Erse Kablo Export Manager Ergun Çoban’s Interview

Erse Kablo strengthens its brand value and corporate image with its participation in fairs at abroad  together with sales and e-marketing activities for the export. We had a talk with Erse Kablo Export Manager Ergun Çoban about Erse Kablo’s export  targets, their point of view  for  the  world  market    and  CPR’s  importance  on  cable  Export.

What have you determined for sustainable export policy for 2017 with respect to the vision of Erse Kablo which has been operating for many years in the sector?

I want to start with a nice sentence from Immanual Kant: “There is no doubt that all our knowledge begins with experience.” The correctness of this sentence is a real fact. But the biggest problem of today’s people is the confusion of experience with prejudice. We reflect our experiences in the light of technological, design and managerial developments that progress at a great pace and occur every day while living in the communication age. We can’t achieve sustainability in any area and we can’t have a vision as long as we don’t develop new approaches on the basis of objective science and present day reality.

In the past, to have knowledge was much more valuable than now; because the resources for reaching this information were scarce and inadequate. Today, it is more important that how can you reach the information  or  acquisition within the shortest time rather than possessing it, how will you have the most correct information by applying cross checking methods among the information pollution and through which methods do you integrate the data obtained into your working field in the fastest way. In this context, as Erse Kablo, the basis of our sustainable export vision is the capability of bringing new  approaches to  the  export and breaking down our prejudices first.

I think that export is among the ideals of every enterprise. Export seems to be a rose garden. Nobody other than those who’re engaged in exports and have knowledge on this subject is aware of the difficulties and thorns of this rose  garden.

The export world day by day feels more the effects of the problem of not creating added value   by  the products manufactured and price oriented competition which is the biggest problem of local markets for many years. Because of severe competition conditions, producers increase their concessions especially against hot money, and these concessions turn back as fewer profits, less productivity and longer terms.

You may tend to price oriented competition as a result of being captivated by the sector and its forcing, you may outdistance your competitors in numerical terms by recording large turnovers, but if you assess the conclusions of these relative successes in short times in the axis of the concepts of continuity, added value and creating brands which are basic goals of every enterprises, you will see that these successes are temporary. In conclusion, we shape our export policies within the framework of this reality with intense efforts, activities and supports of our senior management. In this context, as Erse Kablo, the basis of our sustainable export vision is the capability of bringing new approaches to the export and breaking down our prejudices first.

The management of financial tools brings a complex process also in cable production like in other similar industries, if you add other business costs paid in TL  to raw material inputs purchased in Euro and American Dollar in a trade environment where constantly changing rate fluctuations is effective.

The primary impact of the fluctuations in euro-dollar parity is seen on the cost components of our products on the sales. It is not possible to react to sudden and instantaneous changes in the parity at the same speed as a producer which has adopted total quality management. As  a  result, there are many compelling factors such as the works of a commercial contract, ongoing productions, existing stocks and market habits.

If we think that same situation is applicable to all actors of the sector, the losses here will be on the basis of country economy not on the basis of company.

In the light of economic indications, in the medium term, there will be risks such as shifting demands to more stable countries, turning developments into harder and unconscious competition. As is known, technologic developments occurred in recent years have made easier the sales, purchasing, production, logistics activities, have led to the expansion of boundaries of commercial activities. When you look at the balance of import and export of our country, and considering  that the export is in close relationship with the import, we can’t assert that “high exchange rate” is not an advantage for the export and exporters.

What kind of developments are currently occurring in the world lead market? Which zones or countries is production shifting to? Which products are requested more?

Especially in recent years, we face with a situation that the demand is followed by a large number of supplies. Of course, this brings the competition as well. Many producers make effort to protect or increase their market share. As a natural consequence, there is a very severe competition in the world cable market. But nowadays another concept that is as important as competition even more important than competition is “unfair competition”; unfortunately as I mentioned above the affordable price is confused with the cheap price.

Competition has a positive aspect like its being a triggering element which eventually leads to advancement by ensuring consumers to have high quality products and the most appropriate prices among numerous diversity of products as well as ensuring businesses to have innovation and know how at the same time. While the optimum sales price set for a product enables requestors to purchase a product with same properties for the most advantageous and affordable price, they are required to serve the basic principles of enterprises like continuity and added value creation. Here at this point, as one of the cable producers which create quality and confidence, allocate resources and makes serious investments in production, continuity and control, we have been engaged in activities to explain our cables produced are sufficient, reliable and accurate products intended for customer special needs and in accordance with specifications, national and international accepted standards. Our works to create awareness will increasingly continue in the next period.

At the same time, in an environment where the current supply is already more than enough for the total demand, the production of world’s cable sector is renewing itself through purchase and merging of existing companies rather than shifting to a certain region, and specialized producers are inclined to customized cable production that creates benefits within their enterprises by establishing business and solution partnerships. In this context, what is more important is not which products are in demand, but your answer you can give to the question of whether you can create demand by designing a new product  through  objective  outputs  of  the changes caused by  the  sector needs.

