İbrahim Erdemoğlu, Chairman of the Board of Directors of Erdemoğlu Holding, which grew by 120 percent on TL basis and 50 percent on dollar basis by the end of 2021, reaching 22 billion TL in turnover, did not suspend his investment agenda despite the inflationary environment. He even increased the budget of the petrochemical plant investment planned in Yumurtalık from 13 billion dollars to 20 billion dollars for a 10-year projection. Erdemoğlu said, "There is also a base effect of foreign currency in our growth, but our real growth rate is also quite high. Our investments and production increases have a significant impact on this growth. Given that we will grow at the same pace in 2022, I predict that we will reach 45 billion TL in turnover." Erdemoğlu also reveals with figures that the group doubles its turnover on a dollar basis every 10 years and says, "Our Investments continue all the time. We do not invest what we earn from companies to other areas, we invest it in our own business. This investment in Yumurtalık will be the biggest investment that Turkey has made,". Erdemoğlu Holding Chairman of the Board of Directors, İbrahim Erdemoğlu answered our questions as follows:

How did the pandemic go for the Erdemoğlu Group?

In the early days of the pandemic, there was a 1.5 -2 month shutdown across the country. We shut down all our businesses except SASA. At SASA, we also produce fiber raw materials for the health sector. At that time SASA had to operate. We were producing the raw material of the health care industry in hygiene materials. We did not leave any company in Turkey or even in Europe without raw materials. The demand for fiber increased a lot because fiber was used in face coverings. After 1.5 months of shut down, there was an incredible increase in demand from all over the world. Our carpet factories and other sectors have also returned to full capacity operation.

By the end of 2021, Erdemoğlu Holding has grown by 120 percent on TL basis and 50 percent on dollar basis, reaching 22 billion TL in turnover. Erdemoğlu Holding Chairman İBRAHİM ERDEMOĞLU did not suspend his investment agenda despite the inflationary environment. He even increased the budget of the petrochemical plant investment planned in Yumurtalık from 13 billion dollars to 20 billion dollars for a 10-year projection. Erdemoğlu said, "We will reach 45 billion TL in turnover by the end of 2022. This investment in Yumurtalık will be the biggest investment that has made in Turkey ,".




Why and how did the demand for carpet increase?

When people stay at home, they see the needs and deficiencies of the house and get into the psychology of buying it. A pickup started in the carpet industry. We experienced a great demand especially from America and Europe. At that time, we were working at full capacity. We did not experience any problems in terms of production, financing, growth or investment during the pandemic period. On the contrary, we continued our investments.


What is your production capacity in carpet?

While our Merinos and Dinarsu brands are by far the leaders in the production of piece carpets and have a 6 percent market share in the world, they will reach a 7 percent market share as of 2023 with the investments we are making. Our monthly production capacity is about 10 million square meters.

What was your turnover at the end of 2021 and how was your growth rhythm in the last few years? What is your turnover target in 2022?

Our group turnover in 2020 is 10 billion TL. In 2021, we reached 22 billion TL in turnover. Foreign exchange rate also has a base effect, but our real growth is also quite high. Our investments and production increases have a significant impact on this growth. Considering that we will grow at the same pace in 2022, I predict that it will be 45 billion TL.

We do not invest what we earn from companies to other areas, we invest in our own business, as investments continue. We do not even make our private expenditures from company revenues.


We monitor the course of company functions by looking at EBITDA, trade-financial indebtedness and cash flow balance. With the rapid increase in inflation and accompanying exchange rates, the pursuit of quantitative turnover growth instead of monetary turnover has gained more importance for our group.


In this period, when inflation and exchange rates tend to increase, the export figures of our group companies are high, and foreign currency sales have a significant share in domestic sales. The fact that most of our input costs are in foreign currency and our intensified foreign currency-based investment expenditures have increased the importance of foreign currency position, inventory turnover and long-term ECA loans for us.

