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Borusan says ArcelorMittal raises JV investment

ISTANBUL - The world's largest steel maker ArcelorMittal is increasing to $850 million its investment in a 50/50 joint venture with Borusan to build a new hot strip mill in Turkey, the CEO of Borusan Group said late on Tuesday.

The plant, announced last October, is expected to be operational by the first half of 2010 and have a capacity of 4.8 million tonnes. Arcelor's original investment was put at $500 million.

‘The figure of $500 million did not take a lot of details into account. Also Chinese and European machine manufacturers have increased their prices because of the euro-dollar exchange rate, which pushed up our prices,’ said Borusan Group CEO Agah Ugur.

The joint venture will reach full capacity by 2012, driving Borusan's share of the domestic flat steel market to 20 to 25 percent by 2015, Ugur said previously.

At full capacity he expected an annual revenue of $3 billion from the plant.

Borusan Group is also planning to invest more than $3 billion in the 2008-2013 period, said Ugur, adding that $2 billion of these investments would be dedicated to energy.

Borusan is planning to have energy production facilities with a capacity of 2,600 megawatts by the end of 2013, said Ugur.

The group has also signed a $170 million syndicated loan with seven banks, he said.