Esteemed BEYSAD Readers;
We give you the first of the most important interviews of this issue and we believe it will attract much attention. As you may have read in the newspapers, Ak-Kim Kimya and Gizem Frit, the company of Mr. Tolga Ballık, member of BEYSAD Board of Directors, made a merger in the recent months. Although it was covered by the media, we wanted to create an opportunity for you to learn the details. We would like to thank Ak-Kim Kimya General Manager Mr. Onur Kipri and Gizem Frit General Manager Mr. Tolga Ballık for their valuable inputs and we present you an interesting interview.
Could you please tell us briefly about yourself and your duty at Akkim?
Onur Kipri:I am Onur Kipri, the General Manager of Ak-Kim Kimya. I started working for Ak-Kim on January 22, 2014. Tolga is, as you know, the former owner of Gizem Frit. However, upon the acquisition, Tolga will keep his post as Gizem Frit General Manager for at least two more years. He will manage the growth projects of the company and work to grow Gizem Frit especially overseas.
Could you tell us about Akkim and its activities?
Onur Kipri:Ak-Kim Kimya was founded in 1977 as the subsidiary of Akkök Holding, one of the deep-rooted private sector organizations of Turkey. We have been engaged in production in our modern facilities equipped with advanced technology for 37 years and we are the market leader in many basic chemicals. Ak-Kim Kimya was the first company in Turkey to produce certain highly important chemicals for the domestic industry which require advanced technology including sodium metabisulphite, ammonium persulphate, potassium persulphate, dimethylacetamide, dimethylformamide, hydrogen peroxide, and sodium percarbonate. We have approximately 20 production facilities in 3 premises equipped with cutting-edge technology located on an area of approximately 300 thousand m2 in Yalova and Çerkezköy. In our factories that have a production capacity of 600 thousand tons per year, we produce more than 500 chemicals.
Ak-Kim Kimya produces performance chemicals using its own technology and is distinguished from its competitors with its strong know-how and technical experience. Ak-Kim Kimya develops “integrated chemical solutions” in line with the needs of our customers in all the sectors which we provide products with. Moreover, we sell our know-how and technology to foreign companies since 2002 and provide all kinds of services from engineering to turnkey undertaking activities. So far, we have established various turnkey facilities in Jordan, Pakistan, Saudi Arabia, Algeria and Greece.
Additionally, we have founded Akferal through an equal-share partnership with Feralco, Europe’s second top water chemicals and coagulant manufacturer, in the recent years. We produce Akferal products that will contribute greatly in the development of the sector in Ak-Kim Kimya facilities located in Yalova. Also, we bought Gizem Frit, one of the biggest enamel and ceramic frit manufacturers of the world, in December 2014 and took a step into a new market in the sector.
Which sectors do you provide service with?
Onur Kipri:Ak-Kim Kimya produces a wide range of products including inorganic and organic chemicals and textile auxiliary products as well as chemicals for paper, water, cement grinding and concrete additives, personal care and cleaning sector, which have the quality approval in the international market, and submits various products to the market. We mainly produce for the industry, but we are in every point of life.
We started the betaine production facility with a capacity of 15.000 tons in 2014. With betaine production, one of the ingredients used in soaps, detergents, and shampoos, Ak-Kim has added products for both the detergent and the cleaning industry in its production portfolio and improved its knowledge to produce chemicals that are not yet in its portfolio. Moreover, Ak-Kim produces thickeners used in concentrated detergents, bleaches and paste detergents to address to this area.
Could you tell us about your new investments? Could you especially tell us about the acquisition of Gizem Frit? Why another sector?Why Gizem Frit?
Onur Kipri:Ak-Kim Kimya has been engaged in production in its modern facilities using advanced technology for 37 years and is the market leader in many basic chemicals. In order to keep our leading position and to grow Ak-Kim, we aim to enter new fields. Also, we aim to gain 1 billion dollars turnover in 2023.
Gizem Frit has displayed a tremendous success on its own so far and has become of the most important manufacturers in the world. Sustaining new investments needed to increase and continue this success under a corporate roof with capital power will bring great gains to the company. Therefore, Ak-Kim from now on is focused on R&D studies under its roof and aims to increase its growth. Gizem Frit will play an important role in Ak-Kim’s achieving the goal of 1 billion dollar turnover.
Acquisitions have an important part in our growth strategies. Now, we are reviewing a few companies. Last year, we accomplished more acquisitions besides Gizem Frit. We bought Dostel Kimya’s two factories located in Gebze and Osmaniye for Akferal. In 2015, we will work on integrating these acquisitions to Ak-Kim Kimya. We plan to achieve one more acquisition in 2016.
