SHAPING THE FUTURE WITH
AT BORUSAN
ANNUAL REPORT 2019
“Throughout my life, I have always believed that people come first and companies exist to serve them.” 1924-2012 Asım Kocabıyık Founder and Honorary Chairperson Contents
OVERVIEW 04 Financial Highlights 06 Chairperson’s Message 08 Group CEO Messeage 12 Borusan Holding Management Board of Directors Steering Committee 14 Borusan Corporate Center
CORPORATE RESPONSIBILITY 16 Borusan Kocabıyık Foundation 17 Education 18 Borusan Sanat 20 Borusan Contemporary 22 Gender Equality 24 Borusan Ocean Volunteers Platform
MANUFACTURING 30 Borusan Mannesmann Boru Yatırım Holding 32 Borusan Mannesmann Borusan Mannesmann Pipe US Borusan Mannessman Vobarno İstikbal Ticaret 40 Borçelik 46 Supsan
MACHINERY AND POWER SYSTEMS 52 Borusan Cat
AUTOMOTIVE 60 Borusan Otomotiv, Borusan Oto, Borusan Otomotiv Premium 68 Borusan Araç İhale
LOGISTICS 74 Borusan Lojistik 80 Borusan Port
ENERGY 84 Borusan EnBW Enerji
93 Consolidated Financial Statements as of 31 December 2019 and Independent Auditor’s Report BUSINESS LEADERS – ARCHITECTS OF THE FUTURE
We continue to add value to life with products and services in manufacturing, machinery and power systems, automotive logistics and energy. We place as much importance on educating leaders who shape the future of both Borusan and Turkey as we do on being “the best” across our business areas.
We groom our employees to be business leaders. We accelerate their personal and professional development with the Borusan Leadership Model. As a result, these high-performing staff members will have a greater voice in shaping the future of Borusan as well as the country’s economic and social environment. OVERVIEW
Financial Highlights MOVING FORWARD INTO THE FUTURE
(USD million) December December December December December 31, 2015 31, 2016 31, 2017 31, 2018 31, 2019
Sales 4,381 4,297 4,688 4,793 4,016
Exports 816 915 1,367 1,663 1,412
EBITDA 329 394 418 352 331
Working Capital 1,214 1,311 1,558 1,571 1,148
CAPEX 362 204 364 103 32
Net Financial Debt 1,168 1,348 1,493 1,371 1,035
Total Assets 3,896 4,115 4,498 4,592 4,065
SALES (USD MILLION) EXPORTS (USD MILLION) EBITDA (USD MILLION)
2019 2018 2019 2018 2019 2018
4,793 1,663 352 4,016 1,412 331
Borusan Holding ended fiscal year 2019 with net sales of USD 4,016 million and total assets of USD 4,065 million.
4 BORUSAN HOLDING ANNUAL REPORT 2019 BORUSAN HOLDING ANNUAL REPORT 2019 5 OVERVIEW
Chairperson’s Message CREATING SUSTAINABLE VALUE IN ALL OUR BUSINESS LINES
Esteemed Business Partners, Colleagues and Shareholders,
Demonstrating rapid growth thanks to financial market liberalization for some years, the global economy faced various challenges in 2019. These included trade wars between the USA and China ongoing since 2018, fluctuating capital markets due to the Fed’s monetary policies and the impact of the Brexit process in the Eurozone. After the IMF continually revised down its growth forecasts throughout the year, the world economy expanded by 2.9% as of year-end 2019. With the Covid-19 outbreak in December in the city of Wuhan, China, a global pandemic took hold and spread with great speed. This unfolding crisis has had a significant impact on the growth performance of the global economy and the world order. Intensive aircraft traffic, urbanization, and increasing interaction between communities around the world have been among the most important indicators of global economic growth over the last 20 years. However, these same factors appear to have accelerated the spread of the Covid-19 pandemic, leading to serious questions regarding the course of the post-pandemic world economy. At Borusan Holding, we believe that the global economy and the international community will learn important lessons from this challenging period. Economic activity and wealth generation will return. We expect that the Covid-19 pandemic will present opportunities to create a better world over the long term, despite the many short-term challenges.
6 BORUSAN HOLDING ANNUAL REPORT 2019 Turkey: Sound economic Turkey’s reassuring industry group fundamentals and social unity Borusan Holding is a global industry After facing multidimensional group with expertise in steel, machinery Ongoing digital challenges, such as foreign exchange and power systems, automotive rate shocks, inflation and rising distributorship, energy and logistics. transformation geopolitical risks, Turkey was regaining In 2019, we recorded successful Thanks to its ongoing digital growth momentum in the second half financial and operational results transformation investments, of 2019, thanks to rebalancing steps while maintaining stakeholder trust Borusan Holding achieved implemented across the economy. with our professional approach to successful outcomes in 2019 Taking hold in the last month of the risk management. We have proudly by effectively coordinating year, the Covid-19 pandemic had a served as the change and innovation its operations and human destructive impact on the global leader, upholding our corporate values resources in various countries economy. This critical health crisis since our founding in 1944. Thanks across the world. also seriously rocked Turkey’s macro- to its ongoing digital transformation economic balance. By capitalizing on its investments, Borusan Holding strategic advantages in food production achieved successful outcomes in and healthcare manufacturing in 2019 by effectively coordinating its addition to its robust social ties, Turkey operations and human resources in plan to be operating two centuries from has managed to blunt the extreme various countries across the world. now. Every time we face significant impacts of the pandemic, which has We consistently create sustainable challenges such as the Covid-19 morphed into a crisis with multiple value in all our business lines with our pandemic, we return to our foundations dimensions. Although there is no human capital focused on continuous and our mission, refreshing our energy clear global exit strategy on when improvement in addition to our and renewing our belief in a bright the outbreak will come to an end, innovation-oriented management future. We are committed to creating Turkey has limited the effects the crisis approach. During the year, our Group sustainable value in all lines of business by implementing new responsive once again demonstrated its agility and geographies where we operate. measures on every front. At Borusan in evaluating risks and opportunities. Group, we sincerely believe that we will We are keenly aware that the I would like to thank all our employees, endure this crisis, which underscores multidimensional crisis environment business partners and customers for the importance of domestic production, created by the Covid-19 pandemic will their support in our achievements in with minimum damage. With our require new roles and actions for the 2019, which was a challenging period significant experience and expertise private sector. Currently, we are taking in every sense. We hope to share the in diverse lines of business, we are steps to speed up our decision-making pride and happiness of even greater committed to doing our part to processes across our organization in the successes in the future. ensure that Turkey emerges from coming period in line with our mission this multipronged crisis. In addition and vision. Kind regards, to our strong corporate foundations, I would like to indicate once again to our Borusan’s experience and Ahmet Kocabıyık stakeholders that we strongly believe in expertise will leave its mark on Chairperson the bright future of our country. centuries to come Borusan Holding Borusan Group represents 76 years of experience and expertise in the industry sector. With our deep experience, we
BORUSAN HOLDING ANNUAL REPORT 2019 7 OVERVIEW
Group CEO Message SUCCEEDING IN UNCERTAIN TIMES
Esteemed Business Partners, Colleagues and Shareholders,
First of all, I would like to briefly review the state of the world economy in 2019.
The main factor that affected the global economy during the year was the ongoing trade wars. Disagreements between China and the US, coupled with political and economic uncertainties on both sides, adversely impacted the global economy.
According to the IMF’s latest estimates, world economic growth slowed to 2.9% in 2019, down from 3.6% a year earlier. As the pace of economic expansion in advanced countries fell from 2.3% in 2018 to 1.7% in 2019, emerging market growth declined from 4.5% to 3.7% in the same period. China’s economy registered growth of 6.1% for the year, down from 6.6% in 2018. Meanwhile, the Eurozone economy expanded 1.2% in 2019, versus 1.9% a year earlier.
While the US has recorded relatively strong economic growth of 2.3% in 2019, the world’s biggest economy could not escape the impact of global recession concerns. The high level of economic uncertainty throughout the year caused central banks in developed countries, especially the Fed in the US, to change the direction of their monetary policies, from contractionary to expansionary in 2019.
8 BORUSAN HOLDING ANNUAL REPORT 2019 Steps to rebalance Turkey’s economy The Covid-19 pandemic hit just when started to yield results… Turkey’s economic rebalancing The Turkish economy entered 2019 measures, initiated in 2018, had started Business with rising foreign exchange rates and to produce results. By leveraging its growing inflation, which impacted extensive health care infrastructure continuity every aspect of the economy in the as well as the country’s competitive without prior year. After GDP contracted by 2.1% advantages and advanced production and 1.0% in the first two quarters of capabilities in strategic sectors compromising the year, Turkey’s economy emerged such as textiles and food, Turkey safety from recession in the third quarter. quickly established itself in the new Borusan Holding enters this Thanks to a more robust external environment. new environment emerging environment and the positive impact with the Covid-19 pandemic of the government’s rebalancing In the coming days and months, we by focusing on protecting its efforts in terms of both monetary and will more clearly see the economic employees, stakeholders and fiscal policies, the Turkish economy impact of the Covid-19 pandemic on our business. expanded by 1.0% and 5.9% in the last country. However, government policies two quarters of the year, respectively. to support the private sector in addition Turkey recorded GDP growth of 0.9% to SMEs and tradesmen will need for the year. The economy’s upward to be implemented as well as other momentum as the year came to close interventions to stabilize and stimulate shows that the rebalancing steps Turkey’s economy. implemented by the government restored Turkey’s macro-economic Borusan will further contribute to stability. Turkey’s sustainable growth Borusan Holding enters this new Covid-19 pandemic brings about environment emerging with the uncertainty Covid-19 pandemic by focusing on The Covid-19 outbreak in December in protecting its employees, stakeholders Wuhan, China quickly became a global and business. We are taking all pandemic, significantly impacting necessary measures to safeguard the entire world. Under globalization, the health of our employees and societies across the globe have become stakeholders. We maintain business interdependent in every aspect thanks continuity without compromising the to increasing communication and safety of our people. At Borusan Group, transportation links while the rate we believe this is the most appropriate of urbanization has climbed to 75%. approach for our national economy as These factors resulted in the Covid-19 well as for our shareholders, employees pandemic rapidly morphing into a full- and all our stakeholders. We aim to blown global crisis, whose destructive successfully overcome this difficulty impact is felt across the world economy with social unity – much like the unity and society. and togetherness shown by Borusan employees.
BORUSAN HOLDING ANNUAL REPORT 2019 9 OVERVIEW
Group CEO Message
Borusan Group has significant experience and a comprehensive vision: We want Borusan to be successfully operating 200 years from now. We have great trust in our corporate structure, which was established with decades-long experience and built on deep expertise.
At Borusan Holding, we see that the strong player in every country where it Covid-19 crisis has highlighted the operates, Borusan Group recorded total Value-added power of economies that engage in international sales of USD 1.4 billion value-added production. We remain through its various companies, making products committed to significantly contributing up 35% of our consolidated turnover. Borusan Group left behind to the sustainable growth of our a successful year where it country with the rich heritage of our We differentiate from the ventured into new markets well-established corporate culture competition with our value-added due to declining global trade and our strategic product portfolio in products volume, rising protectionist domestic and international markets. Borusan Group left behind a successful policies in the steel business year where it ventured into new while focusing on value- Nothing will darken our markets due to declining global trade added products. achievements volume, rising protectionist policies In 2019, I can proudly say that we in the steel business while focusing prudently managed our risks in spite of on value-added products. With total the difficult conditions. During the year, production capacity of 1.5 million we focused on efficiency and never tons with the Borçelik brand and 500 compromised our financial discipline at thousand tons of metal processing Borusan Group. Thanks to our drive capacity with the Kerim Çelik brand, and determination, we recorded Borçelik is Turkey’s largest high-quality another successful year. In 2019, our steel producer. In 2019, Borçelik further Group reported total turnover of boosted its profitability and expanded more than USD 4 billion and EBITDA of its market share. As a leader in the USD 331 million. Showing improvement Turkish steel pipe industry, Borusan in our general administrative expenses Mannesmann also recorded a strong compared to the previous year, year with its innovative product portfolio we significantly reduced our net and prudent management approach indebtedness by 25%. both in Turkey and the US. Boosting its productivity drastically with Industry 4.0 Our affiliate Borçelik, operating in investments made throughout the year, the flat steel industry, once again our Borusan Mannesman company accounted for the lion’s share of our continued to move forward on its digital total Group turnover. In 2019, Borçelik transformation journey with great posted turnover of USD 1.1 billion. Our success. steel business, including Borusan Mannesmann, recorded turnover In 2019, Borusan Automotive Group of over USD 1.9 billion. Meanwhile, increased its market share despite Borusan’s automotive and heavy the major contraction in the machinery business lines also made a market and achieved real growth in significant contribution to the Group’s profitability. Boosting its EBITDA by total turnover accounting for about 75% compared to the previous year, our USD 800 million each. Aiming to be a Automotive Group recorded a strong year all around. Celebrating the 25th
10 BORUSAN HOLDING ANNUAL REPORT 2019 anniversary of its business partnership Borusan EnBW Enerji generates Borusan Group has significant with Caterpillar in Turkey and the power for Turkey and contributes to experience and a comprehensive vision: 20th anniversary of its operations in sustainability with 11 power plants, each We want Borusan to be successfully Kazakhstan in 2019, Borusan CAT was based on renewable energy sources. In operating 200 years from now. We our company that was most affected by 2019, Borusan EnBW Enerji expanded realize how difficult it is to achieve this the contraction in the domestic market. its installed capacity from 495 MW ambitious vision. However, we will rely Nevertheless, thanks to the exceptional to 505 MW. Reaching a total portfolio on our deep experience and expertise, performance of our overseas dealers, size of 1,200 MW as of year-end 2019, which is part of our corporate DNA. our Caterpillar company increased its Borusan EnBW Enerji aims to increase I wholeheartedly believe that we will EBITDA by 9% year-on-year. its total installed capacity to 715 MW by achieve this goal with the help of our year-end 2020. shareholders, customers, business Supsan, the valve supplier of the world’s partners, and most importantly, our leading car brands and Turkey’s largest Borusan aims to operate 200 years employees. We are one big team manufacturer of valves, produced a from now… whose members are all interconnected total of 5.5 million units in 2019. The Borusan Holding has the capability to – moving forward together into the company exported 3.6 million pieces grow further in all its business lines, future. during the year. Widely recognized for including steel, energy, automobile and its R&D efforts, our Group company heavy machinery distribution as well as Thank you all for your support to us on Supsan included push rod, cam shaft logistics. this journey. and turbo products to its portfolio in addition to its valve offerings, What moves Borusan forward is its Kind regards, significantly boosting its market well-established corporate culture. This penetration. As Turkey’s first and only competitive advantage will enable us Erkan Kafadar manufacturer of push rod products, reach new heights in the future. As Group CEO Supsan maintained its leadership across the entire world, change and Borusan Holding position in the industry during the year. transformation continue at full speed in our lines of business and the markets Borusan Lojistik consolidated its where we operate. With the Covid-19 sector leadership by developing a new pandemic, we are facing risks as well business model, eTA Platform, for road as opportunities. We stand among the transport. The company continued to leaders of this change and those who be the most trustworthy companion of shape the future by evaluating risks its customers with its digital truckers, and opportunities effectively. With our thanks to the eTA Trucker Mobile App, innovative approach, the importance which has become the third largest we place on R&D and our investments digital logistics platform in Europe. in future technologies, Borusan Group More than 150 thousand trucks were will add value to our country not only registered on the eTA Platform as of today but also in the future. year-end 2019. In addition, the average number shipments per month reached 30 thousand.
BORUSAN HOLDING ANNUAL REPORT 2019 11 OVERVIEW
Borusan Holding Management
BOARD OF DIRECTORS
Ahmet Kocabıyık Bülent Demircioğlu Chairperson Vice Chairperson
Zeynep Hamedi Nükhet Özmen Agah Uğur Member Member Member
12 BORUSAN HOLDING ANNUAL REPORT 2019 STEERING COMMITTEE
Ahmet Kocabıyık Erkan Kafadar Chairperson Group CEO
Mehmet Hamedi Semih Özmen Levent Kocabıyık Member Member Member
BORUSAN HOLDING ANNUAL REPORT 2019 13 OVERVIEW
Borusan Corporate Center CONTINUOUSLY CREATING VALUE
As the corporate center of Borusan Borusan Group company is a leader Group, Borusan Holding provides in its respective industry. Borusan Strategic strategic guidance to the entire Group. Group enterprises create value with Acting as a bridge between shareholder their international partners in the guidance expectations and Group companies, manufacturing, service and industrial As the corporate center of Borusan Holding adopts a systematic sectors. Empowered by Borusan’s Borusan Group, Borusan and nuanced management approach long-standing core values and solid Holding provides strategic in its strategic role. The Holding offers corporate culture, Borusan Group guidance to the entire Group. recommendations and poses questions companies conduct their business Acting as a bridge between while also directing and supervising operations with the primary goal of shareholder expectations and Borusan Group companies. However, creating added value for customers, Group companies, Borusan Borusan Holding does not participate employees and business partners as Holding adopts a systematic in the direct operational activities of well as the societies, countries and yet nuanced management Group companies. If the ideas and environments where they operate. approach in its strategic role. recommendations it provides are Group companies are also committed adopted by Group companies, Borusan to providing business advantages Holding supports its implementation at work, quality and convenience in through cooperation. life. Borusan Holding determines the rules creating value for the companies Borusan Holding Steering Committee and stakeholders while safeguarding is an executive platform composed Borusan’s corporate culture. The of executive directors that Group Holding delivers strategic guidance and Company General Managers report to. conducts supervisory activities for the The Steering Committee aims to set the entire Group. Group’s strategy, conduct best practices and operationally guide Borusan Group Borusan Holding continuously companies. enhances the value it creates for shareholders via its strategic leadership, Borusan Group is a well-established, services and supervision for the Group’s powerful industrial conglomerate in companies. Borusan Holding ensures its 76th year of operation. The Group that Borusan Group continues to is a leader in the steel, machinery move forward as a well-respected and and power systems, automotive innovative powerhouse that creates distributorship, logistics and energy significant value and benefits for sectors. With nearly 11,000 employees, Turkey. Borusan operates across a wide geographic area that includes 12 countries on three continents – North America, Asia and Europe. Each
14 BORUSAN HOLDING ANNUAL REPORT 2019 HOLDING EXECUTIVE MEMBERS
Erkan Kafadar Group CEO
Barış Kökoğlu Nursel Ölmez Ateş Group Chief Financial Officer Chief Human Resources and Corporate Communications Officer
Deniz Emre Dağ Ümit Aslantekin Assistant General Manager - Strategy Chief Information Officer and Business Development
BORUSAN HOLDING ANNUAL REPORT 2019 15 CORPORATE RESPONSIBILITY
Borusan Kocabıyık Foundation CREATING VALUE FOR COMMUNITY
Standing as one of the leading industry Honorary President of Borusan, organizations of Turkey, Borusan founded the Asım Kocabıyık Culture Contribution to achieved progress by adopting the and Education Foundation in 1992 as principle of sharing what is gained the first step taken towards executing community from the community back with the these activities under the roof of a Acting with the vision community. Focusing on education, corporate structure. of “Contribution to culture and arts under corporate Community,”Asım Kocabıyık social responsibility projects, Borusan Acting with the vision of “Contribution Culture and Education maintained its growth by creating a to Community,” he brought the Asım Foundation and Borusan national value on the one hand, while Kocabıyık Culture and Education Sanat were established it undertook the contribution to the Foundation and Borusan Sanat, together under the roof community in any areas where public established in 1997, together under the of Borusan Kocabıyık resources fell short as a duty on the roof of Borusan Kocabıyık Foundation Foundation in 2008 within the other hand. in 2008 within the scope of social scope of social responsibility responsibility activities. activities. Having contributed to the national educational and cultural life for many years either through the resources of Borusan or his personal initiatives, Kocabıyık, being the Founding and
16 BORUSAN HOLDING ANNUAL REPORT 2019 Education CONTRIBUTION TO FUTURE GENERATIONS
The Borusan Kocabıyık Foundation has completed construction of Zehra High priority for Nurhan Kocabıyık Primary School; Gemlik Borusan Primary School; education Borusan Asım Kocabıyık Technical Among the social and Industrial Vocational High School; responsibility areas that Kocaeli University Asım Kocabıyık Borusan covers, education is a Vocational College; and Uludağ top priority. University Asım Kocabıyık Vocational College. BKF also completed restoration of Istanbul University’s Faculty of Economy Library.
