Dear BEYSAD Readers;
In this issue, our guest is Konveyör and its executives who are in fact very well-known BEYSAD members being one of the BEYSAD Founding Board of Directors member companies and who contributed greatly in BEYSAD during its 25 years of existence as well as the Turkish economy and our sector. Konveyör has just made a new investment in Poland and their depth of experience is unbelievable. In this context, we are thrilled to share our interview with you, every word of which is, in our opinion, a priceless lesson for all of us.
In this interview, the sector’s connoisseur, Konveyör and BEYSAD co-founder Mr. Hasan Basri Aksu and a very successful 2nd generation executive of the company and BEYSAD Board Member Mrs. D. Yasemin Aksu answer our questions. We would like to thank them and wish them success in their new investment.
Could you please introduce yourself?
DYA (Deniz Yasemin Aksu): It is a bit cliché, but on a winter day in 1990, I was born in Istanbul. Actually I could say I grew up in Konveyör. When I was studying at Robert College, I had the chance to work in various departments of the company during summer. Although I had some distance from our company, as I went to the university in the UK, I did my master’s project as an example for ERP applications in Turkey in Konveyör.
Upon graduation, I wanted to work definitely in a different company, even in a different sector as my first job experience – because besides the contributions of a completely unfamiliar circle, I wanted to see the other side of the employer-employee medallion without censure. Therefore, I had a 2-year adventure in the ready-to-wear sector, during which I gained many valuable experiences – for better or worse – which I would not be able to get at Konveyör. For the last 3 years, I have been holding various duties in various positions and various premises of Konveyör; now I am in the Sales team. Also, I am leading the Young Beysad committee as a member of the 14th Board of BEYSAD.
Could you tell us more about Konveyör, its operations and organization in Poland?
HBA (Hasan Basri Aksu): Konveyör was founded in 1979 to produce conveyor systems. Along with our current name, our logo, which is the stylized version of a pneumatic conveyor chain link, has not changed since then. Even though in time we were less and less involved in conveyor business and finally ended it in 1992 and became an entirely white goods supplier, we did not change our name “Konveyör” (Conveyor) both as a respect to our past and its particular meaning.
Today Konveyör is operated in 5 premises – three in Tuzla, one of which is in the free zone, one in Eskisehir Organized Industry Zone and one in Manisa Organized Industry Zone – on a closed space of 65.000 m² and with 2300 employees. We produce all cooler system components (except compressors), drying machine components including copper air conditioner interconnecting pipes, gas pipes and manifolds for ovens, copper pipes for central heating boilers and gas heaters and heat pumps. Our export share has ever increased year by year and this year we are expecting it to be around 45%. Of this share, 80% is to the European countries, 10% to the Americas, and the rest to the Asian countries. You can check out our website (www.konveyor.com) for more detailed information.
Considering we have achieved a certain scale and maturity in our operations, for the past few years we have been following investment opportunities abroad and started checking out Bulgaria and Romania. Last year, we learnt that a supplier group put up its businesses for sale, which had factories in 5 countries around Europe, and this drew our interest to Polish businesses. After flying back and forth for about 10 months and due diligence (financial, legal, environmental), we acquired the aforementioned factory of 10,000m² with its present clients, machines, and 230 employees.
What are your motives for investing in Poland?
HBA: For the last at least 3 years, because our country’s image began to be tarnished in Europe, 3 distinct global accounts of ours – as if being in cahoots – insisted we invest in a European country, which inspired us to do so. One of them has shifted its prior plan of investing in Turkey to investing in Poland and started to buy fewer and fewer supplier products from our country. Since other global accounts could begin doing the same, we wanted to be prepared. At this point, that the factory we acquired would compete with us in certain areas created a double chance for us. Moreover, the strategic importance of Poland which is the second biggest white goods producer in Europe after Turkey and that the country could offer us new business and client opportunities created an attractive environment.
Could you tell us about the challenges and conveniences of this process?
HBA: We prefered to work with international advisors and audit institutions from the very start risking all expenses. At first, our advisory institution provided us with the financial data about the company in Poland, we analyzed them together and determined an initial price. After our offering was considered appropriate, we flew to Poland and checked out the company. Everything seemed perfect other than the challenge of finding employees. Therefore, we revised our initial price and lowered it a little. After our revised price was seen fit, our financial and legal institutions started the due diligence. In truth, we did not expect these audits could take 3-4 months and such detailed and certain results could be obtained. For instance, we found out that even a 130 Euro expense could lead to a fine in a possible tax audit. The concrete findings we obtained lowered the price a little bit and after the advisors of both parties worked for a long time, we finalized the contracts. After this stage, it was now time to bilaterally sign the priorly drafted 2-page notary document in the Warsaw office of the other party. After signing it, the company in Poland was finally ours as of August 1, 2018. However, we had to wait until the end of October to register the company with its new owners and new name “KONVEYOR POLSKA” as per the Polish laws.
