Dow Chemical in Joint Venture for Turkish Carbon Fiber Plant

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Aksa, Turkey's leading carbon-fiber producer, is making a 50:50 investment with Dow Chemical Company (NYSE:DOW) (Midland, Michigan) in a $1 billion project in western Turkey's Yalova province. This will strengthen the country's stake in global carbon-fiber markets and enable Aksa (Balikesir, Turkey) to become a strategic provider of carbon fiber products.

The joint investment by Dow's European subsidiary, Dow Europe Holding BV, and Aksa covers the construction of an additional facility to increase capacity at Dow's existing plant in Yalova and includes an agreement to jointly produce carbon fiber products.

Under the agreement, the $ 1billion investment will be made in Turkey over the next five years. The new plant will produce carbon to reinforce composite materials used in the alternative energy, aerospace, oil and automotive sectors.

Global demand for carbon fiber composites is expected to reach $13.2 billion by the end of this year. Carbon fiber is seen as a strategic product that is gradually replacing principal materials such as iron and steel in the construction, automotive and aviation industries. With the new venture, Turkey is now positioned to become one of the leading suppliers of this key product in global markets. Currently, the country is one of 10 global carbon fiber producers and should become a hub for carbon-fiber supply for the Middle Eastern, Asian and African markets.

Turkey's science, technology and industry minister, Nihat Ergun, said that the Yalova investments are expected to contribute to government efforts aimed at reducing the country's current account deficit, which mainly stems from the country's dependence on foreign oil and chemical products.

"Dow has been in Turkey for the past 40 years, and they are determined to expand their presence in the country. This is an indicator of the strong interest in Turkish markets on the part of foreign companies that has grown recently," said the minister.

Heinz Haller, executive vice president and chief commercial officer of Dow Chemical, said that Turkey was one of the four fastest growing markets for Dow, which has put an initial $200 million into the project.

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