The public knows very little about you. You are the CEO of Çalık Holding and the Prime Minister’s son in-law. This is about all the public knows about you... If you like we can start from the stage you entered Çalık Holding...
I started at Çalık Group as a finance specialist after my graduation in 1999.
Which school did you graduate from?
Istanbul University, with a degree in English Business Management.
Was Çalık Holding your first step in your professional career?
I had actually worked in a variety of companies in my final year at university. But yes, my professional career began at Çalık Holding.
You were 21 when you started at the Group, weren’t you?
Yes, I was 21. Those first years were a great opportunity for me in terms of gaining experience. During the 2000-2001 financial crisis, our finance manager resigned, so being the assistant finance manager, I was appointed as the acting finance manager of Çalık Group. At a time of financial crisis this was a great responsibility and from that I was able to gain a lot of very valuable experience. For example, as you know, after the incident in the National Security Council on the 19th of February 2001, the crisis became more serious and the devaluation period started. Just three days earlier we had restructured most of the group’s debt on a more long-term basis. Overnight interest rates reached 7500%, but because of the restructuring we were in a good position.
However, immediately after this key experience you decided to leave the Group to do your PhD in America...
I wanted to complete a PhD so that I could further my career academically. To do this I went to the business and financial capital of the world, New York. At the time many people were saying “you have just been promoted; you are in a new position, why are you going”; and it certainly was not an easy decision to make. However there are times in people’s lives where they have to make decisions looking at the long term. Even though it was a very positive period for the Group, especially after our successful financial operations during the crisis, I wanted to take this risk to better myself. It was a very difficult but at the same time a very enriching period for me; when I look back now, I’m glad that I did it. I gained a great deal of knowledge in New York, not to mention career development.
Hadn’t you gone to America for your PhD? I understand the academic part but how did the career development come about?
Well you see... At a time when I was focused solely on my schooling, Çalık Group made a proposal to start operations in the US in 2002. This meant I had to make a critical choice, because it would have been very difficult to continue with a PhD and work at the same time. Ultimately I decided to take a break from my academic studies. While I was working, I was subsequently able to start an MBA part-time, and completed it. I worked and continued my education at the same time – it was a very intense period. The work itself was intense too - in 2004 and 2005 we had a successful road show for the Tüpraş bid in New York, and we were involved in the projects for the Group in the textiles and energy sectors. Initially I was the Finance Manager, then the Finance Director and finally the Country Director. After that I returned to Turkey and became the Group’s Assistant Financial General Manager. I remained in that position until 2007.
THE RESPONSIBILITY THAT COMES WITH THE POSITION
Later that year, you became the highest professional manager in the Group, the CEO. I believe you completed an important financial operation just before you were promoted...
Yes, I believe that 2007 was a benchmark for us and for Turkey because the export of Eurobonds started. The experience that I gained during those years opened a new path for me. We made arrangements on a short-term basis because 2007 was considered to be a touchy year due to the elections. It was a period where the Group strategically had to make very important decisions, and take the correct actions accordingly. Because of this we went through a period where serious strategic planning needed to be done. Then we had to convince the board of directors... After this was achieved, the planning for and launch of the Eurobonds export program was carried out with a high calibre team. We reached a very successful level of Eurobond exports within a short two-and-a-half month period, with a young and dynamic 7-8 man team. During the road show period, we met with close to 100 foreign investors one by one in a single week, and achieved one of the most successful bond exports in Turkey’s financial history. Think about it; in 2001 our government was having problems with a 300 million dollar debt in the markets. Just six years later, we achieved an export of close to 1 billion dollars, as a company in Turkey in a year where there were two choices and where market analysts were calling it a risky period. After this success, there was at that time no one in the General Manager’s chair, and so I was appointed to that position.
The thing that is most commonly heard is “he was able to become a CEO in a large group like Çalık Holding because he is a relative of the prime minister”...
Yes, I know that this kind of talk is common.
Well, don’t you have an answer for this?
Actually I don’t believe that an answer is really necessary. My question is, what’s more important - being in this position at this age, or being able to do the job? The things that failure takes away are far greater than the things that success brings. Especially if there is a “title” being held over your head… But in brief: I had started working at Çalık Holding long before my relationship began. Also I started at the lowest level... I was appointed to this position by completing every responsibility and soaking in the experience necessary. When you look at it from this point of view, I don’t believe that there is a need to dwell on the politics. I joined the Holding in its third year and have been in the Çalık Group for 11 years. So I have been here for 11 years of Çalık Holding’s 13 years. If you want to be specific, you could say that because of my many years with many firms both within Turkey and abroad, and the different positions I have had within the Holding, I probably know and understand the culture and have the most experience. When you think about it like this, I have a lot of critical experience regarding the company. There are many experiences and success stories that I can give as examples. For instance, how we managed the 2001 crisis... The crisis only had minor effects on the group because of the successful managers, treasurers and professionals taking the right steps at the right time and opening new avenues by using the positive opportunities.
What happened after you became the CEO of Çalık Holding?
