OYAK ERDEM‹R - ERDEMİR

Upon completion of ongoing investments, the
unloading capacity at each of our ports are planned
to reach 16 million tons per year, allowing us to better
utilize long term freight contracts and reduce freight
costs by USD 1 per ton, thereby generating
approximately USD 20 million savings per annum.
RAW MATERIALS PROCUREMENT
After achieving notable success in reducing costs and
eliminating bottlenecks with utilization of long term
purchase contracts for our core raw materials, we
started to employ a similar approach for auxiliary raw
materials and other consumables, as well as applying
consignment sourcing for certain ferro-alloys.
Concurrently, we broadened our portfolio of suppliers,
creating a more competitive environment that is to
the advantage of Erdemir Group.
We aimed to maximize our use of domestic ore and
coal resources amid bottlenecks encountered in global
raw materials markets during 2007.
As a result, we increased our domestic coal consumption
from 30 thousand tons in 2006 to 163 thousand tons
in 2007.
While all 3,9 million tons per annum output of domestic
iron ore was consumed by the three integrated plants
in Turkey, 2 million tons of this amount was consumed
in our ‹skenderun plant thanks to favorable logistics.
Erdemir Group’s pellet production output will almost
triple from its current level of 1,2 million to 3,2 million
tons, upon completion of planned investments in
Hasançelebi Pelletizing Plant, allowing us to be better
equipped against volatilities in the global raw materials
markets.
Despite facing inventory increases averaging 30% per
year over the course of previous 5 years, we managed
to stabilize inventory levels during 2007, thanks to new
procurement and inventory management strategies put
in place. We were also able to sustain order lead times
throughout 2007 for locally sourced materials.
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