Termikel General Manager Ahmet Kaya
April 2012

Dear BEYSAD readers,

We continue to introduce main industry officials to you. In this issue we have made an interview with Ahmet Kaya, General Manager of Termikel, which has made great contributions to the Turkish appliance industry based on the inherited principle that states "The half of the success in business depends on courage and the other half on courtesy." We would like to extend our profuse thanks to Mr. Ahmet Kaya for sparing his time in his busy schedule.

Could you please briefly tell us about yourself and your past experience?

I was born in Ankara in 1963. I joined Termikel A.Ş., our family business, in 1980. I am now working as the chairman of the Board of Directors of Termikel Group of Companies. 

What is behind your success? Can you please tell us about the way you do your job? What principles do you adopt?

My father, Mehmet Kaya, founded our company adopting the principle that "the half of the success in business depends on courage and the other half on courtesy". The key to success for us is linked to courage and kindness today. Working hard, learning continuously and developing new things are sine qua non for our success. 

Can you please tell us about Termikel's management structure?

Termikel Group was established as a family business. The Group comprises 17 companies and employs almost 2000 people. 

The flagship company of Termikel Group of Companies is Termikel A.Ş. that manufactures household appliances in the white goods industry. In addition to Termikel Beyaz Eşya, the Group mainly consists of Elektromed, a firm manufacturing prepaid counters for utilities, Kanal A TV in the media sector and Eldaş Denetim Kurumu, a firm engaged in monitoring and certification as well as other companies active in the construction and health sectors.  

Can you please tell us about the development of Termikel?

Starting its production activities with the manufacturing of Thermo pressure cooker in 1950, Termikel manufactured the first rectangle oven with glass door, first mini-washing machine with automatic wringer and the first churn with eccentric belt. Today, Termikel has the Europe's largest built-in oven and hob plant. In addition to its approximately 2000 customers located in Turkey, the company sells ovens and hobs to a customer portfolio ranging from Australia to Chile, England to the Middle East.We established our own plant in Germany in 2005. We have a sales force of 20 people there. In Germany we currently have 400 customers which we call kitchen studios. They sell Termikel products. This year we will start our operations in Australia with the Termikel brand. We have already established Termikel Russian practice. We have moved our own personnel to Buenos Aires in South America. By carrying the Termikel brand to different parts of the world, we aim to make Termikel a global brand. 

Where do you have plants exactly and what products do you offer to which customers?

Completing our plant in Ankara in 2009, we have taken into operation one of the largest and most modern facilities of both Turkey and Europe. Termikel carries out its production activities in its new facilities of 45,000 sqm which has been built on an open area of 60,000 sqm. The company has a manufacturing capacity of 1.5 million built-in and free-standing ovens annually, which allows the firm to offer quick services not only in Turkey but also in the entire world. Operating as a supply industry plant, Termikel's second plant is based in Şefaatli, Yozgat. 

Termikel performs its sales and marketing activities via its different firms located in Germany, Russia and Argentina. The company manufactures all kinds of ovens, whether free standing or built-in, electricity or LPG or natural gas operated, with the Termikel assurance and at the international standards by expert teams in all stages from design to after sales services, in addition to making exports to more than 50 countries. 

What are your evaluations about the current position of the white goods industry in the Turkish market? What is the role of Termikel in this development?

The world appliance trade was realized at around USD70 billion in 2011. The recent crisis in European economies and Turkey's contrasting dynamic structure have yielded to upwards trends in Turkey's industrial production. The growth becomes stronger every passing year. Turkey's appliance export will also increase in parallel with its growing industry. Analyzing the share of countries in the world appliance trade, it is seen that Germany and Italy have the same share at 12%. We foresee that Turkey will reach a minimum share of 10% with its export figures in the coming years. This means a 15%-growth at least in the short run.

As a result of its recent investments, Termikel will continue to expand its operations. Market diversity and penetration into new markets will help us turn the crises in world economies into opportunity and we will increase our overseas sales. Our target is to have a say among major cooker companies of the world. 