The Project for Sustainable Quality Improvement in Education was initiated in 2009 at Uludağ University Gemlik Asım Kocabıyık Vocational College, which was constructed by Borusan Kocabıyık Foundation. The initiative was awarded numerous accolades in recognition of its educational quality excellence. The Project for Sustainable Quality Improvement in Education received the EFQM Certificate of Determination in 2009; Quality in Education Jury Encouragement Award and Competency in Excellence 3-Star The project also won the Turkey Certificate in 2012; Quality Success Excellence Grand Prize in 2016, gaining Award in 2013; and Grand Prize and the distinctive position of the first and Competency in Excellence 5-Star only vocational high school to receive Certificate in 2014. the award in its first year of applying.
In addition, BKF granted scholarships to 180 students in 2019.
In 2019, Borusan Kocabıyık Foundation presented 27,500 books to 99 school libraries across the country.
BORUSAN HOLDING ANNUAL REPORT 2019 17 CORPORATE RESPONSIBILITY
Borusan Sanat A COMMUNITY INTEGRATED WITH ART
Borusan Sanat also acts as the coordination center of Ertuğ & Kocabıyık Publications, a prominent publishing house offering exquisite art volumes presenting the rich cultural heritage of mainly Anatolia and recently Europe. A performance venue and a new home, Borusan Sanat opened Borusan Music House in 2010 and has since organized classical, jazz, world and new music concerts as well as dance performances and contemporary art exhibitions at this venue, to reach a wider audience.
In Borusan Istanbul Philharmonic Orchestra (BIPO)’s 21st year, 11 concerts await music lovers this season; Borusan Quartet will be perform eight concerts on both banks of the Bosporus and Borusan Sanat host award-winning Turkish virtuosos Borusan Sanat, the driving force behind as well as world-known musicians. Ray Chen: the Borusan Istanbul Philharmonic During the 2019–2020 season, Borusan Orchestra, was founded by Borusan Istanbul Philharmonic Orchestra will a talented Holding. Placing Borusan Istanbul share the stage of Istanbul Lütfi Kırdar musician Philharmonic Orchestra (BIPO) at the ICEC with Ray Chen, Yeol Eum Son, core of its activities, Borusan Sanat Miloš Karadaglić, Dorothea Röschmann, In 2019, BIPO hosted a organizes the orchestra’s regular Angel Gheorghiu, Andreas Ottensamer, violin virtuoso with a truly monthly concerts as well as those Yuri Bashmet, Pablo Ferrández, impeccable technique and of Borusan Quartet, which is made Harriet Krijgh, Ekaterina Siurina, Elena skillful interpretation to match up of BIPO’s group leaders. Borusan Maximova, Peter Sonn, and Bogdan – Ray Chen. Children’s Choir is another meaningful Baciu. initiative that commenced in 2002 to foster a love for classical music in In 2019, Borusan Istanbul Philharmonic children. Orchestra (BIPO) hosted a violin virtuoso with a truly impeccable technique and skillful interpretation to match – Ray Chen. Chen is a talented musician who is praised world-wide and who has won first place at the 2008 Yehudi Menuhin and 2009 Queen Elisabeth competitions and received the ECHO Klassik for his album released in 2017. Gürer Aykal conducted Borusan Istanbul Philharmonic Orchestra accompanying pianist Yeol Eum Son.
18 BORUSAN HOLDING ANNUAL REPORT 2019 The concert, where La Clemenza di Tito, KV 491 Piano Concerto, KV 165 “Exultate jubilate” and Symphony in C Major were performed, is a tribute to the grandmaster of classical music. This season, Borusan Istanbul Philharmonic Orchestra under the direction of Diego Matheuz, accompanied the eminent guitarist Miloš Karadaglić. The concerto for orchestra and guitar titled “Ink Dark Moon,” by the young English composer Joby Talbot, commissioned by BIPO, and performed by BBC Symphony Orchestra, made its Turkish premiere at Lütfi Kırdar. One of the most unusual concerts of this season was without a doubt “A Golden Page In Music History.” Historian Prof. Dr. İlber Ortaylı simultaneously delivered a speech on the history of music during the concert. Music devotees were familiar with the concert soloist, ECHO Klassik winner Dorothea Röschmann. The Borusan Istanbul Philharmonic Orchestra welcomes the new year with Angela Gheorghiu, one of the greatest stars of the opera scene. The soprano has always received praise and admiration since she stepped onto the stage in 1992. She has enchanted music lovers at concerts and operas around the world ever since. Gheorghiu got together with the Borusan Istanbul Philharmonic Orchestra under the direction of Ludovic Morlot for the BIPO New Year’s Concert.
BORUSAN HOLDING ANNUAL REPORT 2019 19 CORPORATE RESPONSIBILITY
Borusan Contemporary WHERE THE CONTEMPORARY ARTS MEETS TURKEY
14,388 visitors
A total of 14,388 people visited Borusan Contemporary’s exhibitions in 2019.
Borusan Contemporary is an In 2007, the building was leased by associated institution of Borusan Borusan Group, renovated and has Kocabıyık Foundation, which is a been used as Group headquarters since subsidiary of Borusan Holding. Borusan then. As the building was designed Contemporary opened its doors in as office space, the exhibition areas September 2011. The institution offers a and training rooms are integrated multi-platform program of exhibitions, with the office infrastructure. This events, educational activities, new means there are certain restrictions in commissions, and site-specific terms of allocating space for children’s installations, Borusan Contemporary Art workshops, events, and meetings. Collection spans 30 years of collecting. Borusan Contemporary’s core activity It is located in Perili Köşk (the Haunted is preparing exhibitions that are Mansion), one of the iconic buildings either curated from the Borusan of Istanbul, and is open to the public Contemporary Art Collection or during weekends. organizing shows with guest curators and artists included in the collection.
20 BORUSAN HOLDING ANNUAL REPORT 2019 Moreover, Borusan Contemporary In 2019, Borusan Contemporary In fall 2019, two new exhibitions plans extensive education, events planned five exhibitions. In March, were opened for art lovers to visit. and programs designed for children of the three exhibitions open to visit, The first exhibition was of Bill Viola: aged between 5-12, and adults. two were curated from the Borusan Impermanence, one of the pioneers of Through these programs, Borusan Contemporary Art Collection, They video art. This solo exhibition is the first Contemporary welcomes thousands of are Uttered and Left Unfinished All in Turkey dedicated to the artist. Ten visitors each year. The Loves in the World and Overture: artworks, from 1969 to 2015 are being Selections from the Borusan exhibited until September 13, 2020. The As part of the educational programs, Contemporary Art Collection. The other exhibition, the extended version Borusan Contemporary opened its blog exhibition was named after one of of They are Uttered and Left Unfinished in 2018. Digital content was created Turgut Uyar’s poems, They Are Uttered. All the Loves in the World, is curated focusing on the exhibitions organized Turgut was one of the pioneers of from the collection. in Borusan Contemporary, and Turkish literature. In comparison, artists included in the collection. The Overture presents a selection of A total of 14,388 people visited Borusan content is designed to give in-depth works recently added to the Borusan Contemporary’s exhibition in 2019. information about the exhibitions and Contemporary Art Collection. Another Borusan Contemporary opens to arts artwork, as well as to enhance the exhibition that opens in March is audience for weekend visits as part artistic and curatorial perspectives. The Bosphorus by Boomoon. Boomoon of the Borusan Group’s transparency aim is to educate the audience on how is a South Korean photographer who policy. It is rare to see corporations to look at media artwork and create launched a project commissioned willing to share their headquarters with new engagement opportunities for by the Borusan Contemporary Art the public. the audience. Two posts are published Collection. online each month. Furthermore, the Borusan Group is aware of the vital Borusan Contemporary Art Collection place culture and art have in society. commissions numerous artists, both As a result, Borusan Contemporary local and foreign, to produce new strives to extend its reach and enhance artwork. These commissioned pieces the interest in the arts. are also included in the collection. Thus, collecting is not limited to existing groups of works, as it also aims to contribute to the art world through this patronage activity.
BORUSAN HOLDING ANNUAL REPORT 2019 21 CORPORATE RESPONSIBILITY
Gender Equality NOT SEPARATELY, ALL TOGETHER
Since 2012, Borusan has focused on gender equality as a priority social responsibility area. The Holding is committed to developing policies to support its female employees and eliminating gender discrimination in its internal corporate policies. Borusan provides infrastructure and financial support to increase women’s participation in professional life in society at large.
As a signatory to the UN Women’s Empowerment Principles (WEPs), Borusan was invited to become a member of the UN WEPs Leadership Group in 2015 – the first Turkish company to receive this honor.
Thanks to its efforts to empower women, Borusan has become a leader of this important cause both in Turkey and worldwide.
My Mom’s Job is My Future at each facility, are built at 4 organized One of Borusan Holding’s most industry zones (OIZ) across 4 provinces important social responsibility in Turkey to provide childcare and pre- Promoting initiatives is “My Mom’s Job Is My school education to children aged 0-6. Future.” Research shows that provision To date, Borusan Joy Factories have gender equality of affordable childcare is critical to opened in Adıyaman, Afyonkarahisar, Borusan Holding is committed boosting women’s employment in Malatya and Balıkesir under this effort. to developing policies to Turkey and worldwide. This long- “My Mom’s Job Is My Future” was support its employees running project aims to expand granted a social responsibility award at and eliminating gender women’s employment by providing the Golden Compass Public Relations discrimination in its internal support for working mothers. “My Awards in 2015, hosted by the Turkish corporate policies. Mom’s Job Is My Future” is conducted Public Relations Association. The with the support of Turkey’s Ministry project was also recognized with an of Family and Social Policies, and award from the Turkish Confederation the Ministry of Science, Industry and of Employer Associations. Technology. Nurseries and daycare centers, known as “Borusan Joy Factories,” with a 75-child capacity
22 BORUSAN HOLDING ANNUAL REPORT 2019 Microfinance such as “Love Begins with Language” flat steel industry. Under the project, The late Asım Kocabıyık, Founder and and “Call Out Sexism” were used to female applicants were provided with Honorary Chairperson of Borusan raise awareness of sexist language technical trainings such as overhead Holding, personally established the and the widespread culture of sexism crane certification as well as 250-hour first microfinance branch in 2009 in in society. The campaign highlighted comprehensive specialized trainings, Afyonkarahisar, his place of birth, to many of the sexist archetypes and including personal development support women entrepreneurs. In 2013, behaviors displayed in both personal and mentor-mentee sessions. At the the second location, Gemlik Borusan and professional arenas. “Call Out program’s conclusion, 26 women Microfinance Branch, opened in Sexism” also drew attention to common who had successfully completed their Gemlik, Bursa, where Borusan Holding chauvinistic expressions such as training were employed in various jobs has a large industrial campus. “This is not a woman’s job,” “Are you a traditionally held by men. feminist?” and “You should smile more.” To date, these two microfinance branch Women’s Employment Initiative at locations have jointly extended loans Gender Equality Seminars Borusan Mannesmann totaling TL 5.5 million to 2,800 women At Borusan, we aim to raise awareness In order to show that women can work entrepreneurs to help them establish or of more than 10,000 Borusan staff and and be successful in the metal sector expand their businesses. their families through gender equality and increase the women employment trainings organized in cooperation with rate, high school graduate female Equal Borusan Platform the Mother Child Education Foundation candidates were given on-the-job Borusan established its Equal Borusan (AÇEV) to prevent gender inequalities. training programs organized in – Social Equality platform in November cooperation with İşkur, while the social 2015, to adopt and embrace gender No Job too Tough for Women areas within the Borusan Mannesmann equality at both the corporate and In 2018, Borçelik, a Borusan Group factories were made suitable for individual levels. The platform aims to company, implemented the “No Job women. The initiative aims to increase obtain results across a wide range of Too Tough for Women” initiative to the ratio of female employees to 10%. issues – from human resources policies underscore that women can perform In line with this target, the female to communication and awareness. any job in male-dominated heavy employee ratio increased from 3% in industry. The effort’s first target was to 2017 to 6% in 2018. Love Begins with Language expand women’s employment in the The Equal Borusan platform published its “Guidebook to Avoid Statements and Behavior Suggesting Gender Discrimination in the Workplace” in cooperation with the Gender and Women’s Studies Research Center of Kadir Has University. The guidebook contains examples of discriminatory statements and conduct that are common in everyday business life. Along with gender-discriminative phrases such as “like a man,” “you’re the man,” “female manager,” “woman’s job” and “man’s job,” ageist language such as “dinosaur” and “born yesterday,” along with their neutral, non- discriminatory synonyms, were outlined. The initiative also included specially designed posters placed prominently in offices and other Borusan working environments. In addition, a video titled “Love Begins with Language,” featuring Borusan employees, was shot for Valentine’s Day and published on the Borusan corporate website on February 14, 2017 to draw attention to the issue of gender discrimination in the workplace.
Call-Out Sexism Borusan launched the “Call Out Sexism” campaign launched in 2018. With a video released on March 8, International Women’s Day, hashtags
BORUSAN HOLDING ANNUAL REPORT 2019 23 CORPORATE RESPONSIBILITY
Borusan Ocean Volunteers Platform COMPASSIONATELY SHARING TO ADD VALUE TO SOCIETY
The Borusan Ocean Volunteers Another effort carried out by Borusan platform was founded in 2008 to Ocean Volunteers platform is the enable Borusan staff members to Free Animal Shelter project. Ocean 16,500 channel their knowledge and skills Volunteers realized this initiative to voluntary social responsibility in collaboration with Aegean Idea hours projects in education, culture and arts, Partnership Association at İzmir Buca environment and human rights. In Stray Animals Rehabilitation Center to Borusan employees also 2019, more than 1,000 volunteers were ensure that disabled stray animals are volunteered for 16,500 hours involved in various projects. Borusan adopted. The project was also designed in 40 projects in line with employees also volunteered for 16,500 to raise awareness of the plight of United Nations Sustainable hours in 40 projects in line with United disabled animals. Volunteers set up Development Goals. Nations Sustainable Development shelters at Borusan Group companies Goals. The Borusan Ocean Volunteers for disabled strays. In addition, food platform often collaborates with non- and water containers were made and governmental organizations on various placed on streets for stray animals. volunteering initiatives. These include book donation campaigns, shoreline and sea cleaning events, book reading for the visually impaired, mentoring, and school friendly programs.
Conducted since 2012, the Coaching Program for Vocational High Schools is Borusan’s longest-running volunteer project. The program is organized by Private Sector Volunteers Association. As participants of the initiative, Borusan volunteers coached vocational high school students, preparing these young persons for their professional lives by sharing personal experiences with them.
24 BORUSAN HOLDING ANNUAL REPORT 2019 BORUSAN HOLDING ANNUAL REPORT 2019 25 BorusanCORPORATE RESPONSIBILITY Holding at a Glance GLOBAL OPERATIONS ON 3 CONTINENTS, IN 12 COUNTRIES
FAR EAST RUSSIA UK GERMANY USA TURKEY
KAZAKHSTAN GEORGIA
CHINA
KYRGYZSTAN
AZERBAIJAN
TRNC
ITALY
26 BORUSAN HOLDING ANNUAL REPORT 2019 MANUFACTURING MACHINERY AND AUTOMOTIVE POWER SYSTEMS
• Borusan Mannesmann Boru • Borusan Cat • Borusan Otomotiv Yatırım Holding • Borusan Oto • Borusan Mannesmann • Borusan Otomotiv Premium • Borusan Mannesmann Pipe US • Borusan Araç İhale • Borusan Mannesmann Vobarno • İstikbal Ticaret • Borçelik • Supsan
LOGISTICS ENERGY
• Borusan Lojistik • Borusan EnBW Enerji • Borusan Port
BORUSAN HOLDING ANNUAL REPORT 2019 27 OVERVIEW
ADDING VALUE TO STEEL
A young team assumed the task of setting up a new factory with a budget of USD 30 million. In a race against time, this ambitious team completed a wholly unique facility in Turkey and one of the few of its kind in Europe. The innovative factory was open and ready for production after an exhausting two-year period.
A major investment was approved shaping the future of the automotive market. After the capital investment received approval, a project team was created to implement the operation at a specified time and budget. Our people joined forces toward this goal. They worked together, from across different divisions and functional areas at the Company. They labored at an intensive pace to realize this forward-looking investment.
As our other operations continued, the young project management team started to take steps to establish a major new factory with a budget of USD 30 million. The ambitious team competed against time to complete the exhausting two-year long process. This effort required a high level of coordination. We planned the best facility and location site with our skilled R&D teams. Nearly every functional area at the company was involved, including planning, technical and engineering, occupational health & safety, human resources, construction, quality and process studies, finance, purchasing, and foreign trade. We commenced commercial production after establishing one of the few facilities of its kind in Europe, and the first in Turkey. During this major undertaking, we implemented many firsts, always maintaining our innovative perspective.
28 BORUSAN HOLDING ANNUAL REPORT 2019 #leadersatborusan
BORUSAN HOLDING ANNUAL REPORT 2019 29 MANUFACTURING
Borusan Mannesmann Boru Yatırım Holding
Borusan Group and Salzgitter Mannesmann GMBH merged their welded steel pipe investments in Turkey under Borusan Mannesmann Boru Yatırım Holding A.Ş. in 1998. The Company holds 73.48% of the shares in Borusan Mannesmann Boru San. ve Tic. A.Ş.
Borusan Mannesmann Boru Yatırım Holding has an investment amount of USD 136.6 million in the last 5 years, including USD 44.6 million in 2019.