You have been doubling the growth in the last 2 years...

Yes, as of TL.

How is the situation in dollars?

If you deduct the dollar increase, our annual growth rate is not below 50 percent.

Where does the biggest contribution to growth come from?

All of our companies continue to grow within themselves. Here, the biggest growth comes from SASA as a percentage. For example, while the turnover rate of SASA within the group was 66 percent in 2021, it has now increased to 70 percent. Previously, this rate was below 50 percent.

At what stage are your investments in recent years?

We took over SASA in 2015 and started investing in 2016. We invested 1 billion dollars in SASA until 2020. We have an ongoing investment of 2 billion dollars that will be completed in 2023. By this way, we will have made an investment of 3 billion dollars by the end of 2023 after acquiring SASA. We produce polyester, polyester fiber, polyester yarn. For now, we have started to invest in the raw materials we need. In the first half of next year, we will produce PTA, the raw material of polyester. We will produce 1.6 million tons of PTA annually.

I'm talking about a huge investment. As of this year, Turkey's imported PTA amounted to 1.6 million tons. In 2023, we will produce all of this at SASA. Turkey will no longer import PTA. The cost of this investment will be 1.1 billion dollars.

Were other investments for increased capacity?

Yes, and it was new technology. When we bought SASA, its technology was obsolete.  The latest technology investment in SASA was made in 1995. We are closing old lines and installing new ones to compete on a world scale. We equip SASA with the latest technology. SASA is a production facility that represents Industry 4.0T and even a little beyond. We follow a growth-oriented strategy with investments in automation, modernization and integration in our industrial companies. We invest in business lines that will increase our market share at home and abroad, have strategic importance for our country, increase employment and contribute to closing the current account deficit.

Is it possible to export PTA?

If our land acquisition transaction in Yumurtalık is finalized, we will establish the second PTA facility in the petrochemical facility that we will realize there. There will be a new facility with a capacity of 1.6 million tons.

Turkey's polyester investments also continue. In the next 3 years, Turkey's need for more than 1 million tons of PTA investment will arise. PTA is main raw material of polyester yarn fiber. It will replace 1.5 billion dollars of imports at approximately current prices.

You had a very large petrochemical plant investment plan in Yumurtalık. The land was in the allocation stage. At what stage is your investment plan?

The Privatization Authority opened the tender for about the 4 million square meter area of the state owned land. The tender will take place at the end of March. In the plan here, the investment will be realized in 2 phases. When the land transaction is completed, we will immediately make an investment of 4 billion dollars within this year. After that, we will start the refinery investment. This investment will be the biggest investment that Turkey has made,". Our investment amount in approximately 12 years will reach 20 billion dollars. Earlier, we announced an investment amount of 13 billion dollars, now we have expanded the project a little more. These investments will be completed 10-12 years from today.

Will raw materials be produced for different sectors in this petrochemical plant?

As of last year, Turkey's imports in the chemical sector, that is, in the raw materials sector, were approximately 18 billion dollars. We estimate that this will reach up to $25 billion by 2032, it could be even higher. Thanks to this investment we will make in Yumurtalık, we will produce 50 percent of the raw materials Turkey imports for petrochemicals. This is why, the Yumurtalık project will be one of the most important projects in Turkey. It is very important to provide 50 percent of a very important imported input from within the country.

How do high inflation and fluctuating exchange rates affect the financial process and your investments?

All of our sales at SASA are based on foreign currency. Therefore, we are not affected that much by the economic conjuncture. We export 90 percent of our carpet companies’ production. In that sense, we are not affected that much. Here's what we're affected by: The rise in Turkey's CDS and the weakening of its credibility caused loan rates to rise. But we continue on our way because we always think "what can we do today".

How much of your investments do you make with equity?

Our earnings stay within the company. We will finance some of the investments with foreign banks and some with our profitability.

