Borusan Mannesmann invests in a new factory in Turkey on its 60th Anniversary

09 January 2018
Borusan Mannesmann with its new factory in Gemlik that will manufacture custom pipes for the automotive industry, not only will solidify its position as a leading company in Turkey’s automotive pipe markets, but also will raise its share in the European markets and support Turkey’s automotive exports.

Borusan Mannesmann’s 60th foundation anniversary will be crowned with a significant investment. As the company sets up a new factory that will manufacture special pipes for automotive industry, it will also raise the production capacity of its factory in Halkalı, Istanbul. A part of the $75 million total investment will go into operation this year, and the rest will be completed in 2019. The investment will lead to a 55% capacity increase and generate new employment for 250 people. In addition to this, with this investment they will achieve an increase in the capacity of industrial pipes, which are used in industries such as energy, mining and machine equipment production. These industrial pipes are being produced in Turkey with a special technology applied only by Borusan Mannesmann.

The goal is to be number 3 in the European automotive industry!

The new factory will produce special pipes having precision measurement tolerance, resilient materials and a specific nature of surface in line with the special demands of the key automotive industry and sub-industry firms. While solidifying its power in Turkey’s automotive segment, Borusan Mannesmann will achieve growth in the European market as well, in coordination with its partner Salzgitter Mannesmann operating in the same branch of industry. Borusan Mannesmann is presently the 5th biggest player in the European market, and aims to be the 3rd with this investment. Already offering 45% of its products to the European automotive industry, Borusan Mannesmann plans to raise the emphasis given on exports over 50% in 5 years, while at the same time solidifying its role as a leading company in the Turkish market. The factory, alongside its direct exports, will create value for the Turkish economy with its products’ contribution to automotive industry exports.

Borusan Mannesmann invests in Turkey as Turkey’s global player

General Director of Borusan Mannesmann, Zafer Atabey made a statement regarding the investment saying, “The first leg of our growth strategy in the field of added value-generating products was the energy pipeline investment we made in 2011. With a $110 million investment, we had built the world’s most technologically advanced facility in its field in Gemlik, and our growth continued in the energy pipeline market, particularly due to contracts we received from the USA market. And we took the second step of our strategy by building a $150 million facility that produces drill pipes intended for petroleum and shale gas industries in 2013 in Houston, Texas. And now we are taking a 3rd and a very significant step by making a $75 million investment in our operations in Turkey focusing on growth in automotive pipes.”

Atabey also added that Borusan Mannesmann recorded 4%-5% growth annually over the last five years in the segment of automotive pipes, both in the domestic market and in exports. He explained that with the new investment this growth rate would increase to a band of 8%-9%.

Borusan Holding’s CEO Agah Uğur: “In 2017, as Borusan we made over $300 million in total investments. With regard to clients, the automotive and domestic appliance sectors continued their growth in 2017. Despite the fragility of our economy, the clients of these sectors strengthened our segments. Our factory investment will create a big benefit in terms of technology intensive products that bring added value, especially in terms of the automotive sector.”

R&D Support For Clients As autonomous driving and electric cars gain more importance and the demand for eco-friendly, low volume emissions vehicles not harmful to the environment gradually increases, R&D and product innovation get more significant than ever. The common global demand from the automotive sector is the production of lighter vehicles, and this requires the parts of the car in which pipes are used to be lighter.

Borusan Mannesmann will also construct a Client Quality and Project Management function within itself with this new investment. This department’s task will be to support the development of innovative products that meet the needs of the clients by working together with the R&D departments of both clients and raw material manufacturers.

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