Appliance supply industry firms manufacturing in Turkey should take cost-reducing measures. Measures relating to automation in production, reduction of overhead expenses and decrease of raw material costs would help them better compete against manufacturers from the Far East.

It is best to learn from your experience about the industries of different countries. Can you please make a comparison of the Turkish and overseas appliance industries?

The development of the Turkish white goods industry brings about the expansion of its supply industry. Turkish supply industry has recently improved its operations remarkably and is today competing well against European manufacturers in terms of quality, in particular. However, white goods supply industry manufacturers based in the Far East grow, as well depending on the development of the Far Eastern appliance manufacturers. They reduce their costs thanks to higher production volumes and enhance their competitiveness by making best use of the price advantage.

Appliance supply industry firms manufacturing in Turkey should take cost-reducing measures. Measures relating to automation in production, reduction of overhead expenses and decrease of raw material costs would help them better compete against manufacturers from the Far East. 

How much of your production output in Turkey is exported and to which countries are they exported? May I learn your opinions about competition conditions? Please do answer my second question from the perspective of countries and brands that you see as competitors both in the Turkish market and overseas.

Turkey's prospering economy, new demand of three million occurring in the domestic market each year and growing overseas demand add us a sound competitive power. The economic recession that broke out in Europe increased our firm's competitive strength in the European markets. Our modern production facilities and high production volumes are other factors improving our competitive position. We hold the capacity to easily compete against the Far Eastern manufacturers, which are among our major rivals. 

Can you please tell us a little bit about Termikel's long-term objectives? In order to allow supply industry firms to anticipate new developments, can you please also mention about new product ranges?

In line with the decisions taken by the European Union, the Eurozone aims to achieve a saving of EUR100 billion annually with 20% energy efficiency until the year 2020. New developments are taking place as regards the environmental policies, as well. In face of these developments in Europe, Termikel's R&D unit now designs environmentally-friendly products with high energy efficiency. These features accompanied by advanced electronic facilities will be more significant in products to be manufactured in the coming years.

We have started to manufacture chimney hoods only this year. Once their production volume increases, they will attract more attention, as well. Termikel's chimney hood models, developed to meet the needs of the upper segment consumers, will particularly be popular in European markets. 

I know Termikel cares a lot about sustainable development, innovation and energy efficiency. Can you please inform us about recent developments in this area?

In order to carry on their manufacturing operations for years, the manufacturers have to improve themselves constantly. Any halt in development is regarded as backward movement in today's world. Under current circumstances the development means innovation, in other words "making inventions". "Making inventions" is a well established aspect of the Termikel culture and it has already allowed us to develop our operations. From hereon, not only the appliance industry but also all the other electrical device manufacturers have to concentrate more on energy efficiency. Energy has become really valuable. Energy efficiency must be a top agenda item for all companies and their R&D units. Termikel aims to manufacture products with superior energy efficiency in the coming periods.

What are recent developments about your R&D activities?

Proceeding to become a global brand, Termikel attaches much importance to R&D activities. As our export network is very wide, our R&D efforts should take into account the expectations of both local and overseas customers, in addition to keeping abreast of modern global trends and meeting requirements in different areas such as energy efficiency. Amidst all these various factors, Termikel never compromises its quality and performs R&D activities with an innovative approach considering varying customer expectations. 

In accordance with the "National Quality Movement - Goodwill Agreement" signed between Kalder (Turkish Quality Association) and Termikel in 2011, our firm aims to implement the concepts of "Total Quality" and "Excellence" in all its entities. By implementing the EFQM Excellence Model at our company, we intend to constantly improve our relationships with all the stakeholders ranging from suppliers, employees to customers. 

What was your global purchasing volume in the world in 2011 including Turkey?

In 2011 we purchased at an amount of TL105 million. 

Is an increase expected in this figure in 2012?

As our product range has grown, we have started to manufacture chimney hoods and, as a result, we have higher sales targets in 2012, we expect that our supply turnover will increase at 60% over the previous year. 

