What has driven your recent growth?
S. SERİM ÇETİN My father founded the company in 1992 after the fall of the Soviet Union to improve trade relations between Turkey and the newly formed CIS countries. The idea was to establish a door-to-door delivery network between all of these countries, not just between Turkey and the individual CIS states. We have considerably expanded this network in recent years to Asia and Africa. Turkey has more connections to Asian countries than most European countries; one does not have to go to Europe or Moscow to send something to Almaty or Baku. We provide faster and more economical services, which is how we gained a name for ourselves and survived against the larger infrastructure of our global competitors.
ALİ TANRIVERDİ As per regulations in Turkey, it is obligatory to establish sectoral foreign trade operations before applying and becoming a foreign trading company. Thus, from 1999—when it was founded—to 2003, TGS operated as a sectoral foreign trade company within the textile industry. Since we applied and were granted the right to be an international trading company, we have since been able to serve in every sector of the Turkish economy. Since 2007, we have been growing and improving our performance. In 2012, we were able to expand further by listing on the Istanbul stock exchange.
What sectors and countries are most important for you?
SSÇ The CIS countries still get a solid volume share because of our existing routes. Europe is also important because it is Turkey's biggest trading partner. Even though we do not promote Europe in our services, we receive a great deal of shipments and projects from Europe because of natural trade flows. We work with the Turkish government and have extensive experience with different countries around the world—we have likely shipped to every country in the world some kind of shipment, whether it is generators to Palestine or drilling machines to Niger. That said, we see major growth in Turkey's trade with the Middle East, Asia, and Africa. There is a huge e-commerce potential in the Middle East, which is where we will invest more in 2020 to grow our network there. We now also get many requests from China to import B2C e-commerce shipments into Turkey because of a recent regulation change that makes it harder for them to use postal services. Our expansion into Africa has been difficult, because most African countries have not developed much of an economic relationship with Turkey. However, these relationships are beginning to develop, and our plan and vision is still to set up regional networks and grow our market in North Africa and sub-Saharan Africa. If we can make a difference in Africa, similar to how we made a difference in Central Asia, then we will consider the endeavor a success. As for our split between exports and imports, we are still dominated by exports, because most of our customers are exporters. However, our vision for this year and the next is to grow our import business. We are not a big network, so we do not get many inbound requests; however, we are currently in talks with several customers that want to utilize our import and last-mile delivery services in Turkey. Our target volume is a 60/40 split between exports and imports.
AT In 2018, automotive was our fastest-growing sector. However, textiles have always been our business. Every year since we began operations, we have maintained growth in our textile business. The growth rates of our textile and automotive sectors are expected to be more or less equal. The automotive sector is the locomotive of Turkish industry and constitutes the biggest share of its exports. Our operations will also follow this trend in the foreseeable future, because it is a field of development and expansion for us. We started it in 2018 and aim to keep it going in 2019 and beyond. When it comes to export markets, our focus is on countries that have foreign trade agreements with Turkey. We generally focus on the US, Europe, and other countries with established trade relations with Turkey. In the short term, we intend to grow and have established a regional directorate in Bursa as a local investment. Through this directorate, our goal is to achieve a wider, more expansive sector profile. Our target is to diversify further. We want Bursa and its hinterland, especially rapidly developing areas such as Eskişehir and Balıkesir, to benefit from our corporate structure, discipline, and services in parallel to a developing country.