Complaining of “boron nationalism” in Turkey, Turkey's top boron official has said, in sharp contrast to popular belief, that boron minerals are not an indispensable material in any industry. “There is nothing in the world that can't be produced without boron minerals,” said Orhan Yılmaz, chairman of the board of the Eti Maden Works General Directorate.
It may seem puzzling to hear from a person who is sitting at the helm of a company dealing with boron minerals that excessive emphasis on boron actually negatively affects their work. But Yılmaz is clear in what he means. “Borates, [as they are], stand not for cash, but just represent potential,” he said. Publicly giving the impression that boron is something easily convertible into hard cash like oil just hampers the company's development. “When the issue is politicized, it wastes our energy,” he told Today's Zaman in an exclusive interview.
Yet, the man on the street in Turkey imagines that if only Turkey could make use of borates properly, the country could even eliminate some of its major economic problems. “Nothing could be further from the truth,” Yılmaz said, noting that there is tough competition in the world boron industry, and there are no easy gains.
Myths about the industry
Boron represents potential. Only when additional areas for the use of boron are discovered can the potential be increasingly converted into hard cash and revenue for Turkey. Although having 72 percent of the world's known boron reserves and being the biggest producer of boron in the world, Turkey has no monopoly on the global boron market. Total boron reserves in the world amount to as much as 4 billion tons. But the amount of boron minerals used as chemicals in industry is no more than 4 million tons a year. This means boron reserves, even when excluding Turkey's supply, are adequate to provide the world with enough boron minerals for almost 300 years. The world is not dependent on Turkish boron.
According to Yılmaz, one of the reasons the myths about boron are circulated in Turkey is seemingly to prevent the privatization of borates, which is, at present, a state monopoly in Turkey. But such a claim is totally baseless for the head of Eti Maden, who made a point of noting that there is no intention of privatizing boron minerals anyway. “In a public enterprise likely to be privatized, you would never make additional investments. But we've already announced investments for the next 20 years,” Yılmaz stated.
Additionally, boron is a material with available substitutes. In the past, Eti Maden sold almost 90 percent of its production to the detergent industry in Europe. But now boron is used much less in the production of detergent because it is considered harmful to the environment. “Boron use in the detergent industry is almost finished,” Yılmaz noted. In the glass industry, which along with ceramics is the main industry in which boron is used, there has recently been a threatening development for boron. Glass fiber produced without boron, which has actually been around for long time, previously had only limited applications, but now its areas of application are increasing. “That's a major threat,” admitted Yılmaz.
Uses for borates
The function of boron chemicals in any product is the same: to decrease the consumption of electricity needed in the production process, or to increase the strength and resistance of a product such as glass. Boron chemicals are not an indispensable material in any industry, but just one of them. “Boron chemicals have never had a leading role; they are supporting players,” Yılmaz said, describing the role of boron chemicals.
As opposed to what some in Turkey may still be thinking, Eti Maden doesn't export even a kilogram of boron minerals as a raw material. Boron chemicals make up 95 percent of the company's total exports, but boron minerals in concentrate form make up just a 5 percent share of exports. He doesn't agree with critical remarks which, he maintained, are based on false information, that Turkey doesn't make sufficient use of its borates. “There is no basic boron chemical which Eti Maden can't produce that others in the world can,” he said, admitting, though, there are a few boron chemicals with a very high market price which the company doesn't produce. “But total sales of these products are no more than a couple of tons a year worldwide,” he said, although admitting there are boron chemicals, with a very high market price, which the company doesn't produce. “But total sales in these products are no more than a couple of tons a year,” he stated.
Thanks to the greater importance accorded to research and development, and to keeping better track of the needs of the related industries, such as glass, electronics, ceramics and composites, in which boron minerals may potentially be used, the company's share in the global boron chemicals market, which stood somewhere in the 20th percentile about 10 years ago, has risen to almost 50 percent. In addition, the production of boron chemicals in the world increased from 3.1 million tons to 4.3 million in the same time period. “You need to know both your own field and the related industries very well to be able to develop products for those industries,” Yılmaz said.
Changing markets for Eti Maden
Although the company has a monopoly in the boron market in Turkey, this monopoly falls short of explaining the company's success in recent years, given that Turkey's domestic market makes up less than 1 percent of the global boron market, and with Eti Maden exporting 97 percent of its production.
