CALIK COTTON CORPORATE PROFILE 2014
CALIK COTTON CORPORATE PROFILE 2014
COTTON ÇALIK COTTON HEAD OFFICE Keresteciler Sitesi, Fatih Cad. Ladin Sok. No: 17 34169 Merter/Istanbul Tel: +90 212 459 26 26 Fax: +90 212 459 26 77 Mail:
[email protected] www.calikcotton.com
100% SUCCESS
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ABOUT US
12 16 18 20 22
ÇALIK HOLDING IN BRIEF OUR VISION, MISSION AND VALUES FINANCIAL AND OPERATIONAL INDICATORS ÇALIK COTTON IN BRIEF THE YEAR 2014 AT A GLANCE
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MANAGEMENT
24 26 28
MESSAGE FROM THE CHAIRMAN THE CEO'S ASSESSMENT OF 2014 SENIOR MANAGEMENT
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OPERATIONS
30 34 34 36 40
THE COTTON SECTOR IN THE WORLD AND TURKEY IN 2014 OPERATIONS IN 2014 MARKETING AND SALES PRODUCT DEVELOPMENT HUMAN RESOURCES
100% Success We qualified in just three months for the AQSIQ certificate, granted to only one or two out of 10 applications received each year. In 2013, we set the vision of starting to sell in China, and we achieved it. In 2014, we became a member of the Better Cotton Practices Association (IPUD), the Turkish branch of Better Cotton. In 2014, we became the first company to export Turkmen cotton to Egypt. We transported cotton from Turkmenistan to the Lloyd market in UK, under an insurance policy that also covered Iran.
Capitalizing on the support of international powerhouse Çalık Holding, we reinforce our successful and stable position in the cotton trade, day by day. We believe that accessibility is of primary importance, and strive to stand by our clients whenever they need us. As such, we serve our clients with local employees in every country where we operate.
TRU ST
As a highly-skilled and specialized, yet young and vibrant team focused on success, we have a dynamic structure. We consistently take swift action through employees who inspire trust, respect their work, and share a team spirit. We go beyond borders with our rhythm and pace, and complete our overseas operations successfully.
EXCITEMENT
Çalık Cotton, with cotton trade as its core business, runs its operations with a view to strengthening Turkey’s position in the world cotton market. As such, Çalık Cotton has become the first company to receive the AQSIQ certificate, required to export cotton to China, and has obtained the increasingly esteemed Organic Cotton Certificates issued by the Better Cotton Initiative (BCI) and the Control Union (CU).
QUALITY
We have a superior performance, as one of the companies least affected by exchange rate fluctuations. In 2014, we expanded our market share by a significant margin. By focusing solely on cotton trade, we continue to work towards our goal of finding new suppliers, countries and markets.
PERFORMANCE
ABOUT US
10
MANAGEMENT
OPERATIONS
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ABOUT US
MANAGEMENT
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ÇALIK HOLDING IN BRIEF A pioneering corporation that continues its ascent with a strong performance in a number of sectors… AMERICA TEXTILES (GAP MARKETING, ÇALIK COTTON)
ENERGY
FINANCE
Çalık Energy YEDAŞ ARAS EDAŞ Keds
Aktif Bank BKT (Banka Kombetare Tregtare)
MINING
TEXTILES
Lidya Mining Polimetal Mining
Gap Güneydoğu Textile Gap Marketing Çalık Cotton
CONSTRUCTION AND REAL ESTATE Gap Construction Çalık Real Estate
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TELECOMS Albtelecom Eagle Mobile
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RUSSIA CONSTRUCTION (GAP CONSTRUCTION) FINANCE (AKTIF INVESTMENT BANK)
TURKMENISTAN ENERGY (ÇALIK ENERGY-EPC) CONSTRUCTION (GAP CONSTRUCTION) TEXTILES (GAP MARKETING, ÇALIK COTTON)
UZBEKISTAN ENERGY (ÇALIK ENERGY-EPC) CONSTRUCTION (GAP İNŞAAT)
KOSOVO ENERGY (ÇALIK ENERGY-EPC) FINANCE (BKT)
5 Continents
GEORGIA ENERGY (ÇALIK ENERGYEPC)
ITALY TEXTILES (GAP GÜNEYDOĞU TEXTILE)
ALBANIA ENERGY (ÇALIK ENERGY-EPC) TELECOM (ALBTELECOM) FINANCE (BKT)
LIBYA ENERGY (ÇALIK ENERGY-EPC) CONSTRUCTION (GAP CONSTRUCTION)
KAZAKHSTAN CONSTRUCTION (GAP CONSTRUCTION) FINANCE (İJARA LEASING)
IRAQ ENERGY (ÇALIK ENERGY-EPC) CONSTRUCTION (GAP CONSTRUCTION)
S.ARABIA CONSTRUCTION (GAP CONSTRUCTION) QATAR CONSTRUCTION (GAP CONSTRUCTION)
DUBAI CONSTRUCTION (GAP CONSTRUCTION) TEXTILES (GAP MARKETING)
INDIA TEXTILES (ÇALIK COTTON)
BANGLADESH TEXTILES (GAP GÜNEYDOĞU TEXTILE)
6 Sectors
USD 7.5 Billion
A local force which extends across 5 continents: Çalık Holding ÇALIK COT TON CORPORATE PROFILE 2014
Total Assets
24,000 Employees
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ABOUT US
MANAGEMENT
OPERATIONS
ÇALIK HOLDING IN BRIEF
One of the largest industrial corporations in Turkey, Çalık Holding provides employment to around 24 thousand people in 17 countries.
