Spin it to win it

The Kanık Group of Companies serves a variety of sectors through its three subsidiaries: Özka Lastik, İlka Plastik, and IRC Automotive. What major competencies do these companies share?
Kanık Group and its subsidiaries manufacture based on a fully domestic capital model. All of our subsidiaries are large exporters to the world’s major markets. We also create our technological infrastructure ourselves and produce our own machinery in-house by Turkish engineers and workers in our R&D units, without having to import. Looking to our three subsidiary companies, there are obvious common features between IRC and Özka—IRC is in the automotive sector and Özka is in the tire sector, an automotive sub-industry. Also, Özka provides some raw materials to IRC. Second, there are major competencies between tires and plastic—the sector where Ilka operates. Plastic factories produce some of the mid-products used in production of tires. All three have connections to each other.

Could you break down Özka Lastik’s revenue by sector and where you expect to see demand growth in the near future?
Özka Lastik manufactures tires in the fields of agriculture, construction, logistics, and defence with a daily capacity of 130 tons in the categories of garden/field, trailer, tractor, combine harvester, construction machine, forklift, pickup/van, and military vehicle tires. Whereas 72% of our annual turnover is from the agricultural group and 25% is from the industrial group, the group that produces pickup and van tires constitutes the 2% and the defense industry 1% of our annual turnover. In the agricultural and industrial group, radial tires constitute the 25% of our total turnover, while the conventional tires constitute 75%. According to the market research we have carried out, we have found out that the agricultural tire market we are involved in has a market share of 60%; the industrial tire market has 33%; and other OTR tire market has 7%. It is projected that these shares will be stable in the near future. However, in the near future, a growth in the radial tire production is anticipated both in agricultural and industrial tire groups, mainly in European countries and all around the world. We also aim to increase our work on the defense and aerospace industries in the future. They are difficult sectors to work in, but they are areas where we have capabilities and would like to expand.

IRC Automotive exports 90% of its products. What hedging strategies do you employ to shield the company from an individual market’s auto sales slowdown?
Although the vehicle sales are stable in the current business cycle, a decrease in sales are anticipated in the long term. That is a factor that will cause economic stagnation. One of the ways to cope with such a global effect is to diversify the market strategy as much as possible. Today, more than 90% of our total sales are from exports. We have a system that watches and monitors world markets in our sector constantly. As a result, we have diversified our markets.

What are your plans and primary objectives over the next 12 months?
Our goal for Özka Lastik is to increase our market share in the markets we are involved in and to enter new markets such as Latin America. By continuing with our success from 2018, in which our exports grew by 440%, in 2019 we plan to reach our goal of a turnover of TRY681 million. With our new investment that will be completed by 2020, our daily production capacity of 130 tons will be increased by 55%. By being able to produce 200 tons a day, we will be able to meet the needs in current and new markets.