12/6/2012

Socar to invest USD 3.6 billion in Turkey facility

Hürriyet Daily News - Azerbaijan’s state-run energy company Socar’s USD 3.6 billion investment in the Star refinery in the Aegean province of Izmir benefits from Turkey’s new investment incentive scheme, Socar Turkey President Kenan Yavuz said yesterday at a press conference.

The company aims to reach USD 15 billion in revenue and USD 5 billion in export volume, with a total employment of 5,000 by 2018, he said. International rating agency Fitch’s elevation of Turkey’s rating to “investment grade”, the new incentive scheme, and a minimum of 35 percent of equity capital use in the financing of the investment lowered the costs considerably, Yavuz added.

Among the governmental incentives are value-added tax and customs tax exemptions, a 90 percent tax cut, and a 50 percent investment contribution, according to the statement made to the Istanbul Stock Exchange (ISE) by Petkim, which is owned by Socar. The government will also return value-added tax for the construction works and give support to Socar in insurance premium and interest payments, according to the statement.

In his own speech at the press conference, Economy Minister Zafer Çağlayan said this was the first strategic investment incentive.

“There are nine more strategic investment applications in six different sectors that are currently being processed. The planned investments include facilities in the petrochemicals, refinery, machinery, paper, pharmaceuticals, ceramics, automotive supply, copper and aluminum sectors,” he said.

Total investments of Socar and these nine other projects amount to TRY 15 billion, he added.
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