30 BORUSAN HOLDING ANNUAL REPORT 2019 BORUSAN HOLDING ANNUAL REPORT 2019 31 MANUFACTURING
Borusan Mannesmann A RELIABLE GLOBAL BRAND
High-quality standards Borusan Mannesmann grows and develops together with its customers in line with its high-quality standards, passion to innovate and the principle of working with a focus on customer satisfaction.
With its pioneering role in the Turkish steel pipe industry, Borusan Mannesmann steers the development of the sector. It also continues creating value for stakeholders by investing in health & safety, people-oriented success, digital transformation, innovation, and globalization. Presenting new products and services each year, Borusan Mannesmann produces a wide range of steel pipe products.
Strategic Positioning Borusan Mannesmann is a globally recognized steel pipe and complementary solutions provider focusing on high value-added products with a production footprint in its major markets. It is positioned as the leader of high value-added products in the Turkish market as well as one of the leading producers in Europe and the USA. The company’s competitive advantages include: • Profitable growth strategy of investing in high value-added products in target markets;
32 BORUSAN HOLDING ANNUAL REPORT 2019 • Global competitive edge attained Strengthening Market Presence Borusan Mannesmann, however, by channeling approx. 70% of prime in Global Markets with High maintained its gross profit margin quality sales tonnage to global Value-Added Products amidst these developments. markets; Borusan Mannesmann recorded sales • Ability to garner more than three- of 667,500 tons in first quality products Although the company faced a fourths of prime quality product in 2019. Protectionist measures taken year-on-year decline in sales of high turnover from high value-added amidst trade constraints around the value-added pipes, specifically, pressure, products; globe had an impact on global markets. special and spiral pipes, the profit • Sustainable and profitable business Furthermore, the shrinkage in the margin derived from these products model for large diameter spirally domestic market resulted in a drop realized at 16%. Turnover of these pipes welded line pipes in high value- in sales. Despite remaining below the reached a 81% share in total first quality added markets; quantities of last year, the company product sales. The sales tonnage of • Aiming to be North America’s most maintained its gross profit margin at high value-added drilling and well profitable and most preferred player 15%, similar to 2018, through profitability pipes grew by 5% year-on-year as the in high value-added products in the generated by high value-added pipes North American market continued drilling and well pipes market; in particular. As Borusan Mannesmann to recover. Sales of value-added steel • Market leader in special pipes for strengthened its presence in global pipes in the automotive sector were the automotive sector in Turkey; and markets with investments in high satisfactory in spite of the contraction of aiming to be one of the top three value-added products and international the sector in Europe and Turkey. Sales manufacturers in Europe; projects awarded, international sales in the automotive sector represent a • Digitalized business processes reached a 70% share in total first quality 16% share in the sales turnover of first that provide efficiency increasing product sales. quality products. Furthermore, new solutions and competitive edge in investment worth USD 75 million in operations; In August 2018, the Section 232 tariff Gemlik targeting production of high • Investment strategy focusing on high was increased from 25% to 50% after the value-added standard pipes and pipes value-added products and processes US president issued an executive order for the automotive sector is completed, to meet customers’ unfulfilled to implement sanctions against Turkey, therefore increasing existing capacity. expectations with fast, innovative and bringing Turkish steel exports to the value-adding USA to a halt. The tariff for Turkish steel Innovative and Value-Added Products solutions; exports was later reduced from 50% to Borusan Mannesmann embraces new • Penetration strategy for niche and 25% in May 2019. However, the positive product and service development as new markets while maintaining impact of the 25% rate cut in tariffs one of the key triggers to reach the leadership in existing markets remained limited due to declining company’s long-term targets. In 2019, by pursuing a strategy focused prices in the US domestic market. The Borusan Mannesmann focused on on innovative products and new European Commission, on the other developing new value-added products business models. hand, started implementing quotas for and further processes for different steel imports as part of its safeguard customer segments. The company also measures. A 25% additional duty is targeted building innovative value- applied to products exceeding the added services for customers to make designated quota. These protectionist their lives easier and increase efficiency measures sharpened the competition in their businesses. in global markets, making trade operations much tougher.
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Borusan Mannesmann
Borusan Mannesmann grows and develops together with its customers in line with its high-quality standards, passion to innovate and focus on customer satisfaction.
Sustainability Steps of Borusan Mannesmann Borusan Mannesmann grows and develops together with its customers in line with its high-quality standards, passion to innovate, and focus on customer satisfaction. Accordingly, Borusan Mannesmann carefully listens to the expectations and needs of its customers and engages in meticulous VoC (Voice of Customer) and customer satisfaction efforts.
Throughout its operations, Borusan Mannesmann identifies strategies to minimize its footprint on the environment and follow environment- friendly policies for a clean environment and a healthy future. It operates in accordance with all national and international regulations with a view to recycling its waste, minimizing its • Reduced boron oil waste at Gemlik • Identifies all potential risks emerging use of natural resources, and ensuring ERW Plant by 25 compared to 2018, from its operations and works to a healthy environment for future • Provided environmental training to mitigate them and attain acceptable generations. 820 students at five primary schools. risk levels; • Strives to minimize waste, and In 2019, as part of its sustainability Reaching “Zero Accident” guarantees the disposal of waste in efforts, Borusan Mannesmann is the Main Target an environmentally-friendly manner; completed the following actions: A significant player in the Turkish • Works to bring consumption of • Replaced existing motors with high- and global steel pipe sector, Borusan natural resources down to acceptable efficiency motors at the Halkalı Plant, Mannesmann’s employees and senior levels; • Reduced water and electricity management are committed to • Inspects its systems and activities consumption with the closed-loop creating safer and healthier working regularly and allows all stakeholders cooling system at Gemlik Cold environments especially for their to inspect them; and Drawing Plant, colleagues, customers, and suppliers. • Adopts a management system • Achieved 280,000 kWh of energy The company targets reaching the built on continuous improvement savings with optimization of two “zero accident” goal, and protecting principles and expresses its pumps used at Gemlik Spirally the environment during production commitment to implement same. Welded Pipe Factory, operations. Therefore, Borusan • Reduced water consumption by 10% Mannesmann: compared to the previous year at • Complies with all applicable laws, Gemlik Spiral Factory UT section, regulations and other rules on Occupational Health and Safety (OHS) and Environmental Protection;
34 BORUSAN HOLDING ANNUAL REPORT 2019 At Borusan Mannesmann, employees are the most valuable assets. Therefore, they are treated as a top priority in the company. By means of the extra attention and efforts devoted, Borusan Mannesmann is improving the Health Safety & Environment (HSE) scores year-on-year. To reach a world-class level in Health Safety & Environment (HSE) standards, the Health Safety & Environment (HSE) programs and activities will be continued, combined with digitalization of the business to reach the ultimate zero accident target. Industry 4.0 implementation will continue to be the focus and improve the Health Safety & Environment (HSE) standards with the help of technology and automation.
Embracing society and the environment, Borusan Mannesmann keeps its OHS and environmental protection policies publicly accessible via its website, bulletins and notice boards.
Furthermore, the OHS and Environmental Protection Policy is communicated to contractors and suppliers prior to working with them, i.e. the contract phase, with a letter. Contractors working on behalf of culture, arts, and gender equality. As employees. The effort turned into an Borusan Mannesmann are required to part of the project, “Önce Babayım,” external communication campaign, act in compliance with the provisions caring fatherhood training was ranking among the five finalists in the of Occupational Health and Safety delivered in cooperation with Mother PR category at the European Excellence (OHS) stipulated by the laws and Child Education Foundation (AÇEV) Awards. Reaching 10 million viewers Borusan Mannesmann’s OHS and for employees at Gemlik and Halkalı. and 15 million views, the video makes Environmental Management principles. This program helps to improve the reference to arts by explaining the communication between fathers and great expertise required to produce a Exemplary Social Responsibility their children and prepare them for steel pipe, although it is recognized as Understanding… the future in a true environment of an ordinary commodity. One hundred Borusan Mannesmann also laid the trust, with the right role model. On different production sounds were foundations of the Group’s social the “Bu İşte Bir Eşitlik Var,” platform, turned into the “rhythm of production,” responsibility-oriented culture. Borusan last year Borusan Mannesmann took composed by Mercan Dede. Borusan Mannesmann supports institutions an important step with the “Birlikte Mannesmann is grateful to the and projects in the fields of education, Eşit” project regarding employment production craftsmen who blend every of women in production. Currently, 20 product with their mastery. women working in our Gemlik and Bursa facilities break gender-based New Digital Human Resources stereotypes for jobs by working in equal Practices Employees first jobs with our male employees. Borusan Mannesmann treats digital transformation as one of the key drivers At Borusan Mannesmann, #PipeAsArt – A 360 Communication in the company. In 2019, numerous employees are the most Campaign projects were completed to increase valuable assets. Therefore, At Borusan Mannesmann, the most the effectiveness and efficiency of the they are treated as a top valuable asset is its human resources. operations. From augmented and priority in the company. The company aims to provide a happy virtual reality, machine learning and working environment where employees production flow simulation practices can develop themselves professionally to the innovation of online platforms, and culturally. #PipeAsArt was Borusan Mannesmann worked on a launched as an internal communication wide range of digital transformation campaign to extend gratitude to projects.
BORUSAN HOLDING ANNUAL REPORT 2019 35 MANUFACTURING
Borusan Mannesmann
Talent Gate is a key development program helping employees acquire long or short-term work experience at Borusan Mannesmann’s subsidiary companies abroad.
58,591 hours of training
A total of 58,591 hours of training and 438 professional training certificates were issued to employees in the past year.
worksite urgently as instructed by their foremen, unless they are competent enough to work there. When taking urgent decisions for large teams, supervisors will not take a risk if they do not know the competencies of each and every team member, because the In 2019, Techstation was made available The competency-based machine system will. The plants will determine to employees, with all its functions. operation project is taking place with the competencies required for their The system is intended to guarantee: the TEKkart system. With this card, sites, following up on employees’ • a systemic and structured approach employees are not allowed to operate abilities through the support of Human for Employee Development and machines if their competencies are not Resources, Training and Development. Training; fit for these machines. At the plants, • alignment with developing and ever- 241 workstations have certain operating “Talent Gate” changing technical requirements; systems posing specific risks. It would The “Talent Gate” Program was • development of technical and not be realistic to expect employees to launched to provide employees with leadership skills; have the appropriate skills to operate all professional experience overseas. Talent • specialization at work through workstations. Employees who operate Gate is a key development program development programs; the lines while lacking the required helping employees acquire long or • furthering of foreman-apprentice skills can experience undesired events, short-term work experience at Borusan relations and succession; and including occupational accidents, Mannesmann’s subsidiary companies • positive contributions in all relevant inefficiency and the cost of insufficient abroad. Employees have an option to fields to targeted business results. quality. An extension of the Safety First work at Borusan Mannesmann Pipe US approach and a guarantor of people- and Borusan Mannesmann Vobarno. A total of 58,591 hours of training and driven success at the worksite, this Thanks to Talent Gate, participating 438 professional training certificates digital project will ensure the effective employees will experience work in were issued to employees in the past and proper use of labor in the factories. different cultures and transfer their year. Thanks to this project, employees will professional experience to the foreign not risk their safety by going to a certain unit of the company.
36 BORUSAN HOLDING ANNUAL REPORT 2019 Borusan Mannesmann PRIME PRODUCT SALES (THOUSAND TONS) recorded turnover Domestic International of USD 769 million 833 and 667,000 tons of 625 667 prime product sales 464 in 2019. 208 203
2018 2019
PRIME PRODUCT REVENUE (USD MILLION) Domestic International
948.9
751.9 769.0 590.5
197.0 178.5
2018 2019
In 2019, Borusan PRIME GROSS PROFITABILITY (USD MILLION) Mannesmann Domestic International Profit Margin
reached the 16.5% 15.0% investment amount 156.7 128.7 of USD 44.6 million 113.9 94.5 with an addition of USD 2 million as 28.0 19.4 compared to 2018. 2018 2019
BORUSAN HOLDING ANNUAL REPORT 2019 37 MANUFACTURING
Borusan Mannesmann
Borusan Mannesmann is the leader steel pipe producer in Turkey and one of the leading producers in Europe and USA.
COMPANY PROFILE
Borusan Mannesmann The company manufactures spirally • Spirally welded steel pipe solutions welded steel pipes with exterior focused on domestic and foreign diameters ranging from 508 mm to infrastructure projects for water, Operational Information 3,048 mm, for water, natural gas and petroleum and natural gas lines and • Prime Product Sales: 667,000 tons petroleum lines. The company has construction industry. • Prime Product Total Revenue: the capacity to match customers’ USD 769 million special requests for Plastic Pipe • Prime Product Gross Profitability: Service Locations (PE), Fusion-bonded Epoxy (FBE), USD 114 million • Bursa-Gemlik, Istanbul-Halkalı Polypropylene (PP), Epoxy and • Investments: USD 45 million production plants, Bursa Automotive concrete-covered pipe types. Pipe Service Center • 90 distributors Production Production Capacity • Manufactures 4,000 types of pipe, • Annual production capacity of 1.1 with diameters ranging from 4.6 mm Business Partner million tons, comprised of about to 3.048 mm and wall thickness from Salzgitter Mannesmann 750,000 tons of longitudinally welded 0.7 mm to 25.4 mm. and 300,000 tons of spirally welded • Produces water pipes, general use steel pipe. pipes, natural gas, and petroleum line pipes, industrial pipes and profiles, construction pipes, drilling pipes, Sectors Served boiler pipes, and spirally welded • A wide product range in pipes. longitudinally welded steel pipe, • Borusan Mannesmann is the only backed by high-quality service European producer of large-diameter focused on the construction, energy petroleum and natural gas pipes. and automotive sectors.
Borusan Mannesmann Pipe US BM Vobarno İsti ̇kbal Ti ̇caret
Production Capacity Production Capacity • Borusan Group’s first company • Annual 300,000 tons of well and • Annual production capacity of • Conducts Borusan Group’s flat drilling pipes 28,000 tons of cold-drawn special steel and pipe exports • 546,000 m2 production plant pipes • Incorporated under Turkish law as • Operational area of 29,000 m2 a foreign trade company (closed space) Sectors Served • Special value-added steel pipes • North America drilling and well, with exterior diameters from 20 and line pipe markets mm to 140 mm
Service Point Sectors Served • Manufacturing plant in Houston, • European manufacturing industries, Texas, US primarily in the automotive sector
Service Point • Manufacturing plant in Vobarno, Italy
38 BORUSAN HOLDING ANNUAL REPORT 2019 EXECUTIVE MANAGEMENT
Zafer Atabey Mehtap Anık Zorbozan Muammer Kızılaslan General Manager Assistant General Manager Assistant General Manager Borusan Mannesmann Financial Affairs, FTO and Information Digital Technologies Borusan Mannesmann
Oğuzhan Kuşcuoğlu Ali Okyay Uğur Onbaşı Assistant General Manager Assistant General Manager Assistant General Manager Standard Pipes Segment Supply and Procurement Segment Infrastructure Projects Segment Borusan Mannesmann Borusan Mannesmann Borusan Mannesmann
Fırat Akkemik Joel Johnson Josh Croix Assistant General Manager General Manager Commercial Director Human Resources, Corporate Borusan Mannesmann Pipe US Borusan Mannesmann Pipe US Development, Environment and Sustainability
Eric Diehl Finance Director Borusan Mannesmann Pipe US
BORUSAN HOLDING ANNUAL REPORT 2019 39 MANUFACTURING
Borçeli ̇k DYNAMIC WORKFORCE, INNOVATIVE APPROACH
Borçelik is the biggest galvanized steelmaker of Turkey offering the highest quality.
Founded as the first private and the Turkey’s Biggest Galvanized • Turkey’s market leader in the hot-dip second-largest flat steelmaker of Turkey Steelmaker, Offering the Highest galvanized steel industry in 1990, Borçelik started its activities Quality • Main supplier to leading industrial in 1994, producing cold-rolled steel. The company has a total production companies Borçelik increased its production capacity of 1.5 million tons with the • 1.5 million tons of production capacity to 1.5 million tons with Borçelik brand and a metal processing capacity under the Borçelik brand investments in total USD 530 million capacity of 500,000 tons with the Kerim coupled with 500,000 tons of metal in years 1994, 2003 and 2008. Borçelik Çelik brand, making it Turkey’s biggest processing capacity which provides has three cold-rolling and three hot-dip highest quality galvanized steelmaker. flexibility and market penetration galvanized lines. As Turkey’s biggest advantage under steel service center galvanized steel producer, Borçelik Strategic Positioning activities with the Kerim Çelik brand offers the highest quality products with Borçelik has strategically a solid vision • Kerim Çelik, Turkey’s first steel service 900,000 tons of galvanized capacity. which is to become the number one center at global standards, with more Borçelik successfully continues its down-stream steel solutions provider than 50 years of experience activities under the partnership of for key segments in our territories • Strategic partnership with Borusan Holding and ArcelorMittal, one thru customer proximity, efficiency ArcelorMittal, a global leader in the of the largest global steelmakers. and innovation. Borçelik’s competitive steel sector advantages are as follows: • Extensive experience and know -how through the being the first private steel maker in Turkey • Turkey’s biggest galvanized steelmaker, offering the highest quality
40 BORUSAN HOLDING ANNUAL REPORT 2019 Sustainable Financial and Operational Results As of the end of 2019, Borçelik achieved sales of 1.7 million tons and reached a total export volume of 216,000 tons. Negative impact of USA Section 232 investigation is compensated by various diverse export markets for achieving better results. With its well-known commercial capabilities and a dedicated focus in value-added operations, Borçelik managed to achieve a 15% increase in its profitability results and continued to add value to its stakeholders in 2019. Borçelik performed 13% of Turkey’s cold-rolled and galvanized steel exports in 2019. The Company exported to 32 countries while continuing to extend strong support to the Turkish economy in 2019 as it is the major supplier of leading export brands of Turkey.
