Sabancı's new business plan

The group's new CEO ZAFER KURTUL does not agree with this opinion. "Every decision is taken according to prevailing conditions," he says. He says that they are targeting faster growth for the future. At Sabancı performance is measured by market value. Kurtul points out that Sabancı's net asset size of $15.5 billion makes it the leader in Turkey and says that they are aiming to raise this to $25 billion in 2015 and $40 billion in 2020. "We are looking at all opportunities, organic and inorganic," he says. We spoke with Sabancı Group CEO Zafer Kurtul about the group's future plans

Capital: You have been CEO for nine months. What was Sabancı like when you took over?
-  I saw that Sabancı Holding had a very high growth potential. I saw that we had a very good team. We have 12 publicly owned companies. The total market value of our companies represents 12 percent of the total value of the Istanbul Stock Exchange. In 2010 our companies made investments worth $1.1 billion. We are very strong financially. We have a very low debt ratio and this boosts the potential for growth.

Capital: The first 100 days are an important learning process for CEOs. How long is the learning process at a group like Sabancı?
- This was a very productive time for me. Working with a strong team reduces the learning period. We are active in several different sectors. Of course, considerable knowledge and experience is necessary in order to understand and manage them. We have now begun the process of making three- and ten-year projections for our companies.

Capital:  It is said that you have introduced changes in the group's strategy in terms of attitudes towards profitability and growth. Has there really been such a change?
- There have been no changes in our main strategies. Every CEO aims to be successful in terms of both growth and profitability. When we succeed in both, then we can increase our share value still further while creating value for our shareholders. Our goal is to increase our net asset value. 75 percent of our portfolio is publicly owned. 55 percent of this is Akbank's portfolio and 45 percent belongs to the other companies in the group. Our goal is increase our non-banking portfolio and, over time, raise the share of the other sectors to 60 percent. This will result in a more balanced structure. Akbank will continue to grow, of course. But we have to ensure that the rest of the portfolio grows faster. We need to evaluate both organic and inorganic growth opportunities very well.~

Capital: So what impact will your concept of management have on your term in office?
- The first priority will be to realize the potential and improve the performance of our existing businesses. We shall apply a growth strategy of creating value in profitability. For this reason, we shall give great importance to progress in terms of new investments, innovation, new markets and new products in our existing businesses. For example, we have made excellent progress in energy. Ourtarget is to have a market share of 10 percent of electricity production in Turkey. In 2011, our market share will be 4 percent. When our projects have been completed, this rate will exceed 20 percent.

Capital: You announced that you were looking at acquisitioıı opportunities here...
- To date, Enerjisa has bought nine companies involved in electricity production. In 2008, we bought the electricity distribution company Başkent Elektrik. We have a market share of 8 percent in electricity distribution in Turkey. We want to buy another regional distribution company but we have not won such a tender yet. Think that such an acquisition will enable us to achieve this goal.

Capital: Do you have plans for rapid growth in any other areas?
- Energy is growing very rapidly. We are planning to triple or quadruple capacity. Cement is one of our leading areas. We have the highest market share of any company in Turkey. We are active in retailing through CarrefourSA, DiaSA and Teknosa. We are aiming to hold a public offering for Teknosa in the first half of next year.

Capital: What are the holding's plans for the next 4-5 years? How big do you expect to be in 2015?
- Today we have a net asset value of $15.5 billion. We forecast that our net asset value will be more than $25 billion in 2015. We are aiming to exceed $40 billion in 2020. In order to achieve this target we need both our existing businesses to grow healthily and to add new business areas to our portfolio. We shall make investments of $2 billion in 2011 in order to support our organic growth.