Established in 1981 by Ahmet
Displaying a consistent growth
Çalık of the Çalık family, which
performance in Turkey and other
has held an active track record in
countries since its establishment,
commerce since the 1930s, Çalık
the Group acquired the Albanian
Holding currently has operations
telecom operator and Internet
in fields such as energy, mining,
provider Albtelecom in 2007;
construction and real estate,
the Yeşilırmak Electricity
finance, textiles and telecoms.
Distribution Company (YEDAŞ) providing electricity to five
One of the largest industrial
Turkish provinces, in 2010; the
corporations in Turkey, Çalık
Kosovo Electricity Distribution
Holding provides employment to
Company in 2012; and ARAS
24 thousand people in around 17
EDAŞ, operating in seven
nations. As a pioneering Turkish
provinces, in 2013.
investor in Central Asia, the
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Balkans, the Middle East and
Çalık Holding’s Energy Group,
Africa, the Çalık Group has total
which maintained its business
annual consolidated assets of
volume in 2013, due to its
USD 7.5 billion.
credibility in the world energy
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sector and a work ethic that
the first prize winners in the
channels category of the
sets it apart from competitors,
“Best Commercial Renovation/
European Financial Management
is among the most-preferred
Redevelopment Turkey”
& Marketing Association
companies in the energy-rich
category of the European
(EFMA) awards. Çalık Holding’s
regions of Central Asia, Middle
Property Awards 2013,
subsidiary BKT, which operates
East and Africa. Çalık Energy
among the most prestigious
in Albania and Kosovo, won for
continued the construction
real estate awards in Europe.
the third time the “Best Bank”
of three power plants begun
Çalık Real Estate is active in
award bestowed by The Banker,
in 2013 in the Turkmen cities
land development and urban
a highly-esteemed international
of Ahal, Lebap and Mari.
transformation.
financial markets magazine.
agreements for the construction
Carrying out its operations
In line with its strategy to focus
of two new power plants in Ahal
in line with proven growth
on its core businesses, the Group
and Derweze. Having become
strategies, Çalık Holding’s
divested itself of the Turkuvaz
the biggest EPC contractor in
subsidiary Lidya Mining
Media Group.
Georgia with the Gardabani
increased its stake in Polimetal
project in 2013, the Group
Mining to 80% from 50% in
Renowned for its authority,
completed two more power
2013; Polimetal’s other parent
strong reputation and robust
plants with a total capacity of 2
company is Alacer Gold. In the
financial structure due to its
thousand MW in Iraq in the same
same year, gold production at
worldwide operations, Çalık
year. In 2013, the Adacami HEPP
the Çöpler Gold Mine - which
Holding cooperates with the
Project was also completed in
belongs to Anagold, another
globe’s prominent companies.
the Turkish city of Rize.
