Yıldız Demir Çelik: Where we stand now after a year is remarkable

Wednesday, 23 October 2019 11:04:58 (GMT+3)   |   Istanbul

We talked with Emrah Kendüzler, marketing and sales manager of Turkish steel producer Yıldız Demir Çelik, which entered the sector last year, about their first year and future plans. 

Could you share some information about your second coating line? Can the market support new capacities under the current conditions? 

Since the first day of our establishment, we have focused on value-added products which would create a difference in the market and which have never been produced before [in Turkey]. Our production capacity has reached 1.5 million mt with our new cold rolled line starting production, following the painting line and galvanizing line that commenced production in March 2018. With this latest investment, we focused on providing high quality flat steel needed particularly in the white appliance and automotive industries, which had been forced to import these products before. Hence, we have continued our investments and, with our second galvanizing line investment, we will concentrate on meeting the Turkish market’s primary need for galvanized products. We will produce more specific products in terms of dimension tolerances, with our ability to meet market needs as regards surface and quality.

With a group of distinctive skills of world-class standard in terms of production and service competence, we will continue to shape our strategies with a proactive approach, to take the necessary actions by monitoring the market closely, and create added value for all our partners by our practices which create a difference in the sector.

What are your expectations for demand from Turkish end-user sectors?

We will continue our test production on the industrial side, taking firm steps forward towards being a certified supplier. Most of these tests of production for end-users have been completed successfully this year. In the coming year, we expect some of the demand from the end-users’ side to move to Yıldız Demir Çelik, particularly from the white appliance and the automotive supply industries. Evaluating Turkey’s economy, no significant improvement is expected until the end of this year, and so no sharp rise in domestic demand is foreseen. We observe that more optimistic scenarios are being voiced for the economy in 2020.

Considering the shrinkage of the local market, what is your strategy for exports? Are there any specific markets you will target?

We have not observed any fall in our capacity utilization rates after the shrinkage of the local market and amid lower demand. This situation has caused most mills to concentrate on the export markets. Within this context, we have planned to direct 40 percent of our capacity to exports this year, and we have achieved our plans up to the last quarter of 2019. We can specify our target markets as the European countries, Canada, the Middle East and Africa. We are continuing on the path of accelerating our sales particularly to companies fabricating white appliances, sandwich panels or to the general manufacturing sector and for barrel production. 

What is the ratio of imports versus domestic HRC in your purchases? What difficulties and opportunities are now observed in HRC purchases given that there are more HRC suppliers in Turkey? 

We are experiencing a period of high volatility in prices resulting from the ups and downs in the global economy with a stronger competitive environment due to the increasing protectionist policies on a global scale as of the second half of last year. We are looking after our own interests as we procure raw material in this atmosphere of high uncertainty and volatility, and also amid the quick changes in market conditions. We work with suppliers who fulfill our conditions for technical specifications and service. Our communication with Turkish HRC suppliers is stronger but, as I mentioned before, we continue to work with both domestic and foreign suppliers as we move in line with the volatility in the market.

Are you planning to invest in HRC production in the future?

Yıldız Demir Çelik’s strategy was established when the company was founded. As is evident from our name (demir meaning iron), we have aimed to be a player in the entire sector from A to Z from the beginning. Therefore, we are planning to invest in HRC production in the coming period. For now, we are waiting for the right time and for convenient conditions to arise. 

Would you consider expanding your coated product range, for example with products such as galvalum?

With our investment in our second line, we will concentrate on producing high grade products which is the primary need of the local Turkish market. We will produce more specific products in terms of dimension tolerance, which will meet the market’s needs for surface and quality. Galvalum is a product that mostly receives demand from South America, and has no voluminous market in Turkey. Hence, our priority will be to concentrate on value-added products rather than on galvalum production.

Can you share with us the strategy followed by Yıldız Demir Çelik in its domestic and export markets for CRC?

At Yıldız Demir Çelik, we are positioning ourselves as a business with a mission to support Turkey’s exports and also as a domestic supplier. It is a reality that the sluggish economic situation in our country over the recent period is felt in the iron and steel sectors. We need an accurately planned export strategy in this period as safeguard measures shape the entire sector’s structure.  It is also possible to say that exporting flat steel is not a choice anymore in Turkey with all these increasing investments over the past years, but is a necessity. Due to the shrinkage of the local market, we will focus on key sectors in our target markets as well as concentrating on increasing our value-added products in 2019, pursuant to our company’s vision.

Can you tell us about your customer services policy and technical support system?

Our customers can easily pass on their demands and suggestions to us regarding our products and services. We examine these demands in the most correct way with our partners who are leading and educated experts in this field.

You have been one of the leading players in the Turkish steel market for one year now. What can you say about your first year? Has it met your expectations?

In 2018, before completing our first year, we managed to conclude export sales while our investment process was still ongoing. Yıldız Demir Çelik has proved its success in the market by entering the list of the “Top 1,000 Turkish Exporting Companies” in 407th position in its first year in the sector, in fact in its first four to five months. This success was a big motivation for us. Also, I can say that where we stand now is remarkable. In the coming period, we have plans to increase our export volume as well as the number of markets to which we export products.