Yıldız Holding Ülker Group Chairman, Ali Ülker: “This Year We Will Be Making a Serious Investment"

Yıldız Holding Board Member and Ülker Group President Ali Ülker, says he believes that the rapid growth in chocolate over the past two years will resume in 2012.  He also indicates that investments scheduled for 2012 may be realized in 2011, "This year we will be making a more serious investment," he said.

In an interview with our AA reporter, Ülker said that while the overall chocolate market achieved a record growth rate of 20% over the two previous years, this year it has not grown.

Ülker said that during to the recent crisis the market did not grow and people shied away from investing in or purchasing luxury items such as cars and houses. However he thinks that things will be different this year.
Along with the resurrection of the economy, some investments that were planned for 2010 which were not realized are now beginning to be made. “The automobile and housing markets have begun to revive. As a consequence, I think consumers may be cutting back on household expenditures,” he said. 
 
Ülker attributes the slump in chocolate sales during the year to the unusually hot summer that we experienced. He indicated that he expects chocolate sales to rebound in the autumn.

Ülker has a 53% share of the chocolate market and is the leading Turkish producer with sales of giftable varieties that have reached 110 million TL. As the religious festival season approaches, Ülker is preparing its strategy by analyzing current consumer trends and meeting consumers in the field.  He continued:

"We gather market data and analyze it. Then we develop different concepts.  This year, for example, we are producing new varieties for our Golden series. Istanbul has been proclaimed the European Capital of Culture for 2010. With that in mind, we used images that symbolize Istanbul on our packaging, such as Galata Tower, Topkapı Palace and the Spoonmaker’s Diamond. For the religious festival season, we will produce 7 tons of special chocolate and candy products. That is the same amount as last year, because chocolate does not have an indefinite shelf life. We are focusing more on the wrappings of our giftable products and offering more kinds of specially boxed items to protect them from melting in the heat.”

Ülker says that recently there have been two important trends in chocolate and that consumers are looking for a richer type of product with more intense flavor. Last year, while the most popular varieties of chocolate were those with lots of hazelnuts and pistachios and high cocoa content bitter chocolate, people were also purchasing chocolate products with different types of fillings.  

"EACH YEAR WE SET ASIDE 5% OF OUR NET SALES REVENUE FOR INVESTMENTS

Ali Ülker pointed out that Ülker makes investments for two purposes:  one is to increase productivity by investing in new technology and the other is to invest in improving existing products to reduce production costs.

At the same time, investments are made to diversify the company’s product portfolio with new, difficult to imitate products that require a certain level of knowledge and experience to realize.

He pointed out the importance of knowing what consumer prefer and meeting their expectations and that in recent years products that have been released to the market have been focused on the desires of young consumers. Ülker said that investments in the rapidly-growing chocolate market that had been planned for 2012 may be made in 2011.  

"We reached our capacity early. Therefore we will be making a serious investment sometime this year. If we fail to set aside a certain portion of our revenues for investments every year, the company won’t be able to grow.  We are also making an important investment in marketing. We dedicate 5% of our net revenues to investments every year. As for our work force, it has been growing at the rate of nearly 5% annually.  It would have grown more, but for our new technology. However we are working to create employment opportunities in various fields. For example, for this religious festival we have hired 500 new workers to introduce our products in markets."

CONTRIBUTIONS TO EXPORTS
Ali Ülker reiterated that Ülker has business activities going on in many markets and said that sales were increasing from the company’s foreign factories. The performance of the company’s foreign factories was especially good in the Middle East and Turkic Republics.  Ülker acknowledged that creating more capacity for foreign factories to export abroad was a handicap, but that it was an unavoidable situation.

Ali Ülker continued:
"I think we can open the way to offer more value-added products. In recent years our exports have remained steady. This is because there are similar factories to ours operating in Jeddah, Kazakhstan and the Ukraine. It had to be that way because shipping goods outside the blocs would not have been successful. We can’t get through the tariff wall. On the other and it wouldn’t be affordable...

We are currently working to introduce more original products and ideas to markets abroad. We have made new investments there, in an attempt to move our products successfully."

Ali Ülker pointed out that Ülker purchases 328,000 tons of wheat annually, as well as 215,000 tons of sugar , 450,000 tons of oils, 6.5 million tons of milk and 8,000 tons of hazelnuts. He said that recently the price of cocoa has sky-rocketed and that as a result, Ülker has cut back on its orders by 10% so that the increase will not have to be reflected in higher prices for consumers.

Ülker stated, "We haven’t increased prices for giftable products during the current religious festival, but after the festivals are over, we won’t be able to put off price increases for biscuits and chocolate."  Ülker said that flour prices have increased by 12% and the cost of oil has undergone a similar increase.

As a part of his job, Ali Ülker tastes every product before he approves it. Each day he tastes a record 280 grams of chocolate.  Describing the sensitivity of the production processes of chocolate, Ali Ülker said that the cocoa Ülker uses is purchased from Ghana and the Ivory Coast, hazelnuts are from Giresun, pistachios are from Gaziantep and milk powder is produced in the company’s own facilities.

ISTANBUL (A.A) - 03.09.2010 - Hülya Çorakçı Ertan