Lidya Mining subsidiary
Çalık Holding stands out as a
Additionally, the Group signed
-increased by 43% over the prior
strong leading player in its core
GAP Construction has become
year to exceed 270 thousand
businesses for its deeply-rooted
the EPC contractor of the
ounces.
institutional structure, rich corporate culture, highly skilled
“Turkmenbashi International Seaport,” worth USD 1.5 billion,
Conducting projects from
human resources, pioneering
and consisting of six ports and
an innovative, sustainable
enterprises, innovative approach
one shipyard. The Seaport was
perspective, Aktif Bank
and sound strategies. The
designed in 2013 as a logistics
established Aktif Bank Sukuk
Holding continues its operations
hub on the route connecting
Asset Lease Company in 2013 to
in all business lines with the
Asia to Europe.
issue lease certificates. With the
target of attaining sustainable
“Active Point” project, Aktif Bank
growth.
The project “Tarlabaşı 360”
shot ahead of numerous global
by the Çalık Group subsidiary
giants to win the first prize
Çalık Real Estate, was among
in the “Physical Distribution”
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ABOUT US
MANAGEMENT
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OUR VISION
To be the most valuable Turkish enterprise in three aspects: employees, management practices and business portfolio. Our Group derives its strength through its business perception shaped by courage, innovation and prudence. Drawing on this fact, the vision of Çalık Cotton is composed of three components. 1. To be the most preferred workplace, employing the best. 2. To be an exemplary Group with its management understanding and systems. 3. To own a superior and high return business portfolio.
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OUR MISSION
To enrich all stakeholders in Turkey and in other countries we do business in, through our innovative, courageous and prudent business understanding. OUR VALUES
Çalık Group exists to enrich its stakeholders. The Group undertakes all its operations in line with this goal, with an innovative, courageous and prudent spirit. Çalık is a family, internalizing its country’s high values and paying respect to all colors of the geographies where it has a presence.
ÇALIK COT TON CORPORATE PROFILE 2014
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ABOUT US
MANAGEMENT
OPERATIONS
FINANCIAL AND OPERATIONAL INDICATORS
TOTAL ASSETS (USD MILLION)
35.9 34.3
2013
SHAREHOLDERS’ EQUITY
SALES
TOTAL EXPORTS
(USD MILLION)
(USD MILLION)
(USD MILLION)
114.4
16.0
2014
8.1
52.6 5.7
2013
18
0
2014
2013
2014
2013
2014
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GROWTH
2014
(USD MILLION)
NUMBER OF EMPLOYEES
16
117% 86%
2013
2014
In 2014, Çalık Cotton’s total
Cotton prices, set in
assets reached USD 35.9
international markets, are
million, while shareholder
subject to fluctuation and,
equity grew by 181% over the
thus, financial risk. Çalık
previous year, reaching USD 16
Cotton protects its cotton
million. The Company employs
through hedging mechanisms,
a total of 16 individuals.
minimizing the potential effects
2013 NUMBER OF EMPLOYEES
16
of these risks.
ÇALIK COT TON CORPORATE PROFILE 2014
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ABOUT US
MANAGEMENT
OPERATIONS
ÇALIK COTTON IN BRIEF Established in 2011 under the
USA, China, Turkmenistan
umbrella of Çalık Holding, Çalık
and India, the Company
Cotton conducts national and
continues its efforts
international trade in cotton,
to provide swift, high quality
and provides consultancy
service to its clients.
services in all areas related to cotton.
Çalık Cotton expanded its trade network in 2013 by
Çalık Cotton conducts operations in key manufacturing areas of the USA, China, Turkmenistan, India and Turkey, and in all important world markets.
Çalık Cotton has become
purchasing cotton and yarn.
the first Turkish company to
The Company bought 12
obtain the AQSIQ certificate,
thousand tons of cotton
necessary for exporting to
from Turkmenistan to sell to
China
domestic yarn manufacturers.
Çalık Cotton’s core business
In 2013, Çalık Cotton also
is cotton trade and the
started to buy yarn from India,
Company conducts its
and now the Company offers
business operations towards
yarn alternatives to domestic
supporting Turkey’s position
fabric manufacturers.
in the world cotton market. Within this scope, Çalık Cotton
Eco-friendly products
has become the first Turkish
Çalık Cotton forges ahead with
company to obtain the AQSIQ
eco-friendly products and a
certificate, necessary for
state-of-the-art technology
exporting to China; and has
infrastructure. Collaborating
also obtained the increasingly
with Çalık Denim and Crailar
esteemed Better Cotton
Technologies Inc., the Company
Initiative (BCI) and Control
has implemented an important
Union (CU) Organic Cotton
project based on a new type
certificates.
