PASDER proceeds its activities in order to extend use of stainless steel

Chairman of PASDER Stainless Steel Use Development and Extension Association Mr. Ufuk LEFLEF has provided information regarding many subjects such as works and activities of the association, raw material price increases and problems experienced in the sector.

SUBCONTURKEY: Firstly, could you tell us about yourself?

Ufuk LEFLEF: I got introduced with the sector in February 1971 as the partner of Tokel Kollektif Şirketi Hamdi Tokel ve Ortakları company acting as stainless steel importer in the sector and assigned as the Exclusive Representative in Turkey of Zapp Fortuna GmbH/German company which is the export department of the German producer of stainless steel and all other special alloy steel, Stahlwerke Südwestfalen AG called as ThyssenKrupp Stainless today. Because I participated in the mentioned company personally as a partner, I undertook all representation duties and responsibilities regarding the exclusive representation of the German company. I established the Asal Çelik Mümessillik ve Ticaret A.Ş. company at the beginning of 1977. As a result of the merger of Stahlwerke Südwestfalen AG and Krupp Iron Steel Industry in 1980, I continued to act as the exclusive sales representative in Turkey of all special alloy steel and stainless steel products of Krupp company. As a result of the merger of Krupp and Thyssen Iron Steel Establishments in 1994, I continued to act as the exclusive representative in Turkey of just stainless flat steel products of the German company called previously Krupp Thyssen and later on Thyssen Krupp Stainless. I made the German company participate in my company as Asal Celik with a 49% share between the years 1994-2001. Starting from 2002, I successfully maintained this duty until end of 2005 within the new investment projects belonging to the German company. I ended my 35-year relation with Thyssen Krupp Germany within mutual understanding and amity starting from 2006 because they decided to realize all of their activities within TK-Eurinox which they had established previously in Istanbul.

I established in December 2006 PASDER-Stainless Steel Association together with companies which act as the biggest and most significant establishments of Turkey in this sector depending on the consensus and decision taken unanimously with All European Stainless Steel Producers and EURO INOX Association in order to transfer my knowledge and experience gained during 35 years to the Turkish Stainless Steel sector. The names of the founding members, their duties in our Association and their logos are available at our web site which is www.turkpasder.com. The establishment purpose of our Association is developing and extending the stainless steel use in our country.

SUBCONTURKEY: Could you tell us about the activities of your association?

Ufuk LEFLEF: Following the establishment of our Association:

• I was invited and represented our association via participating in the Euro Inox-Brussels Marketing Committee Meeting held in March 2007. The European Stainless Steel Association EURO INOX-Brussels suggested that our association should participate in this establishment and apply for membership. We officially applied for membership. Our membership was accepted by Euro Inox starting from 1 November 2007.

• I was invited as a speaker on behalf of our association to the Steel Orbis - Iron Steel Conference held in Istanbul Ceylan Intercontinental Hotel in June 2007. I provided information regarding the past, current and future situation of stainless steel in our country to the audiences consisting of the notables of the foreigners and the sector.

• I participated on 01-03 November 2007 in the IV. Iron Steel Congress held in Karabuk University upon the invitation of the General Secretary of the Iron Steel Producers Association Dr. Veysel YAYAN as a speaker on behalf of our association. I provided detailed information regarding the status of stainless steel in Turkey.

• I was invited to participate in the first Marketing Committee Meeting of 2008 organized by Euro Inox Brussels.

• Our application made for the membership of our association in ISSF-Brussels International Stainless Steel Forum will be discussed and decided in the Board Meeting to be held in May 2008.

• We were invited to the ordinary general assembly meeting for 2008 held by Euro Inox Brussels Association of which we are a member. I was assigned by the Board of Members of the Association in order to attend the General Assembly Meeting held in Helsinki on 10th of June.

• The Turkish version of our website www.turkpasder.com was put into service in March 2008. Direct and immediate access to the websites of all of our members and foreign organizations of which we are a member has been enabled via the links available at our site.

• We will receive applications of our new member candidates until end of 2008 in short term as PASDER. Following the changes of regulations which will be discussed and decided in our General Assembly to be held at the end of 2008, we will evaluate the membership of all new member candidates in the first Board meeting.

• We will hold seminars regarding extending use of stainless steel and participate in the exhibitions where stainless steel products are exhibited. For example: We participated in TUSID exhibition within our member Oztiryakiler Professional Kitchen in 2008. We translated catalogs and brochures of Euro Inox and ISSF which contain various technical information, printed them in Turkish and distributed to the relevant parties in the sector. These services will go on in a way that helps solution of the problems in all aspects of the sector.

