In addition, a series of joint ventures in which West German steel firms joined with East German firms and Krupp, Klockner, and Thyssen of Germany was pursuing other developmental initiatives in eastern Europe as well. Likewise, Arbed of Luxemburg was involved in steelmaking facilities in the former East Germany. According to Mangum et al., "The rising market for improved galvanizing for automobiles, appliances, canning, and other uses is producing a rash of joint ventures throughout the world. Some of these are internal to various countries and others involve international partners" (p. 74). As a result, nearly 30% of the world's steel supply is now produced by plants belonging to companies that did not exist just 3 decades ago (Ahlberg, Pitkanen & Storsch 1999). As these authors point out, "Such upstarts have entered a global market that since 1980 has grown by less than 1% a year -- an average combining annual growth of 4.7% in the developing world, 0.5% in the developed world, and -5.5% in Eastern Europe and the former Soviet Union" (Ahlberg et al. 1999, 83). During that period, the rates of operation for steel producers in Europe, Japan, and North America averaged just 80% of capacity, a production rate that provides razor-thin profit margins and creates a pressing need to reduce operating costs and become more energy efficient (Ahlberg et al. 1999).

Ukraine. A report from Green (2006) suggests that the Ukraine has been dealt its fair share of political and economic challenges in recent years that have affected its steel industry in profound ways. In 2006, for example, the Ukraine experienced a costly dispute with Russia concerning the price of its gas supplies, followed by parliamentary elections that produced inconclusive results that mired the country in a lengthy political showdown for some time (Green 2006). Although these political issues have been resolved to some extent, the main perception among some international investors remains one of "wait-and-see" before they make the leap into formal investment commitments. In this regard, Green advises, "Some believe it will take much longer for most investors to gain the clear economic picture they need before they will sink money into this resource-rich nation of nearly 50 million people" (16). Moreover, there are some distinct foreign exchange risk management issues at work in the Ukraine that will likely contribute to the "wait-and-see" mentality as well. For instance, one industry analyst reports that, "Ukraine saw the biggest increase in wage inflation of 23%. However, the depreciation against the Pound is also the highest. Hryvnia's devaluation is 15%, which gives an overall estimated increase cost of 4% in both wages and other costs. Even though the wages were lowered in November 2008 by 4%, the projected wage inflation for 2009 is 17%, the highest compared to other locations" (Inflation and currency fluctuation 2009, 2). In addition, the Ukraine has experienced some disputes with export partners such as Egypt concerning the massive amounts of cheap steel being imported that has adversely affected their domestic steel producers. According to the editors of The Middle East, "In 1996 imports from Russia, Ukraine, Romania, Moldova, Belarus and Latvia amounted to in the region of 250,000 ton and rigid quality controls did little to stem this flood of cheap steel, although a quarter of Ukrainian shipments were turned away from Alexandria" (25).

Turkey. Turkey's entrance into modern steel production can be traced to 1932 when the country's first state-owned integrated steel mill was completed with technical assistance from the German firm Krupp (Amsden 2000). The first steel plant was an enormous facility but was poorly situated with regards to sources of raw materials and the coal deposits it needed for energy (Amsden 2000). This enterprise enjoyed a domestic monopoly until the middle of the 20th century when there was a growing movement for the Turkish government to privatize these large state-owned enterprises. There was also a push at that time to increase the export market for Turkish steel. According to Amsden, "Turkey tried to promote exports starting in the 1960s, making them a condition for capacity expansion by foreign firms" (151).

Despite the efforts of foreign corporations and industry leaders to provide the technical and technological assistance needed by Turkey during the 1960s, the fact that the steel industry remained under government control was a sticking point for many foreign investors. In this regard, Amsden notes that, "Any capital increase required the consent of the Turkish government. It also became a policy of the Turkish government to agree only to a capital increase by forcing companies to take on export commitments. The government maintained that, in general, any profit transfers abroad had to be covered by exchanges through exports" (151). Because...

Today, Turkey is a major steel producer (Jewel in the crown 1999).
For comparison purposes, the respective populations and per capita GDP for the Ukraine and Turkey are show in Table 1 and Figures 1 and 2 below.

Table 1

Respective Populations and Per Capital GDP for Ukraine and Turkey

Country

Population

Per Capita GDP

Ukraine

45,700,395

$6,400

Turkey

76,805,524

$11,200

Source: Based on data from CIA World Factbook 2010 entries for Ukraine and Turkey

Figure 1. Respective Population Rates for Ukraine and Turkey

Figure 2. Respective Per Capital GDP Rates for Ukraine and Turkey

Source: Based on data from CIA World Factbook 2010 entries for Ukraine and Turkey

Case Studies:

A case study methodology was deemed especially suitable for this analysis because of its ability to provide a synthesis of relevant information from a wide variety of sources. For instance, according to Neuman (2003), the case study approach is "research in which one studies a few people or cases in great detail" (530). Therefore, the ability to develop an in-depth analysis of a specific topic makes the case study methodology a highly suitable technique for this study. In this regard, Feagin, Orum and Sjoberg (1991) point out that, "The study of the single case or an array of several cases remains indispensable to the progress of the social sciences" (p. 1). These authors also note that, "The case study offers the opportunity to study these social phenomena at a relatively small price, for it requires one person, or at most a handful of people, to perform the necessary observations and interpretation of data, compared with the massive organizational machinery generally required by random sample surveys and population censuses" (Feagin et al. 1991, 2). Based on the foregoing considerations, the case study methodology represents a useful framework for providing the researcher with increased validity of the findings that result for two main reasons:

1. Conclusions that are related to a certain aspect of a phenomenon under study need not be based solely on one data source.

2. Case studies generally rely on a variety of data sources (Benz & Newman, 1998).

Finally, as Mangum and his associates emphasize, "Intensive examination of case studies should both serve to enlighten the steel industry to its own performance as well as offer other industries a number of useful lessons from the steel experience" (74).

No. 1: Arcelor Mittal.

Arcelor Mittal is the world's largest steelmaker and the sole steel-producer in Zimbabwe and largest steel producer in South Africa (Guerrero 2009).

The company's official Web site states that, "ArcelorMittal is the world's number one steel company, present in more than 60 countries. It has led the consolidation of the world steel industry and today ranks as the only truly global steelmaker. ArcelorMittal is the leader in all major global markets including automotive, construction, household appliances and packaging" (ArcelorMittal 2010, 1). Like Erdemir which is discussed further below, Arcelor Mittal also holds substantial reserves of minerals in the countries in which it competes and has an enormous distribution network in place (ArcelorMittal 2010). Unlike Erdemir, though, Arcelor Mittal is faced with two realities when it comes to foreign exchange risk management. On the one hand, the company enjoys the resources that it needs to weather fluctuations in currencies in the various countries in which it competes. For instance, Healey (1995) notes that, "Exchange rate flexibility has an asymmetrical impact on firms. It is significantly more difficult for small and medium-sized firms to absorb the costs of foreign exchange risk management than it is for large corporations" (89). On the other hand though, because it competes in more than 60 different countries, the company's foreign exchange risk management assumes some truly daunting aspects. Despite the latter constraint, according to Ford, while the organization is headquartered in Luxembourg and headed by UK-based Lakshmi Mittal, Arcelor Mittal is widely considered to be well poised to take advantage of emerging markets wherever they may be, but particularly those located in Africa. For instance, in February 2007, Arcelor Mittal revealed that it had…