Zorlu Holding CEO outlines
his vision of a more self-sufficient Turkey
“Aholding which has roots in industry but can grow the services sector with every job it does, innovative in its DNA, transformative in its approach to traditional industry with an eye for futuristic business,” this is the 2018 vision for Zorlu Holding CEO Omer Yungul. According to him, Turkey is in need of a revolution in thinking, along the lines of the Korean miracle, in terms of its domestic production. He is not wrong: seeing imported TVs at public offices or foreign-made mobile phones in the hands of bureaucrats is cause for an industrialist to feel upset. “A patient policy will support the bounce that Turkey needs,” Yungul says, adding that Zorlu is entering 2018 with an appetite for global acquisition and a hopeful outlook. “We are doing our part in domestic production.”
►W ll the power of the domest c market support local product on as, for example, t s expected to do for domest c cars?
I estimate 17-18 million mobile phones are sold every year. That’s a very big figure. They come from China, Korea and the USA. Our phones are not inferior but we have not been able to reach similar figures. People need to support domestic production. Here we all have responsibilities. In one of my trips to Korea in 1998, I brought a carton of cigarettes for the shop owner I used to shop from. He said that he quit smoking. I asked why and he said that it was because they were importing the tobacco. With this point of view, Korea paid its debt to the IMF in three years. It should also be common in Turkey. It’s unfortunate that people in Turkey do not trust our own products but the feeling is misplaced. There are very important values in this country. We need a patient policy here. From 2018 onwards, I believe it will be achieved.
►People speak of a new growth story. How do you look at t?
Three percent of Turkey’s exports consist of value-added products. This is such a small figure. We need to find a way to increase it to 15-20 percent. This, innovation and industry, should be Turkey’s new story. Otherwise we will not grow. Looking at 10-year periods, an integrated program needs to be prepared. For example, we are in the nickel business. After mining nickel, we entered into the network related to it and were one of the first in Turkey talking about batteries. We looked at nickel derivatives, other minerals, higher level products. That is how I know the future plans of all battery manufacturers in the world today, and I can prepare myself according to it. When you build a main road, you see the developments that emerge around it. Value added products have just such an advantage. Another example: We have very advanced knowledge of the electric car now. This is because we are in that network.
►So how can these networks be mult pl ed?
You make progress when you insert yourself from the ground up. In nickel, we are now planning to increase capacity 4-fold in 5 years. We saw that potential and now we get more lucrative offers, including 10-year deals. This is an example of why these things need forethought. The government must have a policy in this regard. The most important issue for the future is financing. Either direct or indirect, it is important that the government be at one side of it. There is still a tremendous amount of liquidity in the world, with 10-15 years of financing at 1-2 percent rates. If you can only access financing at 6-7 percent rates here, reaching your investment targets is very difficult.
►Do you have new projects that exc te you n the com ng per od?
Sure. There are many inventions and patents which our company is undertaking in the spirit of innovation. We will move ahead with some of them, but not others, that is the nature of innovation. For example, we are working on advancements in textiles that are completely al- ien to the classical textiles we know. I believe that there will be houses made of textiles in 8 to 10 years. If you have this know-how, you can go on that path. We have an R&D laboratory that is probably larger than many factories in the country. Nothing is spontaneous; you have to give these projects sustenance. We have a $500 million investment plan this year in every business we operate.
►We hear more and more that you are n pursu t of fore gn brands. What k nd of progress have you made?
There is a Chinese invasion in the brand business. We see this all over the world. We see it in Africa, in England and Korea. They look at companies and, if they like them, they buy them with the support of the government. We are a little less equipped but we have the ability to fight with our own power. And getting into the ring brings its own opportunities: when people know we have an appetite for acquisition, options present themselves. We are active in this market. It is a lifestyle for us. Hopefully we will increase the number of brands we have.
►What w ll be the most mportant ssue of 2018?
It’s important to lower inflation and pull up the confidence indices. It is also important to have a more peaceful country where people respect each other. Jobs should be given to companies that have the expertise. Taiwan has achieved its development both with government policies and all kind of support given to companies with expertise. Like in airport project, competence should be taken account on every issue.
“We always have pol t cs on the agenda, and th s needs to change. People are really t red of hav ng so many elect ons.
The 2019 elect ons dom nate TV programs but we have other ssues that need to be d scussed. People need to be calmed down a l ttle b t as people’s respect and pat ence for each other s d m n sh ng.”
Omer Yungul Zorlu Holding CEO