SUBCONTURKEY: What are the problems faced in the stainless steel sector?

Ufuk LEFLEF: The stainless steel sector had a difficult period in 2007 due to instability in raw material prices. Since necessary precautions were not taken in order to prevent unfair competition, problems in local market sales of manufacturing sector increased. It is a fact that especially Far East origin products disturb the local producers in local markets. It is observed that the officials in Turkey did not put forth sufficient sensitivity regarding this subject during a period when European countries applied sanctions to Far East countries in stainless steel sector. Export of Turkey origin products, especially the white appliances and others with good quality, slightly relieves our industrialists and gives them hope for the future.

The stainless steel raw materials and semi-finished products across the world are produced especially by European producers, and in South Africa, USA and South America-Mexico, Brazil, Asia and Far East and exported to Turkey. According to data of 2007 calendar year, global liquid stainless steel production is around 28 million tons. The new investments of current stainless steel producers, especially in Far East countries, will easily meet the demand increase which is around 5% to 7% annually.

SUBCONTURKEY: Could you mention about investments in stainless steel sector?

Ufuk LEFLEF: Half integrated facilities are stipulated to be established in Turkey

in the coming years. It was planned to complete until 2010 the investments of the South Korean Dai Yang Company which started investing in Çorlu Free Zone in 2006 and reach a production capacity of 100,000 tons. But we observe that the speed of first investment regarding this subject has considerably slowed down. The import figures of Turkey which are approximately 300,000 tons in 2007 must have drawn the attention of Turkish Entrepreneurs that it is stipulated to design half integrated facilities within a couple of years. We should wait for establishment of full integrated facilities in Turkey for a couple of 10 years as I mentioned in my previous various interviews. The main problem of both types of investment is KNOW HOW. The producer establishments in the world which may provide production know how are known. All of these establishments have to think about their own benefits firstly. The Turkish entrepreneurs with whom they will be partners should be very cautious, awake and sensitive.

In my opinion, even if production is made in our country, the continuation of import is normal and necessary. Other than some European Producers, every producer cannot produce all kinds and quality of stainless steel. For this reason, it will be logical to think the production made in Turkey as partially related to export. We should go on producing, exporting and importing at the same time. Even the most developed countries all over the world comply with this rule.

SUBCONTURKEY: What is the quota per capita of stainless steel use in our country and its proportioning to the use in developed countries?

Ufuk LEFLEF: Quota per capita of annual stainless steel consumption in developed countries is 12 to 14kgs. The consumption in our country is 4.2kgs per person according to the data of 2007. High consumption amounts in developed countries are due to extensive use areas. This situation is significant in the building sector recently. To give another example, we observe that significant amount of stainless steel was used in construction of some bus stops of Istanbul Municipality inside the city. We heard that these bus stops were installed after being granted by some foreign countries. Other important use areas are chemical industry and especially the food industry and medicine sector. Food production in developed countries is realized in facilities established using just stainless steel.

SUBCONTURKEY: What can you say about stainless steel service centers?

Ufuk LEFLEF: Stainless steel service centers are one of the most important units of the sector. We should concentrate on the services expected from these centers rather than arbitrary works. Producer demands should be evaluated very well. It is obvious that today’s small producers will have to completely change within the coming 10 years and that their dependency on service centers will increase in case this change is positive. Thus, necessity for service centers will definitely increase. The vicious circle service concepts of the service centers which are just buy-sell or buy-cut-supply are not correct. Service centers should correctly evaluate the demands and problems of the producers who are their customers, have sufficient stock in terms of quality and amount and support the producers in technical aspects in order to preserve and maintain their existence. It is imperative that service centers choose very good suppliers from abroad amongst the raw material producers. No service center may be able to develop or compete via spot purchases. The meaning of competition, as the name implies, is service. Competition in just prices is considered as a very primitive approach and is of secondary importance. Persons and establishments in our country that meet these aspects in terms of views and implementations have been increasing. This is a pleasing fact.

SUBCONTURKEY: What can you say about raw material price increases?

Ufuk LEFLEF: Iron and steel, in terms of raw materials, take place on the top of metals needed by all countries and people. The increase in prices is a significant indicator of the supply-demand law. The population of the world is increasing, people in all countries demand more comfort more or less. Comfort means a more comfortable life standard. In order to obtain it; we should have a good residence, purchase sufficient food for good nutrition, own white appliances, car etc. and many other products. In order to obtain all of these, we need iron and steel and most importantly stainless steel. Prices are increasing all over the world and all countries for all kinds of metals and will continue to increase.