More than 450 Koç personnel take part in a Koç Group Strategy Summit held online this year to review and discuss Koç Holding’s medium and long-term investment strategies as well as new investment opportunities.
During his opening remarks at the start of the summit, Koç Holding CEO Levent Çakıroğlu said that conflict in Ukraine had further worsened supply-security worries. Stressing that ensuring the supply-side security of food, energy, raw materials, and manufactured goods has become a strategic-priority issue, Çakıroğlu said “Even though carbon emission-reduction through energy transition remains at the top of our energy agenda, the current situation is such as to make fossil fuels a lifeline. Rises in oil, natural gas, and even coal prices have reached enormously high levels. To be sure this situation does not adversely affect investments in renewable energy or new technologies: quite the contrary, it throws a spotlight on such investments as a way of achieving both carbon mitigation and energysupply security. Developments in energysupply issues demonstrate how on point our Carbon Transition Program is. We are committed to continuing our efforts in this direction. To make the Green Consensus a reality, billions of dollars are going to be invested in everything from transportation to energy-production, from building renovation to farming, and from hydrogen to carbon capture and digitalization. Some of that investment is also going to be used to support local economies in areas that are adversely impacted by these changes. It should be obvious that there are going to be great business opportunities in countries and sectors into which so much in the way of money and other resources are flowing.” While disruptions in precious and rare-earth metal exports and sanctions imposed due to the war between Russia and Ukraine affect all industries, automotives and electronics are particularly hard hit says Levent Çakıroğlu, adding that especially because of the automotives industry’s ongoing electrification process, supplies of rare-earth metals and minerals are going to acquire the same strategic importance as oil.
Levent Çakıroğlu: “In addition to our ventures in Turkey, we’re also investing in private equity funds outside the country”
Stating that a different approach was taken in last year’s strategic planning process, Çakıroğlu said “We assessed the strategic priorities of designated Koç Group companies on the basis of comprehensive scenarios. We conducted in-depth examinations of initiatives in which those companies could make big moves. In line with our vision of pursuing growth abroad, Arçelik acquired a 60% stake in Hitachi’s white goods business outside Japan. With an annual turnover of about a billion dollars, this new company owns nine sales/marketing subsidiaries and two production plants in the Asia-Pacific region and the Middle East. Just this year we also signed a most important agreement that will support our international growth vision. Under this agreement, Ford Otosan is buying the Ford plant in Romania, one of Ford’s most productive manufacturing bases in Europe. As the first successful undertaking by one of our companies in the international arena, this venture is a historic step forward in our corporate history. In addition to our ventures in Turkey, we’re also investing in private equity funds outside the country with the aim of eventually becoming a shareholder in the companies the funds invest in.”
“The important thing is to be as accurate as possible when predicting the future and to be prepared to deal with many different contingencies”
Noting that uncertainty and change are a part of life but that recent political and economic instabilities have taken the cloud of uncertainty into an entirely new realm, Levent Çakıroğlu said in conclusion “Sometimes developments take place faster or slower than expected or may evolve in unexpected ways. The important thing is to make the best possible calls based on what we know in order to be as accurate as possible when predicting the future and to be prepared to deal with many different contingencies. Through the Cultural Transformation Program that we’ve been conducting for seven years despite constantly changing conditions, we have acquired digital competencies, smart factories, agile management practices, a capacity for innovation and entrepreneurship, and a zero-based approach to budget management. The result is that we are able to manage change successfully and, as a group, demonstrate an extraordinary performance. Starting out with the assumption that change is constant, the Koç Cultural Transformation Program’s aim is to foster a corporate culture that is not afraid of change, embraces change, and leads change. We enrich the Koç Group’s inherently solid foundations and values with the addition of new competencies and values. We always adhere to a long-term perspective when formulating our strategic plans.”
Melih Poyraz: “Our task is to turn the ideas we create as colleagues into business models capable of competing internationally”
Pointing out that it is easy to create new business models by making the most of one’s own production and engineering capabilities, Koç Holding Strategy & Business Development Director Melih Poyraz said “Our task is to turn the ideas we create as colleagues by combining the different competencies found in our countries into business models capable of competing internationally.”
Adding that medical devices and digital health technology had been identified as one of the group’s focus areas based both on Arçelik’s experience with ventilators and on the trend towards remote patient monitoring and inhome care, Poyraz said “Through our Koç Yaşa Çok Yaşa company, which is affiliated with our Holland-based holding company, we’ll be focusing on digital health solutions while also managing the manufacture and export-oriented sales of medical devices such as HFOs, home ventilators, and bedside monitors. In addition, we have also begun to move in the direction of possible collaborations with digital health ventures in Turkey and other countries.”
The aim of electrification projects is not limited to Turkey but to expand into foreign markets as well
Turning next to the matter of electrification, Poyraz provided information about the latest developments saying “We’ll start seeing our E-Transit vans on the roads in the months ahead and before long Tofaşmade all-electrics are going to be out there as well. In order to have the benefit of WAT Motor’s electric motor, inverter, and on-board charge production experience on Ford Otosan’s Rakun project, we set up a new company–WAT Mobility Solutions–in which WAT will control a majority stake and our Opet, Otokoç, and Entek subsidiaries will hold minority shares. Poyraz also said that a network of electric vehicle charging stations would begin serving customers in July of this year and that the aim of electrification projects is not limited to Turkey but to expand into foreign markets as well.
Poyraz added that a venture capital fund had also been acquired so the group could invest in startups in Turkey. “This fund will grow our investable venture capital resources, will increase our attractive presence in the venture capital ecosystem, and will give us the ability to quickly invest in a large number of undertakings. The aim of this new platform is to support economically viable projects that our 105 thousand employees may come up with and to accelerate the process of turning those projects into commercial enterprises.”
“We target high-margin, highcashflow companies that have sustainable competitive advantages”
Stressing that they had begun investing in international venture capital funds in order to gain access to entrepreneurial ecosystems elsewhere in the world, Melih Poyraz also noted that their aim in this was to diversify investments by buying into funds that operate in different countries and vertical markets. Saying that their investment strategies weren’t just concerned with investing in startups but that they were also interested in making acquisitions that would contribute to their international growth vision, Melih Poyraz added “We target high-margin, high-cashflow companies that have sustainable competitive advantages in sectors whose growth potential makes them attractive.”
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