In this issue our interviewee is Mr. Turan Nurcan, the General Manager of Flammasstek. In addition to sharing valuable information with us, Mr. Nurcan was kind enough to visit our headquarters. Therefore, BEYSAD extends profuse thanks to Mr. Nurcan for sparing his time. A summary of our interview is as follows:
Flammasstek is a subsidiary of the Flamm Holding which has five different groups of companies in Germany. The headcount of the entire group is 650 people and the annual turnover equals EUR 90 million. As the Turkey operation of the Group and with its staff of 150 people, Flammasstek offers services to the cooler and solar collector industries by means of manufacturing roll-bond evaporators. With a turnover of EUR 6 million the firm is located in the Çerkezköy Organized Industrial Zone and operates in a manufacturing area of 8700 m2 out of total 10,000 m2.
Can you tell us a little bit about yourself?
My name is Turan Nurcan. I am 56 years old. I am married with two children. Following my graduation from Vefa High School in 1973, I took my undergraduate degree from the Mechanical Engineering Department of the Bochum University in Germany. I spent 20 years in Germany working in different industries and serving as senior manager for various companies.
I returned Turkey in 1999 and began to work as the General Manager of the Babcock Textile Plant. In 2003 I met Flammasstek. I started working for Flammasstek in February 2003. My eighth year is about to expire now.
Can you explain the history and business activities of Flammasstek?
Flammasstek is a joint-stock company established in the year 1998 as a supply industry firm of BSH in the Çerkezköy 2nd Organized Industrial Zone. Bearing the legal entity name Flammasstek Teknik Montaj San ve Tic. A.Ş., our company is one of the six companies of the Flamm Group in Germany. Majority of group companies used to work with BSH in Germany. There was a need for a BSH supplier here in the Turkish market. It was when BSH and Profilo partnership was made. Due to confidence in the Flamm Group, BSH asked Flamm Group to set up an operation in Turkey; hence, the original investment in the Turkish market was made in 1998. Our initial business was the supply of shaped metal part.
We were performing the gas group assembly for the oven plant. In the year 1999 the site where our premises lie now was bought and manufacturing activity commenced in 2000 in a closed space of 8700 m2 out of total 10.000 m2.
As a company we entered the Turkish market as a result of our loyalty to the BSH Group. Although we are currently performing manufacturing activities in different areas, we are still performing the gas group assembly of 1000 ovens and 1000 cookers per day. Our work is to connect the gas equipment and electrical parts, install spark plugs and test, designate and follow up transformers, ultimately, to ensure this equipment is directly place on the BSH manufacturing line. That is to say, our work should be completed just-in-time. The products that leave our plants are installed on BSH ovens and cookers within the next 2-3 hours in the same day.
When I first joined Flammasstek, the firm was focusing solely on gas group installation, and then we began to manufacture roll-bond evaporator. In the roll-bond technology two aluminum parts are rolled to one another by means of drawing. By making investments and implementing modernization and automation, we made our machinery as the most modern machine of the Europe. We are the sole manufacturer of the plate – called by some as the heart of a refrigerator - where refrigerator gas is switched. We utilize roll-bond technology for this purpose. A company engaged in this business in Italy went bankrupt and now they are our customer. In Turkey we offer this service to every firm which needs it.
Roll-bond requires the use of advanced technology and is a complicated process. There are only three firms in Europe dealing with this business and we are one of them. CGA in Italy and Talum in Slovenia deal with the roll-bond technology.
What is your company’s export levels and to which countries is the export made mostly?
The business of gas group installation in ovens that we offer to BSH includes some transportation risks; therefore, it is very difficult to sell this outside of Turkey.
Evaporator: We meet all the demand in the Turkish market. Moreover, export is made to 20 different countries which mostly include European countries. The share of export in our turnover corresponds to 12%.
38% of the production is allocated to the installation of gas groups in BSH ovens and cookers, half of it focuses on production of refrigerator evaporators, whereas the remaining 12% comprises export activities. Our objective is to make these shares closer to one another, each occupying around 30% in our manufacturing efforts. We estimate this objective can be achieved in 2014.
We are planning to add a fourth item to our production portfolio.This item is renewable energy, solar collectors…
With the same roll-bond technology we plan to manufacture panels for the solar energy industry. This is a new industry to which we attach much importance.
There is not any other company performing production in this field by utilizing this technology. Our plan is to implement a four-tiered manufacturing model within 2-3 years, where 25% of our activities relate to recyclable energy products. The business areas that might be included in this group are as follows:
The first area can be named solar energy and thermal heating. We can manufacture solar panels that can make available hot water for users in Turkey.
Central heating systems can be modified to make use of these panels in which the energy necessary for heating houses is generated with cooler gas and heat pumps instead of circulating water.
The third area relates to panels that generate electrical power from solar energy by means of PV technology. We are currently working with firms in Italy and Austria in this area. Our panels are transported to overseas in order to cool these panels. Once PV panels are cooled, efficiency of the electrical power generation is enhanced. The heating can be made via liquid that is circulated below. This operation ensures heat, thermal and electrical power is linked to one another. That is what we call “co-generation”.
As the number of channels in our panels is higher, their efficiency is higher than those others manufactured in Turkey. No connection exists between the pipe and plate. The transfer is made immediately. Besides, its performance is high.
To which industries does your company offer services?
White goods, domestic-type and commercial refrigerators. When we discuss commercial refrigerators, the refrigerators used in luxury cars are also included.
Plates for refrigerators used in yachts and boats.
There is a demand for a panel which cools the batteries of electric cars in summer and heats the same in winters. We are going to manufacture these panels.
You might be surprised, but a panel that would cool coffins has also been requested. Our technical draftsman was reluctant to draw it. One company in Turkey is already manufacturing it and the demand is not small. Of course, panels for coffins are included in our portfolio as well.
In light of your company’s own experience is it worth entering the Turkish market? What are your recommendations to other firms intending to invest in the Turkish market?
I can say on behalf of my company that it is worth entering the Turkish market. However, when we first began our operations in the Turkish market, we experienced some difficult times, as Turkey was going through a challenging period, and were unable to propose new investment areas. Still, it was Mr. Flamm himself who recommended the Turkish market for investment even then. Manufacturing in Turkey yields really good results, especially after certain obstacles are overcome. Let’s take as an example the access to intermediate staff member.
BSH Çerkezköy and Bursa Bosch, foreign companies operating in the Turkish market for long, have been able to cope with this problem. They have their own schools training students. They recruit students and then send them to vocational schools in addition to training them to have access to journeymen and masters with required skills. Those receiving their training at these facilities develop a different perspective and serve as qualified staff members. If a foreign company is to start operations in the Turkish market, either it should open such schools or our government should set up them.
What are your company’s main attributes that make it different from your competitors?
We face no competition in Turkey. There are two companies in Europe which we see as our competitors. Our quality level is same as theirs. The factor that makes us different from our competitors in Europe is low cost production. We are capable of offering price advantages. Our other competitors are based in China and India in Asia. Our price is higher than theirs; however, our quality is much higher. We trust our quality. Some of our customers try several cheap markets, but they come back to us.
Compliance with the delivery deadline is a very significant factor for a supplier. That product is delivered to the customer timely and in a flexible fashion is important in addition to offering price advantages. We also trust ourselves in this respect.
We do not classify our customers in terms of their size. We offer services to every class. In the event the agreement is reached cost-wise, we perform manufacturing activity, regardless of whether it requires small or large scale mass production.