With its pioneering role in the Turkish steel pipe industry, Borusan Mannesmann steers the development of the sector. It also continues creating value for stakeholders by investing in health & safety, people-oriented success, digital transformation, innovation, and globalization. Presenting new products and services each year, Borusan Mannesmann produces a wide range of steel pipe products.
Borusan Mannesmann is a globally recognized steel pipe and complementary solutions provider focusing on high value-added products with a production footprint in its major markets. It is positioned as the leader of high value-added products in the Turkish market as well as one of the leading producers in Europe and the USA. The company’s competitive advantages include:
- Profitable growth strategy of investing in high value-added products in target markets;
- Global competitive edge attained by channeling approx. 70% of prime quality sales tonnage to global markets;
- Ability to garner more than three-fourths of prime quality product turnover from high value-added products;
- Sustainable and profitable business model for large diameter spirally welded line pipes in high value-added markets;
- Aiming to be North America’s most profitable and most preferred player in high value-added products in the drilling and well pipes market;
- Market leader in special pipes for the automotive sector in Turkey; and aiming to be one of the top three manufacturers in Europe;
- Digitalized business processes that provide efficiency increasing solutions and competitive edge in operations;
- Investment strategy focusing on high value-added products and processes to meet customers’ unfulfilled expectations with fast, innovative and value-adding solutions;
- Penetration strategy for niche and new markets while maintaining leadership in existing markets by pursuing a strategy focused on innovative products and new business models.
Borusan Mannesmann recorded sales of 667,500 tons in first quality products in 2019. Protectionist measures taken amidst trade constraints around the globe had an impact on global markets. Furthermore, the shrinkage in the domestic market resulted in a drop in sales. Despite remaining below the quantities of last year, the company maintained its gross profit margin at 15%, similar to 2018, through profitability generated by high value-added pipes in particular. As Borusan Mannesmann strengthened its presence in global markets with investments in high value-added products and international projects awarded, international sales reached a 70% share in total first quality product sales.
In August 2018, the Section 232 tariff was increased from 25% to 50% after the US president issued an executive order to implement sanctions against Turkey, bringing Turkish steel exports to the USA to a halt. The tariff for Turkish steel exports was later reduced from 50% to 25% in May 2019. However, the positive impact of the 25% rate cut in tariffs remained limited due to declining prices in the US domestic market. The European Commission, on the other hand, started implementing quotas for steel imports as part of its safeguard measures. A 25% additional duty is applied to products exceeding the designated quota. These protectionist measures sharpened the competition in global markets, making trade operations much tougher.
Borusan Mannesmann, however, maintained its gross profit margin amidst these developments.
Although the company faced a year-on-year decline in sales of high value-added pipes, specifically, pressure, special and spiral pipes, the profit margin derived from these products realized at 16%. Turnover of these pipes reached a 81% share in total first quality product sales. The sales tonnage of high value-added drilling and well pipes grew by 5% year-on-year as the North American market continued to recover. Sales of value-added steel pipes in the automotive sector were satisfactory in spite of the contraction of the sector in Europe and Turkey. Sales in the automotive sector represent a 16% share in the sales turnover of first quality products. Furthermore, new investment worth USD 75 million in Gemlik targeting production of high value-added standard pipes and pipes for the automotive sector is completed, therefore increasing existing capacity.
Borusan Mannesmann embraces new product and service development as one of the key triggers to reach the company’s long-term targets. In 2019, Borusan Mannesmann focused on developing new value-added products and further processes for different customer segments. The company also targeted building innovative value-added services for customers to make their lives easier and increase efficiency in their businesses.
Borusan Mannesmann grows and develops together with its customers in line with its high-quality standards, passion to innovate, and focus on customer satisfaction. Accordingly, Borusan Mannesmann carefully listens to the expectations and needs of its customers and engages in meticulous VoC (Voice of Customer) and customer satisfaction efforts.
Throughout its operations, Borusan Mannesmann identifies strategies to minimize its footprint on the environment and follow environment-friendly policies for a clean environment and a healthy future. It operates in accordance with all national and international regulations with a view to recycling its waste, minimizing its use of natural resources, and ensuring a healthy environment for future generations.
In 2019, as part of its sustainability efforts, Borusan Mannesmann completed the following actions:
- Replaced existing motors with high-efficiency motors at the Halkalı Plant,
- Reduced water and electricity consumption with the closed-loop cooling system at Gemlik Cold Drawing Plant,
- Achieved 280,000 kWh of energy savings with optimization of two pumps used at Gemlik Spirally Welded Pipe Factory,
- Reduced water consumption by 10% compared to the previous year at Gemlik Spiral Factory UT section,
- Reduced boron oil waste at Gemlik ERW Plant by 25 compared to 2018,
- Provided environmental training to 820 students at five primary schools.