of fiber called “Crailar.” Crailar is a natural, environmentally-
4 Number of Export Destinations 20
By capitalizing on the long
friendly fiber made with less
term business know-how and
water and no chemicals. The
expertise of Çalık Holding, Çalık
Çalık Denim facilities have
Cotton has reached success
already manufactured the first
in the sector within a short
examples of this fabric using
period. Carrying out operations
two tons of Crailar fiber.
in a number of significant global markets such as Turkey,
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ABOUT US
MANAGEMENT
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THE YEAR 2014 AT A GLANCE
The nature of the textile sector
volume, which pushed down
Globally, record levels of
makes it a driving engine of
cotton prices globally and in
beginning inventory in
development and international
Turkey. An investigation has
cotton, and expectations of
trade. As the sector’s
been launched into possible
few problems in the future
production and consumption
dumping of US cotton into
cotton supply create a
areas are vast, its weight in
Turkey. Turkish yarn factories
certain safeguard for textile
global trade increases more
should continue to monitor
industrialists. For this reason,
than any other sector’s, almost
this situation; if dumping is
purchases are at current need
year after year. The sector’s
confirmed, it is expected that
level as industrialists choose
impact on the world and
cotton sellers in the domestic
not to build up inventory levels.
on Turkish trade is certainly
market will raise their prices. Bangladesh preserves its
economic, but also cultural and Cotton prices are witnessing
prominent position in textile
a downward trend, due to
manufacturing: at the moment,
Domestic Developments:
the decision by China, which
the country is the world’s
Investment in new machines
accounts for 60% of the world’s
second-biggest cotton
at Turkish yarn factories have
cotton stocks, to decrease
importer.
enabled cotton consumption
its cotton purchases. As well,
to rise from 1.40 million tons in
India’s status as of 2014 as
The USA remained the world’s
2013 to 1.44 million tons in 2014.
the world’s biggest cotton
biggest cotton exporter in
However, China, the world’s
producer, and high levels of
2014.
largest cotton importer, placed
ending inventory worldwide are
a quota on cotton imports
driving prices downward.
social.
and decreased its import
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ABOUT US
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MESSAGE FROM THE CHAIRMAN Çalık Cotton procures cotton from Turkey as well as internationally, from regions and countries such as the USA, India, Central Asia, Africa and Greece; and offers these products to yarn consumers in domestic and foreign markets. Esteemed stakeholders,
of becoming the foremost
As the only company in its field
representative of Turkish
with 100% domestic capital,
Cotton is a key raw material
enterprise and entrepreneurship.
Çalık Cotton has embraced
in the textile sector, one of
As a result of the Group’s
the twin missions of promoting
international trades’ main
business development
and exporting Turkish cotton
pillars. This commodity’s
experience, the Company closed
across the world. Within this
impact on global and Turkish
the year 2014 with important
framework, the Company took
commerce is not limited to the
achievements.
important initiatives in the
economic arena, but also has
export field in 2014, adding
cultural and social implications.
Çalık Cotton procures cotton
Egypt and Bangladesh to
With enterprises in nearly
from Turkey as well as from
its already-existing export
20 countries, in such areas
regions and countries such
destinations, such as China. As a
as textiles, energy, telecom,
as the USA, India, Central
result, the Company contributed
construction, finance, the media
Asia, Africa and Greece, and
significantly towards lowering
and mining, Çalık Holding
offers these products to
the Turkish current deficit in
stepped into the cotton sector
yarn consumers of yarn in
cotton trade. The Company
in 2011. With the Çalık Cotton
domestic and foreign markets.
currently has operations in
brand, Çalık Holding capitalizes
In addition to the cotton trade,
the USA, China, Turkmenistan,
on its years of experience and
the Company is also active in
Tajikistan and India. In addition,
expertise, in line with its vision
consultancy services.
we strive to expand our cotton supply network and are pleased to retain our leading position among international traders marketing Turkmen cotton in Turkey.
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Çalık Cotton forges ahead towards its goal of becoming a leader in all major markets by capitalizing on its position as a 360-degree service provider, and its rapid and consistent sector growth.
