Turkish Steelmaker Tosyali Seeks to Buy European Producer

(Bloomberg) -- Turkish steelmaker Tosyali Holding AS is looking to acquire a producer in Europe to expand its green steel business while advancing multi-billion-dollar projects in Saudi Arabia and Africa.

“We are looking for companies in a similar condition to the one we acquired in Spain last year,” Fuat Tosyali said in an interview during the World Economic Forum in Davos. He was referring to the acquisition of Baika Steel Tubular System, which boosted Tosyali’s spiral steel pipe production capacity to 240,000 tons annually from 150,000 tons. The new acquisition could cost up to $500 million, he said.

Tosyali said that European steelmakers, reliant on coal for production, face barriers due to strict carbon emission rules. 

“We’re particularly targeting companies struggling with raw material access and financing production. We will channel our semi-products to downstream producers instead of selling our final products and we believe this will create a value chain.” 

Apart from environmental concerns, steelmakers in the US and Europe are being squeezed by a fresh wave of cheap imports and anemic demand that’s pushing prices lower. ArcelorMittal SA, the biggest producer among Western nations, cut its forecast for consumption outside China — a key barometer of the world economy.

Tosyali Holding’s total steel output, which includes production in Turkey and Algeria, reached 15 million tons a year at the beginning of this year, he said. Turkey is among the 10 largest steelmakers in the world, producing 33.7 million tons a year.

Tosyali is also investing in new plants in Saudi Arabia, Senegal, Angola, and Libya.

The company will spend $5 billion for a 4 million ton-a-year steel plant in Saudi Arabia’s Dammam region and has just secured 1.8 million square meters of land from Saudi authorities to build the plant, Tosyali said. Once all permits are in place the company aims to complete the plant in up to 36 months, he said.

In Libya, Tosyali plans an 8.1-million-ton-a-year facility near Benghazi, with an initial $1.5 billion investment for the first 2.7-million-ton phase. In Angola, it will invest $500 million with state energy company Sonangol to develop iron ore operations and a steel plant.

As part of its plans to produce steel from green energy sources, the company aims to increase its solar output by more than 10 fold to 2,500 megawatts from 235 megawatts through a $1.5 billion investment, Tosyali said. 

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