Hit by U.S. tariffs and instability in the Middle East, Turkish steel industry is taking action
Turkey, the eighth largest steel producer in the world, is losing market share in the U.S. and EU because of trade wars and protectionist measures following the tough export decline experienced in the Middle East in recent years due to geopolitical developments. Now, sector representatives are taking action to counter the alarming export figures witnessed over the first six months of the year.
The Steel Foreign Trade Association has announced that steel exporters will jointly establish a company with one million dollars of capital and launch “scheduled passages” to regions such as West Africa and Sub-Saharan Africa where there is great potential but Turkish steel products lag behind due to high transportation costs. Association Chairman, Namik Ekinci, told Reuters that they will organize these passages with the “time charter” system, where ships are leased from ship owners for a certain period of time together with the captain and his staff.
Ekinci said that the establishment of the company that will organize scheduled passages will be completed this year but the first shipment of the project will take place in the first quarter of 2019 after announcements and promotional efforts are made in export markets. Some other potential products - such as cement, flour and pasta - could be included in this project over time, he added.
The cost w ll go down to $30
“Our method will reduce costs,” Ekinci noted. “When products are transported by shipping containers, the cost for the importer approaches to $100. According to our calculations, we will cut costs to just over $30. Thus, we will provide a competitive advantage by reducing product costs. When we look at the types of products consumed by these countries, the products are in our production capacity, such as construction iron and pipes.”
The target markets initially will be West Africa and Sub-Saharan countries. “These countries are where we have an opportunity. For this reason, the first market we are going to work with is West Africa. After West Africa, our vision is the Caribbean, South America and Southeast Asia.”