Cement producer pays compensation to foreign customers, Turkey

Cement producer pays compensation to foreign customers, Turkey
13 June 2006

Due to a boom in the construction sector, Nuh Çimento prefers to sell cement to domestic customers, thus reducing its exports and having to compensate international customers as a result.

Nuh Çimento, a leading cement producer, had to cut into its exports to meet domestic demand this year, CEO Atalay Şahinoğlu said.

Nuh Çimento had deals to export 1,700,000t of cement this year but had to reduce this amount due to a boom in the construction sector in Turkey that led to an increase in domestic demand for cement. Supplying the domestic market is more profitable than exporting, and like other cement firms Nuh Çimento diverted output to its Turkish customers.

Şahinoğlu said the firm contacted international customers to inform them that they would not be receiving the full amount of cement they had ordered. “We had to pay compensation to our international customers because we couldn’t deliver the amount they had asked for. We didn’t export around 100,000t,” he said.

Domestic sales of Nuh Çimento are expected to rise 30 per cent from last year.

“We had a net profit of YTL 5.694m for the first quarter of last year. Our net profit for the same period this year was YTL 20.281m. This dramatic increase in profit is due to an increase in our production capacity,” Şahinoğlu said.

Nuh Çimento plans to export a maximum of only 300-500,000t of cement in 2007. “As long as domestic demand continues, our preference will be on domestic sales. Since cement is a product that takes up considerable storage space, it is always more profitable to sell to the domestic market,” Şahinoğlu said. Nuh Çimeto’s production capacity will soon reach 5Mta with their new facilities.
Published under Cement News