Decisively forging ahead with
At Çalık Cotton we believe that
With the belief that working
operations that carry the Turkish
the growth strategy we pursue
together will yield even higher
cotton sector forward, the
will carry us even further in
achievements, I would like to
Company began manufacturing
2015, adding value for all of our
extend my gratitude to all the
“better cotton” during the year,
stakeholders. With its young
stakeholders, customers and
in cooperation with its supply
staff, the Company resolutely
associates who have contributed
partners. Çalık Cotton also
continues its efforts to enhance
to our operations, and hope
offers certification services for
the Turkish cotton sector and
that 2015 delivers positive
“better cotton,” whose share in
carry out manufacturing at
developments in both the
the world market rises daily. The
world standards.
domestic and global markets.
Company is proud to be the top seller of Turkish “better cotton.”
Best regards, MAHMUT CAN ÇALIK Chairman
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ABOUT US
MANAGEMENT
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THE CEO’S ASSESSMENT OF 2014 Distinguished investors,
While making such progress in
World cotton supply and
Esteemed business partners and
exports, we did not omit the
inventory figures, and cotton
associates,
issue of imports. In 2014, we
prices used to follow a normal
expanded our sales volume as
trajectory until two seasons
The year 2014 was a period
regards cotton from all origins.
ago. However, the world’s
when Çalık Cotton extended
Çalık Cotton sold 37 thousand
largest cotton importer, China,
its footprint in all the areas it
tons of Turkmen cotton in Turkey
placed a quota on its cotton
operates, and diversified its
in 2014, thus maintaining our
imports, thus bringing down
services to step into a number of
leadership among international
the commodity’s price across
areas crucial for the future of the
traders in this field.
the world. The downtrend in
cotton market.
cotton prices poses a significant We took additional measures
financial risk for the entire textile
In this direction, we made
to extend our cotton supply
sector as well as the Company.
significant process, in particular
network. The first among
During the year, in order to
in the field of exports. After
these was feasibility studies
protect ourselves against such
focusing on domestic sales in
concerning Greece, which
financial risks we set up a
2012 and 2013, we started to
were followed by operational
hedge mechanism, reinforcing
export products in 2014. We
processes. The Company has
our resolve for consistent and
started our export drive with
also designated itself the vision
safe growth. In this regard, the
sales to China in April, and then
of becoming the company
Company has hedged against
added Egypt and Bangladesh
that imports African cotton
falling prices via forward
in May and June. All of these
to Turkey. African nations are
contracts for 6 thousand tons of
export destinations were
relatively new cotton producers,
cotton. In Turkey, Çalık Cotton
chosen for strategic purposes.
and five countries account for
is among the rare pioneering
In order to acquire a prominent
900 thousand tons out of the 1.6
firms to employ this insurance
position in the cotton sector,
million tons of cotton produced
mechanism, which is rather
it is import to be present in
in the continent. As such, the
widespread in the world.
China and Bangladesh, the two
Company places a special
top importers of cotton in the
emphasis on Burkina Faso,
A key development in the year
world. In addition, Egypt, which
Benin, Mali, Ivory Coast and
2014 was the production of
we know very well due to Çalık
Tanzania, which constitute 54%
“better cotton” jointly with a
Holding’s textile investments,
of the market.
local supply partner. As more
stands out as a safe and
and more world-renowned
promising export destination.
brands give their support to
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Established in 2011, Çalık Cotton adheres to a business philosophy that prioritizes cutting-edge production technology and customer satisfaction, built upon the Group’s more than 30 years of experience in textiles.
BCI and commit to gradually
Human resources is another
infrastructure at Çalık Cotton.
replacing conventional cotton
field where we try to create
Our mission is to bring Turkish
production with better cotton,
a difference. The Company
cotton production up to world
we expect that the trend towards
has developed its Talent
standards and thus to market
“better cotton” production will
Management Program to recruit
more Turkish cotton across the
head upwards in the coming
the best talent and gain their
world. Our clients’ trust, business
years. The Company believes
loyalty. Boasting a very young
partners’ and investors’ belief,
that “better cotton” will assume
and dynamic, yet highly skilled
and our employees’ diligence
a very significant position in the
and specialized workforce, we
will be our biggest advantages
global market in the short and
first strive to ensure employee
in reaching this goal. I hope that
long term, and has redefined
satisfaction in all the fields
this new period will be one of
its vision in favor of “better
we operate in, and then to
success and that the year 2015
cotton”. As such, Çalık Cotton
reach world-class service and
will bring peace and prosperity
is the Company which produces
production standards. In
to all of our stakeholders.
and sells the highest volume
this regard, I believe that our
of “better cotton” in Turkey
investments will bear fruit in
through strategic partnerships.
