(Updates with comments from Aksa chairman in third paragraph, shares in fourth, Dow vice-president in last.)
Dec. 20 (Bloomberg) -- Dow Chemical Co., the largest U.S. chemicals manufacturer, and Turkish synthetic fiber maker Aksa Akrilik Kimya Sanayii AS will set up a 50-50 joint venture to invest $1 billion in carbon fiber production within five years.
The partnership will “create a large-scale, integrated production capability” at Aksa’s carbon fiber plant in Yalova in northwestern Turkey, the companies said in a press release to reporters before a news conference in Istanbul today.
Aksa is already completing investments that “will bring our annual carbon fiber output capacity to 3,500 tons, accounting for eight percent of the global capacity,” Chairman Mehmet Ali Berkman said at the conference, after signing the joint venture agreement. “We can further increase capacity, based on global demand.”
Aksa Akrilik jumped 3 percent to 4.48 liras at 12:30 p.m. in Istanbul, bringing gains in the past four days to 9.8 percent. The main market index climbed 0.4 percent.
Turkey is battling to draw in foreign investment to help finance a current-account deficit that’s widened to about 10 percent of gross domestic product this year. Foreign direct investment will be about $12.5 billion this year and won’t be less than $10 billion in 2012, Industry Minister Nihat Ergun said at the conference.
Aksa, owned by Turkey’s Akkok Group, is the world’s largest producer of acrylic fiber, with more than 14 percent of the worldwide market, according to the statement. The company expects sales to exceed $900 million this year, compared with about $850 million in 2010, it said.
Turkey is a promising market and can become a significant center as one of the eight countries making carbon fiber, Heinz Haller, Dow executive vice-president and chief commercial officer, said. Carbon fiber composites are used in motor vehicles, ships, planes, wind turbines, construction and sports equipment.
--With assistance from Steve Bryant in Ankara. Editor: Aydan Eksin
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