ECONOMY

Trakya Cam turns to Russia for expansion

ISTANBUL (Reuters) – Turkey’s Trakya Cam, the world’s eighth-largest flat-glass maker, is studying Russia with a view to investing there, Chairwoman Alev Yaraman told Reuters yesterday. Trakya Cam, a unit of Sisecam, produces in Turkey’s industrial city of Bursa and Bulgaria and sells 85 percent of its products to the automotive and building sectors. The company, whose stock has risen 18 percent so far this year, expects sales growth of 10 to 15 percent in 2006, helped by an increase in car production and construction, after the company’s 4 percent rise last year, Yaraman said. «We are examining Russia in order to invest. In Russia there is potential for a similar growth dynamic to Turkey’s,» Yaraman said in an interview. «It’s in the evaluation phase,» she added. European Union candidate country Turkey is targeting economic growth of 5 percent this year, while larger oil-producing Russia expects 6 percent. Trakya Cam is investing $220 million (175 million euros) in three plants in Bulgaria, two of which came on line this year and last while the third is due to be operational by the end of this year. With new investment also in Turkey, Yaraman said the company’s capacity would increase to more than 1.5 million tons at the end of 2007, compared to a current 1.06 million tons. Trakya Cam’s net profit fell 19.4 percent to 83 million lira in 2005, hurt by the impact of a strong lira on exports, low prices for its products and an increase in investment spending. Cheaper glass imports from China rose to 80,000 tons in 2005 from 10,000 in 2004 and prices fell 8 percent. But from April Chinese flat-glass imports will be capped at 20,000 tons a year for three years. Yaraman said an improvement in the German economy could push up glass prices, although the firm had not yet decided whether it would increase its prices. «If there is a trend for price rises in the whole world so we will also increase,» she said, adding that earnings before interest, tax, depreciation and amortization (EBITDA) would also rise this year. Shares in Trakya Cam, 70 percent of whose free-float is held by foreigners, rose 18 percent this year to Tuesday’s close.