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Sabanci’s Cement Group looking for acquisitions

World Cement,

In an interview carried out with Reuters earlier this week, Sabanci Holding Cement group President Mehmet Göçmen said that the company has no plans to increase capacity or purchase new facilities in the domestic market but is conducting studies for around 15 acquisitions in nearby regions, including the Balkans, the Black Sea area and the Mediterranean basin. These have the capacity to create synergy with existing facilities in Turkey and fuel the company’s growth potential. The cement group, which has a partnership with HeidelbergCement in Akçansa and holds Çimsa as its subsidiary, controls about 20% of the domestic market.

“We have already grown very big in Turkey and it is now time to look abroad,” said Göçmen. “We have enjoyed a fine running partnership with Heidelberg in Turkey for 15 years and it is quite likely that we can carry the same model abroad”. He confirmed that the group can use its own resources to finance the acquisitions without having to add extra capital to the company’s equities. The group hopes to keep its combined turnover to over US$1 billion this year.

Göçmen stressed that, “The increasing prices of energy and fuel are putting pressure on our costs and this is increasing pressure on profitability. Such a high growth in the domestic market is expected to yield better consequences, but it seems that this is not so likely. The operational profitability seems to be horizontal this year over the previous year. It may edge up a bit, but it will still be far from full, reflecting the growth in the market”.

The Group’s President said that he expected no consolidation in the cement industry and that the entry of a foreign player into the domestic market would be very surprising. On the contrary, some foreign players may even leave the game in Turkey during the next three years.

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