The real growth will occur in 2014

Four months ago, in a surprise move, Ahmet Dördüncü, the former CEO of Sabancı Holding, was appointed head of Akkök Holding. This experienced businessman spent his first 90 days getting to know the group and finalizing his goals and says that he found the group to be sound and to have completed its sectoral focus. He explains that the group is focused on sectors which have a bright future, such as energy, chemicals and real estate and that it will go on the offensive in these areas. Akkök Holding CEO Ahmet Dördüncü spoke for the first about his new post to Capital. He answered our questions on a range of issues, from him taking up his position to his future targets. the same size this year as we were in 2012.

We shall continue at the same size not because of the business but as a result of our own preferences. In summer 2014 we shall bring a very large plant into operation. But, before the beginning of the year, we shall consolidate our existing energy portfolio, get rid of those which are out of date and put new ones into operation. As a result, we shall experience the real growth in 2014. This year will be a year of preparation for us.

Capital: Which of your businesses has been affected by the global turmoil?
- The global turmoil has affected business, of course. Aksa is in a very important place. It has annual exports of nearly $450 million. Almost 7-8 percent of Aksa’s exports have shifted from the West to the Middle East. Yes, we have been affected by the crisis but we have been less affected by it. There was no decline in our exports in 2012. Our exports remained at roughly the same level.

Capital:  How much longer do you expect the turmoil to continue?
- The economy in the US is more durable than the one in Europe. It looks as if the US

Capital: What is expected of you at Akkok Holding?
- In the approximately four months since I was appointed to my post, we have designed the expectations together. We evaluated the past, present and the future of the sectors in which the holding is active. The sectors in which its companies are active are really very well chosen sectors. Growth in Turkey will be focused on these three sectors. As a result, it is not necessary to spend a lot of time searching for something new. We are in agreement with our shareholders that what is needed is to build on what we have.~

Capital: In 2011, Akkok grew by 10 percent. It had the same target for 2012. Was this target achieved?
- In 2012 we grew by around 8 percent. We are not forecasting significant growth in 2013. The reason is not that the company is not growing. We are closing several of our plants in the energy sector in particular. We shall shut down some of our plants which use natural gas because we do not think that they are operating efficiently enough. We are preparing ourselves for 2014. We shall remain economy will grow by 2-2.5 percent in 2013. But this is not the case in Europe. Even Germany is forecast to grow by less than 1 percent. As a result, I don’t believe that the recession in Europe will improve in 2013. Where the European economy is heading is not clear at all. I don’t think it can be worse than this.

Capital: What is the sectoral distribution of your revenue?
- Our turnover is around $3.5 billion. When we look at the 3-5 year average we can see an even distribution between the energy, chemicals and real estate sectors in which we are active. After 2014, energy will account for the majority of our turnover. Because a 900 megawatt energy plant will come into operation. This will singlehandedly contribute about $1 billion to our turnover. You will see Ak-Kim’s share increase as the result of a number of acquisitions that it will realize.

Capital: You have signed a strategic agreement with Dow Chemical. What benefits will this agreement bring?
- This cooperation creates a really unbelievable synergy. Never mind Akkok, it is a very important development for Turkey. Aksa is one of the 7-8 companies in the world which manufactures carbon fiber. Dow, as a chemical company, develops the chemicals that are needed to process carbon fibers as final products. We are making considerable efforts to go into final products with Dow. They will also make investments. It is a major global operation. I really believe in this. These things will be realized very soon. We shall invest $1 billion in the next five years.

Capital: Will there be acquisitions in energy?
- The acquisitions will be on the market. I think that tomorrow or the day after, the small players in the market will be brought together by a major company. Then the number will decline to 5-7. At the moment, we are seventh in energy and we want to be among the top five. We want to be in the top five by 2015.

Capital: Will your arrival result in new sectors, new opportunities?
- As things stand, no. But I don’t know what will, or will not, happen over the next five years. These are dynamic things. If you are managing a portfolio, you should continually check your portfolio. The portfolio managers should be looking at where trends are heading and try to catch those trends as early as possible.

Capital: Where do you want to take the group over the next five years?
- I want us to be one of the five leading energy companies in Turkey within the next five years. I believe that, as a domestic company, we shall be one of the most important companies in Turkey. In real estate, we should be an environmentally friendly, sustainable company which offers people comfortable, peaceful living environments.

Capital: So how fast will you grow after 2014?
- I think that we need to grow at least 1-2 percentage points above the medium-term plan. If the mediumterm plans forecasts that Turkey will grow by around 4-5 percent, then, provided nothing exceptional occurs, we should grow in a sustainable matter at a rate of 7-8 percent.