Erse Kablo General Manager Selami Sivritepe: “The increase in productivity is the driving force for the economic growth of a manufacturing company.”
In the past year, Erse Kablo have been rising in the Electrical, Electronics & Services Exporters’ Association and Turkey`s Second 500 Top Industrial Enterprises List and draws attention with its investments in its production area and laboratories. Erse combines its success in both domestic and export with the importance it attaches to its marketing activities and the perception of trust it creates in its quality standards.
With the brand perception it creates in the sector, Erse Kablo takes pride in being the brand that gives confidence to its customers in the sector with its perspective on quality and marketing. We discussed the 2018 – 2019 views, the plans and the critical change in the sector with Erse Kablo General Manager Selami Sivritepe.
How do we leave a year behind in terms of the cable sector? What are your impressions and evaluations about 2018 for your company and sector?
As everyone has known, 2018 was a very difficult year for our country and our sector. The financial fluctuation and recession that started in August in our economy caused serious deviations in our targets within the following months.
As a result of this sudden change in the position of the Turkish Lira against foreign currencies, firms were dragged into a state of uncertainty, which led to the absence of a predictable projection, even in the short term. In this case, when the fund resources hesitate to fund the market, rising interest rates and the deteriorated payment balances, a sudden contraction in the sector and a decrease in market shares occurred. As a result, we felt more and more indirectly the effects of an unexpected negative change of the financing chain, which consists of many interconnected elements.
These are experienced in the domestic market; Although our exports supported all of their resources to overcome this economic turbulence situation, 2018 was a year of significant difficulties and difficulties in terms of exports.
The periodical tensions with the European Union, our main market; After the crisis with Russia, the conjecturally favorable course between the two countries is more severe than expected. The referendum and its effects in northern Iraq; Tax rates and restrictions imposed by some countries, such as Israel and Jordan, on Turkish cable manufacturers only; Supply and price increase problems on the basis of the producer in some of the externally dependent raw materials; Reflection of the USA and Chinese economic war on the markets; The uncertainty due to Brexit in the UK market is only a few examples of the challenges associated with external factors.
The actions taken by the firms to increase their export market shares in terms of sector led to the deterioration of the cash flow rate, which is one of the biggest advantages of exports, due to the supply of products in non-meaningful long terms, and the profitability rates that have progressed in a critical line have decreased further.
Even though I cannot present a refreshing picture for the last year, we started Erse Kablo in the past years, especially in the past five years, on the basis of the institutionalization, sustainability and quality management systems, we have spent a year in which we have completed our goals as a turnover, not in terms of quantity and tonnage but as a result of the sum of the positive outputs of our policies based on creating a strong company
In order to achieve this, we continued to maintain our strong domestic dealer structure in 2018, while remaining loyal to our growth rates determined in our exports; In both markets, we maintained our strategies for customer visits and we continued our strategies in our marketing action plans. On the other hand, we continued our investments in our production site and R&D activities. With this occasion, while we maintain our strong position and market leadership in the domestic market for the past year, we can express our admirable and visible progress in our exports to become a known and reliable brand in the Europe and Eurasia markets.
What do you think about the cable sector for 2019 and your company? Which subjects should be in the foreground for the sector and companies for this year?
First of all, I have to say that, unfortunately, the effects of the economic troubles we have experienced in the last year are still continuing and we expect that this situation will continue even though there are partial improvements. We do not expect the construction industry to recover before 2 years.
Our first priority in current market conditions is risk and finance management. It is of great importance that risk performance is measured regularly by defining risks, defining limits, determining limits and managing them within the framework of these risk limits.
The primary goal of the companies should be to overcome the inefficiencies resulting from their internal dynamics rather than to a growth based on artificial turnover and to increase their profitability by focusing on added value products and efficiency. The increase in productivity is the driving force for the economic growth of a manufacturing company. In order to achieve success in these priorities, we make measurements and feasibility studies, and we take care to reduce the margin of error according to the feedback from our customers. We regularly evaluate the performances of our workforce and machinery. With the importance we attach to our logistics, we internalize a customer-focused approach in service. Integrated quality management is adopted as a way of company life.
The processes you offer with high quality services are in fact of great importance as it becomes part of the products purchased by customers.
In this period, where no error is accepted, competitor and product analyzes are of vital importance. You have to make these actions more frequently and more rigorously during these periods. To make spot determinations and be cool in today’s conditions; it allows you to get less damage and move forward despite everything.
