NEW YORK Overcapacity in
the U.S. steelmaking industry will not discourage Turkeys
Ozkan Demir Celik Sanayi AS from building a micro-mill and
related scrap facility in Louisiana, a company executive told
AMM, as the company plans to produce only niche
products not currently available from domestic steel mills.
"We are not here for rebar or
regular profiles," Ugur Ozkan, president of Houston-based
subsidiary Ozkan Steel USA LLC, said in an interview. "We are
entering this market not like the other steel producers; we are
here to produce niche products."
Ozkan Steel USA, which confirmed
plans to build a scrap facility, micro-mill and rolling
facility at a yet-to-be-determined location on the Louisiana
Gulf Coast in late January (
amm.com, Jan. 24), will primarily serve consumers
in the U.S. shipbuilding, transmission tower, trailer and
mining industriessectors today largely served by imports
from Europe rather than domestic operations, Ozkan said.
"We will never produce something
thats already produced in the U.S. We will always be the
first one," said M. Fehmi Nuhoglu, the companys vice
president for investments and strategic development.
Ozkan agreed that the company is
not aiming to displace domestic steel suppliers. "This is bad
news for German producers, not (U.S. producers)," he said.
The multipart project is still
in the preliminary stages, Ozkan said, but if everything goes
according to plan the company hopes to select a site by June
and bring the recycling facility online before the end of the
year. Ozkan Steel USA would then begin construction on the
steelworks in 2014, followed by the rolling mill, with the
entire integrated facility slated for completion by the end of
The steel mill, which Nuhoglu
said would have a maximum installed capacity of up to 1 million
tonnes but would target an annual output of around 300,000
tonnes, is already in early talks with potential customers,
The Turkish companys
decision to build steelmaking capacity in the United States is
driven partly by a desire to slash logistics costs, Ozkan said.
Today, the company sources U.S. scrap for its Turkish
operations and then ships finished product to consumers around
the world, including many buyers in the Americas. By setting up
its own domestic scrap and melting facilities, it will be able
to reduce lead times, costs and carbon emissions, Ozkan
"Our rolling mills
location must be in America," he said. "Theres no sense
building (another) mill in Turkey. Scrap is here, our customers
are here, so we need to be here."
Ozkan is the second Turkish
steel producer to announce a U.S. scrap facility in recent
months. In November, Istanbul-based Colakoglu Metalurji AS set
up a scrap facility and finished product trading house in
Houston, although the company does not have plans to build a
mill at this time (
amm.com, Nov. 12).
Some players in the metals
sector have questioned Ozkan Steel USAs decision to
locate in southern Louisiana, since the majority of ferrous
scrap reserves are in the Midwest. But according to Ozkan,
incentives from the state of Louisiana, as well as the
states year-round warm weather, made the location a
"Our aim is to be in Louisiana.
The weather conditions are suitable for 12 months (of)
trading," Ozkan said, noting that the company intends to barge
scrap from the Midwest to the new site. "We know the
best-quality scrap comes from Chicago, but we are interested in