Could you talk about Nuh Cement?
As Nuh Cement Group, we have production facilities in Marmara Region, especially in Kocaeli, spanning from cement and concrete to building materials. We are one of the Kocaeli-based 80 businesses listed in Istanbul Chamber of Commerce’s top 500 companies. Ranked as the second city, following Istanbul in terms of tax volume, Kocaeli pays tax as much as the 72 cities combined. And we feel the pride of being one of the top three taxpayers in Kocaeli, the industrial heart of an extremely competitive region. With tax champion prize awarded to us in 2016, we also succeeded in being the leader in terms of economic value as much as the production and employment.
What are your targets for this year? What is your growth expectations for the industry and also for yourself? Do you think that your estimations at the beginning of the year match up with those of year-end?
As Nuh Cement, we target at a growth of around 8% for 2018. Political developments in our region, especially election during this year, do not disturb us. This year, the driving forces of the growth will mainly be public investments; especially large projects such as airport, highways, subways and city hospitals have a positive impact on the growth. With our investments in production capacity, product portfolio and service speed, we will continue to pursue our market share and growth targets oriented to the profitability. If we find attractive opportunities, local or foreign, we may consider acquisitions and/or new investment.
What items are at the top of your agenda for this year? What items are under your lens?
As Nuh Cement Group from cement and concrete to building materials, we substantially achieved our 2017 targets in terms of both production and sales. We safeguarded our cost leadership against the rising coal prices and exchange rates across global markets, especially, by the last quarter of 2016. In addition to the private investments, public demand was the driver of our growth in 2017. The most important developments for us were the capacity increase and modernization investments, resolutely pursued in our Nuh Cement itibacompany in 2017. With mill and silo investment which are currently in progress, we aim at significantly stepping up our daily shipment speed. Our priority in foreign markets was profitability in 2017, while for local markets it was to increase our market share.
Where do you want to see your company in the next 5 years? What preparations are you pursuing as of today?
In the next 5 years, we continue in capacity increase and modernization investments as well as we have a projection to grow at abroad (the USA and Europe). By accessing the final consumers of our target markets in the Europe and the USA, we plan to expand our balance sheet in terms of foreign currencies. Also, we plan to use alternative fuels and alternative raw material more and more, and to push down our cost base with the investments in the energy efficiency and cost reduction.
In operations of Nuh Concrete, a company of our group, our production of concrete increased by 17.6% in 2017 compared to previous year despite of the ever increasing fierce competition in our region. Our concrete plants continued to produce concrete for Regional Hospital, one of the largest public investments in the region, and for a port investment among the largest ones in the region.
Our company Nuh Building manufactures gas concrete, lime, thermal insulation boards, aluminum paste, alpha gypsum, generating around 10% of group turnover. Our gas concrete production makes up 15% of the market of Marmara Region.Our Nuh Building company launched aluminum paste and alpha gypsum plaster products in 2017, which is currently growing at an increasing rate. Aluminum paste is a material used as a leafing agent in the gas concrete production. In this respect, we feel the pride of our success in commercialization of an import product by using local resources, and being the only company which produces Aluminum Paste in Turkey and neighbors.
Nuh Building also finalized the works for commercialization of Thermal Insulation Board ThermoCube, developed thanks to efforts spanning two years, therefore, added a new product in Nuh Building product portfolio.
This product is used for thermal insulation of the buildings. As a distinctive feature than thermal insulation solutions available in the market, this product is produced by using local resources and is fire-resistant.
Our efforts increasingly continues to promote the use of this fire-proof product not emitting hazardous gases in the important buildings such as hospitals, schools.
Your business is in a competition-intensive market. What are you doing to increase your strength and what investments and activities do you plan, which will make you stronger in the future?
Our Nuh Cement company has ceaselessly ramped up its investments in 2017. We invested 120 Million TL in order to boost our cement production capacity and efficiency with modernization in our processes. With mill and silo investment currently in progress, we aim at significantly stepping up our daily shipment speed.
What works are you carrying out in terms of Corporate Social Responsibility and Sustainability?
Beyond our contributions in national economy, we support our community in education, culture and sports via our Nuh Cement Education and Health Foundation. In every academic year, we grant scholarships to university student, the number of which increases every year (currently more than 700). Under the “100% Educational Support” campaign, we had laid the foundation of “İzmit Nuh Cement Education Campus” in 2016, which we continued in 2017. Therefore, by 2018 we will increase the number of school constructed by us in Kocaeli up to 12. As aligned with ambitions of our respected founders, who left great marks in our company, we will continue to touch the future of our country’s children as long as we exist. In Sports, our corporation continued to support Rowing Club, which won great victories in Europe, and football clubs, which are the spirit of Kocaeli.