What is the main expectation of Termikel from supply industry firms in the scope of purchasing processes and what are your criteria?

Our main expectation is that the suppliers provide us with products in a timely fashion that comply with quality specifications. 

At what point do you mostly encounter problems with your suppliers?

Inconsistency in quality and pricing fluctuations are the major problems that we face. 

May I ask you to make a comparison of your foreign and local suppliers? If there is superiority on country basis, where does it stem from and what exactly are they?

The added value that local suppliers give to Turkey's economy is very important for us. Termikel's ultimate goal is to contribute to the development of the domestic economy. On the other hand, we make exports from different countries. In terms of logistics and quality Europe-based suppliers surpass others. 

Does Termikel carry out joint works with its suppliers and at what level are they conducted?

We make constant exchange of information about R&D and quality with our suppliers. We aim to increase our own quality together with that of our supplier. We always regard our suppliers as our business partners. 

How do you make sure your suppliers are aware your expectations? Do you give any assurances for encouraging them to make investments? How do you support your supply industry, in particular Turkish supply industry? We know you care a lot about the use of local parts.

We meet our suppliers on a regular basis and inform them about our production plans and targets. Our quality department visits the premises of our suppliers and monitors their production activities. 

Are there any foreign suppliers which have based their operations in Turkey upon request by Termikel?

At the time of overseas fairs, in particular, foreign supply industry firms not present in the Turkish market contact us in order to sell their products and manufacture for us. We assess those suppliers which have the capacity to meet the qualifications specified in our purchasing specifications. Apart from such relations, we mostly prefer to work with local Turkish firms. 

What is the ratio of local and foreign suppliers in Termikel's manufacturing activities? (If the ratio of Turkish manufacturers' products is lower, what can be done to increase their share?)

Our products utilize local parts at 80% and raw materials originating from abroad at 20%. 

What are your policies towards your suppliers? Are there any messages that you would like to share with them?

As a firm exporting majority of its production output to European countries, Termikel cares a lot about high quality standards. We desire that our supply industry should grow hand in hand with our operations and we support them in different areas. 

We have been regularly consulting your opinions for the preparation of the Strategy Paper for White Goods Supply Industry, but I will ask you to share these with our readers as well. What are your expectations from the Strategy Paper? Which topics should absolutely be covered in the Strategy Paper in order to ensure the project serves to the best advantage of the Turkish white goods industry?

I am very pleased to contribute to the preparation of the Strategy Paper for the White Goods Supply Industry. In today's world, prior planning is a sine qua non for success. The Strategy Paper is a requisite for healthy growth of the industry. Lack of strategy is not a shortcoming, but a fault. The finalization of the Strategy Paper will help our industry grow faster. 

The paper will dwell on different topics. However, as to me R&D emerges as the top priority topic. The incentives granted by the Turkish government are more relevant for larger firms. Amendments should be made to these regulations and incentives should be made available to those R&D centers set up by the consortium of smaller firms and to R&D units of medium-sized companies. The existing R&D centers make best use of such incentives in expanding their activities; however, the SMEs cannot effectively benefit from them. This problem must be resolved immediately. 

What are your opinions about BEYSAD and what do you expect from BEYSAD? What can BEYSAD do for main industries in addition to Strategy Paper?

BEYSAD was established in order to bring together different strengths. We appreciate BEYSAD's activities. I believe BEYSAD guides its members successfully. It is possible that we sometimes fail to detect the shortcomings in our businesses. Operational blindness prevents people in the business from seeing certain mistakes. It might be necessary that people from outside should warn them about shortcomings. I believe BEYSAD is in the best position to perform this role. BEYSAD members should see one another as members of a family. They should support each other, tell them about their shortcomings. Industrial meetings might be a useful platform for this purpose. All Turkish firms should assist one another. Our competitors are not our peers manufacturing in Turkey. We compete against overseas firms. We should take actions in light of this fact.

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