ŞENİZ KIZILDAĞ
BOARD CHAIR, KIZILDAĞ HOLDING
You are a company acting in the cement sector for 25 years, and have combined all the values you earned under the management umbrella of Kızıldağ Holding. In your opinion, how does the close future of the sector look?
Quality Control and R & D sector are a toddler, not even a juvenile, in ourcountry. It is a sector where statements are just slogans, the legislation thereof is passed around, and even its name is not clearly decided on: Surveillance? Supervision? Audit? Control? Inspection? Examination?
That’s why we have taken all our values under an Holding Umbrella, and no matter what others say, we try to follow and implement the standards of this global profession that is older than a century.
Turkish cement sector is located in a very lucky region both geographically and geologically in comparison to its competitors in the world. Both our country and our close neighboring countries show highest population increase and almost all these countries are in the league of developing countries. A development without cement is unthinkable. Therefore, such a market is already there around us. Our neighboring countries have been suffering devastations of wars for years, and when wars are over, a new re-constructing starts. In such a cycle, our cement factories will be needed.Our geographic location provides key advantages to such countries in terms of logistics costs.
We are a country geologically rich in raw material used in cement production. Sources of some factories are almost natural cement. You competitors have no such advantage. Cement factories in many countries import raw materials. On the other hand, cement factories in our country generally built next to raw material resources. The cement produced is very much higher quality beyond the world standards. Therefore, we hold the capacity of a leader; at least, we are the leader in quality. The most important issue for our cement factories is costly energy.
Despite all above-mentioned advantages, our sector started to lose its leadership position day after day in the last 15 years. The countries, which were the largest markets for us, became our greatest competitors. For instance, Egypt was our largest customer; now, she is our primary competitor. We had to share the market with them. Whereas 15 years ago, cement prices were raised up to 125 Dollars, but recently, dropped tp 25-30 Dollars. Currently, it is in the range of 30-40 Dollars. This is an extremely desperate situation. It puts all factories in depression, and delays investments. The primary reason for being in such positions is to fail to follow a rationalistic national policy; we have privatized many factories without a visionary strategy – even, handed them over to our competitors. In other words, we failed to foresee the future. Most of those factories acquired by foreigners indispensably had to follow policies of foreigners. No one accepts the mistakes done. However, in a close future, I forecast that wars gradually will come to end and a new investment process will start, particularly depending on the election results in USA. The need for cement will pick up again and the prices will raise.
In terms of economy and health, what was the impact of pandemics on surveillance and quality control companies?
Pandemics effected us in two ways. We have 4 companies under the holding umbrella. Two is laboratory and the other two surveillance companies. Since laboratories are stationary, we applied short working hours. However, we neither cut the number of personnel nor lowered the wages; on the contrary, we employed new personnel. Nevertheless, the work area of the surveillance department is most of the times ports, it was not possible to apply short working hours. For sea vessels do not care about pandemics. Crew lists come from the ships waiting offshore, their body temperatures are measured, a quarantine team goes abroad, and if there is no pandemic, ships come to ports one after another. As part of our job, we are after keep track of ships on full-time basis.
What is level of surveillance and quality control sector in our country comparing to other developed countries; where are we in terms of competition?
When we are overseas, we get the chance of working together with our competitors. As far as what I observe during such times, the surveillance companies in Turkey with the awareness of accreditation are much more better than their competitors in Europe. Our engineering knowledge is much advance and our engineers have much more better professional knowledge and experience. What they do out there are much more superficial. However, they have specialization, which we don’t. That is one of the most important issues for us. Our surveillance companies handle every type of work. Someone, who is at an iron and steel loading today, may go to a grain unloading tomorrow. In Europe, it is not like that. They work much more specific cases. Sampling cement, analyzing it, ship surveyor are all handled by different personnel. In our case, all work is handled by only one personnel. Therefore, our personnel are much more trained and qualified. Nevertheless, we lack greatly in equipment and devices in comparison to them. Since our chance of access to technical equipment depends completely overseas, and also the taxes thereon, we get the same equipment they use by paying four times higher prices. Besides equipment, they have much better laboratory assistance than us; in other words, almost every port they have a laboratory. Presently in Turkey, there are about 180 surveillance companies authorized by Ministry of Economy. Only a few of all these companies have a proper laboratory. Matter of fact, we are one of them.
What are your problems in legislative issues, or what regulations do you want?
First of all, what we do almost every day is to tell almost everyone what our profession is. People thinks us a ship broker or customs broker. We carry out “surveillance” work. In Turkey, this profession is not named yet. The professional standards thereof are not established. Personally, I applied to the Professional Competency Board for this purpose, and even drew up our standards; nevertheless, the Professional Competency Board does not accept personal applications. They replied that applications must come from an institution or the governmental agency. For instance, our legal name presently is Inspection Body; if accredited, it is called Type A Inspection Body, and if not, Type B Inspection Body. However, on the field there is no difference between Type A and Type B. In other words, they both may do the same job. The only difference is that Type B ones cannot do radiation measurement. Actually, radiation measuring is not considered a work in our country. It is just one of the works handled when providing surveillance service. Because we measure it mercilerand report our findings anyway. After then, it is the responsibility of TAEK (Turkish Atomic Energy Authority).
