusan Berg Pipe, serving our customers by producing within the markets where we operate. In Europe, meanwhile, our production infrastructure in Italy and Romania enables us to develop local solutions for regional needs.
Our local production model spanning different regions and our balanced global portfolio enable us to adapt rapidly to changing trade policies and provide uninterrupted service to our customers. This approach allows us not only to manage existing risks, but also to capitalize on new opportunities arising from the changing global trade environment.
How is the Carbon Border Adjustment Mechanism affecting pipe exports? How do you think the Turkish steel industry is preparing for this process?
As of January 1, 2026, the financial obligations and carbon taxation process under CBAM officially entered into force. This represents a significant cost factor for Turkish iron and steel producers exporting directly to the EU. At Borusan Boru, we have placed sustainability and CBAM compliance efforts at the center of our operations in line with our “Climate, People, Innovation (i3)” strategy. We source the energy used at our facilities from certified renewable sources. As part of our sustainable and profitable growth target, we are also accelerating our cultural transformation focused on environmental, social and governance principles. Through our Gemlik integrated production campus consolidation investment, we aim to achieve significant improvements in carbon emissions. Green steel procurement, renewable energy and circular business models constitute the main pillars of this transformation. We view CBAM not as a threat, but as a strategic opportunity for companies that complete their transformation early. For us, CBAM compliance is not merely about regulatory compliance; it also means transitioning to a more efficient, lower-carbon and more competitive production model.
Finally, is there anything you would like to add?
Borusan Boru is not merely a pipe producer; it is a strategic global player that creates value in global markets, with a production capacity of 2 million mt and more than 4,000 product varieties. We are further strengthening our approach as a reliable partner by combining our position as a high-quality and leading brand with our status as a preferred producer among customers and suppliers. We have a disciplined growth approach that always considers acquisition and merger opportunities. Our 2030 vision includes sustainable profitability, becoming a more widely recognized brand internationally, growing through higher value-added products and continuously increasing stakeholder value.
We will continue on our path with an agile structure that adapts to changing global conditions. In line with this approach, we are integrating artificial intelligence technologies into our business model to support operational excellence and data-driven decision-making processes. The most tangible recent example of this strategic integration is SparkAI (Safety ProActive Risk Knowledge AI), our AI-powered accident prediction system, which received a prestigious first-place award for its proactive risk management capabilities and is helping us take industrial safety into the digital future.