Borçelik reached a high capacity utilization rate as in previous years in 2019. The strong export performance of automotive and white goods sectors helped maintain the market share in domestic market sales and also, strong export position of Borçelik in 2019 result investment in test equipment, in high percentage of utilized capacity. prototypes, engineering software Borçelik recorded purchases, software maintenance R&D, innovation and digitalization costs, consultancy and consumables, all 538 thousand tons of initiatives continued in 2019 with dedicated to R&D projects. shipment under the internal focus on cost reduction, productivity, health and safety and In 2019, Borçelik R&D continued Kerim Çelik brand as external focus on new products industry previously started projects and of year-end 2019. 4.0 incentives and enhanced customer launched new ones. Of these, 13 service. projects were concluded and closed and 5 new ones were launched. Turkey’s First Steel Service Center at Focusing on quality and value-added Global Standards projects are the policies of project Advance Planning, which aims to create Kerim Çelik, Turkey’s first steel service management. In this regard, the a frictionless supply chain and reviews center at global standards with over 50 academic contacts and relationships all processes in purchasing, planning, years of experience, maintains strong have expanded, as has contact with sales, and delivery. The second was the market share performance in 2019 other R&D centers of Turkish industry SAP S4/HANA transition, which aims to and continued to add new sectors and stakeholders. The Borçelik R&D test have leaner, more efficient and faster customers to its sales portfolio. center is also enriched with new testing processes in sourcing, production and capabilities, especially on the corrosion delivery areas. The third was Robotic Innovative Power of Turkish side, one of which is the first in Turkey Process Automation, which aims to Flat Sector (Svet equipment). automate processes after reviewing the Innovation, research and development, two projects above. Last but not least, digitalization studies, and new product In 2019, 7 projects came from the was Digimon, which aims to create developments are core business innovation department and Borçelik a predictive maintenance platform opportunities in the flat steel sector made 7% of its sales from these in order to reduce breakdowns in to create competitive advantage and projects. “Galvanoks” was added to production. value-added brand perception. Borçelik’s product portfolio in 2019, and with the existing “GalPlus” two new One Coil One Sapling Borçelik R&D (research and trademarks were offered to the market We are presenting one sapling to the development) had roughly USD as part of the innovation initiative. nature for each coil we manufacture, 3 million of expenditure in 2019. because a livable future is possible only This corresponds to a 10% increase Four major projects were initiated with love and respect shown to the compared to 2018. Borçelik’s R&D for strengthening the digitalization green. expenditure consists of physical initiative of Borçelik. The first was
BORUSAN HOLDING ANNUAL REPORT 2019 41 MANUFACTURING
Borçelik
Highest production quality with long term automotive sector experience together with innovation, R&D and digitalization initiatives and strong human resources provide Borçelik a competitive advantage in its sector.
Sustainability is the Main Priority Sustainability is a priority in the steel sector and the sector closely follows the U.N. Sustainable Development Goals. Safety and health, technological developments to reduce the carbon footprint, modernization of processes and social responsibility are major topics in sustainability in the steel sector.
Environmental sustainability is one of the main drivers of Borçelik’s strategy and Borçelik makes responsible decisions that will reduce its negative impact on the environment. Borçelik aims to design and carry out all its activities with the intention of preserving natural resources and using energy efficiently, preventing pollution and leaving a cleaner, livable environment for future generations. As a part of this project, the saplings grown in the greenhouse of 2,000 In order to achieve this, Borçelik Environment- square meters within the factory measures, continually monitors, complex will be given to nature, and by reports and improves its performance friendly green doing so, the future will be protected. indicators on its environmental solutions Having given to nature a total of footprint. Borçelik carries out many 600,000 saplings over 10 years, Borçelik projects and studies every year to Environmental sustainability has already re-forested an area equal to improve the efficient use of natural is one of the main drivers of 2% of the total green-field area which resources in production (water, Borçelik’s strategy. Borçelik has burnt out in the country over the consumables, etc.), to improve energy makes responsible decisions last 10 years. efficiency (electricity and natural gas), that will reduce its negative to reduce its amount of waste, and to impact on the environment. To the “Give a Breath to Future” tree increase the use of recycled materials. planting campaign organized by the Turkish Ministry of Agriculture Continuous OHS and Forest, we have contributed by The Company’s occupational health planting 5,000 saplings in the memory and safety policy aims to stop unsafe of 25th Anniversary of our foundation working, continuously improve in Borçelik Memorial Forest located in dangerous situations and create a Yalova/Altınova/Havuzdere Village. culture that gives feedback on unsafe practices. Therefore, risk-assessment, hazard hunting, and behavior-based
42 BORUSAN HOLDING ANNUAL REPORT 2019 safety management (Number Ten) Total Sales (000 tons) 2015 2016 2017 2018 2019 tools have been implemented for a while. Employees participate in each of Domestic Sales 1,518 1,664 1,850 1,840 1,734 these tools. In conclusion, the goal is to Export Sales 173 291 404 292 216 continuously improve the safety culture. Total 1,691 1,955 2,254 2,132 1,950 In 2019, much training was carried out, in OHS Training, Number Ten Observer and Captain Training, and Corporate Borçelik delivered 1,500 hours of Orientation OHS Training in particular. training in 153 sessions under the Borçelik Technical Academy, as part of Borçelik Technical Academy continuous training for employees. 1,500 Borçelik Technical Academy (BTA) was established in 2014 with the Borçelik Technical Academy included hours of training initial intention of designing and 80 vocational school students in the Borçelik Technical Academy delivering technical training to coaching and professional training delivered 1,500 hours of Borçelik employees to develop/ program and delivered 450 hours of training in 153 sessions improve their competencies and hold voluntary training to 35 volunteering as well as 450 hours of corporate technical information. BTA coaches, as part of the Student voluntary training to 35 has extended these internal training Development Program. volunteering coaches, as part activities beyond the scope of Borçelik of the Student Development employees over time and has focused Borçelik Technical Academy included Program. on the training of potential future five female students from the Metal employees of Borçelik. As a part of and Machinery Department of Mimar this target, BTA has collaborated with Sinan Vocational and Technical vocational high schools in its region and Anatolian High School under the • The Company was awarded the has been involved in many corporate Coaching Program for Vocational High second best project prize in the Big social responsibility projects. BTA has Schools. Data and Analytics category in the supported these vocational schools, Smart Production Technologies their students and their trainers with Awards Awards organized by International coaching programs, training of trainers Borçelik was granted to prestigious Data Corporation (IDC), a global programs, common projects, and awards in 2019 as a result of its technology counseling company. intangible support programs. achievement. • Bursa Nilüfer Organized Industrial • According to the results of the “Top Zone (NOSAB) and NİLSİAD awarded In 2019, Borçelik Technical Academy 500 Industrial Enterprises of Turkey the Company its prizes for the largest (BTA) decided to go one step further 2018 Survey” conducted by the turnover, the highest number of in these activities to be more active in Istanbul Chamber of Commerce, the exports, the greatest employment vocational training and create a new Company climbed from the rank of and the support given to women business line through a vocational 22nd in 2017 to 19th in 2018. employment qualification certification. • According to the Capital 500 – the • The Company was recognized by the Top 500 Companies of Turkey – Bursa Chamber of Commerce and Borçelik Technical Academy aims survey, the Company is excelled to Industry (BTSO) as “Champion of the to ensure the creation of a qualified ascend from the 61st to the 58th on Bursa Metal Sector” in the “Adding workforce in the country by experience the list, and in the Fortune 500 survey Value to the Economy 2019” awards. from all sectors in which an active published for the 12th time this year, • In the Haier Europe 2019 Suppliers role is taken and to be a training and company is excelled to ascend from Meeting, organized by Haier, the certification institution that performs all the 51st to the 44th on the list. Borçelik largest white goods manufacturer in the activities in a reliable, high quality, is going to continue the efforts to the world, Borçelik was awarded the ethical and legal frame further move up the ranks in these “Best Industrial Cooperation” prize. very important surveys. Borçelik Technical Academy will • The project “No Job Too Tough establish training and certification For Women” was awarded a units in its internal structure with prize in the Corporate Social this accreditation process. The Responsibility Programs of the communication activities to be Turkish Confederation of Employer conducted on the Borçelik Technical Associations this year Academy brand are intended to be started by 2020. With this system model to be established, it is aimed to provide a financial contribution to the development of vocational education activities.
BORUSAN HOLDING ANNUAL REPORT 2019 43 MANUFACTURING
Borçelik
At the Haier Europe 2019 Suppliers Meeting, the largest white goods manufacturer in the world, Borçelik was awarded the “Best Industrial Cooperation” prize.
COMPANY PROFILE
Borçelik Keri ̇m Çelik
Product Portfolio • Metal processing capacity of • Hot-dipped galvanized steel, cold- 500,000 tons in total rolled steel and hot-rolled steel • Bursa Steel Service Center: (pickled and oiled), used as industrial 340,000 tons raw material. • Manisa Steel Service Center: • Production of various grades of flat 130,000 tons carbon steel, including commercial, • Adana Steel Service Center: drawing, extra deep drawing, 30,000 tons dual-phase, bake-hardening, rephosphorized, High Strength Low Sectors Served Alloy (HSLA), high-carbon and special • Borçelik serves the following alloy, enameling, and structural steel. industries: household appliances, automotive (main and sub- Production Capacity industries), panel radiators, • The total production capacity of 1.5 construction, color coating, pipe million tons and profile, packaging, metal • 600,000 tons of cold-rolled steel goods, and steel service centers. • 900,000 tons of hot-dip galvanized • Kerim Çelik serves the following steel industries: automotive sub- industry, household appliances (main and sub-industries), heating, cooling and ventilation, electricity, electronics, lighting, construction, elevator, machinery, and spare parts industries, radiator, silo and poultry equipment, furniture and accessory manufacturers, cable and conveying systems, pipe and profile, steel service centers, and other sectors.
Service and Manufacturing Center • Gemlik • Bursa Steel Service Center • Manisa Steel Service Center • Adana Steel Service Center • Istanbul Sales Office
Partnership • ArcelorMittal
44 BORUSAN HOLDING ANNUAL REPORT 2019 EXECUTIVE MANAGEMENT
Kerem Çakır Hafize Çetinel Mesut Güney General Manager Executive Committee Member Executive Committee Member Financial Affairs Production and Investments
Sinan Sözen Güvenç Temizel Mustafa Ayhan Executive Committee Member Executive Committee Member Executive Committee Member Purchasing and Kerim Çelik Sales Sales, Marketing, Customer Technical R&D, IT, Digitalization, Management Relations, and Innovation System
Önder Aydoğan Executive Committee Member Supply Chain Operations
BORUSAN HOLDING ANNUAL REPORT 2019 45 MANUFACTURING
Supsan TURKEY’S LARGEST ENGINE VALVE MANUFACTURER
Supsan is very close to announcing its own engine valve material to reduce the raw material costs. In 2019, Supsan’s material was produced and underwent metallographic and mechanic characterization studies. After successful results in production and engine tests, new material will be ready. Moreover, Supsan started the “Development of Data Collection System” project in 2019. Data analysis and deep learning are the most popular R&D subjects.Supsan started to use different types of sensors to collect data on its own utility services. Supsan can monitor all data 24/7 and predict the next scheduled maintenance. These data will also help to anticipate the root cause of any defect.
Following Digitalization and Industry Positioned as the valve supplier for the TL 5 Million for R&D 4.0 Trends… world’s leading automobile brands and Supsan spent TL 5 million for R&D in Supsan considers the Finite Element the largest manufacturer in Turkey, 2019. Electric and hybrid cars are on Method (FEA) Analysis as important. Supsan continued to move forward in the agenda. The ambition is to have One of these R&D projects is “Valve the 2019 operating period. high power output from small engines Seat Insert Optimization by Finite to match new emissions. Therefore, Element Method (FEA) Model.” The Strategic Positioning advances have been achieved in both main objectives of this project include Operating as a Borusan Holding the engine technology and the use creating a Finite Element Method (FEA) company, Supsan carries out distinctive of turbo. However, these changes Model to define maximum stresses business processes thanks to the cause the engine temperature to rise on the surface between the valve seat following competitive advantages: too high because of hollow valves; and valve seat ring and to optimize • Supsan is Turkey’s largest consequently, sodium valves are the match of the valve seat angle with manufacturer of engine valves, considered. Nine internal R&D projects the material. In another R&D project • It is the leader of the domestic were launched and six internal R&D which utilizes Finite Element Method Original Equipment Manufacturer projects were finalized in 2019. These (FEA) modeling, the engine valve is (OEM) and spare parts market, were about process development, developed and prototyped according to • The company’s strategy is focused new material development, new the Original Equipment Manufacturer on expanding its product range and product development, digitalization, (OEM) customer’s requirements. increasing reference units to meet and Industry 4.0. One of the process the needs of the automotive spare development projects was “Direct parts market. Quench Process Design for Martensitic Steels,” which aimed to increase Supsan’s heat treatment efficiency.
46 BORUSAN HOLDING ANNUAL REPORT 2019 Supsan follows digitalization and Industry 4.0 trends closely. Several examples may be provided for these trends at Supsan. First is the adaption of an industrial robotic arm to allow for automatic visual inspection and avoid the failure of products. This project improves the effectiveness of error detection in the K1 QC line. The other project is the adaptation of sensors for early detection systems to detect problems in all auxiliary facilities and production lines.
Almost ready to supply lightweight, high-strength engines with a hollow valve, Supsan conducts Türkiye Bilimsel ve Teknolojik Araştırma Kurumu (TUBITAK) and internal R&D projects to support characterization of the hollow engine valve. Solid valves and hollow valves are subjected to a thermometric engine test at Supsan’s Dyno Test Room to compare the temperature Significant Increase in Productivity Future Outlook of Supsan distribution on the engine valve surface. with Lean Six Sigma Existing performance and future The thermal stress of a hollow valve is In 2019, Supsan enjoyed considerable outlook of valve business led to three analyzed in comparison with a solid improvements in production and initiatives to transform Supsan: valve by the finite element method productivity due to its efforts focused (FEM). As a result, the maximum on Lean Six Sigma and its philosophy of Reorganization of Valve Business temperature and thermal stress of continuous development. • Receive more projects from potential sodium hollow valve are lower than the players in the Turkish Original solid valve. Turkey often uses regular 2019 Business Outcomes Equipment Market (OEM) market valves, which cannot be replaced. Positioned as the valve supplier for the • Improve sales channels to get more Supsan is launching a new special world’s leading automobile brands turnover in foreign markets valve for LPG. The packaging will be and the largest manufacturer in • Improve the infrastructure to supply different for easy detection. The most Turkey, Supsan recorded a number of large valves to non-automotive distressing side of the valve is covered achievements in 2019: sectors (marine, rail system, energy,) with a special material called satellite to • Focus on developing high-technology increase strength. • The number of non-valve references products such as hollow valves increased from 2,534 in 2018 to 3,236 Occupational Health and Safety in 2019. Aftermarket Transformation (OHS) is the Top Priority • The number of turbocharger • Enhance the distribution network Occupational health and safety (OHS) references increased to 62. and reach wider areas. has always been the top priority at • The share of non-valve products in • Achieve dominance in selected Supsan. The company has significantly total turnover corresponded to 25% in products in high-potential markets. reduced the number of occupational 2019. • Have value-added spare parts (use in accidents through continuous • Some 3,108 people were contacted electrified transportation standards improvement efforts. through 42 customer training & (xEVs) and electronics). introduction meetings and 48 Apprenticeship Training Center New Product Development Meetings, in line with the marketing • Work on Original Equipment strategy for Turkey. Manufacturer (OEM) products that • As a result of productivity studies will generate turnover in addition TL 5 million conducted under Lean Six Sigma and to valve business in the short term, continuous development efforts, 35 replace valves in the long term and for R&D projects were developed in order to also use in electrified transportation become a lean manufacturer on a standards (xEVs). Supsan spent TL 5 million for global scale. • Carry out negotiations for candidate/ R&D in 2019. • Compared to the previous year, the new products, conduct of feasibility number of projects increased by 17% studies, establishof market strategies and the number of Sosyal Destek • Execute investment(s) with incentives Programı (Social Support Program - for candidate/new product(s). SÖDES) suggestions rose 127%.
BORUSAN HOLDING ANNUAL REPORT 2019 47 MANUFACTURING
Supsan
In 2019, Supsan enjoyed considerable improvements in production and productivity due to its efforts focused on Lean Six Sigma and its philosophy of continuous improvement.
DISTRIBUTION OF VALVE CAPACITY AND PRODUCTION (MILLION UNITS) EXPORTS BY COUNTRY (%) Production Capacity
12.0 12.0
6.8 5.4
2018 2019
Italy 83% SALES (MILLION UNITS) Russia 10% Export Domestic Germany 4%
France 2% 3.91 3.56 USA 1% 2.97
1.54
2018 2019
48 BORUSAN HOLDING ANNUAL REPORT 2019 COMPANY PROFILE EXECUTIVE MANAGEMENT
Operational Information Manufacturing Capacity • Total Production: 5.4 million units • 12 million valves per year • Global Sales: 3.56 million units • Production capacity of 3 million • 2019 Valve Sales: 5.5 million units stellated valves and 3.3 million • Exports to Italy: 83% two-piece valves
Corporate Information Sectors Served • Domestic and international OEM and Field of Activity after-market customers • International expertise in the Salih Alson manufacturing and after-sales Service Locations General Manager services of engine parts and other • Headquarters: Halkalı Plant related products in the original • Independent Spare Parts: 100 dealers equipment and aftermarket. • Valve production for internal combustion engines under the Partnership license of Eaton SRL, the leading Eaton manufacturer in the global market.
Products and Services • Domestic OEM • Domestic OES • International OEM & OES
BORUSAN HOLDING ANNUAL REPORT 2019 49 #leadersatborusanOVERVIEW
50 BORUSAN HOLDING ANNUAL REPORT 2019 MAKING A DIFFERENCE IN CONSTRUCTION, RESOURCE AND ENERGY & TRANSPORTATION INDUSTRIES
Component Rebuild Centers of Borusan Cat are integrated solutions providing facilities working just like an actual factory. These facilities, which are built to create a center of excellence and to give the best service to customers both required and gave birth to leadership stories.
The journey of our transformation began in 2017 for Turkey and a critical part of this transformation focused on service operations. From an organization operating in nine locations, we shifted to central of excellence model, with the opening of 2 Component Rebuild Centers (CRC), first in Gebze then in Ankara, as we did in Kazakhstan. One of the most important reasons for this centralization strategy could go live and worked flawlessly was due to influential and constructive leadership examples.
Shifting to the CRC structure leads to working with standardized processes and services. Along with the development of digital tools, optimum planning, improved expertise and technical competence building, we can now offer the solution that our customers need faster and at the highest standards. We can compare CRCs to replacing an airplane engine with a new one, doing maintenance, or making comprehensive overhauls to the aircraft body. And while doing this, we are growing leaders who are becoming experts in their area. Most importantly, this is an endless journey, our transformation will continue from here.
BORUSAN HOLDING ANNUAL REPORT 2019 51 MACHINERY AND POWER SYSTEMS CONSTRUCTION, RESOURCE, ENERGY & TRANSPORTATION INDUSTRIES
Borusan Cat FOR 25 YEARS, WE CREATE SOLUTIONS FOR A BETTER WORLD
Borusan Cat, the market leader in its operating territories since its establishment, represents Caterpillar in six countries, with more than 2,500 employees.
With its renowned capabilities and expertise developed in different territories, Borusan Cat is dedicated to creating value for all its stakeholders through solution-provider-focused strategic initiatives. The company is known as one of the leading dealers of Caterpillar in the world.
