AK Aluminium, one of the top five aluminium producers in Turkey, was first established in 1992 and started its production in 1996 with its imported machinery and first ever casting line. The establishment of the company's first cold mill followed a year later. The company's potential had already begun to attract investors’ attention after only a few years and it was eventually sold to its current owners, Kamer Holding. The company’s production includes aluminium cast coils, cold rolled coils, sheets and strips. It is situated in the central Anatolian city of Konya on a large piece of land which features a 100,000 square metres open area and a 10,000 square metres enclosed facility, big enough to allow the company to expand anytime that it is needed. In 1999, the second cold mill was added to the production facilities and a combined line for degreasing, tensioning and embossing followed in 2001.

With this machinery, the factory was able to produce 12,000 tones per year of cold rolled coils and sheets. However, this was still not enough to respond to the increasing demands from the domestic and global markets. As a reaction to this, the management put together a five year action plan in order to achieve a significant capacity increase. In 2004 a second casting line and an annealing furnace were ordered and a year later production started, increasing the production capacity to 25,000 tonnes a year. Soon after AK Aluminium bought a new lathe and a CNC grinder. The factory is now operating with two continuous casting lines, two cold rolling mills, three annealing furnaces, a combined line for degreasing, tensioning and embossing, a cut to length line, a slitting line and some auxiliary machines like grinders and lathes. After some modernisation works the efficiency of the existing machinery was improved and the production capacity increased to 30,000 tonnes a year.

And then came the crisis 

Since the beginning of the financial crisis many industrial sectors started to tremble and one by one created a domino effect on the chain of supply. The aluminium industry was no exception as it also had its share of the turmoil. Once the construction, automobile and white goods manufacturers started struggling, aluminium suppliers not only had to face a sudden reduction in customer demand, but they also had to compete with prices reduced by the companies who were left with huge stocks and, therefore, had to rush to sell off their stock at bargain prices. 

Mr Çevik explains that when aluminium prices hit 3,300 dollars at the London Metal Exchange (LME) this time last year, the balance between supply and demand was negatively affected. 

Some customers started to opt for steel, others, regular buyers of aluminium, simply did not need the usual amounts of raw material since consumers were no longer consuming as much. The slowdown across various sectors, but especially in the construction and white goods sector, directly affected aluminium producers. They started to slash prices to get rid of stock as fast as possible. AK aluminium also had to cut prices. In Turkey there are many aluminium producers in different product groups and, Mr Çevik, says realistically they could not have competed as well if they had not cut prices. Profit margins also had to be slashed.

In reacting to this, the company first had to implement some cost cutting ventures like many others; but they achieved savings from making sure investment targeted full efficiency in AK Aluminium's existing facilities. Mr Çevik says revision is very important in terms of costs, profitability and quality. All production lines were made to work on increased performance, with better efficiency and as economically as possible. The company also entered a new product area by purchasing the right equipment in order to produce a special and extremely thin product used in PVC windows. This product opened the doors of a new sector and, thus, led to new clients. The company’s research and development department is still working continuously to find ways of targeting new product groups.

In addition to this, the company’s executives talked with their clients and realised that they also had to change their sales strategy and choose markets from which they could get faster returns. AK Aluminium's approximately 35 percent to 65 percent ratio of export to domestic market consumption, is also a balance that it can adjust according to the changing conditions of the markets: sometimes it concentrates on the domestic market more and, at other times, it focuses on international markets, depending on the sales strategy and the financial and economic circumstances of the time. AK Aluminium’s main markets are in Europe, the Middle East and Africa. It has many important clients in countries such as Germany, Austria, Italy, Spain, Russia, Morocco, Algeria, Nigeria, Egypt, Iraq, Iran, Syria and Israel. Foreign marketing and the export of goods are exclusively handled by KAMEKS, one of AK Aluminium’s sister companies.

Is there light at the end of the tunnel?

