What are the products Kardemir supplies or plans to develop for the automotive sector since it will now supply steel to new domestic automobile producer?
Our 11th Development Plan involves the production and development of high-value new materials used by the automotive, defense and railway sectors, that are currently supplied by imports, since production of these products is limited or nil in Turkey. Accordingly, Kardemir will conduct studies within the scope of this plan and supply these materials indicated below to the automotive sector;
Ø Test materials are produced for welded wire used in machine manufacturing and automotive sectors,
Ø Efforts to produce free machining steels continue.
Why do you think steel companies are so eager to supply materials to the automotive sector?
Due to its high integration with global firms, the automotive sector plays an important role in economic growth with its wide sphere of influence. The automotive sector receives a big portion of global research and development investments, following the technology and pharmaceutical industries, and is the leader amongst the sectors adopting the process of “Industry 4.0” and puts this process into practice quicker than others.
Having evolved into a global manufacturing center by exporting 85 percent of its annual 1.5 million units of production, the Turkish automotive sector demands proper steel grades to produce buffers, axle shafts, tie-rods, etc., and if one considers that 900 kg of steel is used per one automobile, the importance of the automotive sector for the steel market can easily be seen. For example, Kardemir has the capability to produce 20-25 percent of the grades required by the automotive sector.
What steps can be taken to strengthen cooperation between the automotive and steel industries?
To be able to supply products to the automotive sector, a firm should have the IATF 16949 certificate, which implies that the technical requirements have been met and which entails having a research and development center. For this, the cooperation with the automotive industry should continue with an innovative insight that prioritizes competition and quality; and also joint projects that are meaningful and realistic should be conducted by adding universities to the process. At Kardemir, we are primarily focused on completing the documents required by the sector and on producing the steel grades needed by the automotive sector with the establishment of our research and development department. We met with sectoral representatives via special working groups, we learned their needs and expectations, and explained our production capabilities. We made several test productions to manufacture steel grades to satisfy expectations, and achieved important results in a user’s trial. This process continues with new steel grade test productions.
How was 2019 for your company? What are your expectations from 2020?
Developments in the nearby geographical region, the magnitude of the unutilized capacity in the global steel sector, problems in the raw material markets and also the protective measures taken by the US leadership in 2019 have caused sharp fluctuations in overall global trade and particularly in the iron and steel markets. Despite all these negative developments, Kardemir – which had increased its production capacity with an investment of $2 billion after the privatization of the company – has focused on Turkey’s automotive, defense and rail systems sectors with its new products. 2019 was announced as its environmental investment year with the aim to achieve its “Green Kardemir” target. Within the scope of this policy, the second stage of our environmental investments, which totals $50 million, was completed. As a result, approximately $150 million of environmental investment has been realized. The third and last stage of this investment continues and to quickly complete this $50 million venture is one of our most important priorities.
Starting serial production in our strategically important railway wheel plant, to reach a capacity to supply all the needs of our country in this segment and to conclude the first railway wheel export transaction, is our prioritized target for 2020. We also aim to quickly complete development studies for coils that can be used to produce fasteners – the fundamental need of our automotive industry – and to improve our collaboration with Turkey-based automobile manufacturers.
Our firm has been certified with IATF 16949 and ISO TS 22163 (IRIS) within its vision to develop value-added products and replace imports. Kardemir is the first Turkish company to have received the ISO TS 22163 (IRIS) certificate.
We are aiming to carry out new material development projects for all the sectors we serve, particularly for the defense and automotive industries, and to prevent imports by improving cooperation with universities, industries and customers.