12.8 billion investment initiated, 3 percent of target global market 17-Jun-2017

Merinos' sister company SASA has set its sights on the top in polyester production. They are preparing to invest $ 3.65 billion to produce 3 percent of the global market.

Erdemoğlu Holding… We know them more by their brands than their holdings… Merinos, Dinarsu, Sultan, Efsane Halı, İmparator Halı… and of course Sasa! Sasa Polyester that they acquired from Sabanci Holding in 2015 ... Erdemoğlu Holding is not only Turkey’s largest manufacturer of machine-made area carpets is the largets manufacturer in the world. 5 out of every 100 carpets produced in the world are produced by them. Now they have gridded their loins to meet 3 percent of world polyester production alone. They are ready to compete China with the investment they will enrich with automation.

At the iftar granted by President Recep Tayyip Erdoğan at the Huber Mansion, he said, “A citizen came to meet with me today. He bought a factory. He's getting ready to invest $ 3.5 billion. He asked to me, "Will you inaugurate our new factory?" “Of course, this question makes me walk on the air”, We talked to Erdemoğlu Holding Chairman of the Board of Directors, İbrahim Erdemoğlu, the businessman, who is the addressee of above words.

Both Merinos and SASA, which are Erdemoğlu Holding companies, are publicly held companies. The figures are clear ... In the statements made to the Public Disclosure Platform (KAP), they state that they have put this huge investment on the agenda to produce the main raw materials PTA, MEG and polymer used by SASA and that they will complete their investments in 8 years according to the updated data. The investment amount is USD 3 billion 658 million, or TL 12 billion 803 million! In addition, in 2019, SASA's turnover is expected to reach 1 billion US dollars.

We convey the process leading to this giant investment and the milestones of Erdemoğlu Holding in İbrahim Erdemoğlu's own words:

The bee does his job and does it just right

The bee does his job and does it just right Jumping to another job without doing one job completely is doing things by fits and starts. My deceased father was a weaving worker in our district of Besni, Adıyaman. Besni was connected to Gaziantep until 1932. Since Adıyaman later became a province, we always say we are from Gaziantep. My father has done manual labor for 6 years. Even his deceased master Ömer has helped him get married. Two beds, duvets, pillows. This is the preparation for marriage in the 1950s. Afterwards, things have gone bad and he became unemployed. My father has started to nomad salesman business for the maintenance of his house. He has marketed carpets in different parts of Anatolia. He started wholesaling in Eskişehir in 1962. Back then, our home is in Besni. Then, with the money he saved, he bought two rug looms in 1970 and started rug production in Gaziantep and we moved to Gaziantep. In 1983, we bought a carpet loom and start carpet business. Starting with 3 machines, then 7 machines, we are growing ...

These were domestic-made machines. In 1992, we established a yarn facility by importing used machines from abroad. That year I went to the Domotex Carpet Fair in Germany. Back then, there were carpet companies in Turkey, and they have been doing export worth 5-7 million dollars. They got above themselves. When I opened up to the world and in the Domotex fair, I saw that our industry was not a drop in the bucket, but drop in the sea. There were companies exporting 300 million dollars. Belgium's exports amounted to 2 billion dollars. At that time, we said to ourselves, 'Carpet is Turkish culture, but we have no say in the world. Why shouldn't we have a say '. We have shaped our land and investments in line with this goal.

Merinos acted like a market maker in carpet

In 1996, we brought the first technological machines to Gaziantep. These machines alone could do the work that 7-8 machines did. It was providing an incredible cost advantage. When we brought the technology used by the world to Gaziantep, we opened our factory for those who want to do this business in the city. We presented our machines. We said, 'Look, this is happening in the world. We did not hide this, we tried to direct them. We acted like a market maker in carpet with this leap of us, carpet weaving in Gaziantep has gained an important momentum. Gaziantep carpet weaving has a 35 percent share in the world today. The leading item of this is Merinos.