Borusan Cat addresses customers’ needs by developing comprehensive and value-added solutions, through expanding its presence in six countries. With its experienced and dynamic team, Borusan Cat looks to the future with confidence and is dedicated to • Process and analysis of continuous Construction Industry creating solutions for a better world. data flow from the field with artificial Despite industry decline, Borusan The company will continue investing in intelligence tools, Cat’s sales and market share increased advanced technology and digitalization • A customer-oriented, agile and lean with customer focused, innovative along with a focus on boosting organization working with founder’s marketing and distribution approaches. operations efficiency. mentality. The company was selected as one of the highest performing dealers in terms Strategic Positioning Borusan Cat Creates Solutions of increasing market share. Borusan Cat sustains its strong Across Territories presence and successful operations, • Through strong financial discipline, • Dominating backhoe loader industry driven by the following competitive efficient organizational structure in Kazakhstan with increased market strengths: and a customer centric approach, share to 50%, while still being one • A reliable consultant for customers Borusan Cat has been maintaining its of the strongest players in paving with solution provider identity, operations successfully. segment resulting in highest level of • Unique expertise gained in different • 2019 was a record year in terms of sales ever, territories, financial results, particularly for • Reached highest sales to user and • Value-added sales and after-sales profitability. market share in Far East Russia solutions reinforced by innovation • Customer loyalty results reached territory despite the slowing down and digitalization, record levels in almost all countries. GDP. Strong footprint and support • Strong engineering capabilities, • The company celebrated its 25th capabilities in the territory combined project management skills and anniversary of the Caterpillar with 3-tier coverage (dominance, extensive turnkey solutions, dealership in Turkey and the 20th focus to grow and selective coverage) anniversary in Kazakhstan.
52 BORUSAN HOLDING ANNUAL REPORT 2019 and innovative solutions enabled sustainable growth in customer loyalty, • Highest performing SEM distributor award received in Far East Russia, reaching ¼ share of the market in 2019. • Turkey operations continued its growth for end user sales in 2019 by 5%. By dedicated focus on core equipment sales, over 25% growth achieved in 2019. • Awarded for making one of the most successful NextGen Excavator launch, managed steady market share increase in medium and large excavator groups. Dominance in marble industry secured by 2 percentage points market share increase in total wheel loader market. • With “Site Technology” approach Borusan Cat is as a game changing player by productivity focused innovative products with smart solutions. As a value creating technology partner with innovative and disruptive solutions, gold and silver certification levels the challenges in the industry, the Sitech Eurasia has been offering in Operational Excellence Program company achieved highest revenue and unparalleled customer experience respectively. Borusan Cat plans maintained market share by creating to its partners. Sitech is the winner to deploy this experience to other solutions for its partners and strong key of all mega projects by value-added Borusan territories with ‘Integrated account management. engineering capabilities, strong Used Equipment and Rental Strategy’ project management skills with in order to provide the same standard • Sustained high market share in highly capable and experienced of customer experience across its underground mining segment and teams operating in Turkey, Azerbaijan, territories. become one of the leading Caterpillar Georgia, Kazakhstan, Kyrgyzstan and • Borusan Cat continued process dealers. launched in Far East Russia this year. optimization and efficiency • The largest truck type tractors of • Benim Filom was strategically increase efforts in 2019 resulting in Caterpillar product line (D11) and repositioned as an end to end improvements in call to dispatch the first 250 tons off high way trucks solution provider from greenfield and turnaround time. The number (793) were introduced to Kazakhstan to landscape concentration in certified of rebuilds increased market. construction industry. Customers significantly in 2019 in Far East • The first licensed manufacturing have the opportunity of simplifying Russia, a record in Caterpillar Eurasia of Ground Force products (water all site works from multi vendors to a Territory. tanks) was completed and exported single trustable vendor. • With the aim of offering fast, reliable in Kazakhstan. The unique rebuild of • Used Equipment and Rental and convenient customer support Metso crushers was also completed. business, continued to sustain its solutions Exchange (B’Daha) business • Along with a long-standing strong position despite tough market is initiated. partnership with Kumtor Gold conditions in Turkey. Turkey’s success • With an increasing focus on aftersales Mine in Kyrgyzstan, the company is approved by Caterpillar with business, pilot studies for customized expanded its service portfolio and and flexible “Customer Value reach significant revenue growth. Agreements” were initiated. • Continued its long standing strong • Ecolog brand, wheeled harvesters partnership with Petropavlovsk in Unique and forwarders for the forestry Russia Far East. segment, were added to Far East • Focus on alluvial miner’s clusters experience and Russia’s portfolio. delivered boost of LTTT sales, which expertise expected to grow in coming years. Resource Industry • Continued its strong partnership With 25 years of experience Being a reliable consultant for with Tuprag Gold Mine (Eldorado Borusan Cat developed customers and offering tailor made Gold Company) and successfully disruptive and innovative solutions through account base completed customers off high way applications for excellent approach, Borusan Cat continued its trucks LNG conversion. customer service and became success in resource industry. Despite pioneer in its territories.
BORUSAN HOLDING ANNUAL REPORT 2019 53 MACHINERY AND POWER SYSTEMS CONSTRUCTION, RESOURCE, ENERGY & TRANSPORTATION INDUSTRIES
Borusan Cat
Borusan Cat addresses customer needs by developing comprehensive and value adding solutions
• Achieved the first sales of complete Marine propulsion package including propulsion engines, gensets, thrusters and an Advanced Variable Drive (AVD) system for the world’s first tugboat, with innovative technology. • Continued to sell IMO III certified Marine engines in the tugboat segment for a clean environment. • Achieved sales of the highest number of small size Marine genset packages worldwide. • Turkey’s largest health complexes which are Bilkent and Bursa Hospitals are commissioned successfully. • Reached the highest commissioning experience on LFG and BIOGAS Projects in terms of power of totally 80 MW. Energy and Transportation Industry • Achieved the first largest custom Leading total solution provider in made generator sales to the Turkish Creating energy and transportation businesses, locomotive manufacturer Tulomsaş delivering the highest value to its with product diversification. innovative, value- customers’ needs with agility, capable • Continued its strong partnership with added services and disciplined project management Ronesans for rental solutions at Amur mentality, with project responsibility AGPZ Project in Russian Far East. Borusan CAT continues to upon sales to commissioning and total • Achieved to deliver fully designed invest in digital and R&D customer satisfaction commitment and built 8 MW power plant at Kuril creating innovative, value- through empowered teams in 6 Islands for one of the largest Fish added services throughout countries. Farm in Russian Far East. the entire customer lifecycle. • Continued strong partnership with • Achieved the sales of first agricultural TPAO as an energy solution provider biogas project. (8MW). by supplying different size of Gas • Preferred Generator package solution Generator Sets to be operated in their to Petrofac for TurkStream project, oil fields. including design and supply of a captive power plant that consist of Digital Transformation Journey containerized gas gensets. Continues at Full Pace • Achieved the first complex Delivering total solutions proactively packaging experience of engineering, is in Borusan CAT’s center line. One procurement and construction of main business focus areas for 2019 (EPC) with containerized four gas was as always, to create value and generators and one diesel generator solution that would improve customer on off shore platform project in experience through digital solutions. Garagol, Turkmenistan.
54 BORUSAN HOLDING ANNUAL REPORT 2019 Pending patents for 2 applications, 2 research papers submitted, 4 trademarks acquired.
Our Digital & Technology team • CRC ERP: A specific ERP solution • Digital Data Security: Regarding including 30 R&D team of engineers, which is solely designed for CRC the “information” as a corporate utilizing cutting-edge mobile/web, data operations developed by inhouse asset that must be protected analytics, machine learning & RPA and resources and adapted to Gebze CRC in all circumstances, ISO 27001 IoT technologies continued serving and Ankara CRC units. Certification for Information Security to our commitment of total solution • Focus on Customer Experience: New Management was successfully provider for customers. website has been launched with renewed. new design and user experience, it Leveraging best-of-breed technologies will be the hallmark for deepening Awards and sophisticated analytics capacities, customer engagement and growing • Borusan Cat was granted with ‘Digital data is transformed into precious e-business. Trailblazer’ award in SAP Global insights making a difference for • ERP Solution for our Authorized Innovation Awards. customers and their business. Dealers: A cost-effective ERP (SAP B1) • Turkey received ‘Bronze’ award for is rolled-out to 28 dealers returning Marketing and Sales Excellence The efforts and successful outcomes improved efficiency both for Program and 3rd prize for ‘Rental of our teams in the digitalization Authorized Dealers and Borusan CAT. Excellence’ in AME region by Cat. were recognized both by Caterpillar • Innovation is the Key: With the vision • Kazakhstan received high recognition and other dealers worldwide. Besides of developing domestic technology of its partnership from one of its key that, best practices and digitalization and intellectual property rights, customers ERG (one of the largest insights were shared with many R&D initiatives progressed further ferrochrome producer) and won the peer firms in Turkey on demand and in 2019. Two applications developed “Best Service Provider” nomination. received appreciation. by Borusan R&D team, are patent • Kazakhstan is also rewarded with pending. Four trademark licenses 2nd prize for ‘Service Excellence’ and R&D and Digital Investments were acquired. Two research papers ‘Paving Best Performance’ categories Bearing Fruit were submitted for publication in and 3rd prize for ‘SEM Consistent Sustaining the investments in the peer-reviewed journals. Superior Performance Eurasia’ by digital and R&D, laid the foundations of • Anywhere Anytime: Efficient Caterpillar. many highlights from 2019: technician planning digital • Far East Russia received ‘EAME application, WeKing, is further Continuous Improvement SEM • Müneccim: An award-winning AI & IoT improved and deployed to Award’ for its successful operations in solution proactively predicted many Kazakhstan and Azerbaijan. SEM machines sales. machinery and component revision • Continuous Process Automation • Far East Russia was also awarded and repair opportunities benefiting & Optimization: 85 new software with Exxon Yellow Blood Challenge to both customers, Borusan CAT and RPA (Robotic Process Automation) 2019 prize, a competition for dealers our world. Roll-out to other countries robots are lunched yielding greater organized by Caterpillar and Exxon is in progress. efficiency and agility with 2.600 Mobil, in the sales growth category. • RFM-S: Brand new AI application human day savings. They had • Azerbaijan received 2nd prize for RFM-S (Recency, Frequency, tremendous impact on processes ‘Building Construction Products Monetary and Sensitivity) identifies by easing the works of finance and (BCP) Best Sales and Market Share the customers with the highest operation departments. Growth’ award from Caterpillar. potential to buy based on historical data and economic conditions.
BORUSAN HOLDING ANNUAL REPORT 2019 55 MACHINERY AND POWER SYSTEMS CONSTRUCTION, RESOURCE, ENERGY & TRANSPORTATION INDUSTRIES
Borusan Cat
Through strong financial discipline and efficient organization structure Borusan Cat achieved successful results in 2019.
BORUSAN CAT COMPLETED COMPANY PROFILE CONSOLIDATED SALES REVISIONS IN CRCS (USD MILLION) (UNITS) Operational Information 2019 2018 2019 2018 • Borusan Cat 2019 Consolidated Sales: USD 833,587 million • Completed Revisions in CRCs: 5,310 964 5,310 • Completed Field Service Work Orders: 834 4,776 30,964 • Customers Served: 8,135 • Active Customer Value Agreements: 5,915 • Customer Value Agreements Sales: USD 51,923 million
COMPLETED FIELD CUSTOMERS SERVED Corporate Information SERVICE WORK ORDERS (UNITS) • Dealer for Caterpillar in Turkey since (UNITS) 1994. 2019 2018 2019 2018 • Caterpillar’s sole representative in Azerbaijan, Georgia, Kazakhstan, 8,794 Kyrgyzstan, and Far Eastern Russia, as 39,791 8,135 well as Turkey. 30,964 • Representative of Metso in Turkey, a world leader in mobile crushers and screener units, and Italian MB Crushers which offers bucket crushers and screen buckets. • Sole representative of Genie boom lifts and Mantsinen port cranes in Turkey. • Representative of heavy fuel and medium speed MaK marine engines Electro-Motive Diesel (EMD) engines. • SITECH is the local distribution channel of Trimble Navigation Limited’s Heavy and Highway Construction Site Technology Solutions. SITECH serves many customers, from contractors with single-brand fleets of machinery to those with mixed-brand fleets.
56 BORUSAN HOLDING ANNUAL REPORT 2019 EXECUTIVE MANAGEMENT
Özgür Günaydın İrem Erdoğan Bülent Atar Chief Executive Officer Human Resources and Learning & International Business Director and Development Director and Executive Executive Committee Member Committee Member
Aslan Hiçsolmaz Fuat Murat İbrahim Harun Akçınar Finance Director and Executive Turkey General Manager and Executive Energy & Transportation Executive Committee Member Committee Member Committee Member
BORUSAN HOLDING ANNUAL REPORT 2019 57 RAISING THE BAR IN THE AUTOMOTIVE INDUSTRY
Borusan Otomotiv Group offers the best sales and aftersales services by providing customized, integrated, transparent and value-focused services at all touchpoints - with its expert staff.
Borusan Otomotiv Group places great importance on employee happiness and loyalty in order to deliver unconditional customer satisfaction. A major success story at the company started with the Employee Engagement Survey, which solicits feedback from staff members at regular intervals.
As a result of the Employee Engagement Survey Actions of 2018 on Leadership, Work-Private Life Balance, Performance Management and Career Development, members of the Executive Committee, led by the Human Resources department, announced a series of initiatives to address these four key areas. Subsequently, an internal volunteer team “Voltran” became the part of the change. The Voltran team commenced a transformation with major research efforts and related projects. With this transformation drive, Borusan Otomotiv Group is taking steps to boost the level of service it provides to both employees and customers. We have embraced a management approach that puts people at the center of how we measure success. #leadersatborusan AUTOMOTIVE
Borusan Otomotiv, Borusan Oto, Borusan Otomotiv Premium BORUSAN MAKES A DIFFERENCE IN THE PREMIUM AUTOMOBILE SEGMENT
Borusan Holding operates with Borusan Otomoti ̇v three companies in its automotive Borusan Otomotiv pursues the Turkey’s group. Borusan Otomotiv is Turkey’s following: distributor of distributor of premium brands with a • Be the first choice and pioneer well-deserved reputation in the global company in the premium automobile premium brands automotive market, including BMW, and motorcycle segment, MINI, BMW Motorrad, Jaguar, and Land • Offer unique experience to customers Borusan Otomotiv is Turkey’s Rover. Borusan Oto holds over 55% and sustainable value to stakeholders distributor of premium brands share in all authorized retail operations with innovative products and services - including BMW, MINI, BMW as an authorized dealer and service in the automotive industry, Motorrad, Jaguar and Land provider for Borusan Otomotiv. Borusan • Know customers well and provide Rover - with a well-deserved Otomotiv Premium, meanwhile, customized, integrated, transparent reputation in the global provides loans, insurance solutions, and and value-focused services at all automotive market. long-term rental services for customers. touchpoints by building trust and fostering, sustainable relations, Strategic Positioning • Be the most desirable company Borusan Otomotiv, Borusan Oto and in the automotive industry that Borusan Otomotiv Premium create respects the principles of equality strong synergy and focus on added and supports the development of value in business processes through the employees in a positive environment following vision, mission and strategic encouraging creativity and high goals: performance,
60 BORUSAN HOLDING ANNUAL REPORT 2019 • Be the most admired brand in the premium automobile and motorcycle segments, in line with the values of the brands Borusan Otomotiv represents, creating value for all stakeholders, • Be a leading company in the implementation of digital solutions and create value by providing a seamless experience to customers, employees and all stakeholders with lean, innovative and data-driven decision-making processes.
Borusan Oto • Holds over 55% share in all authorized retail operations as authorized dealer and service provider for Borusan Otomotiv, • Borusan Oto is the customer-facing part of Borusan Otomotiv Group, therefore it focuses on creating the best experience for customers. Turkey’s geopolitical position and the Borusan Otomotiv Group brands potential of the logistics industry is are the first in the automotive sector Borusan Otomotiv Premium also an opportunity. The fact that the with online sales platforms Borusan • Provides loans, insurance solutions number of cars per person is well below Otomotiv Group has enhanced the and long-term rental services for the levels of developed countries and stock locators for all of its brands. The Borusan Otomotiv customers, the high age of the car park is a signal Group introduced a new sales and stock • Conducts initiatives for used car that the domestic demand can be management system through the stock operations, sustained. locators which provided stock and price • Creates a loyal customer base for transparency and improved product Borusan Otomotiv Group with Turkey’s passenger car and light accessibility for customers which in turn high customer satisfaction by commercial vehicle total market improved the competitive edge. differentiating from the traditional decreased by 22.85% in 2019 compared rental business model and providing to 2018, to 479,060. In 2018, the total In 2019, Borusan Otomotiv Group customized and flexible solutions, market sales figure was 620,937. integrated S/4HANA, transforming its • Aims at providing loan and insurance Passenger car sales went down by operation while gaining speed and services via partnerships, through an 20.37% in 2019 compared to 2018, to agility. Borusan Otomotiv: integrated system infrastructure and 387,256. In 2018, sales were 486,321. • Introduced RPA to increase efficiency, with a team positioned in Borusan Although contracting in the domestic ensure compliance and release value Otomotiv Authorized Dealers. market, the automotive industry is still to its employees. the export leader in Turkey in 2019. • Moved the car buying process to Automotive Industry in Turkey online, structurally changing the rules The automotive is one of the most In 2019, the launch of the all-new of engagement with its BMW, MINI, important industrial sectors all over the and refreshed core models BMW 1 Jaguar and Land Rover customers. world due to its volume and impact Series, BMW 3 Series and BMW X1, Launched a new online platform for area. Fluctuations in exchange rates with attractive designs, advanced used cars - supporting initially B2C - and inflation and fragility in global technologies and the right engine mix extending it to B2B/C2C. demand are the main threats of the increased competitiveness. • Revamped the Customer Relations sector today. The transformation Management (CRM) operation into pressure created by technological Transformation of Marketing Customer Experience (CX) strategic developments in the automotive Communication Strategy of services to drive a data-driven, industry is undoubtedly a threat to the Borusan Otomotiv customer-first approach. sector. In addition to all these threats, Borusan Otomotiv started transforming • Initiated a cloud migration strategy there are also opportunities for the its product planning and marketing for a lean and nimble IT, reduced sector. The priorities and support given communication strategy in 2019. operational expenditures (OPEX) on to the domestic automobile project, Product offer and price positioning core IT elements. as well as support provided by the based on market and customer insight, government for R & D and investment along with martech assisted digital expenditures, encourage the sector. communication based on the customer journey and lead nurturing lifted the brand perception and strengthened market penetration.
BORUSAN HOLDING ANNUAL REPORT 2019 61 AUTOMOTIVE
Borusan Otomotiv, Borusan Oto, Borusan Otomotiv Premium
“What makes the activity valuable is not endangering the health and safety of the employees.”