As I mentioned before, it has been 13 years since the Group became a Holding and I have been with the Group for 11 of those 13 years. I worked in different sectors of the Group for many years. Consequently, both before and after being appointed to the CEO position, I have been one of the few people who know the Çalık Group inside out. Of course there is an extra responsibility that being a CEO brings – that’s obvious; as CEO, there is a big difference between an ordinary employee failing and you failing. But my level of responsibility has always been high; it is normal for someone with more experience to carry more responsibility. Despite all the hardships we went through I believe that economically we were quite successful. We are now going through a period where we are growing and making a range of investments as a group.
What do you believe was your most important accomplishment during this period?
In terms of management, I gained enormous experience during the 2000-2001 financial crisis. With this experience, we took two important strategic steps before the present global crisis. The first was to enter the crisis with a correct strategy and sufficient liquidity. The second was to successfully sell stocks in 2008. In the last two years as Çalık Group we brought 1 billion dollars of FDI (foreign direct investment) into Turkey. I don’t think there is anything better I can do for this country, or that I can tell my children.
When you look at the present from the day that you became the CEO of the company, where do you believe is your greatest success, in the field of management?
Without a doubt my specialty is finance but when you are the top manager of a company, you have no choice to go beyond your specialty. As a professional manager I believe that you need to be aware of all areas of management starting with Human Resources. I can easily say that merit and ethics are at the base of our operating structure. We evaluate people according to their merit and not their individual preferences. We are very sure of ourselves in this subject. In my opinion, neither merit nor ethics are enough by themselves – both are necessary.
What kind of a manager are you? What is your relationship with your employees? For example, can they walk into your office and talk with you comfortably?
It would be better if you asked the people I work with that question! As a top level manager, I can say that I am in constant contact with my team. I believe that I am as warm as I am as a person, but also as distant as I need to be as a professional, to everybody.
How is your relationship with your boss Ahmet Çalık? What do you think is his best specialty?
I have known Mr. Çalık for roughly 11 years and respect him greatly. Despite him being the connection between the Group and the leader… His experience, cool-headedness and entrepreneurial skills are an example to all of us.
Mr. Çalık successfully represents both the country and the Group with the enterprises and investments that he has started in Eastern Anatolia and abroad in the 1980s. At this point my personal belief is that Mr. Çalık is one of the most successful businessmen in Turkey.
A whole year has passed since Çalık Holding bought Sabah and ATV from the TMSF. This year was full of discussions about the sale process. For example Çalık Group’s bid was the only one despite the American private investment firm Carlyle and Nurol partnership, and RTL-Ipek-Sancak consortium being eligible to enter...
It is the right of those companies to choose whether they enter a bid or not. We met the requirements, we entered the bid and won.
750 million dollars of the 1.1 billion dollar bid was covered by the 2 public banks, VakifBank and Halkbank. This has created substantial public discussion which is still continuing...
We met with many foreign and local banks and firms about the financing of the purchase of ATV and Sabah. No firm will invest in a firm which is not worth investing in. In a free market at the point where supply meets demand, the idea is to bring the best supply together with the best demand. We did not give precedence to any banks during the proposal period. To date the Çalık Group has worked with many domestic and foreign banks and still continues to do so. For example, the European Bank for Reconstruction and Development was a part of the foreign consortium which we signed a 100 million Euro finance packet with around that time. In Turkey many groups in different sectors receive larger sums for financing their investment projects. Another important factor here is the credit history of our company. The history of the borrowing customer in the finance sector, as well as the projects that they will undertake afterwards, are also very important. The Çalık Group is trusted in Turkey, and is one of the few companies who repay on time or is known for closing the balance early. So to approach this from a different angle would only be in order to harm the honor of the Çalık Group.
There were a few allegations made about these loans. The price of the security that you showed was only worth 100 million dollars and not 975 million TL.
These are things that do not hold any truth to them. As soon as these claims were made, we proved that they were false. We used these as credit for the purchase of a 1.1 billion dollar trade which was determined by the TMSF. To receive the credit, we used the full value of the security that we had. Every stock, brand and property the company owned was mortgaged as security. The revenues of the company were given to the banks and the accounts were frozen. All properties were placed under first degree mortgage. Also a 150 million dollar trade capital was added to the total making it 1 billion 250 million dollars. To add to these, many other applications took place which I haven’t mentioned. In sum, these claims are false – and let us not forget that there is a 5 billion dollar group behind the 750 million dollar credit.
You mentioned earlier that you entered the current crisis with sufficient liquidity. How is the financial situation of the company at the moment? Is there a possibility that you may have some problems in making the payments due on the above-mentioned loan?
Last October we made the first payment of the interest. We made the second payment before the due date in April, amounting to 62 million dollars. We deposit the money before the payment and freeze it. So there is no way that we could have a problem with the payments.
One of the biggest criticisms aimed at Çalık Holding is the Samsun – Ceyhan pipeline and that it was given to the group without a bid...
