“Sun will never set on our group”
The fact that the jet crisis that occurred between Russia and Turkey turned into an embargo that has brought the commercial relations between the two countries to a halt forces some Turkish companies, which conduct most of their job in Russia, to look for alternative markets. Rönesans Holding, which has become the 37th largest contracting company of the world and the largest 10th in Europe thanks to its contracting work implemented in Russia until now, is one of these companies. Focusing on growing rapidly in the new markets in and as from 2016, the Holding also aims at “becoming a group where the sun never sets” in a geography extending from Canada to Sub-Saharan Africa. Rönesans MEA Construction, which operates in 20 countries worldwide and also undertakes Rönesans Holding’s activities in the Middle East and Africa, is the leading actor of this objective because these operations located in the Middle East, Africa, as well as the Caribbean and the American continent are carried out under that roof.
We met with Cem Özoğuz, the CEO of the Rönesans MEA, and talked about the company’s growth plans for the new term. The questions that we asked Özoğuz and his answers are as follows:
How important is the Rönesans MEA within the Rönesans Holding, whose name has been almost identified with Russia?
The Rönesans MEA opened its first office in Libya in 2008. When the country was revolutionized in 2011, we have become the largest Turkish company in Libya with a signed contract amounting to approximately 1.1 billion US dollars. We completed the construction of a hotel in a region near the Egyptian border in 2009. This work made a tremendous impact in the region. Afterwards, we started to expand and grow in Africa and Middle East.
Within the context of Rönesans Holding’s future plans, is there any increase in its searches for an alternative plan following the crisis that occurred with Russia?
We have already established the Rönesans MEA prior to this crisis. What’s important is to be able to predict these days. We started with Libya and then continued with Iraq, Qatar, Nigeria and Mozambique in a short period of time. Earlier this year, we acquired a Dutch company named Ballast Nedam which dates back to 130 years. This company has know-how and recognition to a great extent in the African market. It opened a new world for us. For example, we are currently conducting a hospital construction in the Caribbean by this means. Furthermore, we undertook a bridge work in Surinam and a water treatment work amounting to 90 million US dollars in Sri Lanka. In other words, America was also involved in our radar along with Africa thanks to the Ballast Nedam. Within this framework, we are looking for opportunities in Canada and Colombia as well.
Are new acquisitions likely to be on your agenda anytime soon?
Yes, we are considering that, because our area of operation is gradually expanding. We might even change the name of our company accordingly. We are operating in an area extending from South America to Sub-Saharan Africa. We will become a group, where the sun never sets.
Are the works in Libya canceled or pending?
No, they are not canceled, but available now. We are maintaining our limited staff and equipment in Libya for protection purposes. Nevertheless, currently we are not conducting any work. I hope there will be an atmosphere in which we can implement the work on which we have recently made an agreement. A government was established, but it’s not active yet. We are waiting for this.
“Our turnover is to climb to 200 million US dollars in 2016.”
What’s the amount of Rönesans MEA’s turnover share within the Holding?
Our turnover currently corresponds to approximately 6 percent of the Holding’s total turnover. Each year we plan to double our turnover, which amounted to 100 million US dollars as from last year, and surpass 500 million US dollars in three years. Now we are constantly signing new contracts and agreements.
Which other countries of the MEA region, apart from Libya, are now involved in your radar?
We undertook the construction of a university in Qatar, following Libya. Afterwards, we undertook two works in Iraq. One of them is in Erbil and the other is in Diwaniyah. Iraq is a market, where we would like to stay in the long term. We have currently a work amounting to approximately 400 million US dollars in Iraq, which is yet to be signed. We will carry out our operations in the northern and southern regions of Iraq.
Which regions will you be focusing on in the African market?
We undertook a work amounting to 40 million US dollars in Gabon. This figure might refer to a small work for Rönesans, but we consider this work as an entry into Africa. We have entered the Sub-Saharan Africa for the first time with the work in Gabon. We learned a lot in Gabon with regard to the African market. Afterwards, we entered the Nigerian market. We started to develop business in the neighboring countries in a short period of time. I can say that we have learned the continent.
Which opportunities in the African continent are the most important ones to Turkish contractors?
There are great opportunities. Each company will have to enter Africa in five years, in case it fails to do it now. We think that we have planted the right seeds. We think that the future is in Africa. Africa will be our second most strategic market, following Russia. In Africa, we are now applying the same strategy that has enabled us to be successful in Russia.
To give a concrete example, what sorts of opportunities are available in Africa for the investors?
For example, there are great gas sources in Mozambique. This country is important to us. We are currently constructing a consulate building in Mozambique. We placed a bid for three infrastructure projects in Ethiopia and now we are waiting for the results. Nigeria is one of the most important countries of the region with its population of 180 million people. We built a hotel there and 3-4 thousand people were present in the inauguration ceremony. There are 36 states in the country, each of which are competing with each other. We also undertook a road construction work. We provide help with regard to the construction of shopping malls, as well as finding tenants for shopping malls.
How does your company carry out its operations in such a large market like Africa?
We actually consider Northern Africa and Sub-Saharan Africa as separate cultures within Africa. As a result, we use the experiences that we have gained in Libya also in Algeria and Morocco within Northern Africa. Our staff is currently shuttling back and forth between the two countries. Furthermore, we will undertake great works in Algeria and Morocco in a short period of time. We aren’t conducting any work in Egypt as a group in that region and we don’t have such plans for now.
How did the civil war in Syria affect your plans in the region?
We were about to initiate the construction of a shopping mall in the city of Aleppo just before the civil war. It’s difficult to make any comment about Syria now. We attach particular importance to the issue of choosing the city to work in countries near Turkey. We certainly visit that city and analyze the security conditions there before signing a contract. As a result, for example, we chose the cities in Iraq after acquiring a lot of information. Therefore, we can say that our safest worksites are now located in Iraq.