A Safe Working Environment for Employees Borusan Otomotiv Group is committed to complying with all applicable domestic and international laws, rules and regulations while meeting customer requirements and pursuing continuous improvement. Providing a safe working environment for its employees is a top priority across the Group. To this end, Borusan Otomotiv Group shaped its Occupational Health and Safety (OHS) Policy around the slogan: “What makes the activity valuable is not endangering the health and safety of the employees.” To protect the health of employees and to ensure safety in the workplace, the Group also actively protects the environment and conserves natural resources. In addition to fulfilling legal and regulatory requirements related to • Constantly raising employee The Month Award, Puantum Awards, the employee occupational health and awareness on Occupational Health and Department-based Facilitation safety, Borusan Otomotiv Group strives and Safety (OHS) issues, Sessions. The concept is the first in to monitor changes in the law and • Pursuing continuous improvement its category since it was created by makes modifications when necessary. with effective methods to improve the internal volunteer group Voltran. The Group’s OHS related commitments occupational health and safety The group consists of 12 employees include: performance, from different departments. They • Embracing the principle of “Health • Determining protection parameters have worked for 7 months; they have and Safety First, related to health and safety risks that found out employees’ needs and • Identifying potentially hazardous may arise from activities in order to expectations using methods such as situations to which the employees create a safe working environment, brainstorming, interviews, meetings, may be exposed, and taking • Organizing training activities to benchmarks, and one-to-one meetings. necessary precautions in accordance effectively implement occupational As part of the program, managers with risk levels, health and safety practices. received Recognition Seminar on • Periodically reviewing the how to determine best recognition Occupational and Health Policy (OHS) New Reward and Recognition approaches for their employees. In in order to maintain compliance with Concept of Borusan Otomotiv Group: addition to SENDEĞERLİSİN concept, applicable requirements, SEN DEĞERLİSİN in cooperation with Voltran, working • Operating in a way to protect the SENDEĞERLİSİN is Borusan Otomotiv hours were revised, internal mentoring health of employees and to ensure Group’s new Reward and Recognition program MENTORUM, Birthday Leave, work safety, to prevent injuries and concept that consists of Team Player and flexible working arrangement occupational diseases, of The Month Award, Manager of
62 BORUSAN HOLDING ANNUAL REPORT 2019 Mobile Day were implemented. Reflection of Digitalization in Total The creation of internal volunteer Sales… group Voltran and implementation • In the first half of the year, the online of concepts in cooperation with sales platform “BMWnibul” was used 51% of total Voltran have impacted the employee to support dealers in sales. In addition engagement very positively in both to regular sales, aged cars in stock BMW sales ways; Voltran members and employees. were promoted as “Opportunity Cars” Aged cars in stock were Voltran members have become part of and sold only via BMWnibul. 51% of promoted as “Opportunity the change, they have led the change. total BMW sales were sold via this Cars” and sold only via They have used their negotiation platform in 2019. BMWnibul. 51% of total skills and they have had the chance • A total of 59% of MINI sales were BMW sales were sold via to evaluate the dynamics of Borusan realized online in 2019. “BMWnibul” platform in 2019. Otomotiv Group in a holistic way. They • 21.7% of Jaguar sales and 19.0% of have done magnificent teamwork and Land Rover sales were realized online they have developed their networking in 2019. skills.
Firm Steps Towards Digital Transformation
Borusan Otomotiv moved forward with firm steps towards digital transformation. In 2019, Borusan Otomotiv accelerated the digital transformation by enhancing customer experience and improving productivity and revenue. Borusan Otomotiv: - Led the way in the industry with migration to S/4HANA. - Upgraded to Robotic Process Automation (RPA) for highly manual, repetitive, and rules-based processes. - Increased efficiency, ensured compliance, and created value for employees involved in key processes. - Revamped the CRM operation in an actionable and accessible way, contributing to all brands – with the goal to achieve better sales results. - Accelerated customer-centric experience for BMW, MINI, Jaguar and Land Rover based on online channels. - Received the SAP Quality Award in the innovation category by launching the company’s first executive dashboard for all brands and all devices (desktop, laptop and mobile), thus reinforcing its data-driven approach. - Kept the momentum to provide the best customer experience with the Call Center Quality League Award as the 2nd prize winner. - Continued the “Digital Tribe,” a program that supports the evolution of corporate culture to achieve a truly successful digital transformation. - Launched its first customer engagement lab “BOpen” to generate customer-centric solutions and services for the enrichment of customer experience.
BORUSAN HOLDING ANNUAL REPORT 2019 63 AUTOMOTIVE
Borusan Otomotiv, Borusan Oto, Borusan Otomotiv Premium
Borusan Otomotiv was the winner in the Automotive Premium Segment A.C.E. Award (Achievement in Customer Excellence) with the BMW brand for the sixth consecutive year.
• Borusan Otomotiv’s total sales of retail parts and labor revenue for Jaguar & Land Rover Authorized Services amounted to EUR 32 million. • MIXX Award Europe – “Silver MIXX Award” in the program marketing category with BMW 4 Series Addressable TV execution. • MIXX Award Turkey - “Bronze MIXX Award” by BMW in the direct marketing category with Facebook Offline Conversation Project. • Social Media Awards Turkey – “Golden Award” by BMW in the effective use of data in the social media category with Facebook Offline Conversion Project. • Social Media Awards Turkey – “Bronze Award” in the use of new technologies category with BMW 4 Series Programmatic Addressable TV 2019 Business Outcomes execution. • Facebook – Video Polling Case with A.L.F.A. Awards BORUSAN OTOMOTİV The New BMW 3 Series launch. • Sold 12,452 BMW, MINI, Jaguar, and • Automotive Distributors Foundation’s BMW Motorrad won Land Rover automobiles (2018: 15,569) (ODD) Sales & Communications the Golden Award in and 716 BMW motorcycles (2018: Gladiators Awards – “Integrated the Motorcycle category at 1,000). Communication Campaign Award” the A.L.F.A. Awards. • Sold 9,583 BMW units (2018: 12,728). for the end-to-end communication • Sold 1,254 MINI units (2018: 1,373), campaign for The New BMW 3 Series. achieving the highest market share in • BMW won the “Customer Brand its history. Award” in the Passenger Car category • Sold 716 BMW motorcycles, and thus at the A.L.F.A. Awards. kept its leading position in the BMW • At the MINI Marketing Awards 2019 Motorrad Importer Group in Eastern held for the region, MINI Turkey Europe and Asia. won the First Prize among 25 • Sold 7,678 used cars. countries with its “Questions with • Borusan Otomotiv’s total sales of Serkay Tütüncü” Project for MINI retail parts and labor revenue for Countryman SUV. BMW, MINI and BMW Motorrad • MINI Electric was introduced by a pre- Authorized Services amounted to launch display event at İstinye Park. EUR 114 million. • BMW Motorrad won the Golden • Sold 1,371 Land Rover vehicles (2018: Award in the Motorcycle category at 1,248). the A.L.F.A. Awards. • Sold 244 Jaguar units (2018: 220).
64 BORUSAN HOLDING ANNUAL REPORT 2019 • Heavy-duty wooden pallets were reused to create homes for dogs. With the participation of employees and students of Asım Kocabıyık High School, dog houses were produced at Borusan Oto workshops and transferred to Giresun to support the lives of dogs under severe winter conditions. • At the Cannes Lions International Creativity Festival, the largest global event in the creative marketing community, Land Rover won Bronze Lion in the Outdoor category with the project “Land Rover Beyond Fashion.” • At the MediaCat Felis Awards, Land Rover won a Felis Award in the Print Category with the project “Land Rover Beyond Fashion.” • At the Crystal Apple Festival, the largest marketing communication and creativity event in Turkey, Land Rover won Crystal Apple Award for the project “Land Rover Beyond Fashion” in the Print/Fashion & Accessories and Outdoor/Textile & Fashion Categories. Land Rover also won Grand Prix in the Print Category. • Borusan Otomotiv was the winner in industry and representing Turkey • At the Outdoor Awards, “Jaguar the Automotive Premium Segment in this field, organized the Virtual I-PACE shares its electricity” project A.C.E. Award (Achievement in GT Championship for the second won an award in the Outdoor/ Customer Excellence) with the BMW time with the motto, “The Path from Automotive Category. brand for the sixth consecutive year. Virtual to Reality.” The team achieved Complaints from customers via its goal by introducing one young BORUSAN OTO sikayetvar.com were evaluated in driver and supporting him in two • Borusan Oto reported strong annual terms of the first reaction time to races in the Turkish Championship operational results in 2019, despite the the complaints, complaint resolution with two first places on the podium. challenging business environment. process, resolution rate, level of • Borusan Otomotiv was the Bronze New car and motorcycle sales volume satisfaction with results, and positive Winner of the SAP Quality Award in of Borusan Oto reached 6,263 units feedback percentage. the Innovation category in Turkey. at the end of 2019 and used car sales • Initiated by Borusan Otomotiv in The award was granted for the SAP volume was 4,811 units. 2008, Borusan Otomotiv Motorsport Executive Dashboard project, which • Borusan Oto introduced a completely (BOM) won - over the course of supported a data-driven culture at new business model for the first 12 years - 18 championships in the executive level, providing insights time in Turkey in collaboration 352 races, which took place in 36 to the business questions of each with an insurance company. No different circuits in 20 countries on company/leader, in a holistic, real- insurance approval is needed on four continents. In the 2019 season, time manner. Borusan Otomotiv has standard insurance claims, to reduce Borusan Otomotiv Motorsport (BOM) consistently improved its call center inefficiencies and complexity of the participated in the GT4 European management and received the procedures and shorten the lead time Series, which included 50 teams and 2nd prize for the Call Center Quality for better customer experience. over 100 drivers from 12 brands and League Award in 2019. • New projects were launched 35 racing teams. Borusan Otomotiv • Borusan Otomotiv Ocean Volunteers successfully to increase loyalty and Motorsport (BOM) represented has established “Ocean Libraries” in regain the lost customers of older Turkey successfully in races held different locations for the last three cars. in Italy, France, United Kingdom, years. In 2019, Borusan Otomotiv • Borusan Oto created the video series and Holland, taking the podium Ocean Volunteers opened a library “Driving Talks with BOM Academy” in second place in Misano. The at Alagün Primary School in Siverek, and posted them on social media in team participated in the Turkish Şanlıurfa with 4,000 books donated five episodes throughout the year. Championship in two categories by its employees, families of With this project, besides strong and won them both, being also employees, customers, and third- brand and company communication, nominated The Teams Champion for party suppliers. The motto was Borusan Oto aimed to share useful the fifth time. BOM E-Team, founded “Reading is freedom.” driving tips with followers. in 2018 with the aim of playing a part in the emerging e-sports
BORUSAN HOLDING ANNUAL REPORT 2019 65 AUTOMOTIVE
Borusan Otomotiv, Borusan Oto, Borusan Otomotiv Premium
Borusan Oto reported strong annual operational results in 2019, despite the challenging business environment.
BORUSAN OTOMOTIV GROUP WHOLESALES (UNITS)
2019 2018
15,088 12,143
BORUSAN OTOMOTIV GROUP RETAIL SALES (UNITS)
2019 2018
BORUSAN OTOMOTIV PREMIUM The system offers customers the 15,569 • In 2019, Borusan Otomotiv Premium possibility of pre-valuation for their just got the reconciliation of stock own cars via trade pricing module 12,452 movement as 2,787 units. The (powered by Borusan Araç İhale) and optimization strategy was completed pre-loan approval via Borusan Otomotiv by 31.46% fleet reduction. Financial Solutions. • Total turnover was EUR 89.5 million, including EUR 41.2 million as rental Consignment Project: The project revenues, EUR 47.2 million as revenue aims to reach potential car owners in BORUSAN OTOMOTIV from used car sales, EUR 1.1 million the premium segment to help them GROUP REVENUES as revenue from loan-insurance exhibit and sell their cars in Borusan (EUR MILLION) operations. Otomotiv’s Samandıra premises and avoid seller procedures. With this 2019 2018 Borusan Otomotiv İkinci El Platform: unique business model, car owners can Borusan Otomotiv İkinci El is an online now eliminate time spent for showing used car platform and technology cars to different buyers and dealing 815.0 initiative. The platform serves 23 with countless negotiations. Borusan 715.3 Borusan Otomotiv used car dealers, Otomotiv undertakes all services four brands, and rental operations also such as car expertise, offering cars to designed for cross-selling opportunities. potential buyers, price negotiations and contract procedures. In 2019, 38 cars were sold via the Consignment Project.
* Motorrad excluded.
66 BORUSAN HOLDING ANNUAL REPORT 2019 COMPANY PROFILE
Operational Information Products and Services Brands • Borusan Otomotiv Group Wholesales: Sales of passenger cars and 4x4 • BMW 12,631 units (BMW Motorrad included) vehicles used cars, and motorcycles; • MINI • Borusan Otomotiv Group Retail Sales: fleet and corporate sales; sales of • BMW Motorrad 13,168 units (BMW Motorrad included) special diplomatic cars, parts; aftersales • Jaguar • Borusan Otomotiv Group Revenues: services; and long-term car leasing and • Land Rover EUR 715.3 million financial services.
Business Partners Corporate Information Dealer Network Giwa Holding GmbH & Co. KGaA Company History • Borusan Otomotiv provides sales and • Became BMW’s distributor in Turkey aftersales services for its products in 1984. through 18 Authorized Dealers and • Became BMW Motorrad’s distributor 40 Authorized Services across seven in Turkey in 1985. geographical regions in Turkey. • Started Land Rover sales and • Borusan Oto, a Borusan Otomotiv aftersales services in 1998. authorized dealer and service • Became MINI’s distributor in Turkey provider, operates in two countries in 2001. (Turkey and North Cyprus), seven • Founded Borusan Oto Cyprus Ltd. cities (Istanbul, Ankara, Adana, Land Rover in 2008. Gaziantep, Çorlu, Bodrum, Nicosia), • Became Jaguar’s distributor in Turkey and 11 premises (Avcılar, İstinye, Vadi, in the last quarter of 2014. Samandıra, Esenboğa, Balgat, Adana, • Distributor of BMW, MINI, BMW Gaziantep, Çorlu, Bodrum, Nicosia). Motorrad, Jaguar and Land Rover as of the end of 2019.
EXECUTIVE MANAGEMENT
Hakan Tiftik Aslı De Munnink Executive Committee Chairperson Executive Committee Member Chief Digital Officer
Simay Alsan Cem Uluğtekin Executive Committee Member Executive Committee Member Borusan Oto General Manager Jaguar Land Rover Managing Director
BORUSAN HOLDING ANNUAL REPORT 2019 67 AUTOMOTIVE
Borusan Araç İhale TURKEY’S LEADING USED CAR AUCTION PLATFORM
vehicles from fleet lease companies, independent dealers, authorized dealers, banks, insurance companies, distributors, and commercial fleets.
Strategic Positioning Borusan Araç İhale is the unique multi-channel and multi-brand auction company in the Used Car sector. Borusan Araç İhale also differentiates from the rivals by being the only trusted auction service provider between the 3rd party sellers and buyers. Borusan Araç İhale diversified auction channels and managed to provide fast sales and premium prices to their customers in 2019. With the deployment of the CRM system, Borusan Araç İhale started to manage all customer operations centrally and provide a more personalized service to its customers. In Manheim, the 50% shareholder of cooperation with the group company Borusan Manheim, is part of U.S. based Borusan Lojistik, Borusan Araç İhale can Reshaping Cox Automotive Group. Cox Automotive provide countrywide logistics service in the secondhand decided to withdraw from the countries addition to other value-added services except for the main markets as part of such as local/mobile inspection and vehicle market its global business strategy. In addition storage, and valuation. Borusan reshapes the to Turkey, those countries included second-hand vehicle market Portugal, Spain and Italy. In this context, Borusan Araç İhale can also provide with its digital channels that Cox Automotive handed over its shares easy-to-integrate B2B Valuation service offer a unique experience to to Borusan at the end of 2018. Borusan to automotive companies, thanks to customers. Araç İhale conducts its business the API-based pricing system. Having operations as a 100% Borusan company. its own sales channels, its valuation tool calculates the prices based on the A 100% Borusan Company real sales data, which is also its unique A 100% Borusan company since 2019 differentiator in the market. and the first multi-brand used car platform in Turkey, Borusan Araç İhale The majority of the applications is an integral part of Borusan Group’s are developed by its local team in expanding network of automotive Borusan Araç İhale. They include, dealers. The company had 8,495 buyer among others, the new fixed/mobile members as of the end of 2019. Since inspection tool, field management 2001, the company has been organizing tools, portals of online services and auctions for member dealers with used some mobile services. Borusan Araç
68 BORUSAN HOLDING ANNUAL REPORT 2019 The Market Leader in Physical Auctions Turkish automotive industry had steadily grown for a couple of years by the end of 2017. However, it shrank sharply in 2018 and 2019 due to the economic turbulence. This affected significantly the Rent-a-car companies and Franchised Dealers, which were the main suppliers of Used Car Auction companies like Borusan Araç İhale. In spite of the decreasing sales, Borusan Araç İhale leveraged the tough market conditions as an opportunity to transform for the sake of sustainable growth in the future. In this context, online channels and C2B will be the strategic growth areas in 2020. On the other hand, market expectations are more positive for 2020, and a gradual growth is anticipated both in new and used car sectors.
Borusan Araç İhale is the market leader in physical auctions. Digital and process transformations were the key success factors for cost optimization in this area. The profitable physical auctions enabled Borusan Araç İhale to invest in the new innovative growth areas such as online auctions, machine learning, İhale also transformed its inspection While the majority of the sales took and C2B. and photography areas to cutting-edge place between the consumers (C2C), premises to obtain minimal inspection business to business (B2B) sales shrank In this strategic growth area, C2B errors and the most realistic car significantly due to changing dynamics will provide a huge supply channel pictures. in Rent-a-Car (RAC) companies and and diversification in sold cars, which Franchised Dealers. High prices in the is a significant added value for the Competitive Advantages of Borusan New Car sector forced RACs to extend ~8.6 thousand Independent Dealer Araç İhale existing contracts instead of reselling buyers. Borusan Araç İhale will keep on • Development of CRM system the existing car park. On the other investing in digital transformation and • In cooperation with Borusan Lojistik hand, the Franchised Dealers had to new business models. • Integration of B2B Valuation service support the dropping of new car sales into automotive companies by selling used cars directly to end 2019 Business Outcomes • Majority of the applications are locally customers, while they were previously • Economic turbulences in 2018 and developed conducting used car business mainly 2019-> affected the Rent-a-car for trade-in. companies and Franchised Dealers The conjuncture of the Turkish Used (main suppliers of Borusan Araç İhale) Car Market in 2019 Characteristics of Turkish Car • Growth area of Borusan Araç İhale in Last year was a tough one for the Market in 2019 2020 -> online channels and C2B automotive sector. In 2018, the New • High interest, tax and exchange rates • The leader in physical auctions -> Car sector shrank by 35%, and the -> shrinking the new car market by digital and process transformations total of sold cars and light commercial 23% are the key success factors for cost vehicles dropped to 620 thousand units, • A total of 7 million sales optimization compared to 956 thousand units in the transactions-> growing the used car • Investing in online auctions, machine previous year. In 2019, the sector further market learning, C2B shrank by 23%, ending up the year with • Changing dynamics in Rent-a-Car 480 thousand units. High interest, tax (RAC) companies and Franchised and exchange rates were the main Dealers -> shrinking sales between factors affecting the results. C2B and B2B • High prices in New Car sector -> In contrast, the Used Car sector kept forced RACs to extend contracts/ slightly growing last year. A total of 7 Franchised Dealers had to sell used million sales transactions were carried cars directly to end costumers out in 2019, compared to 6.8 million transactions in the previous year.