Could you tell us about the advantages and disadvantages of investing in Poland?
HBA: We already know that there is the state incentive for supplying new machine systems and equipment that may be needed for foreign investments in Poland from the EU countries; however, this was not a decisive factor for us. The minimum wage or the overall personnel cost is around 10% higher than it is in Turkey. The main issue that is applicable to whole Poland is the inability to find sufficient labor. Young people move to the West Europe for work. The deficit for labor is tried to be met by the temporary laborers from the neighbors (Ukrain and Belarus), which makes up to 25% in our factory. If this was not the case, it would be possible to double up your turnover in only 1-2 years; that is the business potential is quite high. Another, maybe the most prominent, gain we have got from this investment is, of course, that we earned the title “international corporation.” I hope we will be successful in this journey.
What distinguishes you from your competitors?
HBA: We think that our most significant feature in this context is that we are able to do business in various areas. Naturally, we have certain colleagues we compete with in different fields; we are glad that we do because competition is good and necessary. Competition is what keeps companies fresh. It, of necessity, makes them improve and increase their competitive power.
DYA: Our broad range of products enable us to act as a “one-stop-shop” for our clients. Therefore, although we have many strong competitors in every range, we do not really have any rivals, when our whole range is combined.
Could you tell us about your new investments and R&D projects?
HBA: Our planned investment is the recently-bought area in the Manisa Organized Industry Zone and the new factory we are soon to begin building. This will be 2,5 times bigger than our current factory. We also bought a rather large area in the Eskişehir Organized Industry Zone, but we have long-term plans about it. Apart from these, our investments in machinery and automation has been continuing non-stop for years; we produce our own machines. Our machine investments might be related to newly purchased businesses, the need to increase the capacity of the existing businesses, or modernizing our existing machines. According to us, every application that increases the efficiency or capacity of a continuing business is kind of R&D. In this sense, we can say that we have been carrying out R&D projects for years and that we have 2 distinct R&D teams (of 30 employees including 5 engineers) – one works on the design and production of the machine and automation systems and the other works on lean production and line balancing. By the way, we should add that we also have an IT department with 12 employees as a third R&D team. This department works on software and applications to develop various business processes in line with the sub-programs of our ERP system or demands of the businesses.
What do you think about the development of the Industry 4.0 in Turkey? Do you have any preparatory works or take any measures accordingly?
DYA: I think that the Industry 4.0 is an area that is hyped by everyone, but noone exactly knows what they are talking about. I don’t want to speak too soon, but I believe it is much more than the overlystated “Robots are coming, they are going to take our jobs.”
It is essentially a concept involving digitally visualising and processing information, the input and output of production, and using it in different formats to transform the plans and models of business processes. It is not a subject to be avoided or scared of; rather it is an evolution opportunity for every company to adopt and adapt to highlight their advantages. We, as Konveyör, experience this transformation with full support of and adoption by the top management on solid steps.
HBA: Surely, we would not ignore the concepts IoT and Industry 4.0, the agenda topics of the recent years: 2 years ago we created a department called MIT (engineering-innovation-technology) and gathered all of our R&D teams under one roof. The department manager is involved with the coordination between the R&D teams and businesses as well as researching the next steps towards our Industry 4.0 objective. The manager found out that the first step is digitalization – that is the need to transform our machines to send data; therefore, we may need to get external assistance. We included our IT team into the process and after holding meetings with suppliers who can perform the transformation and receiving offers for the transformation of the first 10 machines, we found out that we can make it happen with our own means and for a cost that is almost half the offers. Upon the successful digitalization of the first 2 machines as a test about 3 months ago, the process of the other machines in the plan will be completed in the following days. When the data flow from these machines start, – we believe we will gain 3-4% efficiency increase which is said to occur by only collecting data – it will be the turn of the other machines in the plan. Surely, we do not envisage turning our factories into “cold and dark” places, but we would like to go forward as much as possible in the digitalization path.
What are your thoughts and expectations of BEYSAD?
DYA: Having celebrated its 25th year anniversary this year, BEYSAD is an organization that has prestige and credibility. It is unique in the global white goods sector, an also there are not many similar associations that adopt the strategic management strategy like BEYSAD. Following the strategic road map determined with the common mind of all its members, BEYSAD continues working with five committees that serve to three main goals in this period.
I would also like to talk about Young BEYSAD which has been revived this year and I am proud of being a part of. Young BEYSAD is made up of the youngest generations who work at the companies of their founding families among our members. Besides the importance of creating networks for young people, it is equally valuable to increase their adaptation to the sector and knowledge about new developments… Therefore, we frequently come together and provide social assistance in our internal solidarity and also carry out activities that would increase our competency through various workshops (first of which was at Bosch). We are now 30 members and I believe we will continue to grow bigger.