TBY talks to Dr. Murat Binark, General Manager of Garanti Koza, on the company’s operations, its activities abroad, and the state of the sector.
TBY How has the company gained expertise over the years in various areas of construction?
MURAT BİNARK We gained expertise by learning from our mistakes. A lot of the buildings you see around Turkey were built by Garanti Koza, starting with the Turkish Parliament, to Bağdat Caddesi on the Asian side of Istanbul, to all the developments of the Etiler area on the European side of Istanbul. We have built more than 20,000 houses, and more than 3 million square meters of industrial plants.
How many of the contracts you are currently winning coming from the state and private sector?
From the early years until the 1990s our major client was the government. Since then it has been becoming less and less significant, until almost nothing. Our focus now is private developments.
One of your current projects is the Akkoza development, aimed at turning the Esenler region of Istanbul into the new Etiler. How is this project progressing?
It is a large mixed-use development project that will contain around 5,000 apartments, a shopping mall, schools, a hospital, a club, and all related facilities. With this integration you build value. If you build everything separately then the necessary synergy is not attained. People usually think that the value is in the land, yet it is on the development side. Out of nothing, value can be created. If Dubai hadn’t happened, it would still be a piece of desert, and so the value of Dubai does not lie in the value of the sand that is there. A group of people with an idea transformed the area into a booming city. When our Akkoza project is finished, Esenler will be far better known than it is now.
You have worked with the Design Development Group on the Akkoza and Kozaşehir projects. How has this relationship developed?
Before we started the projects, we had to choose an architect group. We chose five or six big internationally known companies and they all made designs for us. We paid them for these designs—without paying them they will do half-hearted work. From these six we chose the design that we believed was the most beautiful and functional. We like to work closely with our architects on every stage of development. Working with the same group also allows us to develop a closer, more trusting work environment.
Garanti Koza has completed projects ranging from dams, to high rises and multi-purpose complexes. Are there any areas where Garanti Koza is still trying to gain more expertise?
We try to follow the market. When the Turkish government was building dams one after the other, we followed that market. Right now, no dams are being constructed. We go wherever the market takes us. Right now the market is moving more toward the private sector and the government is not tendering anything.
What international projects and plans do you have?
We are focusing on countries in the region, such as Azerbaijan, Iran, Iraq, Syria, and Saudi Arabia. Previously, our focus was on the Russian market, but it is saturated. There are also no big projects in Europe. We are concentrated in countries that are close to us, and that have large demand for all types of construction, and where this type of service is not well supplied. One-third of the contracts that we take on are in foreign countries.
Construction companies were some of the first Turkish companies to go abroad. What has made them so successful?
The key quality we brought was multi-tasking. When we went to Saudi Arabia in 1983 for a five-star hotel project, on our delegation were two or three guys. On the other side of the table was the Bechtel Corporation with maybe 25 people. This is something we have gotten used to.
I understand insurance, as well as the intricacies of concrete. I can talk with truck drivers, and also with bankers. These are the specialties of Turkish contractors that make them so successful. Turkish managers are also very sought after in the international business community. There are many Turkish CEOs all over the world. We can work under stressful conditions and are good at crisis management. We have a “never give up” attitude.
Garanti Koza is also involved in the turnkey construction of luxury villas. What potential do you see in this sector in Turkey?
Turkey is getting richer and richer, and Istanbul is getting richer and richer. As such, there is a certain demand for luxury villas. We should not over exaggerate it, as when a country gets richer everyone tries to move one step higher. People living in lower quality housing want medium quality housing, and those in medium quality housing want high quality housing, and then in a better location with a garden and the like. Everyone is moving upwards together. The top guys already own their houses. The market, therefore, is not massive. Perhaps the daughter of a family will marry and will also need a villa. It is a niche market, not a very large portion of the market.
How can we assess the construction industry’s performance during the recent economic downturn?
We were relatively unaffected. We saw no issues in relation to financing. Profit margins were reduced slightly, but the amount of contracts we took on remained the same. Data over the last 10 years has shown the construction industry is steady in terms of profits.
You are also involved in restoration projects. How much experience has Garanti Koza gained in this industry?
We have gained a lot of experience in the restoration business. If you take a 1,000 year old building, and you are restoring its stone walls, you do not go there and patch it with concrete. Our experts carefully chisel the original stones out, turn them around, and put them back in. It is a meticulous task. We are currently not working on any restoration projects as there is no systematic market for such projects. When an opportunity presents itself, we are ready to provide our services.
Another aspect of Garanti Koza is its facility management arm, how has this developed in a market that is relatively unfamiliar with the concept?
The value of our products depends on good facility management. With bad management comes a bad atmosphere in a building. This can lower the value of a building indirectly. We started to provide such services to our completed building projects. Later, we began to provide these services to other clients too.
How do you see Turkey developing over the next 10 years in terms of construction?
Turkey is developing very quickly. However, there is still a lot to do. Old buildings will be torn down and built anew. Urban renewal is the name of the game. We will continue doing what we do. Istanbul is an interesting city and the differences we see compared to 10 years ago are tremendous. The visual appeal of Istanbul will continue improving. Foreigners will begin to want to live here as more and more foreign companies set up operations. This is an important signal for the future.
© The Business Year