BORUSAN HOLDING ANNUAL REPORT 2019 69 AUTOMOTIVE
Borusan Araç İhale
In spite of the shrinking B2B business, Borusan Araç İhale has kept solidifying its market leader position in physical auctions, being the trusted actor in used car sales between 3rd party corporate customers.
Steady Increase of Member Dealers corporate customers. Borusan Araç and Corporate Members İhale has leveraged the tough market Borusan Araç İhale got a significant conditions as an opportunity to 1,742 achievement by reaching 8,495 transform for the sake of sustainable member dealers and 1,742 corporate growth in the future. In this context, corporate members in 2019. With operations of Borusan Araç İhale has kept investing members 66,000 vehicles throughout the year, in online channels such as 724Ihale. Borusan Araç İhale sold 15,092 used com, simulcast and cyber-auctions. As Borusan Araç İhale got a vehicles in auctions, while achieving a result, the share of online sales has significant achievement average weekly participation of 3,150 increased to 46% in 2019. 724Ihale.com, by reaching 8,495 member members in these auctions. In addition as the successor of onlinealsat.com, is dealers and 1,742 corporate to the physical auctions, mobile providing a very high UI/UX capability members in 2019. auctions in İzmir and cyberauctions (live promising to be the market leader in its auctions) on different days of the week own segment. continued. Digitalization was another focus Borusan Araç İhale took a significant area of Borusan Araç İhale last year. initiative in 2018 and went live with Borusan Araç İhale invested in digital Onlinealsat.com, the online auction transformation in many areas, including platform allowing customers to buy field operations, inspection system and and sell vehicles 24/7 across Turkey. Customers Relations Management This system enables firms to sell (CRM). used cars by uploading inspection information and photographs and to In parallel to the vision of being the learn the market value, while helping unique reference point for Used Car independent and authorized dealers to pricing, Borusan Araç İhale launched find, bid, and purchase cars, 24 hours the Machine Learning project to per day, anywhere and at any time. The empower the existing Valuation Valuation Module was also utilized to service, 724Fiyat. Although 724Fiyat develop a model for cash purchases, was previously servicing to business whereby vehicles would be supplied customers, Borusan Araç İhale for auctions and authorized dealers announced the easy-to-use pricing would increase their trade-in rates and application in December 2019 in see positive impacts on their business. cooperation with the leading Turkish As of December 2018, distributorship mobile operator. Valuation is very agreements started to be signed. critical for future business strategies of Borusan Araç İhale. Borusan Araç İhale Firm Steps on the Path to started the C2B business in October Digitalization 2019, in which it aims to sell the end In spite of the shrinking B2B business, customer cars through its diversified Borusan Araç İhale has kept solidifying auction channels in a short time and at its market leader position in physical a higher price when compared to the auctions, being the trusted actor market trade-in price level. C2B will be a in used car sales between 3rd party strategic growth area in 2020 as well.
70 BORUSAN HOLDING ANNUAL REPORT 2019 COMPANY PROFILE AUCTION SALES (UNIT) EXECUTIVE MANAGEMENT
Operational Information 2019 2018 • Member Dealers: 8,495 • Auction Sales: 15,092 units 20,602
15,092 Corporate Information
Field of Activity • Providing a platform for used vehicle buyers and sellers in a secure auction format that strictly complies with Sinan Barutçuoğlu laws and regulations. MEMBER DEALERS General Manager
Products and Services 2019 2018 • Private auction • Inspection, pricing, logistical 8,495 support for transportation of 7,800 vehicles to special auctions, and all documentation and financial transfer services between buyer and seller for all domestic or imported used motor vehicles • Sales of all vehicle brands • Weekly private auctions for member dealers from many provinces at Borusan Araç İhale’s Gebze facilities • 7/24 Fiyat-Online Pricing Tool • Online sales systems - Simulcast - CyberAuction - Mobile Auction • 7/24 İhale- 724ihale.com
Sectors Served • Used vehicles
Service Locations • Headquarters: Kocaeli - Gebze
BORUSAN HOLDING ANNUAL REPORT 2019 71 OVERVIEW
eTA: MAKING A DIFFERENCE IN LOGISTICS
Borusan Lojistik’s motto is “We do the right things and deliver our promises!”. As a leader in the Turkish logistics market, Borusan Lojistik is committed to become a “technology company operating in the logistics & transportation sector” and transform the sector through digitalization, as the right thing to do. The first step towards this objective was the establishment of eTA, which has become the third-largest digital forwarder in Europe in less than 7 years, as we deliver our promises.
eTA has been founded by Borusan Holding in 2012, as a technology start-up, bringing together shippers and truck drivers on a digital platform and delivering full truck load (FTL) services without any intermediaries. eTA has been focusing on small and medium sized enterprises while majority of Borusan Lojistik’s customers consists of large key accounts. After eTA has reached the target technological maturity and scale in terms of member truckers; Borusan Lojistik and eTA FTL services have been migrated under the eTA Platform.
In 2019, 270.000 trips have been planned and executed through eTA and there are 156,000 truck drivers registered on eTA, with 36,000 of them having downloaded the eTA mobile application to their smartphones. eTA won the grand prize in the Customer and Market Engagement category of the European Business Awards - 2019, one of the most prestigious business awards in the world.
72 BORUSAN HOLDING ANNUAL REPORT 2019 #leadersatborusan
BORUSAN HOLDING ANNUAL REPORT 2019 73 LOGISTICS
Borusan Loji ̇stik A TECHNOLOGY COMPANY IN THE LOGISTICS SECTOR
Strategic Positioning Sectors Served rd Borusan Lojistik is committed to Core sectors served by Borusan 3 largest develop and run digital platforms Lojistik are food & beverage, consumer digital forwarder delivering specialized solutions for goods, e-commerce, durable goods, its customers, targeting excellent industrial products and automotive in Europe customer and employee experience, as manufacturing, representing ~70% of a technology company operating in the total turnover. • 270,000 trips logistics sector. • 156,000 registered truck Products and Services drivers Borusan Lojistik aims to continuously Borusan Lojistik’s operations can be • 36,000 installed applications transform and expand its operations grouped in three categories: powered by agile technology development and Borusan Lojistik’s eTA: expertise, also driving the digital • Digital platform for domestic full transformation of the Turkish Logistics truck load (FTL) services sector as a strong leader.
74 BORUSAN HOLDING ANNUAL REPORT 2019 Partial Delivery Network, Special Distribution & Home Delivery • Domestic partial delivery network from 81 cities to 81 cities • Special distribution and milk run operations • Storage and customer facility management services including vehicle logistics
International Logistics Services: • International land transportation • Air and Sea forwarding • Chartering services • Project logistics and heavy transportation eTA Founded in 2012, eTA is the first digital logistics platform in Turkey, bringing shippers and truck drivers digitally together without any need for intermediaries.
During its initial phase, eTA was mainly focusing on small sized business while large key accounts’ operations were managed by Borusan Lojistik. This has given eTA a unique opportunity to assess large scale operations for future digitalization, while running a pure digital operation with early adopters from both shippers and truck drivers. Truck drivers can sign up to the eTA Since 2012, eTA platform was developed After eTA has reached the target Platform through the eTA mobile by Borusan Lojistik in-house R&D. In technological maturity and scale application by uploading their vehicle 2019, eTA’s infrastructure is completely especially in terms of member truckers; and commercial documents, which are transferred to cloud services to support Borusan Lojistik and eTA FTL services reviewed and approved by eTA team. the fast growth of the transactions have been migrated under the eTA Following the sign up, truck drivers through eTA platform and also to Platform. Today, there are 156,000 can browse through trips published benefit from cloud computing truckers registered on eTA, with on the eTA mobile application, bidding services mainly for personalized trip 36,000 truckers having downloaded instantly for trips, and can also request recommendations for truck drivers and the eTA mobile application to their loads for desired routes in advance, so best available price calculations for the smartphones and 6,000 truck drivers that they can secure their future dated shippers. using eTA actively. In 2019, 270.000 trips. trips have been planned and executed Besides efficiency and customer through eTA. Together with the 130.000 eTA operating model can be best satisfaction through digitalization, trips operated by Borusan Lojistik described as “digital forwarding” another critical success factor for eTA is before the migration, the total number where all the deliveries are operated the environmental sustainability. Empty of annual FTL trips reaches to 400.000. by Borusan Lojistik. In order to ensure trip rates for FTL services in Turkey excellent shipper experience with are estimated around 18%. By offering no compromise on “On Time In Full” personalized trip recommendations delivery performance, trucks owned and assigning the nearest truckers to by Borusan Lojistik are used to cover trips, eTA aims to bring this rate down to in case an independent eTA Platform 12%, reducing carbon emissions caused +400,000 member trucker cannot initiate a trip. by FTL trips. Same principle holds true for eTA Partial Delivery Network, Special trips in 2019 Platform member truckers. All Distribution & Home Delivery payments upon successful completion Borusan Lojistik, as part of its domestic Borusan Lojistik is the of a trip are made by Borusan Lojistik logistics services, provides partial land leader of full truckload through eTA Card, eTA Platform’s transportation, special distribution, milk transportation services in payment system, offering discounts and run operations, and storage & customer Turkey, with more than benefits to truck drivers besides instant facility management services including 400,000 trips in 2019. payment. vehicle logistics.
BORUSAN HOLDING ANNUAL REPORT 2019 75 LOGISTICS
Borusan Loji ̇stik
In the highly fragmented logistics industry, Borusan Lojistik’s market share is 1% in domestic and foreign markets.
In 2019, Borusan Lojistik has opened the Tepeören Warehouse, as its main warehouse for storage services, 37 offering 1,500 m2 open and 93,000m2 closed stor thousandge area. In total, warehouses Borusan Lojistik has 405 thousand m2 open and closed warehouse area in In total, Borusan Lojistik 37 warehouses across Turkey. Besides has 405,000 m2 of open and its own warehouses, Borusan Lojistik closed warehouse space in is offering storage services at its 37 warehouse locations across customers’ facilities. Turkey.
International Logistics Services Borusan Lojistik provides land, railroad, air and sea transportation services, Borusan Lojistik’s partial delivery as well as multimodal transportation network covers 24 distribution centers operations as part of its international Besides the forwarding operations, and 93 pick-up & drop-off locations, logistics services. Borusan Lojistik provides logistics enabling deliveries from 81 cities to 81 services for project loads that require cities across Turkey. In 2019, 613 million In 2019, Borusan Lojistik’s international sensitive handling, as well as for of loads have been carried through the logistics operations focused mainly on heavy cargo and special equipment partial delivery network. Europe, North America, Russia, Middle transportation. Borusan Lojistik’s East, Central Asia and Far East. project logistics services include Becoming the backbone of the chartering, project consultancy, heavy/ omnichannel operations and Borusan Lojistik’s International Land oversized cargo operations, vessel e-commerce deliveries in Turkey is a key operations mainly focus on European loading/discharging operations, post strategic priority for Borusan Lojistik. In destinations and completed around terminal operations, warehouse 2019, high desi products, mainly durable 20.000 trips through a wide network of management, door-to-door logistics goods and large electronics constituted agents and partners, in 2019. Services organization, unloading at customer the majority of omnichannel and cover full truck load and less than truck site, site operations, installation at site, e-commerce operations, while the load deliveries, as well as intermodal and energy logistics. scope of operations will be extended operations. throughout 2020 and 2021. 2019 Business Outcomes Borusan Lojistik’s air forwarding • Borusan Lojistik’s 2019 turnover was As part of special distribution and home operations cover 80+ airlines through TL 2,522 million, with a 6% decrease vs delivery operations, Borusan Lojistik DSE Agreements in 120 countries 2018. carried around 5 million volumetric and 275 destinations. Borusan Lojistik • Despite sales decrease, the EBITDA weight and completed more than 1,300 has become one of the Top 10 IATA margin was kept at the same level as home deliveries, in 2019. These deliveries Agencies in Turkey, in 2019, in terms of 2018, mainly through cost efficiencies are complemented with digital weight forwarded. achieved through digitalization. solutions such as “scheduled deliveries • Number of trips planned and integrated with e-commerce platforms” executed through eTA grew by and “traceability of deliveries” targeting 5 times vs 2018, reaching to 270 excellent customer experience thousand.
76 BORUSAN HOLDING ANNUAL REPORT 2019 COMPANY PROFILE NET SALES (USD MILLION) Group Sales Non-Group Sales Net Sales: USD 396.7 million Non-Group Sales: USD 352.5 million 494.6 Group Sales: USD 44.2 million 422.4 396.7 352.5
72.2 44.2
2018 2019
NUMBER OF FULL TRUCKLOAD TRIPS DELIVERED BY ETA (THOUSAND TRIPS)
270
55 41 34 1 8 8 16
2012 2013 2014 2015 2016 2017 2018 2019
BORUSAN HOLDING ANNUAL REPORT 2019 77 LOGISTICS
Borusan Loji ̇stik eTA won the Grand Prize in the Customer and Market Engagement category of the European Business Awards - 2019 - one of the most prestigious business awards in the world.
EXECUTIVE MANAGEMENT
Mehmet Kalay Tuğba Paşalı Aydın Başar General Manager Executive Committee Member Executive Committee Member Human Resources and Strategic Financial Affairs Transformation
Tolga Ekren Hamdi Erçelik Canan Ölçer Executive Committee Member Executive Committee Member Executive Committee Member Commercial Excellence & Marketing Head of eTA Platform Home Delivery and Special Distribution
Selman Çoban Esen Öz Tekayak Executive Committee Member Executive Committee Member International Land Transportation International Air & Sea Forwarding
78 BORUSAN HOLDING ANNUAL REPORT 2019 BORUSAN HOLDING ANNUAL REPORT 2019 79 LOGISTICS
Borusan Port STRATEGIC BUSINESS PARTNER WITH THE INTEGRATED LOGISTIC APPROACH
Strategically located at Gemlik Bay with availability, continuous and fast ideal captive location serving the large, operation, liner& customer integrations fast-growing, and diversified hinterland and strong IT systems enables us to Borusan Port is the only Turkish port differentiate by customer touch & 18,562 serving in 3 different segments; general service quality in our region. cargo, container, and vehicle handling hours of training with substantial market shares. Our dedicated customer and account responsible approach in vehicle In 2019, a total of 18,562 hours Operating in multiple segments enables handling segment, and real-time and of training was given to more us to result in high resilience, high integrated information flow, flexible than 500 employees. capacity utilization, and high financial operation ability to customer demand performance. Today in Marmara Region, fluctuations proactively guides the main Borusan Port is the 1st biggest general customer. cargo, 3rd biggest vehicle handling and 8th biggest container terminal in terms Key Industries and Sectors Served of volume handled. Automotive & Automotive Spare Parts Strategic Positioning • One of the worldwide bases of Borusan Port position as an integrated automotive manufacturing solution provider to customers with • Includes 60% of Turkey’s total auto experience in steel & iron business in manufacturing general cargo segment by seamless customer experience with the Flat Steel and Steel Pipes capabilities of equipment & terminal • Manufacturing of iron-steel alloy tube- area, customer integrations, and pipe-profiles, metals, casting and strong IT systems and continuous other products improvement approach in process management. Textile • Produces 75% of all synthetic yarn As a trusted & boutique service provider in container segment, Wood, Paper and Furniture scale-independent customer-centric • Includes Turkey’s 1st furniture and approach, berthing and crane wood products organized industrial zone 80 BORUSAN HOLDING ANNUAL REPORT 2019 It’s our planet: In 2019, 2,357 m3 wooden materials were re-used 9,428 trees were prevented from being cut.
Mines-Marble, Chrome, Zinc, Manganese • One of the leading Turkish bases for marble production
2019 Figures PORT SALES (USD MILLION) Borusan Port handled 3 million tons general cargo, 206 thousand TEUs Non-Group Sales Group Sales container, 267 thousand units vehicles in 2019. 61.5 General Cargo: 48.3 45.4% of 2019 revenue 41.4 - Type of goods carried include hot 33.0 and cold rolled coils, spiral pipes and 20.1 conventional pipes 15.3 Container: 2018 2019 36.3% of 2019 revenue - Majority of the container throughput is O&D
Vehicle Handling: Women Empowerment As Borusan Lojistik, we take the COMPANY PROFILE 18.2% of 2019 revenue responsibility of a fragile societal issue - Type of goods handled comprise like achieving gender equality by mostly passenger cars, light commercial supporting its women employees as a Borusan Port vehicles and high & heavy equipment matter of company policy, promoting gender equality, and providing Port Container (kTEU): 206 Sustainability in Borusan Port infrastructure and financial support Port Vehicle Park: 266,582 As one of the first Green Ports in Turkey, to enable women in other sectors of Borusan Port decreases carbon footprint society to participate in professional General Cargo Volume life. Thus, we increased the number of every year although handling volumes (Million Ton/Year): 2,963 increase. In three years’ perspective, we site employees, especially Borusan Port. aim to decrease our carbon emission by First time in 2019, we have employed 2 drivers in Port - Ro-Ro operation. 10%. EXECUTIVE MANAGEMENT
CFS Area Renewal Project of Borusan Port currently has 506 Borusan Port employees. To support gender equality To increase safety at the port, the CFS in sustainable development goals, area lay-out has been renewed. Best Borusan Port has the highest women practices were benchmarked, and traffic number of site employees in Gemlik flow, stuffing and stripping areas have Ports. been redesigned to shorten the walking distance and to improve security and Digital Initiatives of Borusan Port safety in 2019. State-of-art IT systems: Overhead Bridge Crane Investment of Borusan Port’s both in – house Borusan Port developed and world based recognized Within the scope of ‘affordable and operational systems BOPSNET and clean energy’ goal, Borusan Port NAVIS are integrated with customer invested in 4 OBCs both in the bonded systems. Besides, Borusan Port also Serdar Erçal provides real-time monitoring and and unbonded area with the storage Borusan Lojistik capacity of 160 thousand tons. New booking tracking for customers via Port Services General Manager OBC storage areas allow us to operate Borusan Port Mobile Application and with electricity instead of diesel oil. 3D Borusan Port Web Portal. Being fully positioning systems implemented on integrated with customer systems. OBCs by 2019 enabled us to digitalize the work queue system and improve Our 2020 vision is to renew technology safety by providing an unmanned & infrastructure need for ease of doing working environment. business to and provide efficiency by smart automation with low costs in labor-intensive operations.
BORUSAN HOLDING ANNUAL REPORT 2019 81 OVERVIEW
LEADERS ENERGIZING GENERATION
Borusan EnBW Enerji continues its activities with its mission to support the development of the renewable energy potential of Turkey and to reduce foreign dependency in the area of energy.
