MAIN COMPETITOR IS THE BUREAUCRACY: ERENSAN CEO

Ali Eren, CEO: “Competition is not in the quality since you can’t exist in this industry if you don’t have the highest standards but in the price.”

Ali Eren, said bureaucratic ERENSAN CEO, obstacles are hurting its chances in local tenders, despite the company’s globally-recognized quality. Erensan is the largest manufacturer of pressure boilers and vessels in Turkey and its products are used around the world in buildings like Cambridge and •xford universities, Emirates Stadium in the UK and the Boeing facility in Spain.

“I have negotiated the issue with at least four ministers and recommended to them to give preference to locally-produced industrial boilers in state tenders but the bureaucracy only chooses its foreign rivals,” he noted.

FAIR COMPETITION

The new Central Bank building, the Justice Palace in Istanbul, prisons in Istanbul and Sinop provinces and a university in Rize province all chose a foreign companies, even paying more for the same quality, Eren added, emphasizing that local companies are not asking for unfair advantages but fair competition rules.

“Competition is not in the quality - since you can’t exist in this industry if you don’t have the highest standards - but in the price.”

EXPORTS CRITICAL

While local manufacturers still control the domestic market, with a 70 percent share, according to Eren, Erensan exports 60-65 percent of its production to over 70 countries. With the C•VID-19, the domestic market has crashed, and if exports hadn’t compensated the loss, companies would have gone bankrupt, he said.

At the end of April, the local market had shrunk by 70 percent, including the individual residential combi boiler segment, and was expected to continue the downward trend in May, Erne said, adding that if a second coronavirus wave hits, as experts fear, it could get worse.

In the midst of such a difficult environment, Erensan has orders that will help continue production at full capacity until mid-July. The manufacturer has maintained an 80 percent capacity usage ratio since the beginning of the year with the help of global orders, according to the CE•. The company posted 5 percent growth in 2019, compared to the previous year.

REVIVAL OF THE ECONOMY

“We would be experiencing serious difficulty surviving if export orders hadn’t helped grease the wheels. C•VID -19 will definitely have an effect in the coming months due to the nature of our industry,” Eren said.

The revival in Turkish economy should begin in tourism, which will be critical in the recovery scenario, Eren noted.

ERENSAN PROFILE

Erensan is one of the oldest companies in the boiler industry with roots dating back to 1966. Established as a legal entity in 1970, the family-owned company sold a minority stake to the France-based Atlantic Group in 2011 and a majority stake in 2016. It doubled its manufacturing capacity with the new investor.

With its headquarters in Istanbul, Erensan has a 65,000 square meter manufacturing plant in the Central Anatolian province of Yozgat. It also has a heating lab that serves industrial companies and buyers.

The company manufactures hot water, superheated water, steam, hot oil and waste heat boilers, steam generators, heat exchangers, economizers, flues and pressure vessels for large residential buildings, commercial facilities and industrial complexes.

It builds turn-key solutions for process heating systems and energy generators that require different levels of heat and pressure in different industrial plants, besides boilers and systems for steam turbines in energy plants, according to Eren.

Erensan is one of the 39 companies owned by The Atlantic Group that has around two billion euris in turnover.

The growth potential of Erensan will depend on the endm C•VID -19 and the stability of the Turkish economy, Eren said.