Participating in the 49th World Economic Forum organised in Davos town of Switzerland, Mr. Göçmen presented statements to the reporter from the AA (Anatolian News Agency)
(Sunday) “It is time to take to the road again with the new story of Turkey.”
Mr. Mehmet Göçmen, the CEO of Sabancı Holding said (1):
- “We jumped through critical hoops in 2018. Now, it is time to take to the road again with the new story of Turkey.”
- “Turkey is supposed to look at the future with an understanding that uses production as leverage, creates much more added value with the opportunities of technology and focuses on productivity while doing so.”
- “Turkey needs to gain a competitive advantage from digital transformation. We are required to adapt the existing industries to the current technology and enhance productivity.”
DAVOS (AA) - Reporting that they took lessons from the previous year, Mr. Mehmet Göçmen, the Top Executive (CEO) of Sabancı Holding stated, “We jumped through critical hoops in 2018. Now, it is time to take to the road again with the new story of Turkey.”
Participating in the 49th World Economic Forum organised in Davos town of Switzerland, Mr. Göçmen presented statements to the reporter from the AA.
Mentioning that the main issue of discussion in Davos was digital transformation under the title of “Globalising 4.0”, Mr. Göçmen asserted that digital transformation had two dimensions, which were namely technology and the effect on the business world.
Speaking of the potential of digital transformation to double production efficiency, Mr. Göçmen noted, “It is a structure which highly affects all industries from energy to transportation. Of course, this is the current trend because of the fact that it makes investments in an environment with increasing interest from across the world, starting from the developed countries.”
Mr. Göçmen highlighted that digital transformation was also effective on individuals and continued:
“There is a risk of sharing proprietary information with others. There is an issue of trust. There are questions in people’s minds about what will happen when these huge amounts of data are accumulated by companies. For this reason, there is a need for transparency. The business world has an effect on labour. What will people do when they are substituted with artificial intelligence and robots? All these issues result in a complicated structure in itself. In turn, the world discusses this structure. Which new standards should we introduce to achieve transparency? How can we keep up with the age while we are protecting the national interests of our countries at the same time? In the world, we are in a period when the structures involving multiple localities are discussed rather than re-globalisation. This is the main trend. As a matter of fact, this is the agenda for all of us in Turkey. We cannot make Turkey competitive in the world in other ways. We will have to come up from behind if we miss digital transformation.”
- "The Brexit process increases the question marks about the EU.”
“Besides this, there is another agenda in the world.” said Mr. Göçmen and explained:
“On one side, there are geopolitical risks, occurrences in the region where Turkey is located as well and occurrences in any other geographic region of the world; there is a ‘clash’ environment resulting from these geopolitical risks. The issue between China and the USA is called a trade war; however, I wonder if it is it an economic or technological leadership war rather than a trade war? This is because when we count the top 19 companies of technology in the world, these are Japanese, Chinese and US companies. Europe has fallen far behind in this competition. I wonder if this issue, which is portrayed to us as a trade war, is a leadership conflict or something else? This is another argument. The social unrest occurrences in France, their spread to surrounding countries and the social effects are on the agenda of the EU. And the Brexit process is on the other side. These increase the question marks about the EU. What is being discussed here is, in fact, how Globalisation 4.0 will be achieved in the light of all these issues.”
Stating that Turkey is necessarily included in these arguments, Mr. Mehmet Göçmen noted that an answer must be sought ahead of time for whether the problem between China and the USA would create an opportunity for countries like Turkey, and how Turkey could gain an advantage to assist its own interests in the case that the geopolitical problems of Turkey were solved. Also mentioning the issue of Brexit, Mr. Göçmen highlighted that England played an important role with Turkey and expressed that the only country where Turkey had a foreign trade surplus in the EU was with England; for this reason, it was required to examine the effect of Brexit on the foreign trade of Turkey and determine a roadmap for identifying how the process would be managed.
- “The average age in Turkey is 29, which is much lower than similar countries in the world.”
Pointing out that the agenda of Davos and the agenda required to be converted into an opportunity by Turkey matched up very well with each other, Mr. Göçmen continued:
“The average age in Turkey is 29, which is much lower than similar countries in the world.. New technologies, the Internet, social media and very quick adaptation to all these… Indeed, the majority of the Turkish population find themselves in this environment. Of course, there are opportunities and threats resulting from it. The difference between generations is a factor that requires to be managed. The experience of these situations in such countries which have become urbanised very rapidly, like Turkey, gives rise to results which require to be managed. For instance, there are some issues in the construction industry of Turkey that we are trying to overcome. A large number of people are employed in the construction industry. Our experiences in construction are on the one side and the new labour market introduced by digital transformation is on the other side. How will Turkey overcome the problem of unemployment? So, should the agriculture and tourism industries stand out? Is it necessary to shift to a new model, which will employ people in their own geographies by way of reversing urbanisation in order for the agriculture industry to stand out? Would it result in turning cities into more manageable cities at the same time? We have defended urbanisation up to now. We have sought solutions for urbanisation problems in mega cities. I wonder if remigration and a location with intensive agricultural employment provide a new opportunity for us?