Lately, the LME has been indicating that the average price of aluminium has fallen to around 1,500 dollars. This rapid decrease could have proven advantageous to some, but an inconsistent market can be quite risky, Mr Çevik says. However, he believes that the worst might now be behind the aluminium sector. He says that there is now a new balance between steel and aluminium, since all the prices went down after the crisis hitting many sectors more evenly. Compared to the market conditions in the past winter, revitalisation can be observed in the aluminium sector as a whole. But whatever happens, the key, he says, is not to pass on any bad surprises in the market on to clients. Fortunately, being in the aluminium business, everyone at AK is used to facing sudden changes. He also adds that aluminium is a popular metal and has many advantages and, as long as the prices are reasonable, it is often preferred over other metals by both producers and consumers. He says that compared to the initial months of the crisis, orders have now started to pick up again, something that is obviously a positive sign for the whole sector.

Further investment plans

The fact that the company had been growing consistently until 2008, thanks to its commitment to making continuous investments in the right places, has meant that a year without growth did not affect its future investment plans in a significant way. The company’s first plan is to invest in a new cold mill that will allow it to produce AA5000 series alloys. It has been waiting for the right opportunity to come up in order to realise this vast investment. The technical team have been searching for the right price and the right mill, with the required specifications, for some time now and they do not feel that there is any rush. Once this new investment is put in place, AK’s production capacity will nearly double (it will rise to 60,000 tonnes a year) and the company will be able to offer a wider product range, something it has been working towards for some time. This investment represents an exciting turning point in the company’s future plans and will enable it to offer different products to a new group of clients in addition to its existing clientele. So, as soon as the right supplier is found, Mr Çevik says, AK Aluminium will go for it.

AK Aluminium currently produces AA 1000 and 3000 series products in the form of cast coils between 4–10mm thick and 800-1,650mm wide, cold rolled coils between 0.20–3.00mm thick and a maximum of 1,250mm wide, cold rolled sheets between 300–1,250mm wide and a maximum of 4,000mm in length, narrow strips with a minimum width of 20mm. With the inclusion of the planned new cold mill it will be able to produce AA5000 series products with a maximum width of 1,500mm. Also, upon customer request, the company is able to apply classical stucco, diamond and wood grain textures on coils from 0.20–1.00mm thickness for visual applications. Since the slitting line was modified in order to slit thin and narrow strips, it is now able to produce glass strips at a thickness of  0.20mm and a width of 20mm.

“Quality assurance matters”

Mr Çevik emphasises the importance of quality assurance in a successful business. The Quality Control Department in AK Aluminium, performs analyses and controls at every stage of production, from the raw material to all processes in production. There are many tests and measurements in order to ensure the quality of the product, including spectral analysis, tensile test, hearing and Erichssen tests, metallographic microscope analysis, hardness measurement, gas content and porosity tests. According to these test results, materials are either rejected or accepted. If required, modifications in processes are carried out with different methods. The company’s products are certified by the ISO 9001:2000 Quality Management System and all production is undertaken under the aegis of the Restriction of Hazardous Substances Directive (RoHS), the REACH Certificate of Compliance and the En Euro norms standards.

AK Aluminium is also making sure that its fight against the current economic circumstances does not stop the firm from sticking to its core principles. According to Mr Çevik the first rule is customer satisfaction, which includes offering high quality products at a good price, having a closer relationship with the customers, and developing the habit of solving problems fast. He says that, AK Aluminium does not want customers to fill in long forms and send in photographs. Instead, all the customer needs to do is to give the sales representative a call and he passes the phone to the quality engineer or the technical engineer there and then. He says, “we are all in the an open office and we solve customers’ problems as soon as possible without any bureaucracy.” He also adds that­ if someone gives them a call and wants to find out anything to do with aluminium, whether the caller is a customer or not, they are always happy to share their knowledge. He adds that they even give advice on products that they do not offer themselves, since they have a good knowledge of the sector. The second rule, he says, is providing the fastest delivery possible. According to Mr Çevik, they are very strong on the issues that matter most to the customers. He believes that this will continue to put AK Aluminium in a good position in relation to the competition, no matter what the market conditions look like.