2015, a year when we shall focus on reinforcing our service
Best regards, CÜNEYD HARMANŞA General Manager
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ABOUT US
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SENIOR MANAGEMENT
MAHMUT CAN ÇALIK Chairman
MEHMET ERTUĞRUL GÜRLER Deputy Chairman
CÜNEYD HARMANŞA General Manager
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ABOUT US
MANAGEMENT
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THE COTTON SECTOR IN THE WORLD AND TURKEY IN 2014
The World Cotton Sector
World Cotton (Fiber) Data (Million tons)
Global cotton (fiber) production declined from 28 million tons in 2011-12 to 26 million tons in the following two seasons. Production is
2011-12
2012-13
2013-14
2014-15
Production
27.76
26.91
26.22
25.99
Consumption
22.65
23.47
23.75
24.22
expected to remain at that level
Exports
9.99
10.18
8.87
7.45
in the current season. However,
Imports
9.87
10.08
8.84
7.45
16.07
19.59
22.14
23.91
45.9
41.3
41.8
52.3
82
140
182
181.3
100
88
91
63-91;75
global cotton production fell to 22.8 million in 2011-12, the lowest level in the last ten
Period-End Inventory
years, before increasing slightly
World S/U (excl. China) %
from 2012-13 onwards to reach
China S/U %
the order of 23.5 million in the last season. It is expected that
COTLOOK A INDEX (US cents/pound)
the increase in consumption will continue in the current season to hit the figure
Parallel to these developments in world cotton production and
of 24.4 million.
consumption, the supply and inventory figures as well as cotton prices had followed a normal trajectory until two seasons ago. However, the world’s largest producer and consumer of cotton, China, abruptly changed its strategy in the last season,
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and further unexpected
to fall rapidly from its peak in
before increasing to 57%.
developments could arise in
April, down to slightly above
The Chinese S/U fell first by
the coming period.
its levels two seasons ago. This
13 points to 26%, and then
extraordinary rise in prices,
dropped further to 22%.
Although production rose and
which started in the second
Following the extraordinary
consumption fell in the season
half of the season 2010-11 and
jump in cotton prices, world
2010-11, and supply fell by
reached a peak in the first three
cotton production tilted
just 300 thousand tons over
quarters of the season 2011-
upwards in the season 2011-12,
the previous season, cotton
12, is the result of not only the
which brought up the S/U for
prices showed a higher-than-
aforementioned developments
the world excluding China to
anticipated increase due to
but also speculation. This
59%, and prices dropped down
a supply bottleneck, as large
assumption is confirmed when
to the order of 100 US cent/lb.
amounts of cotton inventory
we break down the Stocks-
were not physically released
to-Use (S/U) Ratio into the
In the same season, China
to the market, triggering
categories of “China” vs “world
pursued a very wise strategy
considerable panic. As a result
excluding China”:
by importing large volumes of
the Cotlook A Index seasonal
cotton at low prices, although
average rose to 164 US cent/
In the seasons 2009-10 and
its domestic production
lb. This rise in prices continued
2010-11, S/U ratios for the
increased. As such, it brought
in the first three quarters of the
world outside China fell by
its S/U to the level of 72%. In
season 2011-12, then started
18 percentage points to 39%,
the following 2012-13 season,
ÇALIK COT TON CORPORATE PROFILE 2014
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ABOUT US
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THE COTTON SECTOR IN THE WORLD AND TURKEY IN 2014
S/U was 49% in the world
be taken as an indicator of the
areas and seed cotton field
outside of China versus 116%
risk that countries except China
productivity is calculated by
in China. It is being estimated
face due to the aforementioned
Ministry of Food, Agriculture
that, in the last season, as a
strategy. In the current
and Livestock via field studies
result of China’s strategy to
season, the Cotlook A Index is
on the basis of the plots
“build inventory at low prices,
expected to fluctuate between
registered with the Farmer
dominate the speculation-
63 and 91 cent/lb to an average
Registry System, as well as
prone cotton markets with
75 cents. Although this picture
observations based on Remote
this vast inventory and shape
seems to be advantageous for
Perception System which will
markets in line with national
consumers, this unprecedented
be extended to cover the whole
(Chinese) interests,” S/U of
abnormality in stocks located in
country. The amount of seed
the world excluding China has
China and the world excluding
cotton by province calculated
probably fallen to 47% while
China could be easily upended
in this manner is reported to
China’s S/U has risen to 160%.
by any abrupt change in
TÜİK, which reports three news
In the current season (2014-
Chinese policy.
bulletins featuring estimates.