As a result, we will consider yesterday, today and the future in 2019. Most importantly, with our corporate vision, we will continue to strengthen our position in the sector.
What kind of strategy will you follow this year as Erse Kablo? Have you created your roadmap for your plans?
All these developments led us to become more competitive in our sales, to accelerate our activities to be more efficient in our production.
We set common goals in sales and production. By creating our norm cadres, we have made the importance we attach to education and human resources sustainable and resultable. I believe that we have moved ourselves to a different point with our investments, quality workforce, test labs, modern, technological infrastructure and facilities.
We aim to be competitive in global markets by responding to customer demands as soon as possible with high added value products. We shape our quality standards according to the feedback we receive from global markets.
As Erse Kablo, it is important to strengthen our regional expanding dealer network in domestic sales and to protect our investments in our domestic dealer network since 2013. To support the success of our sales teams in domestic and export and to improve our existing sales technologies is one of our primary targets in the coming period.
Our 5-year strategy in export is to be a well-known and trusted brand in the international arena. Last year we increased our export share in the company to 48%, and this year we aim to increase this rate to 60%.
All employees, domestic and international customers are worth for the Erse brand. We look forward to reflecting our philosophy of “Further Away Together” within and outside the organization. We aim to launch our dealer portal soon. With the dealer portal, we intend to strengthen our CRM infrastructure and to maintain our mutual trust relationship with our customers, to develop together and to increase our communication with them.
R&D is another area where we are looking at with important. While the world is developing so much in technology, automation systems are an important part of our agenda, and in 2018 we underlined the fact that we supported the development by taking the title of R&D Center. With our R&D Center; in our export, we aim to increase our employment and capacity ratio, to contribute to the economy of our country and to create a positive image of Turkey.
As a pioneering weak current cable company, our technical infrastructure is constantly developing and our technical teams will be specialized in the field of this field, the latest technology to establish our second large laboratory to show our perspective on innovation. The sum of all these elements give us about the our company’s strategy and roadmap.
What do you think about the implementation of the new Construction Products Regulation (CPR) in our country? How did these regulations affect the sector and your export?
The purpose of the Construction Products Regulation (CPR) is to establish the declaration of the CE marking on the performance statements and materials related to the basic characteristics of the building materials. The aim of these materials is to establish is a “common technical language” in terms of market criterias, by determining and deciding the principles. In case the Construction Products Regulation is applied according to the specified principles and methods; is an important turning point on the way to prevent unfair competition and to be an international brand for every manufacturer that produces high quality and reliable cable.
As Erse Kablo, we have been actively working with our R&D activities, internal and external trainings, participation in conferences, symposiums and our market researches with our solution partners since the beginning of this process.
Considering that a long period of time has passed since the introduction of the relevant regulation, it has not been clarified where the CPR classes determined according to the performance of the cables we have produced in the new structures that will still be made in our sector will be used. This is the same case in Europe. Draft work is available, but there is no official publication yet.
When we look at the investments point, we established our own CPR laboratory at Erse Kablo and we are currently conducting feasibility studies to be accredited. Considering the resources, testing and certification fees we have spent on raw material development, all these factors have had a significant impact on our costs.
The Construction Products Regulation is still inactive and the audits on this issue have not begun. As a result of this, as it is not yet formed in the consumer and consumer consciousness, it returns to us as unfair competition on the profitability of the products we sell.
Our wish is to start to be implemented effectively as soon as possible.
Finally, do you share your evaluations about Erse Kablo’s mission in the sector?
As a result of the quality of your product, if your customer is again knocking on your door, wondering if you are visiting your factory, invites you to their work place, production area, warehouse, city or country where they live, make sure that your relations gain meaning. Today, after a certain point, you manage the relationship, not the product. It is important that both parties gain earnings with the win-win logic. Thus, you can create areas of mutual flexibility. It’s about trust. If you are paying attention to the 7P understanding of marketing (Product, Price, Place, Promotion, People, Physical Evidence, Process) in today, if you can manage all your marketing processes, if you can support trade with your technical infrastructure, then you have set up your system in your company.
If you are a company that created employment, you have more responsibilities. Always aiming to do better should be a part of our business. Being a domestic producer in our country has become more important depending on the conditions. Therefore, if we can develop our country, if we can contribute to the Turkish Economy, if we can create employment with new job opportunities, we can make a difference in our sector, this is the greatest source of pride for a producer.