“A Good Market Waits In 2011 For Those Who Survive”

The decision by the 30-year old textile company Sönmez Filament to stop production had everybody talking. Rumours spread that it had collapsed. In fact, Celal Sönmez was applying the focusing strategy which he had initiated in 1997 of “getting out of textiles.” “In any case, we were undergoing a planned downsizing. We are contracting in textiles in line with our forecasts as a result of the problems brought about by not growing,” says Sönmez. Today Sönmez is focusing on four sectors. They are tourism, technology retailing, energy and cement. “2009 is lost. 2010 will be the year of recovery. In 2010 those who are able to survive will continue,” says Sönmez, who believes that what is important is not to go under. Celal Sönmez spoke with Capital for the first time after taking the decision to cease production at Sönmez Filament, and explained the global competition which has made even well-established textile companies throw in the towel, the new business areas on which he will focus and, of course, the global crisis.

* The experts are extremely pessimistic about 2009. What do you think? What will 2009 be like for Turkey and the real sector?

Maybe I am not very pessimistic but I am pessimistic. The global crisis still hasn’t fully hit us but it is approaching very rapidly. Of course, the first to feel the impact will be the financial sector. They have started to experience it. The real sector is being affected. Orders are being cancelled, business isn’t coming… Companies in the supply industry in the automotive sector are in a particularly bad position.

* How long do you think this crisis will last?
I think that 2009 will be a completely lost year. We shall start to feel the effects of the global crisis more clearly in the months ahead. January-March in particularly will be very difficult. I think that 2009 is lost and that 2010 will be a year of recovery.

* What kind of strategy should companies follow in this crisis environment in order not to “sink the boat”?
The most important thing is to manage liquidity well. A US$1 billion dollar company can go under because of a US$50 million liquidity problem. From now on, the most important issue is marketing. We shall find and enter new markets which have not been very affected by the global crisis. We have no other choice.

* In the first week of November you took the decision to stop production completely at Sönmez Filament. How did things reach this point?
There can be nothing more correct than withdrawing from unprofitable areas. How long can you continue? At the most, as long as your capital holds out… This was the situation with Sönmez Filament. This is a focusing strategy. In any case, if we compare the figures for 1997 with those of today then it can be clearly seen that we are in such a process. Ten years ago the textiles part of our group employed 4,800 people. 90-95 percent of the group’s turnover came from textiles. At the moment, textiles account for a 10-15 percent share of our group. In any case, we were undergoing a planned downsizing. We are contracting in textiles in line with our forecasts as a result of the problems brought about by not growing.

* As a group, which sectors are you focusing on?
Services and tourism come to the fore in terms of the growth sectors. The retail sector will also continue to grow. Foodstuffs, cement and energy will become increasingly important. We shall make our name known in these sectors.

Yasemin Erdogan
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