Borusan Holding is undergoing a transformation. At the core of this transformation lies the adaptation to the new economy. CEO AGAH UĞUR devotes a significant proportion of his time to projects related to this. The company is currently incubating five com

Capital (Turkey) - - INTERVIEW -

What kind of year was 2015 for Borusan? Did you achieve your targets?

We worked under very difficult conditions in 2015. Including Turkey, we are active in 11 countries. Last year there were problems in these countries and in the sectors in general. In addition, Turkey underwent a 25 per cent devaluation in US dollar terms. In a year in which there were significant problems in the sectors and in the region in which we are active, we closed the year with our profitability and turnover at the same levels in dollar terms. But we did have growth plans. For example, we were planning to grow in steel. Steel prices fell worldwide by 50 per cent in dollar terms. Steel accounts for 45 per cent of our business. Despite this, we managed to maintain our turnover at the same level. We think that being able to retain our position in such a difficult year means that we were successful.

In such an environment, what targets did you set for 2016?

The targets we have set for our group consist of three complementary pillars. The first is to be better at what we do. I mean, by increasing market share, being more competitive and increasing commercial flexibility. We think that 2016 will be better than 2015 in this regard. The second pillar is investments. Here it is the energy sector that comes to the fore. The third pillar is corporate transformation. Our innovation projects for corporate transformation are going very well.

What kind of corporate transformation are you undergoing?

Our group’s aim is to adapt to the new economy. We are using innovation to develop new products, services and business models. We initiated this four years ago and we have made a lot of progress. Now we have a system in our company that works like a production line. We have incubated five of our companies that are active in our own sectors, in areas such as construction machinery, logistics and automotives, and

made them commercially viable. Now they are recording double digit growth every month. We have plans for another 15-20 projects. This is the first stage of the corporate transformation, I mean the transformation for the new economy. The second part is R&D. We are developing three R&D centers. One has been created. The second will be completed within one year. The third part is digitalization. We are running a project, under my leadership, for which two of our highly competent high level executives, to whom I attach great importance, are responsible. What is your growth target for 2016? We are targeting growth of 7 per cent in dollar terms. The most critical factor for growth is the change in the price of steel. Steel prices are so very low at the moment that, if the average steel price rises this year, then the price of every one of the products that we sell will increase and perhaps at the end of the year we shall see the greatest growth from steel. But this is related more to commodity prices than to our own business turnover.

What do you have on your agenda for investment this year?

We are definitely not going to enter any new areas of business. We want to use innovation to enter certain niche areas with new business models in sectors in which we are already active. But these are not brand new businesses. There are things that we have implemented in this regard in Bukoli and ETA. In the future, we are interested in every kind of opportunity in niche areas, particularly B2B, that can fill the gaps in the energy, logistics, distribution and steel sectors. What is the sectoral distribution of your revenue? We have 330 megawatts in operational plants in energy. All of these are in renewable energy, mostly wind power. They account for around 1.5 per cent of revenue. Logistics accounts for 13 per cent. Steel has a share of 40 per cent and distribution 45 per cent. 28 of our distribution is for automotives, 18 per cent for CAT and 15 per cent is logistics. Where would you like to take Borusan? We drew up a vision for ourselves in 2024, which will be our 80th anniversary. In brief, the vision is this: I may not know today in which sectors I shall then be active but, on that day, we want to be a company that provides services to the full range of customer needs and requirements. In order to achieve this, we shall change the rules of the game using digitalization and market platforms. Five of the companies being incubated are focused on this field. Integrated engineering solutions and market platforms are two ends of this spectrum. We want to extend Borusan to both of these points in parallel.

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