15) the S/U of the former is
The third estimate is later
expected to increase by 7
The Turkish Cotton Sector
recorded in annual statistical
percentage points to 54%,
In Turkey, the Turkish Statistical
tables as the most accurate
and China’s S/U is anticipated
Institute (TÜİK) obtains data
value.
to drop by only 2 points to
on cotton from the relevant
158%. In that case, China will
ministries, and then processes
In this regard, the Ministry
continue to control more than
and publishes them. In this
comes up with an estimated
half (58.4%) of global stocks.
respect, cotton cultivation
Average Cotton Gin
As such, the world’s biggest producer and consumer of cotton has also come to hold over half of global stocks, which poses serious risks for the other nations producing and consuming cotton, and constitutes an issue that needs to be addressed urgently. Indeed, the fall in cotton prices, despite the drop in S/U for the world outside of China, should
32
CORPORATE PROFILE 2014 ÇALIK COT TON
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Productivity for the country
Chart 2. Turkish (Seed) Cotton Figures
as a whole. TÜİK employs this figure to calculate the Cotton
Unit
Fiber Production Volume, and publishes the latter figure along with Average Seed Cotton Field Productivity in annual production statistics. The volume and value of cotton
Cultivation Area
thousand ha
420
Seed Cotton Production*
thousand tons
1,725
Seed Cotton Productivity
kg/da
411
thousand tons kg/da %
fiber imports and exports
Fiber Production**
are published by the Ministry
Fiber Productivity**
of Economy; however, TÜİK
Cotton Gin Productivity***
statistics feature only the value. Until recently, Domestic Cotton Consumption figures were collected by the rural branches of the Ministry of Economy in
2009- 201010 11
201112
201213
542
488
451
490
2,150 2,580
2,320
2,250
2,350
481
2013- 201414 15
447
476
475
499
480
638
817
955
858
878
846
152
170
176
176
195
182
37
38
37
37
39
38
*Figures calculated by TÜİK based on Cultivation Area and Estimated Avg. Productivity (Seed Cotton Production Volume = Cultivation Area x Seed Cotton Productivity) **Figures calculated by TÜİK based on Est. Avg. Cotton Gin Productivity: (Fiber Production Volume = Seed Cotton Production/ Avg. Cotton Gin Productivity) (Fiber Productivity = Seed Cotton Production * Avg. Cotton Gin Productivity) ***Figures calculated by National Cotton Council (UPK) based on TÜIK data (Est. Avg. Cotton Gin Productivity = Cotton Fiber Production Volume/ Seed Cotton Production Volume)
the form of registered cotton bale numbers and weight, and
Chart 3. Turkish Cotton Fiber Data
this data was shared with the relevant institutions. However, this practice was ended two seasons ago as the number of registered bales started being collected on the basis of reports by cotton ginning
2009- 201010 11 Cultivation Area, thousand ha* Fiber Productivity, kg/da* Fiber Production, thousand tons**
companies. The data collected
Beginning Inventory, thousand tons***
in the light of these figures for
Imports, thousand tons**
the last six years is as follows
Consumption, thousand tons**
(Chart 2):
Exports, thousand tons** Ending Inventory, thousand tons*** Aegean St.1 (TL/kg)***
420
481
201112
201213
542
488
2013- 201414 15 451
490
152
170
176
176
195
182
638
817
955
858
878
846
0
12
392
578
585
1186
760
895
612
618
877
653
1,300
1,250
1,275
1,350
1,331
1,368
86
82
106
119
115
71
12
380
578
585
1.186
1363
2.82
5.74
3.72
3.51
4.10
3.55
Source: * TÜİK, 2013 ** Ministry of Economy, BİM *** Izmir Commodity Exchange (October-December Avg.)
