Leading Turkish cement producer Akcansa expects rapid growth in domestic consumption to come to a halt this year and plans to expand abroad, the company’s general manager Mehmet Gocmen said.
Domestic cement consumption grew 20 per cent last year to 41.6Mt, but could fall this year in response to last year’s hefty interest rate hikes and uncertainty related to July’s general election, which slowed housing construction.
"The sector is facing several negative factors in 2007. The rate hikes amid volatility in May-June last year cut demand for housing loans, and this slowed the pace of housing demand," Gocmen told Reuters in an interview.
The prospect of interest rate cuts in the autumn and ongoing uncertainty related to the election of the next president was also keeping fresh projects on hold.
"If it continues like this and there is a further decline in the months ahead it (growth) may even turn negative," he said.
Consumption in the first five months of the year amounted to 16.5 million tonnes, representing growth of around 10 percent.
Akcansa meets about 8 percent of Turkey’s cement needs with an annual production capacity of 6Mt of cement, 3.8Mt of clinker and 2.5Mm3 of ready-mixed concrete.
Major Turkish conglomerate Sabanci Holding and Heidelberg Cement Group each hold a 39.72 per cent stake in Akcansa.
Gocmen said Turkey was heading towards overcapacity in the cement sector. Current capacity of around 50 million tonnes was expected to reach 80 million tonnes by 2010-2011.
"We want to grow, and we want to be a power beyond Turkey’s borders," he said, but added that the company was not currently working on a particular project in this regard.
He said that of new production capacity of 2-2.5Mt planned for next year, 1.5-1.8Mt would be exported to Western Europe or America.