Şişecam Announces US Logistics Investment

Date: 30 March 2023
Source: Şişecam
Şişecam Announces US Logistics Investment
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Şişecam

Date: 30 March 2023

Şişecam To Invest In Port Management with Ciner Group In The Usa

Sisecam decided to invest in this new business area with Ciner Group to meet the future logistics needs of its natural soda ash investment in the USA, which is currently underway and on schedule. Sisecam Chemicals USA, a wholly owned subsidiary of Sisecam, will become a partner in Denmar US LLC which will execute the Stockton Port Management Project. This project will set up a logistics infrastructure for use in potential future exports of the ongoing soda ash investment and feature an annual capacity of 5 million tons. The Stockton Port investment is scheduled to start operations in 2027, in parallel with Sisecam's natural soda ash investment in the United States, which is planned to be gradually commissioned by 2028. This new logistics investment will help Sisecam secure sustainable growth by establishing a supply chain structure to achieve the company's natural soda ash export targets in the USA. 

Prof. Dr. Ahmet Kırman, Sisecam Chairman and Executive Member of the Board of Directors
Prof. Dr. Ahmet Kırman, Sisecam Chairman and Executive Member of the Board of Directors

Prof. Dr. Ahmet Kırman, Sisecam Chairman and Executive Member of the Board of Directors, delivered a statement regarding this strategic investment decision that will support Sisecam's ongoing natural soda ash investment in the USA to reach export targets: “In 2021, we announced our decision to strengthen our presence in the USA in the field of natural soda ash. The growing natural soda ash market and steadily increasing demand clearly demonstrates that this was the right decision. Today, natural soda ash production is one of Sisecam's most profitable business areas. We are planning a gradual commissioning of the 5-million-ton annual capacity of natural soda from the Pacific Project, which is currently underway and on schedule for completion gradually by 2028. At that time, the total production capacity of the Sisecam-Ciner partnership in the USA will climb to 7.5 million tons per year. Multi-port access is key to reducing the cost of accessing international markets, facilitating management of the operation, and eliminating risks arising from the supply chain. As a result, we decided to partner with the California-based Stockton Port Management Project, for which Denmar US LLC has already completed the required permit and license process. The Stockton Port Management Project is planned to expand its annual capacity from 3 million tons in 2027 to 5 million tons by 2029.” 

Prof. Dr. Ahmet Kırman stated that three main strategic factors support this investment decision: “The new port operation will provide the necessary logistics infrastructure for the export activities of Sisecam’s USA natural soda ash investment. Sisecam's multi-port strategy is designed to secure our supply chain operations and ensure flexibility for the company in highly uncertain global markets. The port investment will also lower our logistics costs. Necessary permits and licenses have already been obtained which will facilitate faster and healthier execution of the project. Sisecam Chemicals USA will become a 50% partner of Denmar US LLC, which is 100% owned by Denmar Holdings LLC, via a capital increase in exchange for USD 12 million.”  

Prof. Dr. Ahmet Kırman continued: “Today, uncertainties cause business plans to change constantly. In response to this volatile environment, companies must take continuous steps to review their growth targets and address any potential obstacles they may face. Sisecam is solidifying its sustainable success with visionary and prudent steps forward. In 2022, we acquired Refel, a refractory manufacturer in Italy, to ensure the sustainability of our investments. We are now taking a similar step with our port operation investment in California, which will secure our growth plans in the USA. Every investment we make supports the growth of our existing business lines. Every new business area we enter strengthens our global growth strategy.” 

Sisecam to become the world's largest soda ash producer 

Sisecam's investment history in soda ash in the USA dates back to 2019. Having made the strategic decision to expand its global footprint in natural soda ash production, Sisecam signed a 50-50% partnership contract with Ciner Group to establish a new natural soda ash production facility in the USA in 2019. During the 2-year partnership, the environmentally friendly and sustainable nature of natural soda became apparent while soda ash demand grew rapidly as expected. These highly favorable dynamics prompted Sisecam to further boost its investments in this promising business area and bolster its presence in the huge US market. In 2021, Sisecam increased its stake in the Pacific Project from 50% to 60%. Sisecam also decided to expand its partnership area and become a shareholder with 60% stake in the Wyoming facility, which it continues to manage in the USA. In addition, Sisecam shook hands to assume a 60% share in the Atlantic Project, which was fully owned by Ciner Group, another initiative planned for the production of natural soda ash. Today, Sisecam is one of the three largest soda producers in the world. Thanks to its natural soda investment in the US, Sisecam is poised to become the world's largest soda ash producer. With the US investment's phased completion scheduled for 2028, Sisecam will have a global soda ash production capacity of over 10 million tons under its management by that year. 

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