Erman Ilıcak, who is one of a new generation of entrepreneurs in Turkey, began his business career at Enka after he finished university. The experience he gained there enabled him later to establish his own business. He continued by focusing on growth and making executives into partners. He entered fields such as construction, the building of hospitals, shopping malls and energy. He still applies a strategy of “We shall not be part of any company that is not one of the top three.” He says that they will continue to grow in shopping malls, energy and hotels and by buying companies. “We shall grow by 33 percent a year for the next five years,” he adds. ‘We are planning investments of $12 billion.” We spoke with Rönesans Board Chair Erman Ilıcak about the past, present and future of his companies as they rise into the giants’ league.
You have created a $2 billion company from nothing in just 20 years. Could you talk about the management structure of the company?
- Our strategy is based on our choice of working colleagues and the development of an approach that treats them in a different manner. At the beginning, we were placing advertisements in the newspapers and seeking experienced personnel. Then we found some young colleagues with 1-2 years’ experience. We managed to get hold of a generation which had been well raised. Later we moved to a profitsharing system. Today, 25 of our colleagues work like this. The final decision is mine, but we have a decision-making mechanism. The biggest problem in our sector is losing well-trained personnel. We have grown by employing very valuable personnel. Alarko’s withdrawal from Russia in 1998 was a great opportunity for us.
What criteria do you use to choose the countries in which you invest? What type of business model do you have?
- We have had a lot of plans that didn’t work out. We work in the most risky countries in the world. While doing this we learned which markets we should focus on. We focused mostly on developing countries where there is little competition, which are rich in natural resources and most of which spend money on infrastructure development. We have five main countries. They are Iraq, Syria, Turkmenistan, Turkey and Russia. In other countries, we have either reduced our operations or withdrawn completely.
We have changed the old model of contracting. We have done the opposite of whatever they do. Every country is run from inside itself. It was not like this in the past. Projects would be exported. A coordinator would be appointed there and would follow the business. We don’t work like this any more. We have removed the central management. We have companies and managing partners there. It is they who manage the business. We just provide support.
How large has your volume of business grown? What are your future targets?
- We closed 2012 with a turnover of approximately $2 billion. We are targeting $3 billion this year. We are planning to grow by 33 percent every year. We are aiming to have a turnover of approximately $25 billion within five years. We shall have $10 billion worth of domestic contracting and $15 billion abroad. We need to complete a total of $25 billion worth of business within five years. In order to achieve all of this, we have investment plans of $12 billion.