“We Are Not Selling Companies, We Are Looking For Growth”

Erhan Öner’s story, which began when he was Tekfen Holding’s first scholarship student, continues today in his role as CEO. The holding, which is preparing to announce earnings of over TL 2 billion in 2009, is planning to focus on engineering projects in the contracting sector. Öner, who notes says that they have no plans to enter a new sector, says that the partnership concept that they planned with Socar has not been fully understood. “Our companies are not for sale,” says Öner. “But partnerships are attractive if they increase our business potential.” We spoke with Tekfen Holding CEO Erhan Öner about the holding’s performance in 2009 and their targets for 2010.

* You have four main fields of activity. What share do these different areas have in your turnover?
Our largest field of activity is contracting. This accounts for 54 percent to 58 percent of our turnover. In 2009, this field had a share of 56 percent in our turnover. Agro-industry accounts for 38-42 percent of our turnover. Real estate has a share of 2-3 percent of our turnover.

* What projects are you working on with the contracting group?
In Kazakhstan there is a new oil power plant. We are constructing the initial processing units and the industrial buildings. In Azerbaijan we are beginning to build a third offshore platform. We are building a power plant in Bulgaria. We are constructing a refinery in Morocco. We are continuing to work on a pipeline project in Libya.

* How did your contracting activities fare in 2009?
Building construction was worst hit by the crisis. Most of our customers are states or giant oil companies. As a result, we did not suffer a crisis. The volume of our outstanding business declined. At the end of 2007, it stood at $2.1 billion. At the end of 2009, it was $1.2 billion.

* The figures for end-2009 have yet to be announced. How did you close the year?
We revised our projections in June. According to these figures, we foresaw revenue of TL 2.304 billion, pre-tax, amortization and tax profits of TL 196 million and net profits of TL 60 million. We estimate that our year-end figures were compatible with these forecasts.

* What are your expectations for 2010?
We are predicting that the economy will grow by 4 percent. I don’t expect any increase in our turnover. We shall close the year with figures similar to those for 2009. I think that profitability will be better than in 2009.

* You had a partnership plan with the Socar Group but it was postponed. Will it come back onto the agenda?
A lot of people interpreted this partnership as “Socar will buy 50 percent of Tekfen and Tekfen will receive $520 million.” What attracted us about this partnership was the business potential of $38 billion in 10 years. Moreover, the partnership proposal came from them. We agreed to a partnership because of the attraction of future business. If business grows again in Azerbaijan we shall talk again. But not at the moment… Foreign investment banks are asking: “Will you merge with another company?” Our company is not for sale… Of course, we are open to partnerships in contracting and agro-industry. But we are opposed to selling the company. We are planning to expand business, we are not thinking of selling… If a foreign partner will expand our agro-industry business then we are open to a partnership. In contracting, we would look very warmly on a strong foreign partner in engineering and a less strong one in construction.

Elçin Cirik
ecirik@capital.com.tr