“Ülker will become a regional power in the next 10 years”

Ali Ülker represents the young generation at Ülker, the Turkish food giant. He does not appear in the press but quietly continues with his work. But, like many other businessmen and executives, he spoke with Capital and had some important things to say about the future of the group. Ali Ülker, who is head of the Ülker Biscuits-Chocolate-Candy Group, explained their ambitious plans for the future by saying: “Over the next ten years we want to increase our strength abroad and become more competitive. We shall become a regional power.”

Over the last few years Ülker has undergone a significant change. It has been taking measures to restructure itself along corporate lines and shake off the image of being a family company which is closed to the outside. Ülker has become stronger through adding an increasing number of professionals and now emphasises a dynamic, innovative structure.

The Ülker Group is active in a number of sectors, including finance, IT, telecommunications and packaging, but the sector in which it is strongest is foodstuffs. Ülker is not thinking of expanding significantly outside foodstuffs. In fact, Metin Yurdagül, who is a member of the Ülker Board of Directors and the most experienced professional in the group, explains the situation as follows: “We are a foodstuffs company first and foremost. Our activities outside foodstuffs provide us with support. But we shall continue to be a foodstuffs company.”

We spoke with Ali Ülker, who is head of the Ülker Biscuits-Chocolate-Candy Group, Metin Yurdagül, who is a member of the Ülker Board of Directors, and Mehmet Tutuncu, who is head of the Ülker Foodstuffs Group, about the Ülker Group’s recent performance and its future goals.

What Will New Investments Bring?
Our target is for our investments to produce an increase of 10 percent in our total capacity. This year the biggest investment inside the group has been the expansion of our chocolate factory. In terms of physical area, the size of our factory in Topkapı has been increased by 100 percent.

We have some new investments to increase the capacity of our biscuit group in Ankara. This year we realized an investment in Gebze in Biskrem filled biscuits. New plants and lines are continuing to be developed in virtually every factory in the group.
An increase in new products and market shares may produce an increase in turnover. Of course, an increase in turnover may also result from a rise in price. We are showing sensitivity on the subject of increasing the price. If we readjust our prices then our turnover will increase this year. Our turnover will increase in Turkish Lira terms but because of the adjustment in the exchange rate our turnover will decrease on a dollar basis.

Will There Be Innovations In Foodstuffs?
Mehmet Tutuncu: We are a very dynamic, innovative group. We derive our strength from executives who are very close to the customer, the business and our workforce. As a result, we can understand the market and the consumer in a very rational manner. As a company which had investments in many countries we follow trends in Turkey and in the world and we launch innovative products.

Ali Ülker: “In candy and chocolate we produce a new product every week. At the beginning of 2007 we shall have different factories in our sector. If we see an opportunity then we can immediately enter new categories. The Ülker group has 1,750 different products. In fact, we are having difficulties coming up with new varieties.

Metin Yurdagül: Last year we formed a very important partnership with Kellogg. Before the end of the year we shall be producing several Kellogg products in our plants. Kellogg has plants in 17 countries and distributes to 99 countries worldwide. But we are the only company in the world with which it has formed a partnership. We are the 16th largest company in the world in chocolate and candy. We have 10 factories in seven countries. We export to approximately 110 countries. The vast majority of these are exports of our own brands. We are moving towards becoming a regional power. In order to become a regional power we shall concentrate this year on investments abroad.

In Which Countries Is It Very Strong? 
We are very strong in the Middle East. We have been exporting to the region since 1975. Over the last ten years we have been producing there and have a strong market share. In addition to the Ülker brand becoming well-established, brands such as Biskrem, Tatkat and Petitbeurre have also done very well. As the result of cross-border trade our Ülker brand products are doing very well in countries such as Romania and Bulgaria. We are also well-placed in the Turkic Republics.

There are very few countries where we don’t have a presence. Indeed, we export to some interesting countries. There is a country called Trinidad and Tobago. It played in the World Cup finals in Germany. It has a population of 300,000 and if you go out on the streets you can see a lot of people walking around with Biskrem. We export there. Biskrem is a very popular product in Senegal. A friend of ours who travelled around Africa 15 years ago on a motorbike told us about his. He saw some Ülker products in a little store in a village there. We have a presence in Central and East Africa. You can find Ülker all over the world.

“In Ten Years We Shall Be A Regional Power”
Ali Ülker: Over the next ten years we shall continue to be a dynamic, continually growing company. We shall continue to strengthen our existing structure.
Metin Yurdagül: The Ülker companies are either first or second in the categories in which they are active. There are no thirds. If there are any, then they will soon rise to second or first. We shall continue to protect and expand our market shares. We shall become stronger in the areas in which we have a presence. We shall continue to grow through foreign investments and over the next ten years we shall evaluate any offers we receive. But we are not thinking that we should be in a particular area ten years from now. We are a foodstuffs company first and foremost. Our non-food business is supplementary. We shall continue to be a foodstuffs company.

Ali Ülker: We are targeting becoming more competitive and stronger abroad over the next ten years. We shall be a regional power in the Middle East, the Balkans, the Turkic Republics and North Africa. What we do will be in this direction.

We Are Not Thinking Of Selling But We Are Open To Partnerships

* What plans do you have, both domestically and abroad, in terms of mergers and acquisitions?
We are one of the leading groups in Turkey, which means that we attract interest from foreign companies. We see some of the proposals that come as appropriate in terms of a partnership structure. But when there is a proposal related to an acquisition of Ülker then we cannot say that we look warmly at it. We have never considered selling 100 percent of any of our companies but neither have we ever been completely opposed to partnerships of a reasonable level. We are always open to partnerships for our existing companies and companies that will be newly established.

Nilüfer Gözütok
[email protected]