The Çalık Group has had a lot of valuable experience since the 1990s relating to the region’s geography and politics. As a part of this the project has been carefully considered. The project carries great importance for Turkey’s energy politics - it was approved by the President at that time, Ahmet Necdet Sezer, and the National Security Committee. It is a project requiring substantial investment which has the necessary approvals and licensing for our energy company Çalık Energy to complete it. Therefore there is no project to be bid on. Also the government carries absolutely no risk on this project. The full risk and investment is covered by the consortium that we created. This project will provide the country with great benefits in the international energy arena. It will also contribute greatly in the forms of employment and in added value to the country.
What is the latest situation with Samsun-Ceyhan?
It is still continuing as it has a massive team and is a long-term project. We will have completed most of the engineering and structural work this year.
The Çalık Group has been known for the bids that it has won to date. But there were many important bids that it lost... For example Tüpraş, Petkim, Başkent Doğalgaz and Telekom... What are your views on this topic?
In these bids our competitors put in higher bids and won. We fought to the end but ultimately lost. However I do believe that we contributed to the competition which helped raise substantial sums for the country from the sale of its property. This can be seen in two of the bids. And we can see, with the benefit of hindsight, from the investments made, that the companies that won those bids were the right choice. In the end all of the big groups in Turkey abide by the same laws during these competitive situations.
What do you believe is the greatest strength of Turkey’s economy during the global crisis that we are in?
We really do have a very young population. I believe that we have an advantage against more advanced countries due to their ageing populations and the decrease in their working population. I see the finance sector as very strong due to the lessons they learned from the 2001 crisis. They are like the heart that pumps the blood. The reality behind the people who say that the crisis will continue for quite some time is: a bad economic episode happened, as it sometimes does in a capitalist system. Investment banking died and various leverage instruments came to an end. But in a world where the derivative markets collapsed, the Turkish finance sector is still on its feet. The other countries that need to rebuild their systems, create trust and start to use credit again will find that takes some time. So I believe that Turkey is a few steps ahead in this situation. The other thing is the geographical advantage that the country has in terms of energy pipelines. Until the year 2000, I used to think of the world’s economy as a single motor airplane. When the USA kept the economy active, then the motor spun fast, and when there was a pause the plane began to fall. But from 2002-2003 onwards a new process began. Turkey is such an important point that 70% of the world’s hydrocarbons are here. As you know since 2002-2003 oil prices have seen a huge rise. Where oil was 18 dollars a barrel in 1997-1998, it reached 147 dollars in July 2008. The meter cube price of gas has rocketed from 50 dollars to 600. This region has great liquidity and the region’s innovations provided a breath of fresh air for the world’s economy. This region with these innovations has literally formed the second motor on that plane. The increase in liquidity also brought about great investment opportunities in this region. A simple example: the total work portfolio of Turkish contractors has now reached $10 billion when it wasn’t even $1 billion in 2003. Turkey is third after China and the US in construction. This period has provided Turkey with many great opportunities, and I believe that these opportunities will grow.
Okay, how about the weakness of the country’s economy...
I don’t think that Turkey has expressed itself, its strength and its potential as it should. We need to develop the way that we present ourselves.
“WE SHOULDN’T FORGET THAT WE ARE ALL IN THE SAME BOAT”
Economics is a social science which is based on more than 50% perception. I have always believed in this. Let’s take a look at the recent crisis. It rocked the USA in 2008, but the market has been expecting a recession since 2004. Greenspan, at that time the head of the Federal Reserve, managed to delay the crisis for four years in the US with his optimist speeches. But with us, the views were always pessimistic. For example during November, December and January... perception was affected negatively in Turkey. You could say, political or social, they always show you that the glass was half empty. If you look at the situation that Greece, Spain and Austria are in, Turkey is really in good shape. It would have been a lot better if we hadn’t pumped out the negativity for those 3-5 months. During that period, anyone who had money withdrew. When there is no demand then sales decrease. When sales decrease then production decreases and when production decreases, it creates unemployment. Therefore then amount of people who spend decreases and this vicious circle causes the economy to start shrinking. But I don’t believe that we really were affected that badly. February figures were bad but March was not as bad. April will be better. Starting from summer, things will start to settle. Winter months are always low. I believe that we have seen the lowest capacity usage figures and that they will slowly start to rise. In conclusion, I am trying to look at the figures in a positive way. So everybody needs to be positive because we shouldn’t forget that we are all in the same boat.
THE CHAMPION SHOULD COME FROM ANATOLIA
I read on a website that when you were young you played football very well; that you played for Çapaspor’s star team and were chosen as the player of the year. Is this true?
Yes, they used to say that I was a good player. However it is difficult to study and be successful at football so I had to give it up.
Do you still find the time to play? Perhaps with friends at an indoor football field...
I haven’t been able to play for a long time unfortunately.
As a spectator, what are your views on football?
You know that we are from Trabzon. And I am a good Trabzon supporter. I try to go to as many matches as I can.
Do you go to the matches in Trabzon and away matches?
I rarely get a chance due to my workload.
Okay, do you believe that Trabzonspor can be champions this year?
I certainly hope so! If it can’t be Trabzonspor then I hope it will be Sivasspor. I think that an Anatolian team taking the championship would benefit Turkish football, as well as the economy of that region. Unfortunately in a situation where only three Istanbul teams realistically have the chance of becoming champions, it doesn’t leave much room for Turkish football to develop.