Expansion in the boron industry is directly dependant on the electronics, automotive and construction industries, three major sectors where boron chemicals are most widely used. Roughly 70 percent of the chemicals produced by Eti Maden are being used in glass and ceramics. “If these industries develop, then we also develop in parallel,” said Yılmaz, who speaks proudly of the research and development projects the company is currently engaged in.
Although not a research company, Eti Maden is currently carrying out more than 20 R&D projects. The company's average rate of success in R&D, which stands at 70-80 percent, is rather high in the projects conducted so far. “We hit the bull's eye [in R&D projects],” Yılmaz proudly said, though adding that the figure should not be taken as a rule, given that R&D projects may not always yield results.
Eti Maden has hundreds of customers in 84 countries around the world, but competition is tough, with the US, Russia, China, Chile and Argentina being other major players in the industry. Measures taken to increase productivity have paved the way for this success. The cost of production at Eti Maden is now lower than the figure in 1999, in spite of the fact that energy prices have skyrocketed since then.
This is a formidable achievement given that energy makes up about 50 percent of the industry's total production cost. The trick is that Eti Maden can now turn, in the production process, 90 percent of raw boron mineral into a boron chemical, which means only 10 percent of raw boron is wasted in production. And the company is currently working to raise the figure to 95 percent. Last but not least, in the last 10 years or so, Eti Maden's production has increased fivefold, while staff has decreased by 30 percent.
Yearly turnover of $850 million
Eti Maden, which has a state monopoly on the production of boron in Turkey, had turnover of almost $850 million last year. Profits make up 58 per cent of the company's total turnover. In terms of gross profitability, the company, which stood in sixth place in 2010 on the Top 500 Industrial Enterprises list compiled by the İstanbul Chamber of Industry, climbed, with a gross profit of $487 million, to fourth place last year. But the company should actually be considered Turkey's biggest net exporter, because there is no imported element in the company's final product, which is not the case for Turkey's other leading export industries such as automotives.
The company, which employs more than 500 engineers, does the design work of all its plants itself, thanks to which it doesn't have to pay any extra money for know-how. Eti Maden significantly contributed to the machinery industry in Turkey as well. As of 2010, all of the main equipment used in the company's new plants is locally produced. “The local companies that produced the machinery for us have also started to export their products by citing us in their references,” Orhan Yılmaz, chairman of the board of Eti Maden Works General Directorate, told Today's Zaman.
$2 billion world market
Presently, boron has a world market size of $2 billion, and Eti Maden has close to a 50 percent share of total sales. Boron is used to decrease energy consumption, or increase the resistance of products in a variety of areas such as glass fiber, agriculture and ceramics. Glass fiber and glass wool have the biggest share, with 46 percent, in the total consumption of boron, while ceramics, which comes second on the list, accounts for 15 percent. Other industries using boron are agriculture with 11 percent, borosilicate glass with 10 percent, detergent with 6 percent and ferrous boron with 2 percent, while various other industries have a 10 percent share in total.
In an effort to increase its share in the global boron chemicals market, the company is growing with new investments. One of them is the plant being established in Eskişehir where borax penta will be produced, which is in addition to the existing four borax penta plants. The plant, which will have a yearly production capacity of 500,000 tons, is expected to start production at the beginning of next year.
Working for Eti Maden for 26 years
Orhan Yılmaz, general manager and chairman of the board of Eti Maden Works General Directorate, has been working for Eti Maden for 26 years. Having worked in all the plants of the company and in various positions during his service, he knows the company very well. He has served as general manager for nine years and is the only chemical engineer among those who filled the same post. He believes no success is accidental. “[As a manager], if you don't know the human capital available in a company, then you can only manage your office,” he said.
Devised method in which boron chemicals retain CO2, sulfur
Being a chemical engineer, Orhan Yılmaz got his doctorate with a dissertation on a brand-new process based on boron chemicals that retains carbon dioxide and sulfur which would otherwise escape into the air from the smokestacks of plants such as thermal power plants.
“By making use of boron chemicals, we have managed to retain, with reasonable cost, up to 90 percent of the carbon dioxide and all of the sulfur that come out of the smokestack in thermal power plants or in plants with big smokestacks,” Yılmaz said enthusiastically.
The project, which was conducted as part of research and development at Eti Maden, has already been successfully tested at a plant. It's even possible to retain 99 percent of the carbon dioxide, if the company is willing to bear a greater cost. The carbon dioxide so retained has been turned into a product, soda with boron, by Eti Maden. The company is expected to start, in a year or two, the serial production of this new product. “It's only when you discover additional areas of application for boron that Turkey can more profitably exploit its boron potential,” Yılmaz emphasized.