Aksa, leading carbon fiber producer of Turkey to form joint venture with Dow Chemical of USA
A new joint investment by Turkey’s leading carbon fiber producer, Aksa, and America’s Dow Chemical Co. at a total value of $1 billion in the western province of Yalova is expected to strengthen the country’s hand in global carbon fiber markets and make it a strategic provider of carbon fiber products, participants at a press conference to announce the investment in İstanbul on Tuesday stated.
Observers characterize carbon fiber as “strategic product” which is slowly replacing such principal raw materials as iron and steel in construction and in the automotive and aviation industries. Many believe Turkey — thanks to its improving know-how in this area — now has the advantage to become one of the leading providers of this key product to world markets. Turkey is currently one of 10 carbon fiber producers in the world and is poised to be a carbon fiber supply hub for Middle Eastern, Asian and African markets in the near future.
The joint investment by Dow’s European subsidiary Dow Europe Holding B.V. and Aksa covers the construction of an additional facility to increase capacity at Dow’s already existing production facility in Yalova as well as an agreement to jointly produce carbon fiber products.
The agreement will direct $1 billion in total investment to Turkey in the next five years. The new facility will produce carbon fiber that will mostly be used to reinforce composite materials used in the alternative energy, aerospace, oil and automotive sectors. The global demand for carbon fiber composites is expected to reach $13.2 billion by the end of this year.
Aksa Group CEO Mehmet Ali Berkman and Dow Executive Vice President and CCO Heinz Haller signed the agreement protocol during Tuesday’s press conference stipulating that each company will have a 50 percent share in the investment. The two partners expect the investment to provide 1,000 new jobs in the next five years. Turkey’s Science, Technology and Industry Minister Nihat Ergün and Investment Support and Promotion Agency of Turkey (ISPAT) President İlker Aycı also participated in the signing ceremony.
Speaking at the event, Ergün said he expects such investments as in Yalova will contribute to government efforts aimed at reducing Turkey’s current account deficit (CAD), which mainly stems from the country’s dependence on foreign oil and chemical products. “Dow has been in Turkey for the past 40 years, and they are determined to expand their presence in Turkey. … This is an indicator of the strong interest in Turkish markets on the part of foreign companies that has grown recently,” the minister noted. Making mention of foreign direct investment (FDI) to Turkey, Ergün said the government expected this year’s FDI inflow to Turkey — $11.5 in the first 10 months — to reach $12.5 billion by year-end. “This amount will again be above $10 billion for 2012,” Ergün said. The government is expected to shortly announce the details of two new foreign investments for this year totaling $300 million combined.
Haller said his company is committed to maintaining investments in Turkey, underlining that Turkey was one of the four fastest growing markets for Dow. Stressing that they see an opportunity for continuous growth in Turkey, he said the new facility will both meet domestic demand and also export goods overseas. Haller said they have initially put $200 million into the investment.
Also delivering a speech, Berkman said this investment was important in helping the company to realize its goal of becoming one of the world’s top three carbon fiber producers. “This new investment is particularly critical in creating products with added value. This is what Turkey needs in the coming years,” he said.
‘Carbon fiber to increase competitive power of national car’
Turkey’s increasing experience and growing production capacity in the carbon fiber industry will be an advantage for a planned domestically produced car in global markets, Minister Ergün told Today’s Zaman separately following the meeting.
A high-strength material, carbon fiber has a wide application in commercial and civilian aircraft as well as in various industrial markets.
A recently released government paper, the Automobile Strategy Paper, aims to increase the competitiveness of Turkey’s automotive industry with public-private cooperation. The biggest challenge in the paper is the target of mass producing Turkey’s own national car. The government increased its calls to Turkish entrepreneurs to contribute to the first national car brand, and some holdings said they were in talks with their foreign partners for possible joint studies in the creation of the local car brand.
Speculation centers around a car brand that will produce cars assembled with mostly Turkish parts but will be open to foreign contributions. Turkey’s raw material supply will take on much importance at this point. Observers argue that Turkey’s increasing experience in carbon fiber technology could help Turkish engineers develop relatively more durable auto parts.
SOURCE: TODAYS ZAMAN