Interview with Can Yarangümelioğlu, Gimas Heavy Machinery Manufacturing And Engineering

Interview with Can Yarangümelioğlu, Gimas Heavy Machinery Manufacturing And Engineering

NBN: Mr. Can Yarangümelioğlu, could you introduce us some of your personal background information?

CY: I am a mechanical engineer graduated from İstanbul Yıldız Teknik University in 1996

I worked in this sectors in the last 20 years, especially for petrochemical in the US and in the Middle East, on site activities.

NBN: Where have you been working in the Middle East?

CY: In Saudi Arabia, I worked with Arabian-American Oil Company (Aramco), Saudi Bitumen Industries Company Limited (SABIT) in Egypt.

NBN: Where in the US?

CY: In Ashville, close to North Carolina for one and half year. Then, in 2013 I joined Gimas and am working with them for the last 4 years. I know those guys before I join the company, for more than 10 years. I have met my current boss in 2007-2008 when I was working with Bureau Veritas, the 3rd party company. During that time, I was agent in my zone, so I worked with the inspectors.

NBN: So, your experience with Bureau Veritas helped you to become the quality manager of GİMAŞ?

CY: Most probably yes, also, I have seen too many different companies, worked as an inspector for 10 years roughly and I have a site activity experience.  I joined them at the end of 2013 and still working with them.

NBN: What exactly is your role as a quality manager in GİMAŞ?

CY: I have 9 colleagues working for me on QA and QC. Beside of this, I have other responsibilities for new clients at the biding stage and I am directly reporting to the general manager 

NBN: Very interesting. Your new company, Gimaş was created in 1976, can you tell us in which market the company started to work?

CY: Especially for the refinery. The founder Samil Girgin, was retired from the refinery. There are two refineries in İzmir, the first one is owned by TÜPRAŞ and the second one is PETKİM (STAR Rafineri A.Ş., a subsidiary of SOCAR Turkey). When Mr. Girgin retired, he started to manufacture parts such as pressure vessels, drums, exchangers and so on, for 10 years. Then he started on the cement and the mineral industries. In the cement industry, he started to produce, feeders, vertical and horizontal mills and thickeners. Ten years ago, the management met with Leroy Somer (a subsidiary of Emerson Industrial Automation) they produced some parts for industrial alternators for their conventional power market. Then four years ago we started to discuss about the nuclear parts that we are manufacturing now.

Leroy Somer comes on regular basis to audit our company, the last time was a couple months ago.

NBN: You are a manufacturer for the heavy equipment in Turkey, and your business is split in five areas: Cement, Power Plant, Petrochemical, Machine tool and Mining.

CY: Yes, the energy, cement and refinery are the main ones.

NBN: What is the trend in your company?

CY: Right now, I can tell you that the energy is roughly 30%. Because in the energy, thermal, Hydro, Wind and Nuclear represent 30-35% of our production capacity. Cement is 50% and the rest is for mineral, refinery etc.

NBN: Which sector is really taking off since the last 2 years?

CY: It’s Energy! We started 4 years ago with 5%. Within 3 years it became 30-35%. And now we are refusing some works exceeding our capacity. There are 3 or 4 global players especially on hydro and wind powers and we supply for all of them. They are investing in Turkey because of financial and tax incentives to localize equipment.

NBN: Why don’t you find industrial partners and subcontractors to help you?

CY: We tried to find, but the energy sector is a little bit different compared to other sectors, that requires control of quality on constant basis. It is not easy. We found some Turkish sub suppliers, trained them but we faced various problems along the way and we prefer to control the quality expected by the client.

NBN: You supply to many large EPCs,  and equipment manufacturer. What is your exporting rate?

CY: Last year the rate was 93%.

NBN: Which countries are you exporting mostly?

CY: Mostly Europe. We are selling to US, the United Kingdom and Europe and the clients are using and assembling our products all over the world.  For example, I am selling to Thyssenkrupp which uses our products for the Middle East. We are selling to GE which is using our products for Mexico.

NBN: How do you keep up with the quality? What makes your competitive advantage?

CY: We have different advantages, one of them is flexibility. We are manufacturing even the small parts such as injectors for turbines. Secondly, it is our strategy coming from the management culture, we are focused on the client. Then, in the QC team, when I joined, they were 3 peoples but it tripled within 3 years and we always train our personnel. We don’t have any budget for training. We are just informing the management which training could be beneficial for the company. For example, when there was a painting training, the management paid without hesitation the 10,000 USD cost. We are investing in people, and we are proud to say we have some workers who have 30 to 35 years of experience in the company.

NBN: Essentially, you retain people not only you have the business, but also you help them grow. Do you think that this is the key of having very high-quality team and also very high ongoing training? 

CY: Absolutely. For the nondestructive training, for the welding training, whenever the training is related to the manufacturing, we send our people.

NBN: You mentioned earlier that you have some visit for nuclear program, you are exporting some components to China, to one of the clients, Leroy Somer. When did you start doing business in nuclear?

CY: Four years ago. Our third project has been finished and shipped last year. We faced many difficulties at the beginning. Normally for simple parts in regular manufacturing, we produce two pieces per month but for nuclear, even for the conventional island we could finish just one piece in six months. We send several persons to France for training to know about what they are focusing on, what they are doing. During the last 4 years, we are manufacturing for nuclear sector and there are mostly for the Chinese market. We have finished three projects and EDF now is auditing us for projects in France.

NBN: Did you have any inspection from the Chinese users?