How the world’s agenda will reflect on Turkey and how Turkey will create new structures out of this agenda in conjunction with its own interests? I think these are the issues that we will frequently discuss in this period and they give a clue about how we can take yet another turn altogether.”
- "Creating new areas of employment by means of maximising the industries is the greatest opportunity for Turkey.”
Addressing the importance of the fact that Turkey has made its existing industry more competitive in the world through digital transformation, Mr. Göçmen stated, “Today, there is no cost difference in the digital world between producing a clothing product in Bangladesh and Germany thanks to technology. This results in less defective and cheaper products. Suits are produced in Bangladesh because it is a labour-intensive process. Labour is cheap there. If you move this production to Germany, Europe or Turkey, how will Bangladesh survive? Turkey is supposed to gain a competitive advantage from digital transformation.
For this purpose, we need to adapt the current and existing industries to today’s technology urgently and enhance productivity.
We are required to create new areas of employment. Technology replaces employment on one side and there is a young population on the other side. It is necessary to create employment for them. The digital world will create employment for some of them with higher qualifications. We are immediately required to raise our average education level based on our education system, but also establish labour intensive industries in the meantime. One of these industries is agriculture. How can we reconcile people with the agricultural industry again by encouraging migration from cities to villages? How can we generalise tourism across the country and open our historical heritage and sites of natural beauty to tourism? This is also a labour-intensive industry. There are many contracting industries in the world with superior competitive power. How can we provide employment for them by making them competitive abroad? Creating new areas of employment by means of maximising the industries is the greatest opportunity for Turkey.”
- “A story of a new entrepreneur, Turkey”
“The cost of money is increasing. It is becoming hard to obtain. Encouraging investors is far more difficult than ever. The value of money in the pocket is getting higher,” said Mr. Göçmen and asserted that it is the responsibility of everyone to present a story of Turkey to the whole world.
Reporting that all stakeholders must come together and decide how to tell this story of Turkey to the world, Mr. Göçmen stated, “We need to take a decision to attract capital from the world. The growth of Turkey with its own capital is at the level of 3 to 4 percent.”
Mr. Göçmen expressed, “We unfortunately could not become a society with a high level of saving” despite of all kinds of efforts made by the government and made the following assessments:
“We need to close the gap externally on the grounds that we could not become such a society. It is necessary to encourage investors for outsourcing. Our own potential is 3 percent if we are unable to attract capital from abroad. However, Turkey needs to grow at not less than 5 percent in order to achieve real growth. More than 5 percent growth is required for the enhancement of the welfare levels. This is the duty of all of us. This is the target we need to achieve.
We took lessons from the previous year. We jumped through critical hoops in 2018. Now, it is time to take to the road again with a story of a new entrepreneur, Turkey. Turkey needs to look at the future with an understanding that uses production as leverage, creates a higher added value with the opportunities of technology and focuses on productivity while doing so.”
(Sunday) Sabancı Holding will relieve the world with “composite materials”.
- Mr. Mehmet Göçmen, the CEO of Sabancı Holding, said (2):
- “We are making investments in the field of composite materials all over the world. There is an approval process taking 7 years for aircraft components and space vehicles. You are 14 years behind if you start from scratch. We acquire companies which have already obtained this approval”.
- “We started the year of 2019 readily. For this reason, we have already taken the probable precautions”
- “The steps taken by the government for the last six months substantially met our expectations.”
- “We are the largest company in Turkey in the field of energy by far, we have invested about 11 billion USD.”
DAVOS (AA) - Mr. Mehmet Göçmen, the Top Executive (CEO) of Sabancı Holding, stated that they had made investments in the field of composite materials all over the world and added, “There is an approval process taking 7 years for aircraft components and space vehicles. You are 14 years behind if you start from scratch. We acquire companies which have already obtained this approval.”
Participating in the 49th World Economic Forum organised in Davos town of Switzerland, Mr. Göçmen presented statements to the reporter from the AA with respect to the investments of Sabancı Holding.
Asserting that some investments were inevitable, Mr. Göçmen noted, “We are making investments in the field of composite all over the world. There is an approval process taking 7 years for aircraft components and space vehicles. You are 14 years behind if you start from scratch. We acquire the companies which have already obtained this approval. Composite materials substitute for iron. It is used for aircraft, rail systems, automobiles, bridges, dams, tunnels and sportive materials.”