"Cable types employed in the European market requires newer technologies. In regions such as the Middle East, cables that can be manufactured with older technology are utilized. Of course, in this case the Middle East region is the market which is easier and more attractive for producers. This is because the technology we have is fit for cables which can be sold to this region. "Are you in agreement with this evaluation?

First of all it is necessary to identify the main countries to which Turkish Cable Sector exports in order to reach the answer of your question. You will see United States and European countries when you look  at  the first  5 countries. At this point, I don’t agree with the opinion expresses in the question.

On the contrary, Turkish Cable producers are very closely following technologic developments and they are quite successful about integration of the technology. At the same time, even though they’re not specialized in weak current and industrial cables, there’re also very strong cable manufacturers in the Middle East. In my thought, I believe that the basic problem of the sector is not focused on technology, but it is caused by the resistance of not changing their habits of past years. I think that positive sciences are ignored or not taken into consideration more in respect of production and sales techniques in our sector, as a negative consequence of the habits dating back to long years ago, when company profits were very high. I believe that in the next years the sustainability of companies can be achieved through financial engineering, cost accounting, purchase engineering and active planning under the main title of industry and enterprise engineering. It  will be compulsory to use these engineering tools effectively and ensure that business resources are used in the most efficient manner and strategies and objectives are guided accordingly.

Another very important issue is that the concepts I have used in this interview such as innovation, know-how, synergy and analytical thinking must be based on solid infrastructure not by using only their literal meanings. What I mean can be understood as a general statistic by comparing the inverse proportion between the "yes" answers given in the question of "Do you think analytically ?" and the correct answers given to the question of "What is analytical thinking?"

The phenomenon of "sales engineering" can be carried out far beyond just having technical knowledge about the product which is sold and the fact that the human element lies in the basis of the concept of "new technologies" will be understood more clearly through utilization of all these instruments concurrently and coordinately with the sales business.

Is the data of this year positive or negative compared to the same period last year? Would you please share your 2017 forecasts basing on this data?

First of all, as Erse Kablo Export Department, I must state that we’re in a new structuring and we have focused on developing approaches based on innovative and sales engineering in our vision and policies as I tried to explain in the first question. In 2017, we have committed to create a synergy encompassing all of these elements. When we assess the results of all these activities in the light of measurable data in comparison with past years, we see that we have  left  behind  the  most  successful export year in 2016 among the last  five  years.

I can say that we were successful in 2016 but we have a lot of work to do in 2017 and the following years in this regard.

What do you think about   EU  market?

The European Union is a structure already built on the coexistence of economic power and balances… It is predictable that a global recession that may be suffered in such markets won’t last forever, first there will be a healing and afterwards it will accelerate. Despite this information, these formations should not be regarded as an integrated structure even though they’re under the same roof. As you will notice when you read between the lines of international assessment reports, it is required to consider the parts comprising the whole, that is to say, the countries according to their economic conjunctures even by grading the companies within the same country, by bringing an analytic point of view to your commercial relationships with these countries. Brexit referendum in United Kingdom is the best example for this.

Can you tell which key developments events that have affected your sector and you regard as important in terms of the cable sector in 2016?

In the sector, it has caused the global economic growth to slow, the increase in the world trade volume to remain limited, commercial risks to increase due to the weakening of direct capital investment inflows and interest rate hikes.

The “populist” developments which have gained power in Europe and stretched EU norms, “refugee problem” which has become a problem for the entire world now, the increase of oil barrel prices, the effects of Russian and Iraqi crises, have led to the decline of unit sale prices in an environment where  export  figures  increase or remain unchanged.

EN 50575 standard, which regulates the applications of Construction Materials Regulation (CPR) in the cable sector, imposes certain criteria on the cables that will be used in buildings and other infrastructures. These criteria will be mandatory for cable export to EU countries in 2016. Do you follow these developments?

I see this regulation is a very positive development for cable export to EU countries if the purpose of Construction Materials Regulation is deemed to establish the rules for adding CE sign to the materials and relevant performance declarations with basic characteristics of building materials and to set related principles and procedures in terms of market criteria of these materials and to make decision in this regard. The creation of a  “common  technical  language” specified in the  framework of the regulation on this subject is also another important matter. The awareness of Erse Kablo on this subject is at the highest point. We are in an active study with our investments, internal and external trainings, participation in conferences and symposiums, market researches and solution partnerships. We regard CPR (Construction Materials Regulation) as an important opportunity to become an international brand for every manufacturer producing high-quality and reliable cables in compliance with standards.

What  you  want  to  add…

As in every year, we will  attend  Germany   Hannover  Fair  which  is  the  hearth  of  the  industry  and Dubai Middle East Electricity Fair which have created a difference in the Middle East market on the international platform. The overseas fairs are important platforms for us where we can both increase the value of our brand, and meet foreign customers. We will be happy to see our customers from the sector in these fairs.