Elcab Kablo Profil San. Tic. A.Ş. Board of Directors Chairman Nejdet Tıskaoğlu:
“I would like to point out that our company, which exports 40% of its products to 56
different countries, is aware that there are countless potential markets that could be entered in the world”
The world has been trying to deal with serious problems for the last few years. The long-standing civil wars-conflicts in the Middle East region, the pandemic that has been going on for 2 years and the latest Russia-Ukraine war… like all countries, Turkey has gotten its share of these hardships. The same goes for export companies … How is Elcab Cable, one of the important players in the cable sector getting through this process? We know the company is working towards diversifying its markets. Elcab Cable will be participating in the Light+Building,which will stake place in Frankfurt, Germany October 2 – 6 in line with this goal. We spoke to Elcab Kablo Profil San. Tic. A.Ş. Board of Directors Chairman Nejdet Tıskaoğlu about their company and their opinion of the current developments.
Could you evaluate the first six-month period for your company? Have your capacity utilization and domestic-foreign sales been accomplished in line with your goals? What is your projection for year-end?
Supply problems, uncertainties and rising energy prices that have increased with geopolitical developments are causing downward risks on the global economy to increase. The Turkish economy, on the other hand, has displayed a resilient outlook in the face of these adversities, and has maintained a strong course in the first six months of the economic activity year, with the contribution of foreign demand. Our company, which solves the problems with a realistic and forward-looking perspective and makes a conscious choice to base the company's mission on growth through investment, employment, production and export, continues with determination to implement its plans, projects and programs. As Elcab Cable, we keep features such as safety, performance and ease of use, which are indispensable principles in a product, among the main objectives of our production policy. Our company, which aims to reach more companies in addition to its existing customers, by increasing its production capacity and obtaining more products both in the domestic and foreign market, through fairs, various market research and customer visits, also makes it a principle to develop by following the current quality policies without sacrificing quality. When we consider production capacity and quality and sales and marketing effectiveness, unfortunately, most companies compromise on product quality in order to minimize costs and achieve lead times while increasing their production capacity not only on a sectoral basis, but also in general, or as a result of working with idle capacity even though the capacity is increased, this is reflected on the cost and as a consequence companies resort to unfair price increases. What is essential is to produce with quality and high capacity and to serve customers on time with appropriate, effective and efficient marketing strategies. As Elcab Cable, a company that has utilized its capacity and achieved domestic-foreign sales in line with its goals, I am of the opinion that industrialists should carry out their production activities in the light of these strategies, while our industry continues to grow and develop towards the end of 2022.
Some projections are being made that due to the supply of natural gas being reduced to some EU countries from Russia, this will cause production to slowdown or stop in some of these countries. How would you assess this situation? How much do you think exporting cables to EU countries will be impacted by this.
The global economy has been facing serious challenges since 2020. After the pandemic crisis that affected the whole world, the Russia-Ukraine war caused great difficulties in supply chains in all fields, especially in energy and food supplies, and as a result, many countries were forced to struggle with the highest inflation rate of the last 40-50 years. Our country, which achieved the fastest growth of the last 10 years with a rate of 11 percent last year, has portrayed a successful picture in overcoming all these challenges with strong performance in exports and employment during this restructuring of the global economy and decreased predictability period. In response to the projections that due to Russia’s reduced supply of natural gas to EU countries, production will slow down or stop in these countries, I want to point out that our company, which exports 40% of its production to 56 countries, is aware that there are numerous potential markets throughout the world that we could enter. The fact that the sector is confined to a small slice when exports to specific markets decreases, is entirely due to the past error of industrialists chronically positioning exports around only a few countries. This is why we should participate in fairs, make visits to permanent customers and conduct research and development activities to spread the risk and learn lessons from the adverse conditions we are in to increase the number of markets and expand our sales network. As in the example we have always given, if you put all your eggs in the same basket, you will lose them all with a possible blow from the place the basket is located. But if you put the eggs in two separate baskets and spread the risk, you will at least save half in the event of a problem. Therefore, the most effective and efficient solution, not only for our own industry but also for all industrialists and manufacturers, would be to reduce risk by spreading to different and varied markets without depending only on specific markets, so as not to experience any decrease in export figures if any adversities occur.
On the other hand, there are some positive developments in the Middle East region. Solid steps are being taken in relations with Israel, Egypt and Syria. How do you read these developments?
The adversities experienced in the previous years in countries that have a serious and important potential for Turkey caused these markets to enter a period of intense recession and a decrease in the export figures of many companies. As a company that can compete globally with the development system it practices by effectively using the R&D work it has created, the quality policies and the environment and people-friendly production policies it implements along with the technological advancements of our day; a company that produces economic solutions for the needs of the sector it is in, that produces in accordance with international and local standards, pays attention to customer demands and requests and is constantly in the process of developing and innovating; and as a company that appeals to both the European and Middle Eastern markets with the products it produces as a pioneer of quality, innovation and competition; as a company that follows a customer centric production policy and places great importance on export, we view the developments in the Middle East and the solid steps taken in relations with Israel, Egypt and Syria to be positive and hopeful developments due to what this will gain for our country’s export volume.
What are your thoughts on the Dollar exchange rate exceeding that of the Euro? Turkey exports mainly to the Euro zone. How will this affect your operations from access to raw materials to exporting?
When we discuss the fluctuation in exchange rates, we can say that as a company that supplies products to both the domestic and foreign markets, we can evaluate our domestic sales and exports from two perspectives. The supply of raw materials and commodities necessary for production is purchased in foreign currency and domestic sales are made in TL. Therefore, when we consider this from a domestic market sales aspect, there is a negative impact as a result of the depreciation of the Turkish Lira against foreign currencies and as this change is reflected on the balance sheet and prices, this results in a negative effect on our domestic sales. When we answer the same question from the export activity aspect, we can say that the situation is in our favor since the difficulty of implementing instant changes in the domestic market is not encountered in the international market, and our sales are made in foreign currency. However, whether a high exchange rate is really a serious advantage for exports is debatable since high exchange rates do not have a great advantage in exports because ingredients are foreign indexed and foreign currency based.