Gearing up for the second half

Dunya Executive - - Business -

Erol Bilecik is the CEO of Index Grup and recently became the head of Turkey’s leading business and industry association TUSIAD. “We have to act carefully in 2017 and watch growth figures closely. Profitability and productivity will be key,” he said in an interview with Ozlem Ermis Beyhan, daily Dunya news editor. His projections are key to understand the 2017 plans of Turkish business people.

Index Grup, a tech retailer and distributor, plans to be among the five largest tech companies in Turkey. Its subsidiary Artim has signed a contract with Oracle and will provide solutions to banks, Telcos and public institutions in Azerbaijan, Uzbekistan, Turkmenistan, Georgia, Armenia, Tajikistan and Kyrgyzstan. The company also aims to penetrate the mobile channel in those countries. The expansion is at embryo stages, Bilecik remarked, adding that it has been establishing offices and hiring. “This is a kind of training for us. Although numbers are not significant at this stage, it is a nice motivation for us,” he said.

“As a company we could grow more, however we achieved to grow by 12-14% as we targeted before. Mobile products and value added services greatly contributed to it. Notebook and other classical products were unable to get a share from the growth.”

“All of our incomes and acquisitions from the mobile side is TRY-based. Apple, HP, Cannon, Samsung and Lenovo imports their products to Turkey and conducts their own hedging operations. We sell products to our distributors in TRY. Some 67% of our balance sheet is in Turkish currency and it minimises our exposure to volatility. We have 8,000 dealers and that provides us a 2/3 comfort zone.

Crisis expertise to help survive

“We are a 27-year old company. Like many others we have managed to survive in several crisis. Turkish business people have enough experience to manage volatilities. However, among all 2016 is a unique one. We are walking on a sensitive line. We have experienced a year that saw several ter- ror attacks and a coup attempt that was defeated. No such a year will repeat again. If similar incidents took place in a developed country it would have much more consequences. Due to their unique crisis expertise, Turkish business people were able to overcome difficulties they faced in 2016.”

Optimism for the 2nd half

Every year begins with hopes but we have revised down our hopes for 2017. Unfortunately the fundamental macro problems are visible. There is a climate change in global business environment. The outcome of the US elections and possible results of seven or eight elections to come in Europe in the next term. There are uncertainties here.

Looking back in Turkey, we are still awaiting a solution to the terror problem from the politicians and remarking that we are ready to support it. The conflicts neighbouring Turkey also becomes a part of our picture, too. We hope to skip the first half of the year quickly and focus on a hopeful second half.

We are more optimistic for the second half of the year, 2017. We oversee a second period where the economy will step up the gear. We will do so, too. Some 40% of the turnover is recorded in the first half and the remaining 60% in the second. According to our projections it will be 30% in the first half and 70% in the second. We are in a lucky industry.

Forex volatility

We expect volatility in the first half. We have already bought the projection that such volatility will continue until the end of April. We believe it will have a more stable environment. There is no way such volatility will continue further. Otherwise the crystal vase will be broken and there will be nothing left behind.

Digital transformation as a matter of existence

“Companies that will face difficulties in digital transformation in the coming years will face extinction. Industry 4.0 is a must in improving productivity in manufacturing. May be half of the largest 500 companies in Turkey will be unsuccessful in such a transformation and will be forced to change. Just like those that had taken part in such a list but is lacking now.”

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