CY: Yes, for the Chinese market, we have a team of EDF and the Chinese user coming to our site.

NBN: For which Project you are exporting your equipment to China?

CY: For Fuqing Units 1 &2.

NBN: You complied with Asme S &U standards and ISO 9001 among all your certificates.

CY: Yes, for three years. In april, we have been audited, and we passed the inspection.

NBN: You maintain test certificates to ensure full material traceability, do you see such expertise being developed in Turkey for overseas markets such as China or do you consider this is specific to your requirement?

CY: It depends on the investment. This market seems easy or attractive market but first thing, you have to invest in the people, secondly the machining capability should be high and lastly you should be very patient in the sector. Because at the beginning you don’t earn money. For the first two years, you will get the experience so you could stand financially. This is not easy. In Turkey, people think short term, so the industry will not focus in the quality and investment to improve.

NBN: Since you are very successful for this Fuquing project , does Leroy Somer or any other company asked you to work on other countries on other plants but still in nuclear?

CY: Yes, France, Brazil, Mexico, and we just finished two projects for the Baltic Nuclear Power Plant.

NBN: Very impressive, so you are becoming a global player in the nuclear with Russia, China and France.

CY: Definitely.

NBN: Have you informed anybody from Akkuyu that you are already exporting?

CY: No, we have not informed anyone yet. We attended the International Nuclear Power Plant Summit in Istanbul (INPPS) this year, that was our first fair in nuclear. Especially for the advertising we go step by step because we are not known very well.

NBN: Except those nuclear projects you mention and your business in Turkey, are you also involved in other activities in Middle East and Africa?

CY: We started a first Project with the Turkish government that we have just started is for hydro business. We are conducting this Project with EÜAŞ and TOBB university. We are producing turbine, one hundred percent local in Aydın, Kepez site. As for other markets, we are selling to the global Engineering companies in Europe, United States.

NBN: As regards to nuclear program in Turkey, what are the activities you are performing?

 CY: Mitsubishi sent a question list to us for Sinop project. The government referred us to Mitsubishi for the localisation of Sinop.

NBN: When the Akkuyu and Sinop project start, since you already manufacturing nuclear equipment, you may be contacted by subsidiaries of Rosatom or Mitsubishi, to work with you; what would you expect from the foreign partner?

CY: In our factory, we have different plants. We have 42,000 square meters of area, 20,000 square meters is closed and the rest is open area. If someone comes to tell us to manufacture some nuclear parts, I have an area that will suit the new production and the trained employees for this business. I can isolate this nuclear part from the other area.

NBN: Do you have a clean room?

CY: Yes, Definitely. In this clean room, we have five welding shops, two machining shops and engineers dedicated to this area. Our organization system is different than the other Turkish companies.

NBN: Yes, and you also have the Russian standards. Let’s continue on the domestic market, such as Akkuyu and Sinop. What are the advantages that you could bring to a foreign company.

CY: The first advantage is price. Because we are always trying to keep the right ratio between blue and white collars. We are very selective on this aspect of human resources. Our second main advantage is our machining or welding capabilities. Our third advantage is the large area available, we made a considerable investment in order to grow continuously, and last is our experience in the sector. Even if we have been working for four years only, we delivered successfully in overseas nuclear markets.

NBN: Has your business in the Middle-East been affected by the terrorism and the instability in the region?

CY: In four years, we have passed through more than six or seven crises. In the crisis time, we are always growing because we don’t work for local, only international. We focused into high quality products for Multinationals based in Europe and the USA. Through this strategy we didn’t face any problems until now.

NBN: You said that in the crisis times you are enforcing your efforts to overseas business, beside Middle East, Africa has a very large nuclear program especially in South Africa, Kenya, Nigeria, Egypt and others. Does your company have any plan to expand your exporting capabilities to these countries? or do you just focus on delivering to European large companies?

CY: We never had limitations. Our only limitation is for local. We try to keep 5 to 8% locally and the rest is all over the world. We are selling to multinationals. But we can sell to Middle east, the investors are everywhere. Since the last three years, we sold directly to Egypt especially for cement parts. Our main selling point is Europe right now but in three years it depends on where will be investment.

NBN: You mentioned Egypt, do you know that they are also building nuclear power plants? They signed for 4 reactors with Rosatom, more or less the same technology as Akkuyu.

CY: Our founder has a strategy, “never ever segregate a company or a country”. The only reason we keep local percentage low is because of the fast changing conditions in Turkey. That is why more than 90% of our sales is overseas and the rest is local.

 NBN: You went in INPPS and visited several booths from Turkish and international companies trying to get into your nuclear market. Which advice could you give to any new comer?

CY: Regarding the Turkish companies, I would advise them to change their mind. The “regular” mind and the “nuclear” mind are totally different. Secondly, they should be patient. Then, financially, they need to be powerful, the benefit is not as much as they are thinking, but the advantage is on the overall quality of our manufacturing, and this will impact other sectors.

NBN: And for foreign companies looking to invest in Turkey, which advice would you give to?

 CY: Look at the different sectors, assess which sector is existing or plan to be created. Furthermore, the risk and possibilities in the market, then, the financial background of the local partner and investigate its background.

NBN: Thank you very much for your time.

CY: Most welcome.

Contact:

Mr. Bekir Girgin

bgirgin@gimas.gen.tr

About Author

Arnaud Lefevre

Arnaud Lefevre is the Chief Executive Officer of Dynatom International. Arnaud is in charge of the international development of the business portfolio.

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