Kardemir to Manufacture 200 Thousand Railway Wheels Annually

2018 April 02 Tuesday was held at Kardemir Education and Culture Center. In addition to our Board Members, Hüseyin Soykan and the shareholders were present.

At the Ordinary General Assembly Meeting of Kardemir, which was chaired by the Vice Chairman of the Board of Directors Ömer Faruk ÖZ, all items on the agenda were discussed and resolved one by one.

The General Assembly's opening speech, Kardemir Chairman Kamil Gulec In the 2018 developments in the global steel industry and found them in the assessment of Kardemir 2018 years of activity with reflections of the Turkish steel industry.

At the beginning of his speech, Güleç pointed out that the world witnessed a new era in the global economy led by the US and that President Trump's global trade was driven by fluctuations due to the anti-globalization rhetoric and actions. most of the sectors that take place at the beginning noted.

The highlights of the speech delivered by the Chairman of the Board of Directors Kamil Güleç at Kardemir's Ordinary General Assembly were as follows;

World Steel Sector;

US President Trump does not hesitate to apply Section 232 law, allowing for commercial restrictions on national security grounds by obstructing the warnings of the European Steel Association and protests against the World Trade Organization, and the steel imports from all countries except Canada and Mexico are% 25 and 10 has signed the decision on customs duty. This situation led to the start of a new era in the steel industry and later in the year 2018 25% customs duties to Turkey by bringing more added tax was implemented as 50%.

Reflection of the decision to our country;

This decision followed Turkey's 2018 April in the US with his steel exports amount based on 68% compared to the same month of the previous year, the value is based on the recently fallen to 60%, at the end of the year and nearly zero exports to the United States.

Following the US's additional customs duty for the decision, the Ministry of Economy have been unsuccessful justify attempts made for the exemption of Turkey in the lead and finally in Turkey, on 23 May 2018, customs duties to be applied in imported 22 products from the United States reported the list of the World Trade Organization. In this context, the coking coal used by our company in steel production is also included in this 22 product, and this situation raises our imported coking coal costs from the US significantly as 13,7, while its financial reflection reaches around 30 million per year. Our attempts to abolish the tax imposed on imports are ongoing.

2018 year of World Raw Steel Production;

In this period, called as Trade Wars, according to the data released by the World Steel Association,

In 2018, world crude steel production increased by 4,6 by 1 to 810 million tons.
China, which is the biggest steel producer in the world, has realized% 2018 of world crude steel production alone in 51,3.
India, which brought the crude steel production to 2018 Million tons in 106,5, took the second place from Japan, while Iran made the biggest breakthrough in 2018, and was among the first 25 producers with 10 Million tons production in XNUMX.

Turkish Steel Sector;

In the 2017 13,1% increase proportionally among the first 10 countries that have made most production growth in Turkey, living in 2018 0,6% production loss ratio 37,3 million tons of crude steel production.
When the foreign trade balance of Turkish Steel Sector is examined; 20,5% in terms of quantity, total exports of steel products in Turkey increased 22,1 million tons, while in terms of value 31,1% rise 17,7 billion to $ reaching and imports decreased by 11,3% 14,5 fell to million tons, while in terms of value 3,3% increase 12,8 billion $ A is increased. With these figures, the ratio of exports to imports in 2018 increased from 108 to 138.

Production, Sales and Profitability;

Kardemir, in 2018;

2 Million 413 Thousand tonnes of liquid steel production,
2 Million 315 Thousand tons of final product production,
2 Million 199 Thousand tonnes finished final product sales,
Sales revenues were increased from 3 Billion 973 Million TL to 5 Billion 583 Million TL.

Our efforts to reduce our costs by increasing our productivity, dynamic sales marketing activities and improvements in production processes have ensured 2018 EBITDA margin in 31,8 and 2018 year 1 Million TL gross profitability and 709 Million TL net profit.

With this record profitability, our management decided to distribute 300 Million TL to our shareholders as dividends. I wish it would be good. In the following years, we will strive to achieve the profitability that our shareholders will be happy with.

Product with high added value;

As it is known, with the investments realized after the privatization, our Company has turned towards high value added products. In this scope, we have diversified our product range with high quality steel grades in the bar coil mill, which we established after the rail and profile mill. Stick Coil rolling production in the year of our 2018 29% increase 360 thousand tons, the total number of quality In the 2017 39 2018 also rose in the year 73. This will continue to increase every year. Our company offers many new high-carbon steel grades used in the manufacturing industry. will continue to contribute to the defense industry with automotive, furniture, white goods, machinery manufacturing sectors and the new steel grades it will develop.

We realized the production of the first crude wheel at the Railway Caster Production Plant, which is under construction within the scope of strategic investment, at 24 on September 2018. To date, we have spent around 700 Million TL for this factory established as a fully robotic facility. Our annual wheel capacity is 200.000 units. Our test production continues and we are planning to start mass production in the second half of this year. Then the certification processes will begin. Thus, Kardemir, producing railway wheels until the finished goods from the ore in integrated facilities not only in Turkey, while taking place among the world's leading manufacturers, will further strengthen the strategic cooperation with TCDD as a rail.