We work with the best brands in the world. Carpet business also includes Wal Mart and Europe's most important chains among our customers. If you want to become a world-class company, you will first make it necessary in your kitchen. If your head is big and your arms are small you cannot succeed. Sustainability, infrastructure, and human values are important. We consider neither local nor country scale, we always considered the whole world scale. If you do not have the infrastructure that can compete on a world scale in today's economy, you will temporarily succeed and deceive yourself. If you cannot sell goods to the world, if your quality and price are not competitive, you have no chance to be successful. Otherwise, success becomes with being conservative. That would collapse the state anyway.

The largest producer in the world, with the Russian facility

Gaziantep's carpet exports have exceeded 2 billion dollars today. We provide more than half of the city's exports with products such as carpets and related yarn products. Machine made carpets come in two types. One is an area carpet; the other is a wall-to-wall carpet. We are not in fore front in the world for from wall-to-wall carpet. But, when it comes to area carpet, the world's largest carpet manufacturer is Turkey, namely Gaziantep. Currently, 5 percent of the area carpet produced in the world is made in Merinos facilities. We reached this rate with our facility in Russia. We are the largest manufacturer in the world.

Huge investment to produce raw materials

Technical staff and know-how at SASA were solid but the technology was old. We made studies for efficiency. These were also reflected in the figures. As the second stage, we acted on our large investment projects. We decided to invest in fiber last year. The machines will arrive next year and will be put into operation in the 4th quarter of 2018. We decided to invest in poy yarn texturing for the second stage and then to invest in plastic bottles. In order to be more competitive, we wanted to produce our main raw materials ourselves. Finally, we made the decision of our $ 3.65 billion investment program, which we announced to the public and is currently pending under the incentive at the Ministry of Economy. Whilst we are looking for a land, we saw the place in Hatay-Dörtyol of 2.9 million square meters belongs to Turkey Petroleum Corporation (TPAO). Our negotiations continue to take the place from the Ministry of Energy and Natural Resources.

They told us about China differently, it's not a structure to fear

Merinos exports 70-75 percent of its production. In SASA, this rate is about 40-45 percent. Of course, this will increase. While we made SASA a world scale company, “we will make it polyester base of 'North Africa, Turkey, the Middle East, Europe and Russia” we said. All facilities in this area are old, they are not competitive. China produces 80 percent of polyester. We will produce the main raw materials ourselves, so we will be competitive. We bring the latest technologies of Europe. Our raw material and energy prices are the same as the Chinese. Only workmanship remains. In the technological investments we will establish, the share of labor will not exceed 1 percent in turnover. We will install the automations.

For example, China cannot and will not be able to compete with us in machine-made area carpet. The infrastructure has sat down. You can access raw materials from Gaziantep. They cannot compete with Gaziantep, whose world share has exceeded 35 percent. They told us differently about China. It is not a very fearful structure. Wages in the industrial areas in China are not much different than in Turkey. When we look at our share in workmanship, let's say 1 percent in polyester and 7 in carpet. Even if you cost 3 points high, you will make up the difference with R&D.

We are strong enough to make 7 percent of polyester production.

The important thing is our businessmen to reach raw materials in Turkey. As SASA, we will do this in polyester. Then the fiber, chips, threads, weaving of it will grow gradually. The industrialist will not have to rotate the mill with others’ water. The water will be available for them here. Whatever comes to your mind, polyester is also a recyclable raw material. There is polyester in diapers, in shirts, on the safety strip in the money. The raw material of these strips produced by a company in Europe is provided by SASA. When we put the 3.65 billion dollar investment into operation, we will make 3 percent of the world polyester production. If we think regionally, we have to make the 5 and 7 percent. The volume of world polyester production is 60 million tons per year and its value is 90 billion dollars. Turkey has a structure that will make larger investments. As long as our people trust themselves, their country. We must produce, we must work. We are not in an economy that we can live in self-indulgence.

