ECONOMY

Sell-off talk hampers plans

ANKARA – Privatization plans are holding up investment and modernization at state-run Turkish metals producers while private firms are boosting output, company officials say. Several state metals firms are set for sale as part of Turkey’s drive to raise $3 billion from privatizations this year under its $19 billion loan accord with the International Monetary Fund. Major aluminum producer Eti Aluminyum said all its modernization and new investment projects had been suspended since the company was scheduled for sale by the government’s OIB privatization agency. «We still produce 60,000 tons of fluid metal per year. We had hoped to raise this to 110,000 tons before our investment projects were suspended by the OIB,» Eti’s sales director, Ahmet Arsoy, told Reuters. The company had been planning to change the Soderberg technology at its plant to pre-bake technology but Arsoy said the project was stuck at the design stage for the time being. Officials at state-run copper producer Karadeniz Bakir Isletmeleri AS, which is also under OIB control, said lack of maintenance and investment was pushing down production. The company’s mine and concentrating facilities at Murgul could process only 1.2 million tons in the past 12 months although its total capacity was 3.2 million, sales director Yusuf Ziya Akgok said. The firm expects to produce 1.2 million tons at most next year at Murgul, near Turkey’s border with Georgia. «It would be a miracle of engineering to keep 1.2 million tons running with this lack of maintenance and investment,» Akgok said. The company exports to various markets including Bulgaria and China, depending on shifting demand. Its smelter at the Black Sea town of Samsun, with separate copper producer Eti Bakir, was sold to Ce-Ka Insaat for $33 million last April. But the mood is more upbeat at privately owned Has Celik ve Halat San. Tic. AS, a refining firm making wire rod and cable from primary aluminum ingot. Company officials said it would boost production by 150 percent a month next year due to rising overseas demand. «We are planning to produce 2,500 tons (of aluminum alloy) per month to be used in energy transmission lines and cable manufacturing,» the firm’s Remzi Erciyas said. The role of foreign investors in the Turkish metals industry has also increased with recent privatizations. On September 23 Canada’s Inmet Mining Corp completed the acquisition of the state’s 45 percent stake in copper and zinc producer Cayeli Bakir Isletmeleri for $49.25 million, making Cayeli a wholly owned subsidiary. «This acquisition… provides immediate growth in our base metal production from the Cayeli mine,» Inmet Chief Executive Officer Richard Ross said in a statement last month. OIB officials said last month Inmet would buy the stake in Cayeli in cash and also planned further investments. Company officials in Turkey said they could not immediately comment on any further purchases. Production at Cayeli in 2003 was 33,500 tons of copper and 33,600 tons of zinc. In the first half of 2004 its copper production was 17,600 tons while output of zinc was 19,700 tons according to Inmet’s website.