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TURKEY’S HIDDEN CHAMPION SAFKAR - 30 / 11 / -0001

DÜNYA Newspaper – 06.02.2010

SAFKAR’S SIGHTS SET ON REGIONAL LEADERSHIP

Among Turkey’s hidden business champions is a company that manufactures air-conditioners and refrigeration systems for commercial vehicles: Ege Soğutmacılık PLC that produces under the brand SAFKAR. Turkey’s largest brand in climatization systems for commercial vehicles, SAFKAR ranks among Europe’s top five in the sector. Having reinforced its dealer networks in Lithuania, Spain, Italy, and Russia last year, SAFKAR is targeting regional leadership. Ege Soğutmacılık PLC is getting ready to open a central office in Germany with a view to becoming the region’s leader by establishing a lasting presence in the Middle East and Russia markets in addition to the European market where SAFKAR is already doing well.

Ege Soğutmacılık General Manager Doruk Aydın reports that close to 20,000 SAFKAR products are roaming the world’s vast geography under the company’s guarantee, adding, “We’re under the obligation to provide maintenance and spare parts to our products regardless of what corner of the world they may be in.” Commenting that entry into the markets where they have a presence had not been easy, Aydın recalls, “We managed to surmount the barriers in these markets over the years. Our products have all proven themselves and we stand behind each and every one of them because we are sure of the job we’re doing. Our engineering infrastructure and test centers are very strong. The trust placed in our products is something we built carefully and steadily.”

THE LEADER OF THE DOMESTIC MARKET BY FAR
With a 70-percent share in air-conditioners and transport refrigerators for commercial vehicles, SAFKAR is the leader of the Turkish market by a large margin. Primarily engaged in air-conditioners for commercial vehicles, SAFKAR also undertakes specific applications for military vehicles, construction machinery, and ambulances. The air-conditioners on the passenger cars of the Turkish Railways come from SAFKAR as will those on subway cars in the near future. Exporting its products to more than 30 countries, Ege Soğutmacılık PLC that owns the SAFKAR brand is preparing to manufacture air-conditioners running on solar power next.

SAFKAR IS ONE OF THE FIVE PLAYERS IN EUROPE IN AIR CONDITIONERS FOR COMMERCIAL VEHICLES
SAFKAR is hailed as one of the world’s reputable brands when it comes to air-conditioners for commercial vehicles. Ranking among the top five companies in Europe in its business, SAFKAR has 20,000 products roaming the world’s roads.

SAFKAR is getting ready to open a central office in Germany with a view to establishing a lasting presence in the Middle Eastern and Russian markets in addition to the European market where it’s already doing well.

Despite its brief past, SAFKAR is a successful brand with nearly 20,000 transport refrigerators and air-conditioners roaming the globe. Turkey’s only domestic manufacturer with R&D assets, a test center, and the capability of developing projects jointly with customers, SAFKAR is one of the top five players in the production of air-conditioners for commercial vehicles in Europe, the Middle East, and Russia. Its new goal is regional leadership.

SAFKAR has 33 dealerships and servicing points across the world and has expanded its organizations in Lithuania, Spain, Italy, and Russia in 2009 in keeping with its strategy of enhancing its dealer network. The company is going to open its European logistics office in Germany in the near future in order to advance toward its new objective.

SAFKAR and PENGUEN, the brands for air-conditioners and transport refrigerators for commercial vehicles of Ege Soğutmacılık PLC that had been established in 1988 will be moving on with a new group as of 2009. Becoming financially more powerful upon the acquisition of Ege Soğutmacılık PLC’s majority share by the Abaş Group in the middle of last year, SAFKAR aims to carry forth its current status of a major manufacturer on a global scale which it attained through a rapid growth trend over the years.

SAFKAR has three product divisions: air-conditioners for buses and midibuses; air-conditioners for rail systems; transport refrigerators for carriers, i.e., commercial vehicles, and air-conditioners for minibuses. These three products differ in their competitive environment, their customers, and their critical success factors. Succeeding in all three of these segments with its R&D, engineering, project development, and after-sales network, SAFKAR became one of the five players in Europe, Middle East, and Russia. Ege Soğutmacılık PLC General Manager Doruk Aydın explains what makes the company different: “We allocate a considerable portion of our revenues to test investments, engineering, and the R&D center. Normally, business organizations would want to utilize these revenues as profit but we turn them into investment in our company and that makes us different.”

