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Çelik Yapılar - Tosyalı Holding Özel Sayısı Sayı: 24 - Ağustos 2010   

Suhat Korkmaz, Tosyalı Holding CEO: “WE HAVE PRINCIPLES WITHOUT CONSESSIONS”

We would like to talk about the Tosyalı Holding establishments, their products, production technologies, and production policies...

Suhat Korkmaz, Tosyalı Holding CEO: “WE HAVE PRINCIPLES WITHOUT CONSESSIONS”

Suhat KORKMAZ: The oldest firm in the industry is Tosyalı Demir Çelik which was established in 1994. Till then there is some trade and hand manufacturing in İskenderun. Stove pipes are manufactured till 1994. Other sheet steel hand made productions follow. Some of the bought raw material sheet steel is resold. The first industrial firm is Tosyalı Demir Çelik. Our motto to invest in new sectors is developed in 1994. In general there were mainly rolling mills here. The reason being İSDEMİR. As you know, İSDEMİR is the second largest integrated iron and steel plant in Turkey, established by the state and later privatized. İSDEMİR produces final range as well as mid range materials in those days mid range is essentially pig iron. When there is a surplus of pig iron firms start to appear around İSDEMİR that can utilize this and turn it into final products. Actually there is not much consuming in the area especially in those days. İSDEMİR cased the rolling mills to be established here. And they mainly produced rebars for construction. In 1993 Tosyalı brothers think about founding a rolling mill. After great deliberation they decide on a production other than rebars for there are too many already they think. A profile plant is much needed in the area. And this becomes the basis of our foundation: “shun away from the competitive areas, invest in plants that are much needed in the area and the country .” this is to be our motto in all the future investments. Thus becomes the first angle iron and profile plant in the region, Tosyalı Demir Çelik when established. Looking at the capacity at its first days it is at least 50 times larger today. In those days they were producing 300 tons in a month and today it is over 50 000 tons per month. Tosyalı Demir Çelik in 1997, seven years after its foundation still trades in pipes as they did before along side the rolled products for they have traded sheet steel for a very long time in the region.
Again they think for the first time in the area Tosyalı Demir Çelik in pipe profile plants will supply the demand in the area and the national customers the much needed materials in a short while and rapidly and thus the first pipe profile factory of the region is established as Tosçelik. Before that there are plants for spiral pipes but this is a longitudinally whelded pipe plant. After its establishment as is the demand, it enlarges its market rapidly. In the sector the firm is familiar with the customer from the previous trade. Sees the opportunity and produces accordingly. The firm established in 1997, grows in 10 years, and this year it is the 45th largest ISO 500 industrial establishment becoming the successful leader of the pipe profile sector.

At both our plants product ranges develope constantly. Almost every year we present new items to our customers. At the beginning only angle steel was produced, later larger angles are tackled and I and U profiles are produced in a second rolling mill founded at the same place. At the moment nearly the whole range of small and medium sections of profiles are produced. Every kind of multi faceted, isocelese angles and also UNP, INP, IPE IPEA and IPEAA are being produced. Meanwhile if there are demands for different items in various qualities from the market we produce those as quickly as possible too.

Can you share the production process with us?
Suhat KORKMAZ: Tosyalı Demir Çelik is the plant that uses pig iron as raw material. We have 2 rolling mills, one is for producing angle iron and the other is for I and U profiles. We have heating ovens here. Both mills use natural gas. The pig iron comes in and reheated to rolling temperature then passes through the rolling benches and shaped cut and packed to the customer requirements. We can make up to 15 meters as the market demands. Yet if necessary we can produce in special lengths up to 18 meters as well. Standard lengths are 6-12 meters however when demands are made by the project in fractions like 8, 10 or 10.5m we can also do that. Since Osmaniye plant has started production it has become even easier. When working with standard length pig iron for the production of special lengths then a lot of wastage occurs therefore in our own plant we produce the desired length pig iron and rapidly turn it into the special end product. Later these pass through the plumbing benches and are packed. Both the oven and the rolling, the packing and plumbing are all very highly automated. We pack by automation. Improvements in mechanics and automation are constantly made. This reflected in the cost and the quality.

Talking of which, what have you in certificates for “quality”, and what can be said about it?
Suhat KORKMAZ: Of course the list is so expansive... our market is not just national. 80 countries we have in our interests. Last year only, we exported to over 40 countries. And you have to know all about their markets when you are working in exports this heavily. You have to respond to all sorts of demands. There can be different standards. Sometimes ther can be a standard peculiar to one country, and you have to abide by it. We are producing for the international market so we have to keep track of the standard globally, and we have the necessary certificates. We can roughly say that the most essential are ISO 9000, ISO 14 OOO, ISO 18000, the last two are new even in Turkey and we already possess those. One is for occupational safety and the other is an environmental standard. They are very important for us. We are enthusiastic about them and got them speedily. Osmaniye plants were up to the standard immediately from the very beginning. We are very proud about this.
When planning a plant we aim for a competitive high quality production. Customers are again the main concern. Customer satisfaction, customor favor is what we are after. Their appreciation and choosing us is paramount. Where ever we look it is a consumer oriented production. Production is nnot a criteria how much is required is the criteria, how much the customer favors the material is. Therefore one of our basic criteria is gaining the customer’s favor. This is easy to say, hard to accomplish. Last year, for example, iron and steel secton in Turkey shrank by 20 percent. Yet we are better off than most of the world in this global crisis. West Europe and America there is 45-50 percent shrinkage. When I say 20 percent in Turkey I mean the steel industry, which was better than the whole of the world. Yet, as Tosyalı Holding we grew around 47 percent this past year. This is a result of customer appreciation. Our customer haven’t deserted us, on the contrary their purchases grew supporting us. This is to do with their trust in us, not just about quality or price but shows that we understand our customers and organize ourselves accordingly. This means being one with the customer like a partner..