Our corporation’s success is the joint result of efforts of all our key stakeholders, especially our shareholders, together with our experience developed for more than 50 years. The power of our unity and solidarity, of course, stems from deep and long-term relations we established with all our employees with whom we have been working shoulder to shoulder. In this respect, we support and encourage our employees in their career path, with graduate studies and similar academic studies as well as both professional and competence based career planning, adapted to their professions.
What is the most important problem in cement industry, for you?
The increasing coal prices in the global markets, resulting fluctuations in energy costs and exchange rates significantly shapes the profitability and growth expectations of the industry.
What needs to be done to increase cement exports, by companies and the government?
Economy of the USA left behind by 2014 the impacts of contraction especially in the construction industry after the 2008 crisis. And we foresaw the increasing trend in this market, we have been closely following up, and accordingly positioned ourselves and today exporting to the USA around 1 million tonnage of cement. This corresponds to about 40% of the exports from Turkey to the USA.
The most important problem today faced by exporting plants in the global cement market is market demand not increasing in parallel to the capacity increases. Cement production capacity has seamlessly been increasing although we still see the impacts of the global recession since 2008 crisis. Such imbalance has been aggravating increasingly the competitive pressure on the producers. In the midst of such extremely competitive environment, we have been improving our logistics infrastructure in the recent decade and sustaining our strong presence in the global cement markets in order to achieve our targets. For example, while we had not exported bagged cement until 2013, because of contraction in bulk cement market, we revised our logistics infrastructure starting by 2013 and accordingly we began exporting in the once-unbelievable tonnages such as 45 thousand tonnages to the markets which had been mainly importing cement from the Far East. (Burkina Faso, Togo, Ivory Coasts, Cameroon).
And we launched low-alkaline clinker and cement which are produced by very few producers across the globe to attain a share from the USA cement market, as I said shortly before, and by this means, we positioned ourselves as an important cement supplier in the USA market. On the other hand, we accessed the niche markets which are even hard to find on the map via container shipment which is traditionally unfavorable in the cement trading due to high costs and currently we are supplying cement to these markets.
Has Turkish cement become a brand across the world? What should be done to reinforce it more?
Our plant is one of the most established and leading cement and clinker exporters of Turkey and provides 10% of the total clinker and cement export of Turkey and 22% of the sea export. We export clinker and cement to more than 50 countries and continue our works to expand into new markets. For new target markets, we focus on the niche markets. The USA is one of the example of such niche markets.
Our plants located by the sea, having our own port, a logistic infrastructure adapted to export, high quality product portfolio which meets quality requirements of world markets and a respected brand exporting for many decades in international markets gives us an unprecedented advantage in the midst of such fiercely competitive environment.
As Nuh Cement, we are decisive in strengthening our pioneering position in the global cement market with modern marketing strategies which will make us more competitive. For this purpose, we are also planning to become localized by establishing sales and distribution channels in our target markets.
Could you inform us about investments in environment and energy in the last decade? What have you been doing to increase energy efficiency?
In Nuh Cement, as part of environmental sustainability, we focused on the projects for reducing greenhouse gas emission in the recent years. In the recent decade, we implemented 66 Million USD worth of 14 projects, particularly recovery of domestic waste sludge, using industrial waste as alternative fuels, energy generation via recovery of flue gas and carbon reduction certifications, as part of environment and energy investments.
As a result, we steer new investments as a pioneer of the industry in terms of energy efficiency and take active part in joint projects with public authorities and undertake a mission of contributing in national policies. We are awarded with prizes by Kocaeli Chamber of Industry, Turkey Municipality Association, Ministry of Energy, Istanbul Carbon Summit. In the recent years, we start to come up with 966.000 ton waste that we literally using as a recovery plant, not with 4-4.5 million ton clinker that we produced. All these enhanced our brand value as a company which conserves the nature and environment. Of course, this year we continue to be awarded thanks to our management model guided by sustainable targets.
Nuh Cement is awarded with Grand Prix in 2017 Şehabettin Bilgi Su Environment Awards, organized every year by Kocaeli Chamber of Industry and open to Turkey-wide participations. In this respect, we feel the proper pride of being the first cement plant who is awarded with Grand Prix and receiving the 5th award in this area in the last decade, crowning our environment-friendly investments.