Asian Metal: Sir, we are honored to have you accepting to grant our interview and share your perspective on magnesia markets. Could you make a brief introduction of Kümaş and yourself?

Mustafa TOPAL: Kümaş Manyezit Sanayi A.Ş. was founded in 1972 as a joint stock-company and started to produce dead burned magnesia from natural magnesite in 1976. At the beginning of 1990, when KUMAS completed the installation of its brick and mortar production facilities, it became an integrated corporation producing basic refractory materials from magnesia and dolomite.

Over 40 years, Kümaş has been producing the world’s best quality natural D.B.M. Since 2008, Kümaş has been producing large crystal size and high purity fused magnesia with 17,500t annual production capacity. Kümaş is going to achieve fused magnesia production capacity of 35,000t/year at the end of July 2014.

After acquisition of Tavsanlı Plant and installation of 3rd rotary kiln in Kütahya Plant, Kümaş’s annually production capacity reached 275,000t/year for dead burned magnesia and 55,000t/year for caustic calcined magnesia.

In briefly, I have been working in Kümaş for 25 years.

Asian Metal: Your magnesia products also take an important portion worldwide, so how about the current macro economy situation in Turkey?

Mustafa TOPAL: The current macro economy situation in Turkey in 2013 is not optimistic as well, as some domestic policy decisions are also influenced by the gloomy global economy, all industry moves slowly this year. In Turkey, annual inflation is approx. 10.43%, GDP Growth Annual approx. 8-9%, and unemployment rate 9-10%.

Asian Metal: What are your leverages towards magnesia market development?

Mustafa TOPAL: Our major leverage is Kümaş has more than 50 licensed raw material mines and estimated total reserve of 127 million tons of crude magnesite ore and 112 million tons of crude dolomite ore. Also Kümaş has 8 presses with capacities between 1,250-2,500t, 2 tunnel kilns with the firing temperature up to 1750C degree and 2 temper kilns to supply demands for refractory bricks. So Kümaş is an integrated plant that has the control from the mining up to end products, 100.000 tons bricks & 50,000t monolithic production capacity per year. As I said earlier, Kümaş is also able to produce fused magnesia for his consumption. Kümaş has 90% self sufficiency in Raw material supply. Our market is 50 % to domestic market and 50% for export.

Asian Metal: Meanwhile, could you talk about your disadvantages compared with China magnesia market?

Mustafa TOPAL: I think our disadvantages compared with China are (as of today) the prices. Our production cost is higher compared with China, because electricity is more expensive and man power is more expensive in Turkey as well.

Asian Metal: As it is well known that global magnesia market moves very slowly this year, can you give e brief summary of the magnesia market in 2013 and what is the main factor that caused the sluggish market this year?

Mustafa TOPAL: Magnesia market moves very slow in 2013, and as a part of global magnesia market, demand for magnesia in Turkey is also weak. I think the main factor for decrease in demand of magnesia is the low steel production. Besides some refractory companies invest in magnesia production capacity to increase their self sufficiency rate, they also increase the quality of refractory end products in order to decrease consumption of refractory day-by-day.

Asian Metal: Under the quiet market condition, how has your company fared? And did you reduce output as well?

Mustafa TOPAL: We didn’t reduce our output. As I stated at the beginning, Kümaş is an integrated plant that use more than 100,000t of dead burned magnesia and remaining dead burned magnesia is being sold to approx 55 countries in the world. Decrease in the sales of magnesia is compensated by increasing in end products.

Asian Metal: Does your company have any plan for new production line in the future development?

Mustafa TOPAL: We have some plans for further development. In our future plan, we will investment in fused magnesia production by adding 2 EAF, and as for caustic calcined magnesia capacity, we are planning to increase it.

Asian Metal: What is your expectation about the magnesia market for the rest of 2013, and how about 2014?

Mustafa TOPAL: According to current economic situation, I think the whole magnesia demand is hard to rebound in short-term period. Our expectation is that magnesia demand just maintains current level in the rest of 2013 and do not decrease any more. As for 2014, the quota restriction of China will influence the market prices. If the quantity of magnesia export quota in China decreases, I think the prices will go up next year. However, it’s still unclear, so we will keep holding a wait-and-see attitude towards the market.

Asian Metal: Anything you would like to add?

Mustafa TOPAL: Our main target is to increase our end production and again thank you very much for you for this interview opportunity.