What is the number for customers in national and international markets?
Suhat KORKMAZ: Roughly we do 30-35 percent exporting, the rest is for the national markets. National market looms heavier. Our exports are mainly to the neighbouring countries. We have to look at how they are changing as well. There has to be a flexible, ever reaching structure. Entering a market is not easy. Realizing a sale by e-mails or turning up with files in hand is not possible. You have to invest for long periods of time into a market before anything happens. This past year we had a market shift. Europe and America had a considerable portion but then because of the economic situtation being harsher there the market shrank. Yet this did not affect our production. Because other markets took over. This shows that we had made our investment and were already present in those places thus started easily working with them. Sometimes crisis creats a new opportunity. Growing with the crisis is a Tosyalı Holding speciality. At the most serious crisis points it has grown bigger and invested bigger which denotes that opportunities when identified correctly can be points for growing developing spurts in our country. The know-how, experience, work ethics and daring handed over by generations in the Tosyalı family can be more significant then money. That is why Tosyalı Holding has grown into the leading company it is in two decades in Turkey. Surely the founders being from the trade itself helps. Thus they know the markets, the merchants. This is an advantage. They have been working with the same customers for years. We have nearly over 1500 customers. We are familiar with them. We know most personally by name. We believe that if there is growth to be done, we have to do it with our customers. With our customers growing we may not be able to do so. This is a clear approach, therefore we are in constant communication with our customers. Our investments are guided by them. We annually come together with our dealers. Just like an AGM. It is almost us that report to our dealers. What we have achieved, what level are our new projects, we share these with our dealers. And then discuss our new projects. What is needed, what is in demand, what sectors are heading towards new developements, where the market is heading. This is important. When we are told that such and such product can sell the next year, we produce it and expect them to sell it. Economics can always have deviations up or down, put our projection is more realistic so waverings are seen rarely.

These Tosyalı Holding investments and products, how did they affect the competetion with the imported products in the market?
Suhat KORKMAZ: As the product range grows nationally, not just us but the other national producers as well, the foreign produce can not compete with it. Foreigners can enter places when there is a gap but if national manufacturers do the producing then regarding quality and deadline, they can surpass the exported materials. Where we do the production it is impossible for foreign goods to enter the market. But in some sectors, like profiles, production is still below demand, thus some export is seen in the markets. We hope to close this gap in the future..
Market research is crucial of course. We are expecting significant changes especially in the constructional steel sector in Turkey. Consuming of constructional steel is still low compared to EU. But these numbers will rise eventually in Turkey. Our expectations are in that direction. We have to take the developed countries as example. When we aim that then we know that in 3-5 years the consumption will hit those numbers. There is still some considerable difference. We are consentrating on these points, preparing new projects to fill in the gaps. A project can never be realized in one go: infrastructure, all the details have to be assessed before the decision can be given for the start. Our R&D department provides us with the necessary preparations. They work non-stop.
Where there is a need it cannot wait. You have to bring it in from wherever you can find it, costly or not, naitonally or internationally. It is the same with us. If necessary we find it. We have not altered our project in favor of not importing, for it is a requirement. Such project will be on the agenda even more as they will require more constructional steel in Turkey. Thus if we can beforehand produce more constructional steel nationally, we would be encouraging future project makers which will require these products even more by having these readily available in the market conveniently priced is an incentive for the designers. Culture is also a factor. It is rather important, culture lite traditions keep changing is albeit slowly. There is also the recent earthquakes, the siesmic realities are not forgotten in Turkey. This makes us cautious in such matters. All these point towards a growing demand for steel in Turkey. Our work entails this in a way.

You are a significant name in the market with years of experience in the sector. Prior to Tosyalı Holding you were the General Manager of İSDEMİR. How would you describe the industry with your experience?
Suhat KORKMAZ: Iron and Steel sector in Turkey is one of the prominent sectors. Recently it has become significant in Turkey’s exports and it is a sector that realizes its responsibilities. It is the leading industry of the economy which is showing great achievements in developments. In the 80s from 2.5 million tons today it has reached 27 million tons makes it the second rapid developer after China in this sector. As developement grows so does consumption. I believe that near future will show even higher consumption levels.
The old establishments in Turkey are integrated and founded by the state since in those days private sector had no investment power in the sector. They are all eminent plants. Then in the 80s private sector comes in, a rapid growth takes place. The growth after the 80s is due to the private investments. They are mainly scrap reliant, and mostly have arc ovens. They have focused on rebars since it is in demand. Production is of rebars and ingot irons. They are supplying the national demand and also exporting in substantial amounts. And as the demand for flat steel items grows there occured and instability in the market for years. Larger consumption and limited production sources meant imports closing the gap, and it still is thus. So we aim to change this imbalance in favor of our country when we are making investment plans. There will be other investments after us. Again they will aim to change this imbalance between supply and demand of flat steel towards more national production of flat steel items. There will always be imports. It was and will be so. This makes the companies dynamic and strong and on an even keel. Creats and developes the market. As a country the sector is growing rapidly. Closer to the developed countries actually. On the other side there are the developing countries which are serious potantial markets. Turkey benefits and will be doing so from these markets. My personal expectation is that this trend in growth will continue.
Before the crisis especially besides the flat sector, there was close to an annual 1 million in growth. This increase in consumption was significant in two areas in the context of constructional steel: firstly in the constructional steel sector and secondly in the manufacturing sector. It is considered starting from 2011 for the consuming to be larger.


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