Sadness as Erkunt Tractor no longer Turkish
One of world’s largest tractor manufacturing companies, Indian multinational Mahindra & Mahindra, made the second-biggest acquisition in the Turkish market following its takeover of Hisarlar Makina at the start of the year. According to a statement made by Mahindra & Mahindra, the company paid $76 million (TL 260 million) for a 100% stake in the company, with sales transactions to be completed by Nov. 30.
The Indian giant notified the stock exchange that it owns 35% stake of Erkunt Tractor and has bought at least an 80% stake in Erkunt Sanayi, a leading producer and supplier of iron casting and machine parts in Turkey and other global markets. Mahindra will be paying $41 billion (TL 140 million) for this transaction. If requested, Mahindra will be able to buy the remainder of the stake with an additional $10 million in compensation, which would make the total acquisition price $51 billion (TL 175 million).
In 1952, Mumin Erkut established Erkunt Sanayi in Ankara and 51 years later Erkunt’s daughter and son-in-law established Erkunt Tractor. After completing his professional engineering education in Germany and Switzerland, Erkut shone out with his iron casting and machinery business. He became an important production partner for the world’s most important automotive brands via the company Erkunt Sanayi AS Dokum ve Makine Fabrikalari, which was created in 1953.
Manufacturing engine blocks and switch boxes for the world’s most significant heavy machinery manufacturers in his casting and machinery factories, Erkunt’s biggest dream was to manufacture a completely Turkish tractor with license rights and design. Though he died at the age of 90, his daughter Zeynep Erkunt Armagan and son-in-law Tuna Armagan realized his dream posthumously by creating Erkunt Tractor in 2003.
Founded with local capital, Erkunt Tractor started to produce Turkey’s first locally designed tractor. Within six years, the company ranked as the third-biggest manufacturer in the sector and later became one of Turkey’s top 500 industrial companies, generating turnover of TL 314 million in 2016. Erkunt Armagan, in her role as general manager at Erkunt Tractor’s factory, made the local design of tractors possible and extended the company’s market share in a short time by highlighting the features of the tractors it produced.
Turkey is ranked the first in Europe and fourth globally in the tractor market, which grew by 5% in 2016 in comparison with the previous year, reaching 70,205 units. Some observers may react positively about a foreign takeover of an industrial facility established by Turkish entrepreneurs with local capital, and which became a brand and extended the market share, but I feel as sorry as if I had lost my own property. I know it makes no sense to ask the sellers why they sold but I can’t stop complaining each and every time this sort of thing happens. We sell this and we sell that. What will we do in the end and what are we going to produce?