Investments;

We are planning a new investment here. We would like to install an axle and wheel assembly plant to present the wheel and wheel to the end users together with the axle and the wheel, and we have taken this into our investment plan. Kardemir will not only contribute to the economy of our country with high value added products, but will also serve to increase the advanced technological products in our exports.

Again, in order to increase the liquid steel production capacity of our company, the investments started in the Steel Shop continue. 1.250.000 4 tons / year capacity. Continuous Casting Machine, 3. Ladder Furnace investments will be commissioned by the end of 2019.

Our 90-ton converters with this investment to be issued at the end of the year 120 2019 tons and our company completed its largest investment package for years 3 million / ton will reach capacity. 2020 will have a capacity of 3,5 million / ton at the end of the year.

Environmental Investments,

2018 was the year of environmental investment for our company. As we know, we have invested around 2006 Million $ in the environment between 2016-100. Approximately 50 We have completed the majority of 2018 package in the second quarter of 2019 and the remainder in the first quarter of 21.02.2019, and we made the application for the permission of the Provincial Directorate of Environment on XNUMX.

Filyos Port Project,

One of the important issues for our company is the Filyos Port Project. Filyos Port is of great importance in order to ensure the healthy sustainability of our production in line with the capacity increase in our company and to increase our competitiveness in both our exports and imports. We have seen and examined the investment in the past months. It is expected to be completed next year. We have also conveyed our requests to the Minister of Transportation. After the completion of infrastructure investments, we would like to be in the process of superstructure and operation as Kardemir.

Social responsibility projects;

As you know, Kardemir did not deny social needs and expectations through social responsibility projects, even during intensive investment periods. Last year, we added a new ring and completed Kardemir Anatolian Imam Hatip High School and put it into the service of the National Education. We are happy to bring a very nice training nest to Karabük residents.

One of our goal is to organize our idle facility as Kardemir Museum in Yenişehir Region, known as the Engineers Club. Restoration projects of the museum were drawn and concept projects are being prepared. Then the application will be passed.

Another facility is Yenişehir Cinema. 1954 in the year of our city, which serves as a cinema and cultural center for many years to restore the facility and the theater and cultural center as the center of the service we want to offer. The restoration projects in this place are drawn and we will start the implementation works soon.

In addition, with the foundation of the Kardemir Technology Education and Culture Foundation, we will restore the social building as a management center and a social facility. In 2019 we got our program. Again, for the 2019 year, we will sign a protocol to support our sports students amongst the Youth Sports Directorate and Kardemir.

Employment;

Last year, in line with the call of the President of the Republic of Turkey, HE Recep Tayyip ERDOĞAN for the N Employment Mobilization,, 419 graduates from Industrial Vocational High School and Vocational High School provided new employment. In 2018, 106 joined our new friend Kardemir family, including 135 in the on-the-job training program.

Our trainings to increase the knowledge and competencies of our employees continued uninterruptedly in 2018. Throughout the year, our employees were trained on average 52 hours per person, including Personal Development, Occupational Health and Safety, Vocational and Technical Training. This Education Cultural Center, which we are in, hosted dozens of social, cultural and scientific events throughout the year. Our support continued in 2018 in order for our employees to graduate. Currently, our 70 employee continues to master and PhD. We provided 169 Vocational and Technical High School students with skills training and 254 University students with an Industrial Based Internship. Again, we have contributed to the professional development of the 1314 student during the year's technical trips.

Investor Relations Activities;

In 2018 2 uyla Roadshow ıl was organized in London from World Financial Centers and investment funds were contacted on 40 and the activities of our company were introduced to investors abroad. During the year, 22 domestic and 11 foreign 33 brokerage firms and foreign fund organizations were interviewed. We participated in 2 investor promotion organization and our investors were informed about the activities of our Company.

2019 Year Expectations;

The tension between the US and China has not only affected the economies of both countries but also the countries of the world in the last year. The European economy has been slowing down due to both global trade wars and Brexit uncertainty. Global growth is expected to slow down in the coming years. Certainly, danger signals are increasing in the world economy.

Developments in the near geography, efforts to increase the share of steel mills in the Middle East region led by Iran, capacity utilization rates in the world steel sector still remain at% 75, idle capacities exceeding one million tons, developments in the raw material markets and protection measures in 700 to give prominence.

Our management, with its deep-rooted industrial experience and visionary perspective, will provide product diversity with high added value products, increase our service quality and productivity, reduce our costs, ensure strict market follow-up and make accurate and fast decisions in all sales and purchases, the strategy that will achieve a financially and technically sustainable success with an environmental-oriented approach will then be strictly implemented.

Acknowledgments to Stakeholders;

We would like to take this opportunity to wish the results of 2018 to be beneficial for all of our activities, and to all employees and employees of Özçelik ınİş Union, who are representative of our employees due to their valuable contribution to the realization of the activities, and I would like to thank our Government for contributing to the development of the sectors with common mind and strategy and present my love and respect.