Unfortunately in our country, getting accreditation means to be courage enough to get under the burden of heavy liabilities and costs. First of all, it is an obligation to raise the awareness of all of your staff for getting accredited. Afterwards, you are required to have all the staff go through various certification training courses and exams. Surely, they must be given practical operative abilities and skills.
All the equipment and technical devices we use will be maintained periodically and calibrated by accredited bodies. For every goods we analyze and for each parameter of every goods we have to keep certificated reference materials in stock. Each analysis must be started with the certificated sample O. The lifetime of the B certificated reference material is 6 months in average; meaning, once every six months we incur great expenditures. Certificates reference materials (CRM) are purchased from abroad. There are no professional producers of these materials in Turkey. If you want to do, there is no authority to authorize you. So, unfortunately we have to buy them overseas, and these materials come in small bottles of 50 gr; the cheapest one is around 400-500 Dollars. This is just for one parameter of one material. Let me give you a comparison; it is possible to buy a few property at Bosporus of Istanbul with the cost of certificated reference materials we have in the refrigerator of our laboratory – and these samples are not gold or silver. Most of them are biological masses like human or animal feces.
We have no assistance in terms of legislations. When purchasing such materials we pay additional customs duty, or they are unsealed and opened at customs just for the sake of curiosity – they don’t even know that they are not usable anymore when unsealed. Sometimes, they claim of illegitimacy, and not clear them; in either case, we lose money.
The most urgent issue is to form standards of this profession by MYK (Professional Competency Board) as soon as possible. Secondly, there must be certainly a difference between accredited surveillance companies and non-accredited ones in practice. Such difference is not there purposely just because of political interests; non-accredited companies are much protected and backed up. Whereas, the cost of getting accredited is much greater. In addition to the obligations mentioned earlier, an accredited company has to pay a share of 0.6 percent of its revenue (not out of its profit) to Turkish Accreditation Agency every year. I wouldn’t be surprised if Ministry of Transportation, Maritime, and Communication and Ministry of Ministry of Environment and Urbanization would ask their share in future.
The situation in the cement sector is not different. Sales or procurement managers of factories would not care whether a company they would work with is accredited or not.
Non-accredited ones has no liability, or responsibility, or investment requirement (employment, equipment, laboratory, etc.). They are not scared of competent authorities at all. They know that there is no efficient inspection performed. When an X company is imposed with banning penalty for unduly operation, its subsidiary non-accredited (Type B) Y or Z company comes into play. Therefore, when you are struggling with fine-tuned cost calculations for hours for getting a job, someone else says “It doesn’t matter whether it is worth to one cent”. Unfair competition is at the peak.
Well, are we crazy where they are smart? By working accredited, we subdue ourselves! Surely, we are not crazy. First of all, we act this way just because of the respect to ourselves, our profession, customers preferring us, the bread we eat, and most importantly, to our forefathers leaving this land to us. What else could we accomplish? We just act for the sake of leaving a global trademark that our successors would be proud of.
When do you think that business would pick up again particularly for the cement sector?
Businesses in picking up in the cement sector depends on the President Elect in USA. In other words, depends on ending of wars. Currently, we even have difficulties sending cement to Libya. Nowadays, our largest market is West Africa and Central America; for clinker exports. Our main market should be Mediterranean countries with various types of cement.
I think when the things get normal in the US, the wars might come to end gradually. For instance, in our neighbors, Iraq and Syria, cannons and machine guns will be quiet somehow. The devastation cycle will be replaced with a construction cycle. When that happens, our cement factories will surely start accelerating again.
You personally develop and invest in yourself for a long time. What have you done for the cement sector up until now, and what else in your objectives?
We have made a large investment of instruments up until now. Presently, there is no analysis that we cannot do in terms of raw materials and products of the cement sector. Matter of fact, we can even carry out the most sensitive analyses instantly and daily. Like the other laboratories, we don’t deliver results after 15 days – we just give results very next day. Furthermore, we have different technological approaches for the request coming from factories. For instance, we have put firstly GPRS and then drones into use for inventory measurements; we have two drones. We trained certificated drone pilots. Now, we started to use 3D scanners. We utilize them for measuring inventory areas. We have purchased Mobile XRAY Analysis instruments – we increase our investments day by day. We are able to provide much more sensitive and much quicker results. We also include 3D photographs and videos in our reports; nevertheless, there are some large companies using tape measures for taking measurements – like utilizing a polygon method. Such primitive methods are no longer in use. 3D scanners give you everything you want. By utilization of drones, you are able to determine volumes in large areas quickly and only in an error margin of millimeters. We have accomplished all these. One of the investments we will make in the coming period is the use of integrated mobile laboratories along with the stationary ones. Not only for cement, but also for thermal power plants – we have started to produce mobile laboratories for getting results instantly right at the entry or wherever they are required to be. Next year, we will install them for whoever wish to utilize. Moreover, we accomplished to conduct different test, such as TML, required in exports of fly ash, which was considered as waste for long years, or of clinkers, which were also called waste in the past and prohibited to import; this year, we will take such types of tests in the scope of accreditation. Investments never stop; as technology progress, investments will continue.