A significant player in the Turkish and global steel pipe sector, Borusan Mannesmann’s employees and senior management are committed to creating safer and healthier working environments especially for their colleagues, customers, and suppliers. The company targets reaching the “zero accident” goal, and protecting the environment during production operations. Therefore, Borusan Mannesmann:
- Complies with all applicable laws, regulations and other rules on Occupational Health and Safety (OHS) and Environmental Protection;
- Identifies all potential risks emerging from its operations and works to mitigate them and attain acceptable risk levels;
- Strives to minimize waste, and guarantees the disposal of waste in an environmentally-friendly manner;
- Works to bring consumption of natural resources down to acceptable levels;
- Inspects its systems and activities regularly and allows all stakeholders to inspect them; and
- Adopts a management system built on continuous improvement principles and expresses its commitment to implement same.
At Borusan Mannesmann, employees are the most valuable assets. Therefore, they are treated as a top priority in the company. By means of the extra attention and efforts devoted, Borusan Mannesmann is improving the Health Safety & Environment (HSE) scores year-on-year. To reach a world-class level in Health Safety & Environment (HSE) standards, the Health Safety & Environment (HSE) programs and activities will be continued, combined with digitalization of the business to reach the ultimate zero accident target. Industry 4.0 implementation will continue to be the focus and improve the Health Safety & Environment (HSE) standards with the help of technology and automation.
Embracing society and the environment, Borusan Mannesmann keeps its OHS and environmental protection policies publicly accessible via its website, bulletins and notice boards.
Furthermore, the OHS and Environmental Protection Policy is communicated to contractors and suppliers prior to working with them, i.e. the contract phase, with a letter. Contractors working on behalf of Borusan Mannesmann are required to act in compliance with the provisions of Occupational Health and Safety (OHS) stipulated by the laws and Borusan Mannesmann’s OHS and Environmental Management principles.
Borusan Mannesmann also laid the foundations of the Group’s social responsibility-oriented culture. Borusan Mannesmann supports institutions and projects in the fields of education, culture, arts, and gender equality. As part of the project, “Önce Babayım,” caring fatherhood training was delivered in cooperation with Mother Child Education Foundation (AÇEV) for employees at Gemlik and Halkalı. This program helps to improve the communication between fathers and their children and prepare them for the future in a true environment of trust, with the right role model. On the “Bu İşte Bir Eşitlik Var,” platform, last year Borusan Mannesmann took an important step with the “Birlikte Eşit” project regarding employment of women in production. Currently, 20 women working in our Gemlik and Bursa facilities break gender-based stereotypes for jobs by working in equal jobs with our male employees.
At Borusan Mannesmann, the most valuable asset is its human resources. The company aims to provide a happy working environment where employees can develop themselves professionally and culturally. #PipeAsArt was launched as an internal communication campaign to extend gratitude to employees. The effort turned into an external communication campaign, ranking among the five finalists in the PR category at the European Excellence Awards. Reaching 10 million viewers and 15 million views, the video makes reference to arts by explaining the great expertise required to produce a steel pipe, although it is recognized as an ordinary commodity. One hundred different production sounds were turned into the “rhythm of production,” composed by Mercan Dede. Borusan Mannesmann is grateful to the production craftsmen who blend every product with their mastery.
Borusan Mannesmann treats digital transformation as one of the key drivers in the company. In 2019, numerous projects were completed to increase the effectiveness and efficiency of the operations. From augmented and virtual reality, machine learning and production flow simulation practices to the innovation of online platforms, Borusan Mannesmann worked on a wide range of digital transformation projects.
In 2019, Techstation was made available to employees, with all its functions.
The system is intended to guarantee:
- a systemic and structured approach for Employee Development and Training;
- alignment with developing and ever-changing technical requirements;
- development of technical and leadership skills;
- specialization at work through development programs;
- furthering of foreman-apprentice relations and succession; and
- positive contributions in all relevant fields to targeted business results.
A total of 58,591 hours of training and 438 professional training certificates were issued to employees in the past year.
The competency-based machine operation project is taking place with the TEKkart system. With this card, employees are not allowed to operate machines if their competencies are not fit for these machines. At the plants, 241 workstations have certain operating systems posing specific risks. It would not be realistic to expect employees to have the appropriate skills to operate all workstations. Employees who operate the lines while lacking the required skills can experience undesired events, including occupational accidents, inefficiency and the cost of insufficient quality. An extension of the Safety First approach and a guarantor of people-driven success at the worksite, this digital project will ensure the effective and proper use of labor in the factories. Thanks to this project, employees will not risk their safety by going to a certain worksite urgently as instructed by their foremen, unless they are competent enough to work there. When taking urgent decisions for large teams, supervisors will not take a risk if they do not know the competencies of each and every team member, because the system will. The plants will determine the competencies required for their sites, following up on employees’ abilities through the support of Human Resources, Training and Development.
The “Talent Gate” Program was launched to provide employees with professional experience overseas. Talent Gate is a key development program helping employees acquire long or short-term work experience at Borusan Mannesmann’s subsidiary companies abroad. Employees have an option to work at Borusan Mannesmann Pipe US and Borusan Mannesmann Vobarno. Thanks to Talent Gate, participating employees will experience work in different cultures and transfer their professional experience to the foreign unit of the company.
