MMK’s investment amount announced

tension in political relations WHILE THE HIGH between Ankara and Moscow has been going on for years, the tension in the economy has entered a somewhat de-escalatory phase. The process, which started with Magnitogorsk Iron & Steel Works (MMK), one of the largest steel companies in the world, finally continued with the Russian commercial vehicle manufacturer GAZ.

While MMK decided to restart its production, which it stopped 9 years ago, GAZ announced that the brand’s GAZelle NN model will be produced on the assembly line in Sakarya. However, the most interesting was the decision of MMK.

MMK, which stopped production in 2012 due to oversupply in the hot rolled steel production market, attempted to resume production in 2018 but postponed its plans for a second time. However, in April, MMK announced that it would start production of two million tonnes. “We have started the preparatory work for production,” Pavel Shilyaev, CEO of MMK, announced. However, the amount of the new investment was uncertain.

Andrey Eremin, MMK’s Economy Director, has now announced this amount. MMK will invest USD 200m for the new production. USD 40m of this will be for the new facility and the rest will be expenses such as raw materials and working capital. MMK Metalurji, which has plants in two different cities in Turkey, has a cold rolling plant of 750,000 tonnes, a galvanizing line of 900,000 tonnes and a color coating line of 400,000 tonnes. MMK is the 62nd largest company in Turkey onthe ISO 500 list with 1,163 employees and a turnover of TRY 3bn in Turkey.

$13 BILLION WEALTH

MMK’s global turnover is USD 8bn and it ranks among the top 30 largest steel companies in the world. It boss, Viktor Filippovich Rashnikov, has a personal fortune of USD 13.1bn. Known for his closeness to Putin, Rashnikov also owns one of the world’s largest yachts, Ocean Victory. There are price increases in MMK’s decision to start production after 9 years. Hot rolled steel prices are rising steadily in Turkey and globally. They currently stand at USD 1,0201,030 per tonne as of April 16, according to Fastmarkets’ weekly price assessment for Turkey-origin hot rolled steel. In February, the price stood at USD 760.

Cold rolled and hot dipped galvanized steel prices are on the rise in the global market due to strong demand. MMK expected a profit of USD 90-100m in 2010 from hot rolled steel production in Turkey. It is obvious that this figure will be higher today. However, the cold relations between Turkey and Russia seem to have had no effect on the frequently delayed production of hot rolled coils.