Prioritizing efficiency and compliance with the natural and social environment in all of its activities from investment to operation stage, with an entire production portfolio consisting of renewable energy resources, Borusan EnBW Enerji has initiated two important investments in 2019.
By building 20 turbines each with a capacity of 3.6 MW in addition to Kıyıköy Wind Power Plant (WEPP) in the current facility with an installed capacity of 28 MW, Borusan EnBW Enerji has completed permit processes and finance for the commissioning of the 72 MW additional capacity. European Bank of Reconstruction and Development (EBRD) and ICBC Turkey will provide USD 74 million to Kıyıköy WEPP which will in total have investment of 100 million dollars. Kıyıköy WEPP will replace the production of plants with greenhouse gas emissions thanks to its “0” emission generation and will prevent 140,000 tons of carbon dioxide to be emitted to the atmosphere every year.
Besides, Borusan EnBW Enerji has concluded financing agreements with a total of 145 million dollars with four different banks for the Saros WEPP investment which is performed with its subsidiary Boylam Enerji and which has installed capacity of 138 MW and 27 wind turbines. When the plant is commissioned, it will meet the electrical energy needs of around 200,000 houses per annum.
82 BORUSAN HOLDING ANNUAL REPORT 2019 #leadersatborusan
BORUSAN HOLDING ANNUAL REPORT 2019 83 ENERGY
Borusan EnBW Enerji RENEWABLE ENERGY, SUSTAINABLE FUTURE
Total portfolio size of 1,156 MW Borusan EnBW Enerji has total installed power of 505 MW and a total portfolio size of 1,156 MW.
Featuring an installed capacity and portfolio based entirely on renewable energy sources, Borusan EnBW Enerji makes a direct contribution to sustainability in Turkey and in the world as it becomes one of the leading wind power generation companies.
Total Generation of 6.6 billion kWh Energy in 10 Years Starting from its first investment in Balıkesir with Bandırma WEPP, Borusan EnBW Enerji grew 11-fold in 10 years and reached 505 MW installed capacity while the total portfolio raised to 1,156 MW. With a total generation of 6.6 billion kWh energy in 10 years, around 3 million houses have been enlightened and natural gas imports of USD 410 million have been avoided.
A Very Strong Partnership… Since 2009, Borusan and EnBW have been in a very strong partnership in the Turkish Energy Market and their established joint venture company, Borusan EnBW Enerji, has been successfully managed through economic fluctuations, whereby proving its resilience. Since then, the partnership has seized an important opportunity in flourishing the Turkish
84 BORUSAN HOLDING ANNUAL REPORT 2019 Electricity Market and invested only in Energy Industry in 2019 • In 2019, the total licensed generation the renewable energy portfolio. Turkey’s energy generation industry decreased by 0.7% compared to 2018. is suffering from high exposure to • 2019 electricity demand decreased by With the current financial situation currency fluctuations due to foreign 0.5% compared to 2018. The average of Borusan EnBW Enerji, the status of currency-based debts and limited electricity consumption increase over the Turkish electricity market and the transparency in energy pricing. Another the last 5 years was 2.5%. renewable energy strategy of parent reason for the low spot electricity price • Spot electricity price in 2019 was companies, it can be expected that the is the weak consumption increase 46.03 USD/MWh, 3.0% lower than in partnership will endure many more over the last 5 years in comparison to 2018. years to come. strong private sector investment in the same period, resulting in over-capacity Developments in the Energy Strategic Positioning in the electricity supply. Renewable Business in 2019 Borusan EnBW Enerji aims to lead the power generators, which add up to In 2019, unanticipated extra hydro wind energy industry and has made it a 27% of the installed power, have, on the generation of 29 TWh increased hydro’s core priority to contribute directly to the other hand, benefitted from off-take share to 30%, whereas it was 20% in sustainability of Turkey and the world. guarantees and USD-based incentive 2018. The boost in hydro generation The Company enjoys the following payments. led to a significant drop in natural gas competitive advantages: generation in 2019. Natural gas share • Installed capacity and portfolio Turkey’s installed capacity reached in total generation decreased to 19% comprised solely of renewable energy 91.3 GW by the end of 2019 with in 2019, whereas it was 31% in 2018. sources, 2,826 MW net capacity added in The wind generation is 7% of the total • R&D projects to improve efficiency 2019 compared to the previous year. generation in Turkey. and availability of renewable power Investments in renewable energy plants such as wind, solar and exceeded the investments in thermal In May 2019, unlicensed generation hydroelectricity, power: 542 MW wind, 255 MW regulation was announced. Monthly • Active participation in renewable geothermal, 919 MW solar, 203 MW clearance of generated vs consumed energy capacity tenders in the hydro, 258 MW natural gas, 727 MW electricity was introduced, thus Turkish electrical energy market coal, and 187 MW other capacity were enabling the supply of excess to expand its diverse portfolio commissioned, whereas 265 MW fuel generation to the grid. Unlicensed comprised solely of renewable energy oil capacity was decommissioned. power plants that were built after the sources (wind, hydroelectric and Renewables’ share in the installed announcement of the regulation can solar), and the goal of expanding the capacity including the hydro-dams sell their excess energy at the price of portfolio via new acquisitions, is 49%. By the end of 2019, the state the active energy (TRY) national tariff • Superior services to meet customers’ owns 25% of the installed capacity and (according to previous regulation, green energy needs solely from independent generators own 75% of the unlicensed power plants could sell their renewable sources with its TÜV NORD total capacity. The average increase in excess energy at FiT price (USD)). Ecopower Green Energy certified installed power over the last five years energy product. was 5.7% annually, whereas the appetite in new investments has dropped significantly, resulting in growth rates of 4.7% in 2018 and 3.2% in 2019.
BORUSAN HOLDING ANNUAL REPORT 2019 85 ENERGY
Borusan EnBW Enerji
The total installed capacity of Borusan EnBW Enerji is 505 MW and 1,397 GWh electricity was generated in 2019.
In December 2019, there were legal concerns over 13 coal power plants’ compliance with the environmental legislation. Out of these 13 coal power plants, 5 of them (3 GW installed capacity) were completely shut down until they fulfill their obligations. Following this, the price cap of TL 2,000/MWh was decreased to TL 600/MWh to avoid any extreme price spikes.
In 2019, gas tariffs for natural gas power plants increased by 3% compared to the end of 2018. Electricity tariff for residential customers increased by 20%, for commercial customers by 33% and for industrial customers by 32%.
New Business Opportunities of the Energy Business in 2019 Wind YEKA 2 for 1,000 MW took place • In 2019, Borusan EnBW Enerji sold Total Installed Power of 505 MW and in May 2019. Borusan EnBW Enerji 646.5 thousand tons of CO2. Total Portfolio Size of 1,156 MW participated in the auctions but • Borusan EnBW Enerji also started to Borusan EnBW Enerji has a total withdrew from them on the 1st round collaborate actively with start-ups. In installed power of 505 MW and a total due to the aggressive offers of the other 2019, Borusan EnBW Enerji worked portfolio size of 1,156 MW. Borusan participants. with Tarentum for wind generation EnBW Enerji continued its investments forecast; with Blok-Z for tokenization in Kıyıköy WEPP, Saros WEPP and 10 2019 Business Results of wind generation, and with Aura for tender projects in 2019. The investment • In 2019, Borusan EnBW Enerji drone technology to detect any faults decision was taken for Kıyıköy WEPP generated 1.26 TWh from its WEPPs on the blades. Extension and Saros WEPP projects, and 0.124 TWh from hydro. This • 2019 also marked the 10th anniversary which will start operation in 2020. generation corresponds to of Borusan and EnBW’s partnership.
0.775 million tons of CO2. • The total installed capacity of Borusan Borusan EnBW Enerji’s wind installed • Saros and Kıyıköy’s administrative EnBW Enerji is 505 MW and capacity is 5.9% of Turkey’s wind procedures were almost concluded. 1,397 GWh electricity was generated installed capacity. Borusan EnBW Approval from financial institutions in 2019. Enerji’s share in wind generation is was obtained. Borusan EnBW Enerji • Around 500,000 households were 5.8% in 2019 with 1.3 TWh. The total signed a contract with GE for turbine lightened with clean and green installed capacity of Borusan EnBW procurement and maintenance for energy. Enerji accounts for 0.6% of Turkey’s Saros WEPP. This marks the first installed capacity and its 2019 licensed order of GE’s largest onshore wind generation corresponds to 0.5% of the turbine in the field, Cypress platform total generation in Turkey. in Turkey. Administrative procedures are ongoing for greenfield projects with 400 MW.
86 BORUSAN HOLDING ANNUAL REPORT 2019 Developments of Saros and Kıyıköy Wind Power Plant in 2019
Kıyıköy Capacity Increase Wind Power Plant Project Location: Kırklareli, Kıyıköy Installed Power: 72 MW Number of Turbines to be Installed: (20) Project Full Commissioning Date: October 2020
Project Status • Main permits were already obtained. • The contracts for the wind turbine and electrical balance of plant (EBoP) works were signed. The tender for the civil balance of plant (CBoP) works will be finalized in January 2020. • Construction works started in October 2019. Initial deliveries of the wind turbine scope will start in January 2020. • The project is financed by The European Bank for Reconstruction and Development (EBRD) and the contract will be signed mid-January 2020.
Saros Wind Power Plant Project Location: Çanakkale, Center and Çan Installed Capacity: 138 MW Number of Turbines to be Installed: 27 Project Full Commissioning Date: R&D and Digitalization Steps of Direct and Indirect Contribution to December 2020 Borusan EnBW Enerji the World’s Sustainability… In 2019, Borusan EnBW Enerji The main approach of Borusan EnBW Project Status developed a Digitalization Roadmap by Enerji to sustainability is to create a • Main permits were already obtained. conducting an Enterprise Architecture direct and indirect contribution to the • When Saros WEPP was licensed Study on which areas it should take world’s sustainability in its operations. in 2012, it consisted of 69 turbines initiatives in digitalization. The year 11 power plants generate green energy (each 2 MW). With the developments 2019 was accepted as the starting and directly contribute to the world’s in turbine technology in 2018, the point and the areas to be focused on sustainability with their “0” emission number of turbines reduced to 27 were determined as Data & Analytics, production. Their generation, therefore, turbines as 5 MW turbines. Robotic Process Automation, Business substitutes that of fossil fuel-based • Contracts with the main contractors Process Management, Enterprise power plants having considerable were signed in 2019 (Turbine, Content Management, and Integration green-house emissions. Construction, Power Transmission Management. In 2020, the Enterprise Lines, Electromechanical Equipment). Architecture Study will be revised Borusan EnBW Enerji also aims to • Construction works for access roads and new projects are planned to be decrease its environmental footprint in started in June 2019. Initial deliveries developed in Data and BPM areas. its daily operations and investments, of the wind turbine scope will start in The aim in 2021 is to increase the thereby creating an indirect impact on June 2020. profitability in Sales and Maintenance the world’s sustainability. • Due diligence for project financing by using advanced analytics and is underway with Lenders - DZ machine learning through the Bank (ECA Lender), IsBank - TSKB infrastructure Borusan EnBW Enerji GarantiBBVA (Commercial & ECA established. Guarantee Lenders). The contract will be signed in Q1 2020. In 2019 focus was mainly on the development of a chemical applied to the wind turbine blades to reduce icing. Initial site trials are encouraging so far.
BORUSAN HOLDING ANNUAL REPORT 2019 87 ENERGY
Borusan EnBW Enerji
Borusan EnBW Enerji aims to create a safe and healthy working environment for all its employees, customers, suppliers, and local people in the activity areas. The company is committed to protecting the environment we live in and continuously improving its energy performance.
Investment Projects
Kıyıköy WEPP • Turbines do not have any hazardous waste. • Turbines do not cause any pollution because they work with wind energy and therefore do not contribute to global warming. • The annual power generation will be 230 GWh. With this production, the energy needs of approximately 90,000 households can be met. • Wind power plants use a completely renewable energy source and are clean and environmentally friendly, so they do not create any waste harmful to the environment. The project will prevent 139,000 tons of carbon emissions per year. • To make the footprint even smaller, the turbines were positioned in the • During the construction of the • Wind power plants use a completely most efficient places, using existing project, measures will be taken to renewable energy source and are roads. reduce environmental impact (e.g. clean and environmentally friendly, • Since this is a capacity increase traffic management, dust and noise so they do not create waste harmful project, there is no need for an control, proper disposal of waste). to the environment. Once built, the overhead line and substation. The project will prevent 296,000 tons of project will benefit from the existing Saros WEPP carbon emissions per year. energy transmission infrastructure. • Turbines do not have any hazardous • The project will be built on a mostly • In case of necessity during bird waste. deteriorated forest and individual migration periods, active turbine • Turbines do not cause any pollution lands. In the settlement plan management will be implemented. because they work with wind energy which was prepared considering • Bat protection measures will be and therefore do not contribute to environmental and social sensitivities, implemented based on the reports of global warming. great importance was given to the the experts. • Although Saros Project is one of use of existing roads and open land • Flora protection measures are already the biggest wind power plant to (95% of the transportation roads being implemented. be built in Turkey, with 27 turbines, are on the existing forest roads, in • Proper soil will be taken care of and the environmental impact will be the treeless forest area and 5% on stored separately. In case the Forest reduced considerably. individual lands). Directorate gives approval, it will be • The annual power generation will • In this way, both the environmental distributed to the villagers in need. be 500 GWh. With this production, impact of turbine platforms and road the energy needs of approximately construction will be reduced, and 200,000 households can be met. existing roads will be improved and turned into safe roads that will be used in summer and winter.
88 BORUSAN HOLDING ANNUAL REPORT 2019 Operational Power Plants Due to the operation processes, minor quantities of waste were created and therefore the energy consumption and water usage are very low. Despite this, the Company tried its best to further minimize it and keep updated with the new technologies.
Examples of measures taken: • Rainwater and use it for irrigation were collected. • Plants with very low water consumption at landscaping were selected. • The consumption of water at all sites to locate leakages was monitored. • Faucet aerators and sensors were used to minimize excess water consumption. • The waste and dispose of were separated according to the environmental rules and regulations. • At all the investment projects, the Company complies with the rules Training Programs for the Teams… Borusan and EnBW partnership has of financial corporations such as Throughout the year, different training been celebrated Successful HR projects International Finance Corporation programs were provided depending have been executed throughout the (IFC) and The European Bank for on the needs of the teams. Starting year such as technician management Reconstruction and Development with the basics, General Health Safety& review and HR visits as well as Yarınlara (EBRD) on environmental protection, Environment (HSE) training programs Koşanlar, an employee trademark including biodiversity issues, all types were held for each employee by HSE project whereby employees create the of waste, water and wastewater Specialists. To get one step further, the working environment they aspire to management. needs of operations, maintenance, and have with their built-own actions. investment teams were analyzed and Lean Six Sigma Project Realized… different sets of training were held to Future Strategy of Borusan EnBW Every year, operational costs are closely each group. Enerji monitored to maintain profitability. • Borusan EnBW Enerji’s current Thanks to the digital infrastructure Successful Results portfolio reached a certain maturity (remote surveillance center), most of A new wind turbine supplier was level. The next step will be to hedge the man and plant-based activities selected for the Çanakkale Saros the existing projects that are not in are now carried remotely. BEE’s own Wind Power Plant. Processes and FiT or finance the greenfield projects staff continued to perform wind permit procedures for Saros WEPP through PPAs with commercial or turbine maintenance activities as the and Kırklareli WEPP projects were industrial customers. subcontractor of Original Equipment successfully continued, financing • Borusan EnBW Enerji aims to provide Manufacturer (OEM) and, in some institutions were determined and accumulated experience of O&M plants, performed all works without construction works were initiated. services to 3rd parties. Negotiations Original Equipment Manufacturer In June and December 2017, 10 new are ongoing with Vestas to act as its (OEM) to lower costs. In addition, projects of 395 MW power were subcontractor. lean six sigma projects are realized added to the portfolio under wind • Borusan EnBW Enerji has always consistently to lower operational capacity allocation tenders organized emphasized the importance of expenses and increase the generation by Turkish Electricity Transmission digitalization and will continue to of power plants. Company (TEIAS); processes and work with start-ups and advisors to permit procedures were successfully reach the desired level. Safe and Healthy Working continued. In April 2010 in the context of • Borusan EnBW Enerji is also Environment for All Stakeholders... Corporate Start – Up – Start Up Friendly investigating possible market At Borusan EnBW Enerji, the aim is Corporations organized by Endeavor developments in Turkey, based on to create a safe and healthy working Turkey, Türkiye Odalar ve Borsalar disruptive changes in worldwide environment for all the employees, Birliği Genç Girişimciler Kurulu (TOBB energy markets and preparing to customers, suppliers, and local people GKK), Özyeğin University and Start Up be the leading technology solutions in the activity areas, protecting the magazine Borusan EnBW Enerji has and services provider for distributed environment we live in and improving been awarded as Effective Company/ renewable power in the future. the energy performance continuously New Start Up Cooperation. In 2019, 10th while keeping up with the “Zero anniversary of the establishment of Occupational Accident” target.
BORUSAN HOLDING ANNUAL REPORT 2019 89 ENERGY
Borusan EnBW Enerji
Borusan EnBW Enerji’s current portfolio has reached a certain maturity level. The next step is to hedge existing projects that are not in FiT or finance greenfield projects through PPAs with commercial or industrial customers.
INSTALLED CAPACITY COMPANY PROFILE (505 MW) Operational Information Partnership • Installed Capacity: 505 MWm EnBW • Generation: 1,397 GWh • Existing Portfolio: 1,156 MWm Service Locations • Istanbul Head Office Corporate Information • Ankara Office • Bandırma Wind Power Plant Field of Activity • Yedigöl Aksu Hydroelectric Power • Renewable energy generation, sales Plant • Balabanlı Wind Power Plant • Koru Wind Power Plant Products and Services • Mut Wind Power Plant • Electric energy generation and sales • Harmanlık Wind Power Plant Wind 445 MW 88.3% • Fuat Wind Power Plant Hydro 50.3 MW 10.0% Manufacturing Capacity • Dayıcık Solar Energy Plant Solar 8.8 MW 1.7% • 505 MW installed capacity/1,397 GWh • Pamuklu Solar Energy Plant (2019 generation) • Kartaldağı Wind Power Plant • Kıyıköy Wind Power Plant
Sectors Served EXISTING PORTFOLIO • Balancing market (1,155 MW) • Eligible consumers (industrial and commercial customers consuming over 1,600 kWh/year)
Wind - 1,096.4 94.9%
Hydro - 50.3 4.4%
Solar - 8.8 MW 0.8%
90 BORUSAN HOLDING ANNUAL REPORT 2019 EXECUTIVE MANAGEMENT
Mehmet Acarla Enis Amasyalı Hakan Aras General Manager Executive Committee Member Executive Committee Member Investments Finance and Financial Control
Tuna Güven Emre Okuyan Executive Committee Member Executive Committee Member Operations Strategic Planning, Business Development, Sales and Trading
BORUSAN HOLDING ANNUAL REPORT 2019 91
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