They can't sit and chat in a suburban tea house

We attach importance to social projects. One in 2000 of the students who go to school in Turkey studying in schools that we have built. We have hospitals, mosques, overpasses are built We built 850 houses for our workers with a living room, 3 bedrooms. Saying “all is mine” is immoral.  Currently, we share 10 to 15 percent of profitability in all our companies with our employees during holidays. Our workers also see themselves as the owner of this enterprise. Success does not come so easy. We are not bosses; we are children of a worker. We eliminate the collar thing. There is no white collar, blue collar. If the right one is a friend who makes a mop, and the wrong one is our general manager, the general manager will be dismissed. Those without humane values cannot be successful. People sometimes do the worst thing to themselves with their way of thinking. They find friends from a certain circle and live in a certain neighborhood. Other than that, they do not merge with life. They cannot go to places where there are slums and ghettos, they cannot sit in a tea house and chat. Then they do not know the society.

You secure your future by legating a rich country

Everyone cares about their child. Legating money to your child, you cannot guarantee him or her, he or she may spend and run out of money… Legating the factory, you cannot guarantee it, he or she might not be capable to manage it, cause it to be collapsed… You cannot guarantee it by legating a property, he or she sells and spends it ... You cannot guarantee your children with providing education, a junkie may stab him or her on the street. So how can you guarantee your children’s future… There is only one condition; If you can legate an industrialized, cultured, rich country, then your child's future is guaranteed. Therefore, we have always shared our knowledge with industrialists from Gaziantep.

Feudal bossing disappears, feudal manager comes, it's called institutionalization

While we are managing Erdemoğlu Holding, we don’t act like managing Turkey from Ankara. We run the holding as managing the country state by state. We manage province by province within the state. For example, SASA is a state in our group.

For example, we considered the fiber section, chips, yarn section as separate provinces. We assign governors on their management. Thus, they became able to be managed faster. Each factory is managed in its own place. Therefore, in our management system, it is not obligatory to obtain approval from a building called General Directorate. Our system is horizontal. Problem solving and decision-making processes are very fast. Let's say that there is a problem below in the conic system; 'X'. It is escalated as 'Y' in 8 layers up to that. Solutions are produced according to 'Y'. This becomes 'Z’ while going down. Problem is X but the solution is Z ... It is not possible for such companies to be successful in the future. They will collapse.

This structure causes a disease: Disease of feudalism. Because those sitting in the headquarters building think they are feudal landlords compared to other employees. The system creates this. It's not their fault. We do not have a feudal landlord. Institutionalization is supervision, the rules apply the same to everyone. But feudal bossing disappears, then feudal manager comes, it's called institutionalization

25 years ago, I was called 'İbraam', our job created us

25 years ago, I was called 'İbraam'. I was more handsome than now; my mind was working better. I was more dynamic, more ambitious. Today I am called 'Sir İbrahim'… If I had a miracle, they would call me 'Sir İbrahim' that day. If they do not call me ‘sir’ that day but today, it's thanks to our work. Our business created İbrahim S,r, we as İbrahim Sir did not create the job. This is the most important difference in perspective. People think they are creating themselves. That is why we say, as a family, "Our business created us." We learned from our deceased father; If you say, 'I did it, you're at the beginning of the collapse' You need say 'We did it' or 'It was fortune'. The main thing is the system. Saying 'I' is the dynamite for the system. If we say our “we, if we say “our country” it is different.

When Tekirdağ plan failed, we acquired SASA

As a group, we did what we could do for our country in carpet business. Turkey's 35 percent share of the machine-made carpets will rise to 45 percent. We wanted to invest in a different field. I saw that Turkey imported $ 1.5 billion of polyester products. This figure goes up to $ 2 billion, including by-products. I visited factories in China. We said, 'In Turkey, we can do it”, and 5 years ago we have taken the decision to invest in the polyester business. Ali Yerlikaya, Tekirdağ Governor at that time, our current Gaziantep Governor, made an announcement that 'Tekirdağ OSB is being built' at that time. We request them for a minimum of 2 million square meters of area. The total of the land was 4 million square meters. They said that they could provide 500 thousand square meters of space. We paid our dues for one year. However, the District Court decided to suspend the execution here due to the fact that there was an agricultural land. Our Tekirdağ plan is thus failed. We started to search for new land in Marmara Region. Meanwhile, SASA was sold, it was waiting at the Competition Board. We went to meet them, then we shook hands. We acquired SASA.




July 17, 2017

Dünya Newspaper


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