25 August 2021

Capacity expansion in the plant of Turkey from 65kt to 110kt completed on time & budget

Overview

• Befesa entered the Turkish market in 2010 through a 51/49% JV with Canadian company Silvermet. The plant in Iskenderun had an initial capacity of 65kt. This was then expanded by 45kt in in 2019. This brought the total EAF steel dust recycling capacity at our Iskenderun plant to 110 kt.
• Key facts about the project: capacity expansion by 45kt, started shutdown end January 2019, back in operations in August 2019, timeline c7 months, capex in total c.€20m

The market opportunity in Turkey

• Turkey, alongside South Korea, was amongst the first non-European steel dust markets tapped by Befesa: Befesa entered the Turkish market in 2010 through a 51/49% JV with Canadian company Silvermet. Befesa had an initial capacity of 65k. This was then expanded by 45k in in 2019. This brought the total EAF steel dust recycling capacity at our Iskenderun plant to 110 kt.
• Turkey has always been an attractive market for Befesa due to its high steel dust availability and the quality of steel dust (75% of steel production is EAF in 2012) and interesting environmental regulation.
• Befesa entered the Turkish market, when Silvermet failed to run the plant by itself.
• Within a short period, Befesa turned the business into an up-and-running business and margins to group level.
• In general, the quality of steel dust in Turkey is very good (zinc content >25%).
• Currently, there is an important bar Turkey that prohibits import of steel dust into Turkey from neighbouring countries. Once this is lifted, more volume would become available.

How did Befesa capture further opportunities in Turkey?

• We identified that the EAF trends would continue, allowing the Turkish market to grow its EAF share (as % of total) from 75% in 2012 to 81% in 2018.
• Environmental regulation in Turkey has been in place and is in line with the EU waste management framework.
• In 2014, Befesa assessed the economic rationale for a capacity expansion.
• Befesa identified there would be enough available steel dust in the region and in adjacent regions.
• Befesa secured 50% of the new total contracts with long-term contracts early onwards and found ways to contract the other 50%
• From a technology point of view, Befesa applied its state-of-the-art proven technology, leveraging its strong and experienced international team.