CDS's rose in Turkey, companies caught in the crisis with their investments. You've also been caught in the crisis with a big investment. How are you affected?

We don't have any problems. We have a philosophy that we learned from our late father. Nothing is ours. We only have responsibilities. We have a responsibility to our employees, suppliers, dealers, city, country and world. When you have a perspective within the framework of this responsibility, solving problems becomes much easier. That is the essence of the struggle. We are a group that truly adheres to and implements this philosophy. All of our friends share the same philosophy. In this philosophy, we say goodbye to friends who are not team players.

Where does the new competition come from today?

When we consider the last 20-30 years, technology in the world is changing very fast. Every company needs to keep up with this change, this development. Our industrialists have to bring whatever the technology of the day is, they cannot be successful if they do not. The new competition comes from technology.

We are a company that always uses the latest technology, whatever it is. We renew our machines and our business before the car we ride. Because it's that business that makes us sit in that car.

I would like to get your vision for the carpet industry. How do you see the place of Turkey's carpet industry in total production in the world, and how do you see the future?

In the field of machine-made carpets, Turkey currently has 50 percent of the world's production. Gaziantep is the China of the world for machine made carpets. China cannot compete with us. Let me say it so clearly. All of our friends in Gaziantep are on work. They all follow technology naturally. They can point us as an example and pioneer, it is true. Turkey is the world's leading country in the carpet industry today, and it will continue to be the leading country 50 years later.

What is the secret of success? Was it like this 20 years ago?

We had one domestic carpet loom. Its current value is $10,000. It wasn't expensive. As we count it 10, 20, we increased the number of looms. After 1990, I started participating to carpet fairs abroad. At that time, I saw that the carpet market in the world was in the hands of the Belgians. They had a market share of nearly 50 percent. Turkey's exports were almost non-existent.

Carpet is our culture. We said, "How can the Belgians become a world ruler in a product that is our culture?" and we set sail. We started to invest in technology and we did it step by step, whatever the necessity of being the best in the world. After we did it, we brought all our industrialist friends in Gaziantep and showed us around our factory. We said “make these investments, because the world is going here” and we became a pioneer for them. Merinos served as a school at that time.

What are the numbers in carpet exports?

As Merinos and Dinarsu, we have an export of 450 million dollars. As a country, we exported more than 3 billion dollars. Carpet weaving is the industry that we export the most to America. Turkey exports approximately 8 billion dollars to the USA, of which 1 billion dollars is made by the carpet industry.

You export to more than 100 countries. How are the balances changing in exports? What are your observations?

America and Europe have some remain at bay strategies regarding China. This was very favorable for Turkey as a conjuncture. This is one of the main reasons why our exports are increased. We anticipate that exports will continue to increase in the upcoming period. We think that production in Turkey will increase, and Turkey's nearby geography will become a supply chain center. Our country must produce the main raw materials required for this, and we, as SASA, do this.

How much was the group export in 2021? What will it be in 2022?

Our exports last year were 850 million dollars, 400 of which came from SASA and 450 million dollars from carpets. If major fluctuations and other crises do not occur in the world in 2022, we estimate our total exports to be at least 1 billion 100 million dollars. When we look at the first 2 months, our exports increased by 50 percent in dollars compared to the first 2 months of last year. This pace will likely continue. We speak modestly. We can reach $1.2 billion. Compared to the first 2 months of last year, the increase in exports of SASA is 92 percent.

Then, 2022 is the year of growth for you.
Every year we have the year of growth, we do not stop.

What are the goals of the Erdemoğlu Group in the next 5-10 years?

Let me give you an example from the past if you want. Our turnover in 1983 was 250 thousand dollars. It was $2.5 million in 1991 and $25 million in 2001. Our turnover reached 250 million dollars in 2011 and 2.5 billion dollars in 2021. This chart tells you a lot. Our plans are not short-term.

Running to $25 billion in 2030?

Time will show us. 

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