“We lost time in textiles”

Sabancı Holding Textile Group President Yakup Güngör describes Sabancı Holding’s strategy in textiles as ‘globalizing production and supply’ and ‘vertical integration’. The target is to move beyond being a local company and to prove itself as an international company making progress in retailing and being a major player in the added value products segment. The time lost to date is attributable to consultants’ proposals to “invest in the new economy”.

At the beginning of the 21st century it was suggested, even by the boss Sakıp Sabancı himself, that Sabancı Holding could withdraw from textiles. The rumours have not stopped since that day.

For a long time Sabancı has been continuing to work silently and in fact in the textile group things have been going well; while other publicly owned companies have been posting losses, Yünsa and Bossa have announced profits.

In 2006 Güler Sabancı’s statement that ‘we are looking for a strategic business partner’ made everyone curious about what the holding’s strategy was for this field. Last month’s acquisition of the Uptown brand showed that, as was the case with Kordsa and Teknosa, the holding had set itself a target of becoming a global player.
Yakup Güngör has been president of the textiles group for eight years. He says that they have formulated a strategy based on the twin goals of ‘globalization of production and supply’ and ‘vertical integration’. Güngör explains rationale behind these two goals as follows: “You cannot remain a local company with a local operation. You have to be international. You have no other choice.”

The Sabancı textile group is active in the added value products segment with innovative products. In addition, the group wants to strengthen its retailing arm.
Sabancı Holding Textile Group President Yakup Güngör evaluated the new approaches for Capital as follows:

* At the beginning of the decade there were statements by high-ranking members of the holding that it would withdraw from textiles. Later you continued. Was there indecision at the time?
It is true. There was such an indecision in the holding in the past. There was an interesting paradox which was incompatible with our strategic overview. In 1998-99, as a the result of some studies by McKinsey, there were a lot of discussions about the old economy and the new economy and, as was everyone else, we were advised to withdraw from all of our businesses in the old economy and enter the new economy. At that time, I still remember it very well, the late Sakıp Sabancı came out and said: “We shall need to withdraw from some business and enter others. For example, one of the businesses from which we might withdraw could be textiles.” This really bothered me. Because it affected our workforce, our suppliers, our customers and our shareholders. This left us in an extremely difficult situation for about one year.

* When you look back, doesn’t this mean that Sabancı lost time as a result?
It is true that we lost time in some areas and it is true that we were relatively late in others. I shall never deny this. But the period 2002-2205 is one to which I attach considerable importance. I don’t see it as wasted time. We could have gone in a different direction and we could have used our resources in a different way. But in this kind of business group which manages different business portfolios, my colleagues and I have two basic duties, which are to create sustainable profitability and value for our shareholders.

I think that we fulfilled our basic duty in an extremely good manner in 2002-2006 which you referred to as lost time. Because when you look at the publicly owned textile companies today, apart from us, almost none of them is making money. This means that at least we took steps appropriate to the main strategy of fulfilling our two basic duties.

Ebru Firat
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