TBY talks to Zeki Pilge, President of the Turkuaz Group of Companies, on starting a company in Kazakhstan, areas of expertise, and advice for foreign investors.
TBY Why did you choose Kazakhstan as a place to start business?
ZEKİ PİLGE In my high school graduation yearbook from 1982, I wrote that my greatest dream was to study medicine and work with our brothers in Central Asia. Although I decided not to practice medicine upon graduating from Çukurova University in 1989, I did decide to do business with the newly independent Central Asian republics and focused on Kazakhstan. My childhood friend Ismail Koyuncu is of Uzbekistani origin, and we worked together to establish our first company in 1992. When we started the enterprise, we did not have huge amounts of capital, but we had passion and faith in our goal. Since then, we have worked hard to not disappoint the people who trusted us. We delivered all the products our clients ordered on time, even if it caused us losses. The combination of our trustworthiness, sincerity, and organizational excellence led to our current success. We moved our head office from Istanbul to Almaty in 1997. From our Almaty center we operate in Kyrgyzstan, Turkmenistan, Uzbekistan, Tajikistan, and Mongolia. We are also planning to expand into Afghanistan. Today, we are leaders in every business segment we operate in, including distribution, construction, and industry, and we aim to maintain our position as one of the top three companies in each sector.
What were your initial areas of focus?
Having a vision is synonymous with the ability to take tomorrow’s picture today, and establish a strategy accordingly. We did not reinvent the system—we just discovered our niche and excelled in it. Our departure point was to market Turkish exports in Kazakhstan. When we first arrived here, we saw that the production line from the Soviet era was broken, and there were many consumer needs in every sector. Until 1994, we imported a wide array of goods from Turkey; anything from soap to blankets. In an environment where a plethora of Turkish firms have tried to conduct a similar import business, we took the radical decision of not importing from Turkey and began to distribute goods from other countries. As our distribution network expanded, we negotiated with new partners such as Unilever and Nestlé, and we have been working together with them for more than 15 years.
What role does Turkuaz Group play in the development of industry and energy infrastructure in Kazakhstan?
Soaring chimneys and endless fields have always inspired me. With this excitement, we have launched our operations in industry. Currently, there are four factories, two of which belong to Turkuaz Group: a brick factory and a tea factory. We also have two partnerships. Through our partnership with Henkel, we produce construction materials. With our Saudi Arabian partner, Savola Group, we operate a sunflower oil factory. Annually, we produce 80 million liters of sunflower oil, which is the largest capacity in Central Asia. Our brands are market leaders. Although we established this factory independently, we later partnered with the Savola Group, demonstrating our willingness to form foreign partnerships. Although we are a foreign company in Kazakhstan, we have attained an excellent level of localization. This achievement helps us successfully integrate our corporate culture and professionalism with local requirements. Therefore, it is beneficial for foreign investors to partner with Turkuaz in Kazakhstan. The fact that global leaders such as Henkel and Savola partnered with Turkuaz proves our competence as a local partner of foreign origin. Looking ahead, we are interested in the energy sector. Energy is a subject we would like to explore, and we are particularly interested in power generation. Provided that Kazakhstan has increasing power needs and that the government continues to focus on privatization, the energy sector is an area we would like to pursue.
What advice do you offer to foreign investors interested in Kazakhstan?
President Nazarbayev is a formidable leader for Kazakhstan, Central Asia, and the entire Turkic population. Against the backdrop of every cultural, economic, and political difference among the Central Asian nations, I strongly believe that Kazakhstan is the leader in the region. Kazakhstan is also the most attractive country for foreign investors who seek stability and growth along with access to the CIS markets of more than 200 million people, including Russia. However, it is not possible to replicate the gold rush of the early 1990s in Kazakhstan. My advice to investors that come to Kazakhstan is to do the business they excel at instead of starting new adventures. Kazakhstan presents many opportunities to investors, not only in the extractive industries, but in other fields as well. Investors should keep in mind that they might find themselves in a position to manufacture in the country, as the majority of the country’s consumer goods are imported. In general, we strongly welcome investors to Kazakhstan.
© The Business Year