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Ümit Özdemir

TURKEY - Real Estate & Construction

No Project Too Big

President, Tekfen Construction

Bio

Ümit Özdemir graduated from Istanbul Teknik University’s Civil Engineering department, and began his professional career with Tekfen Construction in 1975. He worked in various positions until he became the Vice-General Operations Manager in 1988. He is currently the President of the company.

"Throughout the years, Tekfen Construction has accumulated significant experience in projects requiring advanced technology."

How has Tekfen evolved into one of the major world constructors since it was founded in 1956?

Tekfen Construction is the cornerstone of Tekfen Holding. It was founded in 1956 as a consulting firm, and later evolved into a contracting company. Currently, Tekfen Construction is one of Turkey’s leading international contractors, with a field of activities ranging from the turnkey construction of motorways, industrial plants, refineries, and petrochemical complexes, to power plants, pipelines, tank farms, satellite towns, and other infrastructure projects. The company provides increasingly sophisticated services with the support of its state-of-the-art steel fabrication plants and sister companies Tekfen Engineering and Tekfen Manufacturing. Since its inception, Tekfen Construction has been substantially involved in Turkey’s infrastructure development and contributed significantly to the Turkish economy. To date, Tekfen Construction has completed various civil and industrial projects in countries such as Iraq, Kuwait, Saudi Arabia, Yemen, Qatar, Oman, Morocco, Azerbaijan, Georgia, Kazakhstan, Uzbekistan, Bulgaria, Russia, Germany, and Turkey to the full satisfaction of its clients.

Which markets projects currently hold the most potential for Tekfen Construction?

Throughout the years, Tekfen Construction has accumulated significant experience in projects requiring advanced technology, with a particular focus on the petrochemical industry. Tekfen Construction has specialized in refineries, pipelines, tank farms, and platform topsides. With this track record, Tekfen Construction became predominantly active in areas producing oil and gas, such as the Caspian Sea region, the Persian Gulf, and North Africa. Tekfen Construction has undertaken projects for global energy companies such as BP, Eni, and large state-owned companies that require the highest professional standards. Tekfen Construction was very active in Iraq for 25 years before the war, and the country offers significant potential now that some stability has been achieved. Tekfen Construction now has the opportunity to re-open its Baghdad office and renew its registration. Currently, Tekfen Construction provides construction management services for BP in the Rumaila oil field. Undoubtedly, Iraq will be the shining star in the Middle East, with a number of new oil and gas projects.

“Throughout the years, Tekfen Construction has accumulated significant experience in projects requiring advanced technology.”

Which type of projects holds the most potential for returns on investment?

The kind of projects holding the most potential for Tekfen Construction are sophisticated projects in the petrochemical industry, pipelines, and motorways, where Tekfen Construction is able to provide value-added with higher profit margins. For higher competitiveness and profitability, Tekfen Construction aims towards turnkey engineering-procurement-construction (EPC) projects. We are taking strategic steps in developing the know-how of EPC and are focusing on the proficiency of our human resources, the company’s most important asset.

What impact has political turmoil across North Africa had on the company?

The al-Khufra-Tazerbo Water Conveyance System is a 400-kilometer section of the Great Manmade River Project (GMR). The water system was undertaken as a joint venture with our Turkish partner, TML, in 2006, and reached 70% completion by the time political unrest began in February 2011. The political and social unrest in Libya forced Tekfen Construction to cease all activity and leave the country. Our workforce was pulled out successfully, and we will not re-enter the country until conditions stabilize. The Turkish government has been in constant negotiations with the Libyan authorities in order to secure mutual cooperation, which would emphasize the role of Turkish contractors working in Libya. The total value of unfinished contracting amounts to approximately $17 billion. Tekfen Construction will re-open its branch office and is closely following the opportunities and new developments in Libya. We will resume our activity in the country when the right moment and project come, and hopefully continue our existing project. There are signs that Libya is moving towards a steady political situation and we believe that Libya will reap the benefits of international investment and aid, which in turn will yield opportunities in the construction industry in the near future.

What trends can you identify for the sector in the medium term?

The contracting/construction sector was hit harder than many other sectors, and several companies in the sector faced severe difficulties in 2009. The precipitous fall in crude oil prices from a high of $145 a barrel in July 2008 to $35 a barrel at the end of 2008 led to a slowdown in infrastructure and housing investments, and adversely impacted investments in the oil and gas industry in many countries. Tekfen Construction was not immune to the decline of economic activity throughout the world. Despite these challenges, Tekfen Construction has signed new business contracts and made additions to existing projects in 2009, and largely overcame the effects of the crisis in 2010 and 2011. In the medium term, we forecast slow and controlled growth in the construction sector, and Tekfen Construction will position itself accordingly. Tekfen Construction has embraced two fundamental principles while doing business. The first is a decisive, cautious, and sustainable growth strategy; the second is concentrating on our areas of specialization. Owing to an outstanding management philosophy, and not focusing on short-term success through a high-risk approach, we have moved forward decisively and steadily, without suffering serious repercussions. Focusing on businesses in which we are experienced has enabled Tekfen Construction’s rise to the top of the field and resist economic crises.

© The Business Year – March 2012

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