1. A LOOK FOR IRON- STEEL SECTOR IN TURKEY Muhammet Ali Baştın 2001431005 Eyüphan Özyurt 2001431036 Soner Turhan 2001431034

3. IRON-STEEL SECTOR Turkey is one of the few countries that possess a vast and diverse mineral resource base. Turkey is one of the few countries that possess a vast and diverse mineral resource base. Excluding resources of oil and coal are about 4.500 mineral deposits in Turkey. Excluding resources of oil and coal are about 4.500 mineral deposits in Turkey. The Turkish iron and steel industry was dominated by state-owned or partially state- owned integrated facilities and dominantly private sector electric arc furnace plants The Turkish iron and steel industry was dominated by state-owned or partially state- owned integrated facilities and dominantly private sector electric arc furnace plants

4. HISTORY OF IRON-STEEL SECTOR Turkey’s first steel factory was established in 1928 for military purposes Turkey’s first steel factory was established in 1928 for military purposes Turkey has 3 integrated plants Turkey has 3 integrated plants In 2002, the İskenderun Iron and Steel Factory was tied to Erdemir In 2002, the İskenderun Iron and Steel Factory was tied to Erdemir

5. THE STRUCTURE OF IRON – STEEL SECTOR The Turkish iron-steel sector has completed its infrastructure, capital structure and technology. It is highly competitive in the world, both in terms of price and quality The Turkish iron-steel sector has completed its infrastructure, capital structure and technology. It is highly competitive in the world, both in terms of price and quality Next to big companies, many small and medium-sized enterprises produce iron and steel. Next to big companies, many small and medium-sized enterprises produce iron and steel.

6. The Sector Companies in Turkey Iron and steel production was first started in Kirikkale, which is now known as MKEK, in 1928 Iron and steel production was first started in Kirikkale, which is now known as MKEK, in 1928 The first integrated plant, Karabük Iron and Steel Works (KARDEMIR) began to operate in Karabük in 1937 The first integrated plant, Karabük Iron and Steel Works (KARDEMIR) began to operate in Karabük in 1937 Eregli Iron and Steel Works (ERDEMIR) started production in 1965. Eregli Iron and Steel Works (ERDEMIR) started production in 1965. In 1977, Iskenderun Iron and Steel Works (ISDEMIR) In 1977, Iskenderun Iron and Steel Works (ISDEMIR)

7. Size and Capacity of Companies The production capacity of the Turkish iron and steel industry reached to 4.2 million tons in 1980 The production capacity of the Turkish iron and steel industry reached to 4.2 million tons in 1980 At present, Turkish steel sector, with its around 15 million tons of crude steel production and 9.5 million tons of total export, ranks in the 15th in the global steel output At present, Turkish steel sector, with its around 15 million tons of crude steel production and 9.5 million tons of total export, ranks in the 15th in the global steel output

8. Products in Sector Products in Sector 1000 tons200220032004 ProductsProductionConsump.ProductionConsump.ProductionConsump. Tinplate146234179239220287 Galvanize4896375887729041016 Cold Rolled111611861375161514432188 Hot Rolled213033862146385819153891 Plate532874626950391 Other6514090129100174 Total Flat Steel399958704424688246327885 Total Long Steel 112306906122657605139328619 Seamles Pipe38531034142 Grand Total152321286116692145901856816646 www.mesteel.com

9. Other Products Steel Products Steel Products * Blooms * Billets * Beam Blank Rolling Mill Products * Hot Rolled Round Steel (Bars) * Hot Rolled Round Steel (Deformed Bars) * Steel Nip Beams * Steel Npu Profiles * Equal Angles * GI Profile * Rails * Billets Rolling Mill Products * Hot Rolled Round Steel (Bars) * Hot Rolled Round Steel (Deformed Bars) * Steel Nip Beams * Steel Npu Profiles * Equal Angles * GI Profile * Rails * Billets Coke Products * Coke Plant Products * Ammonium Sulphate, Pressed Naphthalane, Tar Paint * Carbolic Oil, Grude Benzole, Refine Washed Oil * Crude Tar Other Products * Pig Irons * Granule Slag * Oxygen, Nitrogen, Argon Coke Products * Coke Plant Products * Ammonium Sulphate, Pressed Naphthalane, Tar Paint * Carbolic Oil, Grude Benzole, Refine Washed Oil * Crude Tar Other Products * Pig Irons * Granule Slag * Oxygen, Nitrogen, Argon

