Enhancing Its Energy Identity

In addition to contracting projects in industry and infrastructure Alarko Holding, where second generation executives are now more active, is enhancing its active player identity in the area of energy. Alarko who intends to further highlight its active player role in the areas of both energy production and distribution in 2013, will also be closely interested in the hydroelectric power plants (HES) to be sold by the private sector.

The second generation and the professionals are now active at Alarko. Energy appears to be gaining increasingly more importance in the future of the holding company managed by CEO Ayhan Yavrucu.

Stating that attention must be paid to the price competition among Turkish companies in foreign markets due to the crisis in Europe Yavrucu said, “Turkey will lose if Turkish companies engage in competition and knock-down prices.” Yavrucu also explained the objectives determined for Alarko for the near future.

GROWTH PROSPECT: Our investments will provide employment to 2 thousand 200 people. We are also planning to provide employment to 2 thousand 500 – 3 thousand people in contracting projects we have undertaken and which we will start in 2013. Turkey will attain a growth rate of 4-5 % in 2013 and Alarko is aiming to grow at a rate of 15 %.

INFLATION: While preparing our work programs for 2013 and 2014 and our budgets that are the numerical documents of these programs, we have foreseen an inflation rate of 6,8 % for 2013 and 6,5 % for 2014.

INVESTMENT PLANS: We are planning to complete our investments started in 2012 at the Karakuz Hydroelectric Power Plant by the end of 2013 and to start power production. This investment is approximately 100 million dollars. Our other important investment is the imported coal fired thermal power plant with an installed capacity of 1.300 MWe we will establish in Karabiga, Çanakkale. We estimate that this investment that will start in February 2013 will reach approximately 1-2 billion dollars.

EUROPEAN CRISIS: We planned our work programs based on the assumption that the crisis in Europe will continue in 2013 and even in 2014. Not only is there no amelioration in the economic parameters published in the European region, but there are new countries joining those in trouble. The last figures from Poland show that Poland is also getting into the crisis spiral. The B plan here is, first of all, to maintain our share in this market through marketing strategies and competing in price and quality or at least to continue with the least amount of loss. What is of importance here is the price competition among Turkish companies in the foreign markets. Turkey will lose if that is the case.

EXPORT TARGET: The strategy we will follow to cover the possible losses in market share in the European market is as follows: Our partner Carrier has a distribution and sales network in almost all regions in the world. Hence, we have quite an in depth understanding of the market. We are planning to increase our exports and overcome possible problems by including new products in the variety and quality required by this network into our production lines.

PUBLIC OFFERING: We have no plans for public offering in 2013. However, in 2014, when we are finished with investments at Altek, one of our companies active in the are of energy, this can come on the agenda depending on the conditions of the day.

FOREIGN PARTNERSHIPS: We have no plans to make partnerships with foreign companies in the near future. We have some such requests from time to time. Interest in Turkey and our group is continuing.

ACQUISITION: In 2013, our group will continue to grow inorganically and make use of opportunities arising. We will show particular interest in tenders related to the privatization program in the areas of energy production and distribution. Moreover, we will maintain our interest in the hydroelectric power plants that the private sector will hand over.