KfW Ipex-Bank has agreed a €140mn loan for the export of an ultra-modern production line for the manufacture of train wheels in Turkey.
KfW, the commercial arm of the German development bank, is financing the export of German equipment for Turkish steel manufacturer Kardemir.
In total, KfW is providing Kardemir with a loan of around €140mn. The 12-year financing includes cover from both Germany’s Euler Hermes and Italy’s Sace.
“The Turkish economy is growing, and along with it, the country’s role as a logistics hub between Europe, Asia and the Middle East. German and other European suppliers, which can provide direct or indirect support in the infrastructure sector, are presented with fantastic sales opportunities here – business that we are happy to assist with as a financing partner with country-related expertise,” explains Markus Scheer, member of the management board of KfW, at the contract signing ceremony.
In addition to the train wheel production line and auxiliary plants supplied by Schuler, Kardemir is also using the funds to finance the purchase of a complete bar and wire rod mill, exported from Italy.
The plant exporter is the German press manufacturer Schuler, which is posting the largest individual order in its company history with a volume of more than €90mn.
The deliveries are key components of the ambitious modernisation and expansion programme, which Kardemir would like to use to boost its annual production capacity from 1.1 Mt to 3.3 Mt and to strengthen its rail division. Kardemir is already producing rails and points for high-speed rail tracks, which the Turkish state is currently very keen to expand. According to information provided by the government, Turkey’s entire rail network should be doubled by 2023, stretching across a length of 25,000 kilometres.
Kardemir, the only rail manufacturer in Turkey, is an important customer in the steel segment for KfW. Back in April 2013, KfW financed a basic oxygen furnace for the factory’s eco-friendly exhaust gas purification plant as part of its modernisation and expansion programme.