10. THE CONDUCT OF IRON – STEEL SECTOR The iron and steel market is large and set to grow further The iron and steel market is large and set to grow further Turkey was the world’s 13th steel producer with a total production of 18.3 million tonnes in 2003, with an impressive growth rate of 11.1% over 2002 Turkey was the world’s 13th steel producer with a total production of 18.3 million tonnes in 2003, with an impressive growth rate of 11.1% over 2002

11. Foreign Trade Of Iron Steel Sector Turkey exports almost half of its total production, it meets domestic demand for flat products mainly through imports Turkey exports almost half of its total production, it meets domestic demand for flat products mainly through imports Economic crises in Southeast Asia and Russia and the recent one in Turkey has had negative effects on the sector, exports have recovered Economic crises in Southeast Asia and Russia and the recent one in Turkey has had negative effects on the sector, exports have recovered

12. Foreign Trade Of Iron Steel Sector Turkey exports steel products to about 151 countries and its major export partners are USA, Italy, Greece, Israel, UK, Germany and the Middle East. Turkey exports steel products to about 151 countries and its major export partners are USA, Italy, Greece, Israel, UK, Germany and the Middle East. Turkey's number one steel export partner; the US, has currently launched the Bush Plan which entails the implementation of new tax and tariffs up to 30 percent on steel imports Turkey's number one steel export partner; the US, has currently launched the Bush Plan which entails the implementation of new tax and tariffs up to 30 percent on steel imports

13. State Planning Organization (SPO)

15. PERFORMANCE OF THE SECTOR 1. Profitability of Sector’s Companies 1. Profitability of Sector’s Companies 2. Growth of Sector’s Companies 2. Growth of Sector’s Companies 3. Other Ratios about Sector Companies 3. Other Ratios about Sector Companies

16. Profitability of Sector’s Companies COMPANY NET PROFIT(2005/6) YTL Ratio Of Profitability % YTL EREGLI IR.STE.CO 300.172.6194.49 IZMIR IR. STE.CO 8.946.1663.39 KARDEMİR IR. STE. 11.693.8041.97 TOTAL 320.812.5892.40 FINNET2000

17. Growth of Sector’s Companies COMPANY Total Assets in 1999 YTL Tot Asset in (2005/6) YTL Growth Ratio % EREGLI629.360.1086.678.181.7581077 IZMIR91.928.004264.095.463287 KARDEMİR111.679.568593.256.776531 FINNET2000

18. Debt Ratios (2005/6) COMPANY Debt Ratio(%) Short-term Debt/Total Debt (%) Capital Sufficiency Ratio( %) Long-term Debt/Total Debt(%) EREGLİ46.0253.4667.3246.54 IZMDC38.4876.5972.2123.41 KARDEMİR77.4540.9756.3559.03 AVERAGE84.5571.1456.7828.86 FINNET2000

19. Other Profit Ratios (2005/6) COMPANY Gross profit Margin (%) Net Profit Margin (%) Cost of Sales/Net Sales Profit/Capital Ratio MV/ BV Net Profit 2005- 6/Equity EREGLİ 16.0314.7484.276.680.636.68 IZMDC-1.654.33101.654.690.904.69 KRDMR11.364.7288.643.501.483.50 FINNET2000

20. Price-Earning Ratio,Market Value,Book Value Company Net Profit year 2004 Paid-in Capital YTL Equity YTL MarketValue YTL Market Value USD MV/BV P/E EREGLI496,189,112487,872,0004,542,585,9094,366,454,4003,234,410,6670.968.8 IZMDC12,716,31062,250,000189,899,229195,465,000144,788,8891.0315.3 KRDMR10,163,825115,935,97070,637,582106,661,09279,008,2161.5110.4 FINNET2000

21. CONCLUSION Erdemir’s privatisation Erdemir’s privatisation Mortgage Market,will effect the Iron-Steel sector positively Mortgage Market,will effect the Iron-Steel sector positively Turkish steel producers are one of the best suppliers for the restructuring investments in Iraq and Middle East Turkish steel producers are one of the best suppliers for the restructuring investments in Iraq and Middle East The iron and steel industry will continue to grow The iron and steel industry will continue to grow

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