20,000 products roam the globe
The markets in the segments in SAFKAR’s spectrum pose extremely high barriers and risks. Aydın points out that huge investments need to be made in the market for air-conditioners for buses and midibuses to prove a company’s mettle before any money can be made. To get results, one must definitely have a dealer network in Europe and the Middle East, Aydın stresses, explaining how important this is: “Nearly 20,000 SAFKAR products are roaming the world under guarantee today.
When a problem occurs, we’re under the obligation to provide maintenance and spare parts to these products regardless of what corner of the world they may be in. We managed to surmount the barriers in these markets over the years. Our products have all proven themselves and we stand behind each and every one of these nearly 20,000 products of ours that are moving around on the world’s roads using more than 10,000 different parts in total. We have confidence in our products. Our engineering infrastructure and test centers are very strong. We’re well acquainted with our suppliers and their performances. The trust placed in our products is something we built carefully and steadily.”

A central office in Germany
SAFKAR works with 33 dealers and servicing points around the world. The dealer and servicing network created in its areas of operation is of critical importance to SAFKAR. The company is getting ready to take the first step in Germany to become yet stronger in the markets where its products are sold: it’s opening its European logistics center in Düsseldorf for the purpose of dealer development.

Through this central office, the company intends to handle calls for maintenance, repair, and the correction of malfunctions caused by external factors by making a team of trained technicians available on the spot in no more than a few hours. Aydın points out that the host vehicle manufacturers also stand to benefit from SAFKAR’s having a stronger service network in Europe thanks to this office in Germany. Listing some of their references which TEMSA, BMC, Mercedes-Benz, MAN, Ford, Fiat, Doğuş Otomotiv, Isuzu, Aselsan, Iveco, Citroen, Peugeot, Daihatsu, and Tata, Aydın says, “We have operations across a geography extending from Eastern Europe to Iran and Malaysia, as well as in Turkey. We’re a company that exports to 33 countries but we now focus our efforts on greater effectiveness in the Central European countries to match our strength in England and Ireland.”

Solar powered air-conditioners for vehicles
Air-conditioners for buses and midibuses account for the better part of SAFKAR’s product range because 77,000 buses and midibuses are manufactured in Europe today and 70 percent of the 18,000 devices produced in Turkey are exported to world markets, chiefly Europe. Turkey is Europe’s largest manufacturer in this industry; hence, for SAFKAR which supplies the air-conditioners for these vehicles, the production of air-conditioners for buses and midibuses is a business where it stands out for its competitive power, project development, the capability of rapidly testing the newly developed products, and flexibility.

SAFKAR competes against German and American rivals in buses; Spanish and German in trains; Israeli, Italian, German, and American in midibuses. These competitors boast business volumes from 150 million to 500 million dollars. SAFKAR’s annual turnover is in the 30-to-50-million-dollar bracket. Doruk Aydın muses over what can be done to reach the stature of the competition: “We can achieve greater success if we manage to strengthen our after-sales organization in Europe and other countries as we did through our investment in our new central office in Germany. New products could be, say, diesel products in the transport refrigerator segment. It’s possible to manufacture lighter and more competitive products for a smaller cost employing more advanced technology.”

New product in the works in light rail systems
SAFKAR is rapidly moving forward to becoming a powerful partner in the air-conditioners developed for trains and light rail systems. Admitting that air-conditioners for rail transport is a new field for the company, Ege Soğutmacılık PLC General Manager Doruk Aydın says it’s important to SAFKAR to demonstrate a presence in this area that requires extremely large and specialized engineering investments. Stating they have a portfolio of proven products in rail systems in Turkey, Greece, Bulgaria, and Malaysia, Aydın declares, “We’re going to try to expand our rail system solutions to an even broader geography, mainly the Middle East. We’re going to enrich our product portfolio. We’ll be introducing a new product for light rail systems in the months to come.

Crisis brings new products, new customers
At SAFKAR, developing new products and engaging new customers is also a crisis-time strategy – for automotive is one of the industries hit hardest by the crisis in Turkey; and it’s the primary industry SAFKAR serves. Doruk Aydın comments, ”The area least impacted by the crisis is the Middle East and the one most impacted is Turkey and its automotive industry. The midibus segment, a major customer of ours, shrank by 80 percent and the bus segment by 50 percent, which had a direct impact on SAFKAR. Consequently, what we’re holding paramount nowadays is to develop new products and to open up to new markets.”

Despite the effects of the crisis, the air-conditioner market seems to be manifesting a constantly upward trend because the consumers, driven by a desire for greater comfort, are buying products at shorter intervals. No longer considered a luxury feature, air-conditioners for vehicles have become part of the basic package and are very much in demand. Hopeful about the future of the industry, Aydın predicts that there will be a greater need both for commercial vehicles and for rail systems as standards of living rise higher and that the market for air-conditioners will get bigger as a result.