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Ömer Yüngül

TURKEY - Industry

Friendly Technology

CEO, Vestel Group

Bio

Ömer Yüngül was born in 1955, and studied Machine Engineering at Boğaziçi University. He is currently the CEO of Vestel Group. Other positions have included high-ranking engineering positions at Tefken İnşaat ve Tesisat, Metaş, Faz Elektrik, and Merloni Elettrodomestici SpA.

"The importance of Turkish goods in the international market place is growing, and this fact is undeniable."

White goods and consumer electronics exports have been expanding massively over the past decade. Is this growth sustainable in the long term?

Yes, it is sustainable. Good export potential based on technologies that occur in some sub-sectors bears great importance for the evaluation and diversification of the country’s exports. Turkey is a good manufacturing base for these kinds of products. There are a lot of suppliers around and it is a very competitive field. Therefore, I expect growth is going to continue at that growth rate.

What makes Turkey so competitive?

Due to its geographical location Turkey can provide an advantage for emerging economies. Moreover, the supply chain is very strong. There are a lot of small companies producing parts for it so the base is very strong. As a result, it is an accelerating product area.

“The importance of Turkish goods in the international market place is growing, and this fact is undeniable.”

Given this strength, do you foresee more Turkish brands competing with the more internationally recognized technological brands?

All of them should do well in Turkey—by themselves or as part of joint ventures, whether project based or agreement based. Those that came before, such as Bosch and Merloni, are very happy. They are expanding. They’ve shut down their factories in Europe and are increasing their production capacity in Turkey. I’m sure many other companies will follow, and if they do not follow, then they will form project-based agreements with other companies.

How is Vestel looking to further launch its own branded goods in early 2012?

We are very interested in local brands. We will probably continue buying those brands. When there is an opportunity, we will be there. In the last three months, we bought three brands from the UK. In that regard, we don’t know what the future will bring.

Would you say the UK is one of your main target markets?

European countries are our main markets. Nearly 70% of our export sales are carried out in these countries. Nevertheless, everywhere is our target—the Middle East, CIS, Russia, Europe, and North Africa for white goods. As for brown goods, the US will be added to this list.

Are you facing any competition from other emerging markets?

Once you reach a certain volume, competition is important, but your efficiency is much more important than that. I think we are in a strong position so we don’t fear these emerging countries.

Vestel has a very strong reputation for R&D, launching the first plasma-screen TV in Turkey. How do you evaluate the government’s plan to promote innovation within Turkey?

There a lot of countries where the government provides incentives for R&D. Making new investments, and the expansion of existing investments are beneficial for the country. Investment has been increasing year by year. This rate was 1% of GDP in 2010, and 3% in 2011. This is directly related to the government’s input. Since income is increasing now, and the government has also seen the effects of R&D on exports, it is putting in much more effort than before behind supporting companies’ R&D. If we reach the developed countries’ level of 5% to 7% investment, I think it will be positive. In our case, we have to do what the market needs. Vestel allocates 7% of its budget to R&D.

What role can Vestel play in reducing Turkey’s current account deficit through exports?

We can increase our exports, and if we have the opportunity to support some of the investments that Turkey is attracting it will be good, too. Since our volumes are increasing and the currency price is being re-evaluated, Turkey can be competitive, supporting huge quantities. At the beginning of 2012, the figures will be satisfactory for companies like ours to build supply chain organizations. This turn will have a positive effect on the deficit. Not a huge effect, but better than nothing.

What targets do you have for increasing exports in the medium term?

We will add new products to our range. Still, our market share is more than before. I think we will have 50% more exports in 2012 than in 2011.

What’s your current market share in Europe?

In electronics, we’re number three. I don’t think we can be number two, but we are going to firm up our position at number three. In appliances, we want to be in the top five. We are not there for the time being, but I think we will be in 2012, because we are making substantial investments to get there. Right now we are investing in new models, and they will be finished in the first quarter of 2012. This is going to affect our growth. We’re number one for TVs and number three for appliances in Turkey.

How would you assess Turkey’s customs regulations for exporters?

There is no problem. It’s much better than before, because the regulations are not as complicated as they were. The difficulties experienced in other countries are non-existent here. I think it is definitely better than Belgium and Russia. Every country has difficulties, but this crisis is going to change the rules. Everything is going to be simpler and it will positively affect exports.

A number of Turkish firms have been widely successful on the international stage with white goods and electronics. Would you attribute this solely to the supply chain within Turkey?

Yes, and we have good qualified people. Once you can produce quality goods at cheaper prices, that is enough to achieve success. As we all know, the importance of Turkish goods in the international market place is growing, and this fact is undeniable. Exports are the main power of our economy, from north to south, and from east to west. Many countries have increased their demand for Turkish products. However, in Europe, there are many rules in place to support consumer rights, and this means every product on the market is quality. Given that that is the case, the smart consumer will then choose the cheaper products. Brands are only important in developing countries.

© The Business Year – April 2012

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