Borusan targets record investment
Posted by meb at March 15th, 2008
Borusan Holding, operating in steel, distributorship, logistics and telecommunications, is preparing to make the largest investment in its history.
The company, which saw a $3 billion turnover with 28 percent growth in 2007, announced its decision to allocate $381 million in investments this year. Besides collaborating with the world’s leading steel company ArcelorMittal on hot rolling investment, Borusan will also invest in energy and logistics.
“We are in the highest investment process of our history,” Agah Uğur, Borusan Holding’s chief executive officer, said at a press conference held to reveal the financial outcome for 2007 and projections for 2008.
“We are planning to invest $381 million this year. Our investment between 2001 and 2005 totaled $407 million. This year we plan to invest almost as much as we did during the last five years. The company’s investment target from now until 2010 is $1.7 billion.”
Borusan, which aims to grow 20 percent and earn $3.6 billion in turnover, is planning to increase its profit from $241 million to $308 million this year. Borusan achieved a profitable and sustainable growth target in 2007, said Uğur. “We would attain an operating profit of over $300 million for the first time in our history should we achieve our budget goal for the year,”
“Consolidated operating profit for 2007 seems low due to the difference in the exchange rate. We have been unsuccessful in expenditure management in 2007 with the impact of valuable YTL as our incomes were in dollars and our expenditures in YTL. We have designated the [YTL] 1.27 average as the highest scenario in our 2008 budget.”
Energy will be among the greatest investment items, said Uğur, adding that the company is negotiating with foreigners about forming partnerships. Borusan aims to rank among Turkey’s top ten energy producers, he said.
Time for prudent optimism:
The business plans for this year have not been prepared with crisis expectation, Borusan Holding Chairman Ahmet Kocabıyık said. However, the company took into account the possibility of stagnation on general conjuncture together with global crisis possibilities, he added. “We will continue our investment plans with a prudent optimism this year and prioritize the management of economic risks. It is time to be prudent, not for being superfluously optimistic.”
Turkey is undergoing a great transformation process, but an uncontrollable change may result in chaos, Kocabıyık said. Structural reforms are required particularly in certain areas, he added. Increasing the budget allocated for education, the fight against unregistered activity and reducing current account deficit by increasing the added value of exports are vital for Turkey during the struggle for economic development, he said. The management of economic risks is the most important agenda item for Borusan. “Market data do not seem very positive for the first two months of the year. However, the companies that can create opportunities out of threats in such environments can attain great competitive advantages,” Kocabıyık said.
The distribution of investments in 2008
Sector Investment amount ($,million)
Hot rolling 136
Energy 82
Logistics, port storage
and transportation 61
Distributorship and
other investments 102
Total 381
Source: Turkish Daily News
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