“Major Investments May Shift From Eastern Europe To Turkey”

Some believe that he is overoptimistic. But he really believes in Turkey’s potential and thinks that it has made very significant progress. He believes that in places such as Iraq, Syria, the Turkic Republics, even eastern Europe, Turkish corporations will secure great brand business. Ferit Şahenk is one of the most important representatives of the younger generation of business people and he believes that at some point in the future the biggest industrial investments in eastern Europe may come to Turkey. Doğuş Holding Board Chairman Ferit Şahenk explained to Capital the stage that has been reached in the crisis, future opportunities, risk issues and Doğuş’s road map.

Where Are We In The Crisis?
We are at the stage of healing the wounds inflicted by the crisis. The fragility is still continuing. It is important to allow time for the treatment. Governments both became shareholders and injected liquidity into the markets and the financial players in order to treat the wounds suffered by the global financial sector and the capital markets as a whole. Of course, this creates side effects. There is a drift towards an inflationary environment and the financial aid that has been provided is disrupting macro balances. Now the markets have suddenly begun to see this: Greece is heavily indebted. Spain is heavily indebted… The reality is that the world is still trying to struggle through this crisis.

When Will It Stabilize?
Stabilization will take some time. Things will slowly begin to stabilize from the middle of 2010 onwards. At this point, banks which have received aid will begin to repay some of it. This means that they will begin to free themselves from the restraints under which they have been operating. At the moment, many American banks appear to be a de facto part of the American government. They will find stable financing opportunities which increase their capital adequacy ratios.

The Realities Of The New Era
Growth will be tolerable in the new era. One of the reasons for this will be that both those who received and provided funds got their fingers burnt. As the change was taking place in the world as whole, so we, as the Turkish banking sector, entered this era in very good formation.

When the economy contracts and unemployment rises then this reduces consumption. When consumption declines then so do turnovers. When turnovers decline, unemployment rises and the balance sheets of companies become disrupted. We have to accept that banks can only be as good as their customers. Turkish banks are quietly restructuring non-performing loans in a very successful manner.

There Are New Opportunities
Because the banking sector needs to comply with new regulations, now customers who take loans must not avoid issues such as ratings, transparent balance sheets and auditing either. Because the pressure of capital adequacy ratios will affect banks’ procedures for granting credits.

I am thinking of SEEs most here. Because SEEs who work according to yesterday’s conditions will be immediately forced to keep pace with the newly developing world. Elements such as competition, economies of scale, productivity, innovation and branding will become essential.

Regional Leaders Will Appear
From now on, the manner in which business is done in the world and the way economies operate will change and this will bring with it a new way of thinking about economics, new rules, new conditions, new methods of management and new customers. In terms of the products customers buy, size will be important; and in logistics it will be how customers allocate time. The contraction on the markets has changed the nature of competition. Maybe regional leaders will appear in some sectors. Maybe some sectors will become highly localized. Countries which we can describe as regional powers will emerge.

Turkey’s Advantage
I think that Turkey is a candidate to be an investment center in this region. We are now talking about a Turkey which is opening up to Armenia, which will be able to export directly to and invest in the Turkic republics and which can be a leader in many different sectors from construction to textiles. The economic, political and social impact of these developments will become more clearly visible in the future. Turkish companies will secure very good branding business in places such as a developing Iraq, Syria, the Turkic republics, even eastern Europe. Foreign investors also see this reality.

“There Are Opportunities We Are Following”

* When we spoke 15 months ago, you said: “There will be opportunities in Europe, we shall also be looking.” Did you look at such an opportunity?
It happened, of course. We bought the marina in Sibenik together with our Croatian partner. We received a banking license in Romania. We are starting with a 50-branch bank from day one. We took our Bonus name to Romania. We are growing.

* Is there an opportunity you are following?
There is. I mean, as part of the recent strategy of our automotive group of growing a little regionally we have opened a very beautiful showroom in Lausanne. We have been given the Porsche dealership in Switzerland. We are also growing in different places in Switzerland. They also offered us some places in the USA but we did not accept them because we need to consolidate. But if we are given such an opportunity in Switzerland or Germany, then we shall happily accept.

Domestically, we have bought Göçek Marina and Maris Select. In the media, we have added the Kral Group to our organization. Now we want to grow our acquisitions and increase their balance sheets to a certain level. My colleagues are looking at marinas all along the coast from Croatia to Turkey.