SABANCI HOLDING CHAIRMAN GULER SABANCI’S EVALUATION OF 2007 AND OUTLOOK FOR 2008...

02.01.2008
-  “GLOBALLY, THE 2007 HAS BEEN PAVING THE WAY FROM THE OPTIMISIM OF 2006 INTO THE AMBIGUITIES OF 2008”
-  “TURKEY PASSED 2007 FOCUSED ON INTROSPECTIVE POLITICAL AND SECURITY ISSUES”
-  “THE WORLD ENTERS THE NEW YEAR ON A KNIFE EDGE”
-  “TURKEY HAS NEITHER THE LUXURY NOR THE EXCUSE OF POSTPONING WHAT NEEDS TO BE DONE IN 2008...”
-  “WE ARE EXPECTING THE ECONOMIC POLICY MAKERS TO ACT DECISIVELY, RAPIDLY, AND EFFECTIVELY”
-  “THE SABANCI GROUP HAS REALIZED ALL OF ITS TARGETS IN 2007”
 
Guler Sabancı, Chairman of Sabancı Holding, has made a statement evaluating the year 2007, and announcing her expectations for 2008.  In her statement to the employees of the Sabancı Group, Guler Sabancı, said that Turkey passed 2007 being focused on introspective political and security issues, and that many economic issues are on a knife edge in the eve of 2008.
 
Emphasising that Turkey has no more the luxury nor excuse to postpone what it must do, Sabancı added: “We, being the Sabancı Group, have managed to hit all our targets during the year 2007.”
 
Statement of Guler Sabancı is as follows:
The year 2007 has been one paving the way from the optimism of 2006 into the ambiguities of 2008:
  • Elections or post-election governmental changes in various countries worldwide,
  • Unending clashes in Iraq and in the Middle East in general, and the global war against terrorism,
  • The fall observed in consumer optimism,
  • Onset of the so-called “sub-prime mortgage crisis” spreading from the property market to the financial markets,
  • Global liquidity which was increased dramatically in order to cope with this crisis,
  • Increasing oil prices throughout the year
have formed the background of these global changes.
 
-   “TURKEY HAS FOCUSED ON CURRENT POLITICAL INCIDENTS DURING EIGHT MONTHS OF THE YEAR”
 
In line with these developments in the world, similar ones have been observed in Turkey as well. Our country was focused on short-term, current, and mostly parochial political issues, particularly during the first 8 months of the year:
  • Presidential and general elections, and Constitutional debates, while playing an important role for our democracy, occupied the major part of the year,
  • serious problems of terrorism and security dominated our agenda during the last 3 to 4 months of the year,
  • the EU process slowed down significantly and even stopped in certain fields,         
  • economic targets concerning growth, inflation, interest rate, and budget were missed as a result of the slackened financial discipline in the period leading up to the elections and of the critical microeconomic reforms not done,
  • however, foreign direct investments, AND THE RECORD-BREAKING LEVELS OF EXPORTS which kept increasing despite all the foregoing, was encouraging.
 
 
-“THE SABANCI GROUP HAS MANAGED TO HIT ITS TARGETS”
 
In the midst of all these events, the Sabancı Group has managed to hit the growth, employment and profitability targets it had set for itself at the beginning of 2007.  We estimate that our consolidated net sales will reach 19 billion YTL, representing an increase of 21%, and our operational profit approx. 3 billion YTL, which means a 28% rise.  While realising all these achievements, within its set goals the Group has exited from certain areas and invested of approx. USD 900 million in its main lines of business. Thus, while keeping growing, we have also successfully continued the task of our in-house restructuring.  I wholeheartedly congratulate all my colleagues who contributed to our achieving these goals.
 
-“2008 WILL BE A YEAR OF AMBIGUITIES FOR THE WORLD”
 
The year 2007 has been one paving the way from the optimism of 2006 into the ambiguities of 2008. At the moment many issues are literally ON A KNIFE’S EDGE, and it is hardly possible to predict which way they will fall.  These issues include mainly:
  • The consumer pessimism felt almost anywhere in the world, but mainly in the U.S.A.,
  • The behaviour of the U.S. economy between inflationist pressures and a “soft landing,”
  • The situation of the EU economies,
  • The direction that  the uneasiness in financial markets will take,
  • The effects of the elimination of the quotas applied to China by EU (hence by Turkey),
  • Whether oil prices, and hence overall energy prices, will cross the psychological barrier of USD 100.
 
We must be vigilant and cautious due to such ambiguities.
 
Our expectations regarding Turkey are, on the other hand, more explicit.  We have to fulfil several important tasks “IN TANDEM” and “SIMULTANEOUSLY.” We have neither the luxury nor any excuse for postponing what needs to be done.
 
We are pleased to see a social consensus developing on the new constitution, a pre-requisite for further democratisation of our country.  We are also pleased to note the expressed intentions of following up the success of the military operations with social and political policies to unite and benefit all our citizens.
We expect that the EU process, which is of vital importance for us, be revived with a significant and determined “acceleration.”
 
-“REFORMS ON A MACRO BASIS WILL NOT BE SUFFICIENT, MICRO REFORMS MUST BE ENACTED”
 
As concerns the economy, on the other hand, although we could not hit the macroeconomic targets in 2007, we have to continue without changing the trends or our direction.
 
As we have been saying for the last two years, further improvements in our economy will only be possible with reforms on a micro basis.
 
Sustainability of the growth rate, reduction of inflation, interest rates, and unemployment, adjustments of the exchange rates without serious imbalances elsewhere depend on our being able to raise our productivity.
 
Unless the necessary reforms are enacted in this field, the effectiveness of macro-policies alone will fall short in securing our development.
 
We are expecting the economic policy makers and legislators to proceed RAPIDLY and EFFECTIVELY in this field.
 
-“WE WILL CONTINUE CREATING VALUE IN 2008”
 
 As the Sabancı Group, and bearing in mind the global and national ambiguities and developments just outlined, we will seek to be the best in 2008. With the challenging goals we have set, We will continue to create value for all our business partners, by, again, being a fast-growing and profitable group. We will gain a sustainable competitive advantage through INNOVATION in every field. Benefiting from the very high calibre our human resources and our participative-management approach, we must continuously create new opportunities to refresh and improve ourselves.
 
As always, I am sure that working together toward a common goal, we will achieve the success we deserve.