“It is necessary to think why the investment is made in this field and how much value it creates for Turkey rather than where the investment is made.” said Mr. Göçmen and stated that the majority of the companies of Sabancı Holding were publicly traded and they had foreign partners.
- “We started the year of 2019 by taking the probable precautions.”
Mr. Göçmen reported that 2018 had been a satisfactory year for them and continued:
“Starting in 2017, we decided that we need to be more cautious, reason our decisions in the short run and prioritise balance sheet and cash flow management instead of profitability. We also decided to maintain our ecosystems and stakeholders who provide goods and services to us within the value chain, while we are maintaining our own companies. We saw in the second half of 2018 that this was a correct action.
None of the years pass smoothly. Each year is different and not similar to the other in this changing world with no predictability. Some industries keep growing whereas some others are affected more than the expectations. We achieved our targets in 2018. We started the year of 2019 ready. For this reason, we have already taken the probable precautions. It is impossible for us to be affected by short term cyclical problems on the ground when we deal with investments in the long run as the Group. We take our decisions with this perspective. Almost all of our Group is in this country. If there is a weak link in the value chain, this affects others. Therefore, we are closely following it. I have been in business life for 35 years. I have also worked in foreign companies. I have always had confidence in this country; so have the companies in which I was working. The number of our good times is higher than the number of our difficult times.”
- “Turkey needs to introduce its digital transformation investments properly.”
By emphasising that it was very important to attract foreign investors to Turkey again, Mr. Göçmen pointed out that Turkey needed to properly introduce its digital transformation being made in many fields to global investors. Mr. Göçmen also commented, “Why is Turkey a country in which investments must be made? How can we attract these investments safely? This should be properly explained.”
- “The steps of the government substantially met expectations.”
Mr. Göçmen noted that the steps taken by the government in the last six months had substantially met expectations and continued, “All industries, and particularly the government, shouldered their responsibilities and made progress. Balance was achieved. Our primary duty starts now. The actions taken up to the present day were the right efforts made for extinguishing the fire. We have been a more successful country than others in terms of crisis management from before now.”
- “We manage digital formations with SabancıDx.”
He commented, “What is important is how we will start the period of the new attempt. We have carried it to these days and made it manageable by our own means; we did a good job. However, we are required to implement the new roadmap, which will increase the growth rate and attract foreign investors to Turkey. The performance is very good but we cannot say that it is over; I think we still have a long distance to cover. Our guide must be a new production model based on digital transformation. We are supposed to make an attempt that is based on technology, involves a high added value and focuses on productivity.”
Expressing that all their digital transformations were managed through SabancıDx, Mr. Göçmen asserted, “We use the available data so that companies can enhance their competitiveness and their strengths for cost improvement and grow more by increasing their turnover. We not only pay attention to the synergy to be created between companies on the basis of such data but also try to develop global products and new platforms that can be sold in international markets. We have a clear five-year plan. We know what to do in every detail very well and do it accordingly. We are in a very significant digital transformation process in all the operations of Sabancı Holding, from the bank to retail firms, insurance and industrial corporations. We regard this not only as a digital transformation but also a cultural transformation, which will enable the Holding company to achieve new targets.”
Mr. Göçmen explained the transformation in Sabancı Holding as follows:
“If you fail to enable your corporate culture to manage what is new, you will not have a chance to be successful. We are creating this new structure within our own values. We started it in 2017 and continued it in 2018. Today, we are close to the final point. We shape all our human resources structure in accordance with this. We redefine our annual targets and reward system accordingly. We not only convert the physical environment into digital but also we are undergoing a cultural transformation. The average of age of our employees is 32. The children of our suppliers are now managing the companies. Our investors are young. Therefore, we are culturally transforming ourselves in such an environment where all stakeholders are so young.”
- “We invested 11 billion USD in energy.”
“We are rather trying to create net platforms between industry and energy. We know both energy and industry. Production is in our DNA. The definition of Sabancı is industry rather than the service sector. We started with cotton trading and shifted to textile production. Sabancı has always had a story of production. We are very successful in energy and industry. Moreover, we are seeking the opportunities provided by new technologies and the chances that will ensure a higher profitability and more competitive advantage.”
Stating that they did not have any investments with Germany apart from energy and cement, Mr. Göçmen noted that they were the largest company in Turkey in the field of energy by far and had invested about 11 billion USD.
- "Young people should get out of their comfort areas.”
Mr. Göçmen recommended to young people, “Know yourselves and your surrounding environment well, renew yourselves continuously and get out of your comfort areas. Human beings achieve a higher performance as they encounter difficulties. This will force you to learn what is new.”