We shall raise our brand to a regional level

Eti is one of the companies which is synonymous with biscuits and chocolate in Turkey... The company is continuing with the changes that it initiated several years ago. The CEO Hakan Polatoğlu, says that the changes have resulted in them growing more rapidly than the sector and enabled them to increase their market share. He cites the increase in their market shares of bakery products, chocolate and cake as examples of this. He is very upbeat when he talks about the future: “We are a company which is competing with itself. We shall make our brands into regional brands. It is not enough just to be a national brand. A company the size of Eti needs to carry its success to the international arena.” Polatoglu gave the following answers to our questions.

Capital: You started in your post in May 2011, What were your priorities?
- I started at Eti in 2000. Before I was appointed board chair, I was head of the group’s procurement chain. Before that I was group president for technology and product development. I also worked in other positions. The group has grown a lot since then and become more institutionalised. It is currently one of the most institutionalised companies in Turkey.

Capital:  What kind of action plan did you formulate? What results did you achieve?
-- Our priority was developing managerial knowledge. It was necessary to develop our HR functions in order for them to take us to the point where we wanted to go. This is what we prioritised. We focused on processes which had become blocked, slow and unproductive, such as product development, which is critical from the perspective of competition. Of course, change was an important priority for me. Our sales system has really changed a lot.

Capital: You have been at Eti for 13 years. What do you believe is Eti’s most important characteristic?
- What defines Eti is its search for perfection and its earnest desire to better itself. Eti is a company that has been founded on this general concept. Being imitated is the most important measure of leadership. We are such a company. Our products, our production processes, our purchasing methods, our packaging and the sales system we have established on the market are all imitated. We are very happy about this.~
Capital:  In which categories did Eti gain market share in 2012? What are your shares at the moment?
- In 2011 we had a market share of 38 percent in bakery products. This increased to 40 percent in 2012. In 2012 our market share in biscuits rose from 36.2 per cent to 39.8 per cent. In cakes our market share of 40.5 percent fell to 40.2 percent in 2012. In crackers our market share rose from 42.2 percent to 44.1 percent. In the chocolate category our market share increased from 11.2 percent in 2011 to 12.2 percent in 2012 and 15.2 percent in 2013. It is the first time that we have passed the 15 per cent barrier in chocolate. We are a company that has only recently entered the chocolate category. We hav succeeded in producing products which are liked by consumers. When we entered the sector at the end of 2003 we only had 3 to 4 products. We are now the second-largest player. We rank first in biscuits, cakes and crackers. In bakery products we are the leader in all nine subcategories,

Capital: What proportion of your turnover do you derive from these categories?
- Half of our turnover comes from biscuits, 22 per cent from cake, 17 per cent from chocolate and 11 per cent from crackers.

Capital:  How is 2013 going?
- We shall finish the year well. We are going to record a similar rate of growth. But there have been some developments this year which have restricted the growth of the market. There have been some negative developments in retailing in particular. The crisis in Syria and the economic slowdown in Europe have resulted in a minor slowdown in our businesses on foreign markets. There are problems in the retail sector in Turkey. These problems are slowing down our business a little. But I think we shall achieve a rate of growth similar to last year’s. In 2012 our turnover at the Eti Companies Group was around $900 million. This year it will be $1 billion.

Capital:  How many new products do you produce each year?
- We produce between 10 and 15 new products. We have a very large R & D team. We are completely focused on developing products. We can say that all of our investments are in product development.

Capital: What was your profitability like when you grew by 18 per cent in 2012?
- Of course, profitability is something on which we are very focused. For this reason, we pay particular attention to profitability in our sales operations on the market. This is the basis of also having a presence in the future and of being sustainable. Our profitability is much higher than the publicly owned foodstuffs companies on the market.~
Capital: Eti has set itself a target of becoming a “regional power”. How close are you to achieving this target?
- We still have this target. At the moment we are a significant force, a market leader, in Iraq and in Azerbaijan. We are very active in the Balkans. For a foodstuffs company, becoming an international company is a very significant success. It really requires superior talents. In some markets, Turkey is like the soccer player who has come onto the field in the 45th minute. In fact, we can say this for virtually all of the foreign markets. There have been companies which have succeeded in becoming regional leaders but their number is very small. I don’t think that there is a foodstuffs company which has succeeded in doing this. We want to be the first one.

Capital: There are a lot of companies for sale in Europe. Are there any opportunities that you are following?
- Maybe. In fact, our growth plans include looking at every kind of alternative, whether inorganic or organic. To date, we made progress in the majority of our investments by using our own technology. Because, when we made our evaluations, we saw that this was better.

Capital: In the long-term, where do you want to see Eti?
- We are a company which is competing with itself. We shall make our brands into regional brands. It is not enough just to be a national brand. A company the size of Eti needs to carry its success to the international arena.