“Our Target Is Ytl 34 Billion In 2015”

Over the last seven years, Oyak has recorded a more than thirteen-fold growth and become a YTL8 billion giant. In 2007 it was the most profitable group in Turkey with profits of YTL2.9 billion. Oyak General Manager Coşkun Ulusoy says that it reached the stage it is at today through a series of planned steps and that now it is targeting becoming a global brand. He notes that it will achieve this through aggressive acquisitions. “At the moment we have $3.5 billion in cash,” says Ulusoy. “Europe and America will soon experience the second and third waves of the crisis. Companies whose values are going to fall with come onto the agenda. That is when we shall invest.”

Seven years ago, it was an introspective group with assets of YTL 600 million. When Coşkun Ulusoy took over as head of the group in 2000, its outlook changed completely. Up until that day, the group had been operating as a pension fund but from then on it was transformed into a venture capital company. Its aggressive strategy sometimes meant that it was criticized but it recorded record growth. Today it has reached the point where it is a giant with a turnover of YTL 8 billion. Moreover, last year it posted profits of YTL 2.9 billion, making it the most profitable company in Turkey.

What brought Oyak success were the strategies that it began to apply in the second half of 2000. Coşkun Ulusoy saw that a crisis was coming and halted all investments and switched to dollars. When the crisis broke in 2000, the company made a significant profit. As the finance sector was collapsing, Oyakbank, which was making a loss with its 11 branches, it merged with six banks which the state was getting rid of and created one of the strongest banks in the sector. The growth in volume and new acquisitions and sales have brought it to a different level. First it bought around 50 percent of Erdemir for YTL 3 billion. Then at the moment a global financial crisis broke it acquired US$2.7 billion through the sale of Oyakbank.

Coşkun Ulusoy has announced that it currently has US$3 billion in cash and is setting its sights on other countries. He says that from now on it will continue the aggressive growth it has pursued for the last seven years through acquisitions in Turkey and abroad.

“Europe and America will soon experience the second and third waves of the crisis. Companies whose values are going to fall with come onto the agenda. That is when we shall invest,” he says.

Coşkun Ulusoy’s real target is to become a global brand. To grow by at least 20 percent every year and reach a volume of YTL 34 billion in 2015.

Oyak General Manager Coşkun Ulusoy explained to Capital the group’s performance over the last seven years and its targets for the next seven years.

* How is this year going from Oyak’s perspective?
2008 is becoming a difficult year. Many SMEs are facing difficulties. They are unable to make payments. Everyone is frightened and wondering: “How long can I delay paying?” There is no indication that tomorrow will be any better. We can say that 2009 will not be any easier. I recently attended an international meeting. The CEOs believe that the recovery will be delayed until 2010.

* So how much will the group’s revenue rise this year? Which will be the sectors which drive growth?
This year our total revenue will grow by 25 percent. The Erdemir Group will drive growth. As a result both of the rise in global prices and the increase in its production, Erdemir is on the way to recording some excellent figures. We are expecting an increase of close to US$1 billion in profits. The second group is cement.

* Which companies in particular are you looking at in terms of opportunities?
We are interested in opportunities in Europe and North America. On the other hand, if we find opportunities in things like mines in South America we shall go there.

* What are the sectors and companies which offer opportunities?
At the moment, there aren’t any. We have a department for new investments. It conducts feasibility studies and works to produce new ideas. I also go abroad, talk on television and attend meetings. I say that I am in a position to make investments there. I invite those who are interested to contact us.

* Where will Oyak be in the future, for example in seven years time?
It will be a major global brand. Sometimes it is necessary to set very ambitious targets. If you start off with small ambitions then you will never get anywhere. When I was appointed in 2000, Oyak had assets of TL 600 trillion. Now it has assets of TL 8 quadrillion.

TL 600 was nothing in those years. At that time, getting up and announcing an ambition and a vision such as “we shall conduct business on a global scale” was a very difficult thing to do. You go and you secure an international loan for a company which has never got any loans before, you have an external audit and you introduce international standards. At that time they look at me like I was crazy and they used to ask “what is this boy playing at?”. And then the day came and we bought Erdemir. If you can aim for these things when you have absolutely nothing and then realize them, then now you can aim even higher. Over the next seven years we shall increase our assets by 20-25 percent a year. Now we have assets of around YTL 8 billion. Growth of 20 percent his year makes YTL 1.6 billion. Take it and add it to 8 and you get 9.6. Take 20 percent for seven years and you end up with such an extraordinary figure. In financing the number seven is a very magical number. It multiplies very quickly.”

 “We Have 3.5 Billion Dollars And Are Waiting For An Opportunity During The Crisis”

We Are In The First Stage Of The Crisis
We are still in the first stage of the crisis. As the crisis deepens and banks become unable to provide loans, the real sector will begin to have a series of problems. Citibank, which is currently one of the biggest banks in the world, says: “I shall sell 400 billion dollars worth of assets and convert them into capital.” Is it easy for this institution to provide loans? Now it will move to cash operations. The global crisis will get worse and we don’t expect any improvement for some time.

Company Values Will Fall
 Europe and America will soon experience the second and third waves of the crisis. Companies whose values are going to fall will come onto the agenda. Those countries will experience problems and we shall make investments when prices fall. We have US$3.5 billion in cash. Opportunities may open up in our own country. These opportunities won’t satisfy us. But if the opportunity appears then we shall get involved and
be a company which ensures continuity of production.

Nilüfer Gözütok
Ngozutok@capital.com.tr