The history of the competition between Koç and Sabancı, the two biggest groups in Turkey, goes back to 1974. Because on that date, at the insistence of its then coordinator Turgut Özal, Sabancı Holding relocated from Adana to Istanbul and competition between the two groups began. In the second half of the 1970s Sabancı overtook Koç in terms of turnover. Between 1980 and 1985 the lead changed hands several times. But, in the second half of the 1980s, Koç took the lead and held it for fully 11 years. Sabancı went on the attack but, even though it briefly took the lead, the 21st century belonged to Koç. When we evaluate the two groups based on the figures for 2006 we see that Koç is three times as big as Sabancı.
“Sabancı Holding’s strategy was to form 50-50 partnerships with large companies. This is the direction it took. But these big companies were running the businesses. What is different about us is this: we don’t go into anything which we don’t manage. We have partnerships which are 50-50 or in which the shareholdings are equal. But we prefer to run them ourselves. I think that they tend to hand over the management to the big companies. But this doesn’t mean their system is necessarily wrong.”
At the opening of the Ramstore shopping center in 2005 and when he went to open the Edwards store in Russia, in response to repeated questions from journalists, Koç Holding Honorary President Rahmi Koç compared Koç and Sabancı.
In fact when it comes to the two largest groups in Turkey, it is hard not to make a comparison. We also jumped on the bandwagon, compared the two groups and studied the competition between them.
In fact, even when Koç and Sabancı have been in the same sector, the rivalry between them has always been friendly. The list of fields in which the two groups come into direct competition with each other is headed by finance and retailing. In the past, events which heightened the competition between the two groups was in any case always in these two sectors.
What Do The Figures Say?
Each holding has a history of 82-83 years. When we look at the current state of the two, we see that Koç Holding has 130 companies. Of these companies, 61 are spread throughout 30 countries. Sabancı Holding has 70 companies. The group has 30 companies active in 16 countries. As a result, we see that, compared with Sabancı, Koç has a greater geographical distribution.
In 2006 Sabancı had exports of $1.13 billion. At the time of going to press, Koç had still not announced its export figures. But, when we consider that in 2005 its exports totalled $6.2 billion, we see that in exports Koç is in the lead by quite some distance.
Koç is also the leader when it comes to employment. In 2004 the holding employed around 60,000 people. Following the acquisition in 2005 of Tüpraş, Yapı Kredi and Tansaş this figure grew to 81,000 people. In 2006 the figure rose to 88,248. At the end of 2006, Sabancı employed 50,000 people.
When we compare the two in terms of foreign partners then we see that Koç has 14, of whom 5 are in the automotive sector. Sabancı has 10 foreign partners. In fact in terms of foreign partners Sabancı has been going through a difficult time. The group parted ways with major partners such as Kraft in 2002 and Danone in 2003.
Tüpraş Has Sent Koç Soaring
In fact, at the beginning of the decade there was no great difference between the turnover of the two groups. Indeed, in some years Sabancı even moved ahead of Koç.
In 2000 Koç had turnover of $6.6 billion, while Sabancı’s turnover stood at $5.6 billion. During the crisis of 2001 the difference between the two groups’ turnover fell to $434 million. But since 2002 Koç’s has begun to open up a substantial lead. In 2003 the difference stood at $3.8 billion. But the turning point came in 2004. In this year the difference grew to $8 billion before falling back slightly to $7.6 billion in 2005. But Koç’s turnover of $34.5 billion in 2006 was 2.8 times larger than Sabancı’s. In 2006 Sabancı had a consolidated turnover of $12 billion. So how did the difference between the two groups grew to such a size? There is no doubt that the most important reason was Koç’s acquisition of Tüpraş. Because if it had not bought Tüpraş then its turnover in 2006 would have been $14 billion smaler. Evren Ertay, who is a partner at PDF, confirms this analysis. Ertay says: “Tüpraş was a very important investment which enabled Koç to enter the energy and oil sector, very rapidly and very substantially. This investment enabled the group to enter a sector which is both strategic and important with a major investment and resulted in a considerable increase in the size of its balance sheet.” In addition to Tüpraş, the acquisition in 2005 of Yapı Kredi and Tansaş were important developments which affected the size of Koç’s balance sheet.