Having earlier announced the deal on their website, the company said the new plant will enable POSCO to gain a foothold in Turkey’s domestic market, which has been entirely dependent on imports. “POSCO also seeks to exploit Turkey’s geographic advantage to meet new demands in the Middle East, Eastern Europe and CIS regions,” the company statement read.

Observers say the project would bring “priceless” technology transfer to Turkey, a prominent step in making the country self-sufficient in steel manufacturing. Following energy imports, iron and steel are the second most important intermediate goods Turkey imports. Turkey imported scrap steel and iron valued at $7 billion in 2010, widening the foreign trade deficit -- hence the country’s current account deficit (CAD). The government calls on investors to concentrate more on such investments with relatively higher value-added products in a bid to help minimize the country’s foreign trade deficit. Steel investments have been concentrated particularly in the Hatay region in recent years. The largest iron and steel investment realized in Turkey, an iron and steel manufacturing plant, run by a joint venture between Turkey’s Atakaş and its Russian partner Magnitogorsk Iron, has a production capacity of 2.5 million tons of liquid steel per year.

Speaking to reporters in Seoul, Mehmet Aydın from Kibar Holding said the know-how transfer to Turkey will inject dynamism into the Turkish steel industry to encourage local firms to receive this technology and establish their own manufacturing plants. Underlining that the studies to have the facility ready on time are running smoothly, Aydın said they plan to commence production by April 2013.

“Turkey lags behind many developed countries as regards domestic stainless steel production and we have to compensate for this gap with such investments. … Stainless steel production per capita remains at 4.2 kilograms while this number is 25 kilograms in South Korea,” he explained.

Turkey spent TL 10 billion for 326,000 tons of stainless steel imports in 2010. “Last year, we began talks with POSCO to establish a factory, and we reached a deal in January. We will gradually increase our production capacity to 1 million tons,” Aydın added.

Also speaking to reporters, POSCO’s Ki Wook Kim said they place utmost importance on protecting nature in their projects, adding that the Kocaeli plant will be a “green facility.” “We are going to run the facility above EU and Turkey standards, and the focus is on maximum environmental protection,” he explained.

Noting that 40 percent of the plant’s production will be exported, Aydın said it is going to have the highest standards and use the latest technology in the Middle East and Eastern Europe. The Kibar Holding official said the venture could consider making similar investments in various parts of Turkey.