Yasar Ozkan Engineering and Constructing Co. Inc was founded in 1962 in Turkey’s capital city, Ankara. Soon after its birth, it won the contract to build a drinking water system for two villages in the Kastamonu area of Nothern Turkey. Following this, a second important project was that of lining and modifying new fuel pipelines for ten airports and tanker loading stations around the country. In the following ten years the company completed numerous major projects for the public sector and for private companies in Turkey.

In 1979 the company began to expand its activities outside Turkey with the construction of infrastructure for six villages in Misurata, Libya. Libya later became a very important market for Yasar Ozkan, which went on to complete major projects for the Departments of Economy, Electricity, Health and Construction as well as for some private companies such as the Baytur Group. Some of these undertakings opened new doors and helped to win new contracts in Russia. Of particular importance was the 50/50 joint venture with another Turkish Company, Turan Hazinedaroglu, in a Russia-based project covering the Maloyaroslavetz Aluminum Extrusion & Galvanizing Plant and 285 surrounding apartment units, 14 villas and all infrastructure work: a project worth over US$71 million. The joint venture continued in Russia for some time and earned the firm another US$250 million. In 1990, Yasar Ozkan became a fully-fledged corporation.

To date, the completed jobs in Turkey and abroad are worth US$480,345,139 about US$74 million of which is made in the company’s Turkish projects. With these figures, ENR 2008 statistics revealed the company to be the 225th biggest engineering and constructing company in the world. It currently employs around 650 people but only a few months ago this figure was 1,500. As work starts on new contracts Mr Ozkan will once again be recruiting a fuller workforce and expects to reach the higher number of employees again fairly soon.

New directions

Mr Ozkan explains that the slowdown in the construction sector in Turkey and the unpredictable market conditions scared many companies off. However, he says the narrowing down of the market had started even before the global financial conditions started to deteriorate, partly because the IMF decreased the extent of its investments in Turkey and in the last five to six years concentrated its efforts only on smaller projects. In Turkey, there are currently over 200 construction companies which are fiercely competing with each other for an ever smaller share of the profits. Clearly, the domestic market will not be a priority for the immediate future: “There are no projects in Turkey big enough to attract our attention for the time being”. This is why they are focusing on larger projects in Libya, and in fact the company has stopped operating in construction projects in Turkey for the moment.

Having said this, management has decided to enter new ventures to begin fairly soon. One of these plans is to build and run a boutique hotel in Turkey’s famous Cappadocia region, something that clearly marks a new direction. Mr Ozkan has already pushed things forward to the extent that his company has bought land and is currently waiting to conclude the construction plans. He is adamant that this will not be just another big block of ugly hotels, but instead will be a charming boutique hotel in keeping with the region, which is a very popular tourist attraction and accepted as one of the wonders of the natural world.  

In the meantime, another completely new area the company wishes to break into is that of modern agricultural food storage. Mr Ozkan says he has done some research into climate change and has been observing neighboring villages, which are famous for their agricultural products. He was unhappy to see a large volume of wastage of food products which was largely caused by a lack of modern storage facilities. It did not take him long to decide to act to try and alleviate this problem and thus, after a period of research in this new area, the company began to build storage facilities. In time, the company will be involved in the buying, storing and selling of food from these facilities and hopes to find success in an area in which it has not yet had a great deal of expertise.

Current major projects

While these new business ventures get under way in Turkey, Yasar Ozkan is continuing with a variety of major constructing projects in Libya, including a renovation of university buildings and an old factory. Mr Ozkan says Libya’s construction industry is one of the least affected by the global crisis and the company has enough stock of projects that should keep it operating for a long while, by which time they hope that the crisis will be over and the construction sector will start to revitalize. The plan of concentrating on Libya is aided by the fact that this is a market in which Yasar Ozkan has extensive experience and close contacts, since it built almost all the administrative buildings in Al-Jufrah when there were plans to move the capital city there from Tripoli some time ago. Yasar Ozkan has also restored many historical buildings and university buildings and hospitals. Mr Ozkan says that his company is not currently interested in doing business in Gulf countries, unlike many other construction companies. “During the crisis, we are not looking for adventures so we’ll stick to Libya where we have known the market for 30 years. In the future, we intend to enter Saudi Arabia but there is no rush at the moment”, Mr Ozkan says. “Europe should make use of Turkish experience in getting through economic crises.”

According to Mr Ozkan, everybody seems to have put the brakes on new investment in Turkey and is busy trying to protect their current operations. There is a serious crisis in all major industries relying on export and the Turkish government has not yet revealed what help it will give to its businesses to get them through this difficult time. Mr Ozkan is convinced that the response is not quick enough and is dismayed with the news that the government is still deliberating over its strategy. Although the picture seems grim, he believes that Turkey is in a better situation than many other European countries. For one thing, the experience of coping with the 2001 financial crisis taught Turkey some important lessons and the fact that it led to the development of strict regulation of the banking sector meant that the country did not suffer the fallout from similar mistakes to those made by banks in other countries, such as Britain and the USA. All in all, Mr Ozkan thinks that the precautions taken following the 2001 crisis offer a useful lesson, which should be studied by other countries, who might also benefit from looking at the strategies that Turkish businesses employed in order to come through intact. However, while the present crisis is not centred around the Turkish banking sector, there are serious problems in the real economy, since Turkish industries rely heavily on exports. Mr Ozkan believes that the state’s belated response to dealing with the global crisis is potentially very damaging to Turkish industry and cannot continue.

Facing the global crisis with confidence

The question, then is how Mr Ozkan proposes to deal with the present situation in his own company. He believes that the company’s biggest asset is that it has remained a family business so that everyone involved feels a strong sense of responsibility to ensure that things go well. He suggests any company facing difficulties during this time of crisis must begin by ensuring it takes on only as much work as it can readily control and thus avoid looking for contracts that it cannot handle comfortably. Balance is the key, and uncontrolled growth is extremely risky and making big plans in such difficult times is akin to daydreaming: “Now is not the time to grow fast, it is the time to protect what you have”. In relation to the future, he adds that nobody is in any position to guess what will happen, as this largely depends on the financial health of other countries and how foreign companies manage to survive. His own firm’s strategy is to do everything it can to protect its current position and he is confident that, with the food storage business and hotel venture both scheduled to begin in earnest, the company can expect a 10 percent growth in revenues for 2009. All this is informed by the experience of 2001, which hit the company fairly hard but did not stop it from completing all of its projects even if they made a loss on some of them and were saddled with bank loans which had to be repaid at 75 percent interest. 

This time around Mr Ozkan’s company is in a much more secure starting position and has a number of contracts to last it this period so it can therefore look to the future with a degree of confidence.