How do you evaluate the point reached by the white appliances sector in Turkey? Can we consider that you have a positive outlook to the development of the sector due to this acquisition?
Tolga Ballık:Turkey’s white appliances export performance is quite high. The majority of the white appliances manufactured are exported. As Gizem Frit, we have customers in 54 countries mostly in the white appliances sector. In the recent years, there has not been any other country that displays the rapid growth rate as shown by the Turkish white appliances production. As this sector grows, we also grow rapidly. Therefore, we desire and support the development and growth of the sector.
Could you tell us about your growth goals and objectives in the upcoming period?The merger of two significant organizations will definitely create a very good synergy. What are your expectations of this merger?
Onur Kipri:We want to grow in double digits every year. As Ak-Kim, we aim to achieve 1 billion dollar turnover in 2023. We plan to grow by 11% in 2015. We looked into five acquisition opportunities last year. Among them, Gizem Frit was very appealing to us and after a good negotiation, we came to an agreement and we shook hands. This year will be the year of integration of Gizem Frit to Ak-Kim Kimya and we are working to make it happen. We want to create a good synergy.
Tolga Ballık:As Gizem Frit, we export to 6 continents. I believe we have established a good cooperation with Ak-Kim Kimya. Gizem Frit will play an important part for Ak-Kim to attain its goal of 1 billion dollar turnover. We plan to establish new facilities in the USA, China, Brazil etc. We will prepare plannings on manufacturing points this year. In the coating sector, we will create a world giant under the roof of Ak-Kim Kimya.
We would like to learn more details about Gizem Frit. Could you share information on its activities? What differentiates you from your competitors?
Tolga Ballık:Founded in 1979, Gizem Frit is engaged in the production and sales of enamel, ceramic, glass, cast and aluminum frits, pigments and non-adhesive coating.
In the ceramic frit market which it entered in 2008, it has 55% share in Turkey (excluding companies that manufacture ceramic frits internally). Gizem Frit is the only independent ceramic frit manufacturer in Turkey. It is the biggest porcelain enamel frit manufacturer in Turkey and the second top in the world. In 2014, it sold 36.000 tons of porcelain enamel frits and 27.000 tons of ceramic frits.
Its porcelain enamel frit capacity is 70 thousand tons per year and ceramic frit capacity is 50 thousand tons per year, while the total capacity is 120 thousand tons per year. Its share in the Turkish porcelain enamel frit market is over 70%. It has solid technical knowledge on establishing a frit manufacturing facility and can achieve it for a lower cost than its competitors can.
It has representation offices in 10 countries including the USA, Brazil, China, Egypt and Italy. It exports to 54 countries in 6 continents. In 2014, the export constituted 55% of the turnover with 47 million USD and 24.500 tons of items were exported. Its customers include world giants such as Bosch-Siemens, Electrolux, Ariston, Arçelik, Vestel, Beko, Whirlpool, and Indesit.
Gizem Frit has grown by 20% in average in the recent years. However, last year this growth rate diminished a little and it was 10%. Our 2014 turnover is 90 million dollars. We completed the investments of approximately 40 million dollars, which we started in 2010, last year. These investments created an important capacity power for Gizem Frit. In the global scale, we have a market share of 12% in our field. We surely want to increase this share. Our facility in Sakarya is ideal for this. Gizem Frit is the company with the biggest production capacity under one single roof in its sector in the world.
Which sectors Gizem Frit give service to?
Tolga Ballık:There are 5 varieties of coating materials including 2 main materials. These are performance-based coating on porcelain, enamel, ceramic, aluminum, cast and glass. Also, there is ceramic and organic-based, non-adhesive, heat resisting PTFE coatings.
The ceramic used for ceramic coating is frit. The enamel frit is used for white appliances, pots, frying pans and cooking tools. Considering the field of use of the porcelain enamel in the world, it is seen to be used for ovens the most by 58%. This rate is followed by boilers by 19%, pots and pans by 10% and stoves by 6%. Glass frit is used for oven windows, glass bottles (coke bottles, etc.) and vehicle windows.
Following the new acquisition period, what kinds of changes are expected to happen at Gizem Frit?
Tolga Ballık:Now, our market share in Europe is about 25% - 30% and this is quite a good rate. The North and South Americas are among the regions we are successful in. We need to increase our market share in the Far East, especially China. We need to carry out production in closed proximity to especially the white appliances manufacturers which we serve. Now, we have offices and technical staff in China and the USA. Additionally, we think about establishing a facility in these regions.