ÇALIK COT TON CORPORATE PROFILE 2014
33
ABOUT US
MANAGEMENT
OPERATIONS
OPERATIONS IN 2014
MARKETING AND SALES
Çalık Cotton’s target audience
By capitalizing on its position
Likewise, it provides local
in the cotton sector, which
as a 360-degree service
quality and logistical services
holds an important place in the
provider and its fast and stable
through its Turkmenistan office.
national and global economy,
growth in the industry, Çalık
are domestic and overseas
Cotton aims to offer services in
As for the supply of Turkish
yarn manufacturers, denim
all major consumption markets
cotton, the GAP (“Southeastern
manufacturers, firms involved
so as to become a leader in the
Anatolia Project”) / Urfa region
in cotton trade and their
cotton market. In this regard,
has become the largest cotton-
agents.
the Company also expends
producing area in Turkey. Çalık
efforts to supply and sell
Cotton’s regional office ships
cotton locally in China.
cotton either directly or from a
Çalık Cotton carries out its operations in the major
warehouse under supervision,
production areas in the United
Via its office in the United
by using experience gained as
States, China, Turkmenistan,
States, Çalık Cotton organizes
a result of its long presence in
India, and Turkey as well as in
the sale of American cotton
the region. Cottons of domestic
all major global markets.
through immediate shipment
and foreign origin are stored
and advance shipment.
in cotton warehouses in the
34
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Malatya Organized Industrial
importance that the products
zone, Gap/Urfa Region and
it markets have on the lives of
Mersin Free Zone.
customers and, accordingly, strives to offer added value
Çalık Cotton continues as ever
to clients with its products
to offer services to its valuable
and help them gain time and
business partners, based on its
value through long-term
philosophy centered on trust
collaboration.
and quality in the global cotton market.
As a modern Company which constantly upgrades and
The Company is fully cognizant
innovates itself to face intense
of the historical and industrial
competition, Çalık Cotton’s
significance of cotton. As for
target is to offer its clients in
other fibers, the Company
the textile market both high
aims for high quality and
quality products and services
distinguished production, price
through swift customer
and service levels in terms of
services and sustained quality
both product and added value.
standards.
Çalık Cotton continues as ever to offer services to its valuable business partners, based on its philosophy centered on trust and quality in the global cotton market.
Çalık Cotton is aware of the
ÇALIK COT TON CORPORATE PROFILE 2014
35
ABOUT US
MANAGEMENT
OPERATIONS
OPERATIONS IN 2014
for sustainable cotton production. Farmers are trained to regulate the use of pesticides, utilize water resources more efficiently, enhance soil quality, and improve the living standards of the agricultural workforce, all in line with internationally recognized standards.
PRODUCT DEVELOPMENT
World-renowned brands’ support to BCI and their commitment to reduce
Better Cotton Production
(BCI) to secure the future of
conventional cotton production
Since 2005, manufacturers
the cotton sector. Upon the
in favor of better cotton,
strive to correct the
establishment of the Better
suggest that this trend will
undesirable social and
Cotton Practices Association
continue its ascent and “better
environmental conditions and
(İPUD) in 2014, Turkey became
cotton” production will
effects associated with the
a part of the better cotton
increase in the coming years.
production of cotton, one
initiative, as part of a strategic
of the most-consumed daily
partnership agreement with the
With the belief that “better
commodities across the world.
Council. The ultimate goal of
cotton” will hold a crucial
this initiative is to guarantee a
position in the world market
safer future for the sector.
in future years, Çalık Cotton
Global stakeholders focused on making cotton production
has redefined its vision to
environmentally, socially and
İPUD defines “better cotton”
add “better cotton” alongside
economically sustainable,
as a product cultivated with
organic cotton. As part of its
and on expanding this high
the aim of reducing the
strategic partnerships, the
quality production across the
environmental footprint, and
Company offers “better cotton”
world, established in 2005
improving the living standards
products to buyers, already
the non-profit organization
of farmers. As such, it is a
becoming the biggest seller of
named Better Cotton Initiative
globally recognized standard
“better cotton” in Turkey.
36
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ÇALIK COT TON CORPORATE PROFILE 2014
37
ABOUT US
38
MANAGEMENT
OPERATIONS
CORPORATE PROFILE 2014 ÇALIK COT TON
FOR DETAILS, CALIKCOT TON.COM
ÇALIK COT TON CORPORATE PROFILE 2014
39
ABOUT US
MANAGEMENT
OPERATIONS
HUMAN RESOURCES
Çalık Cotton’s human
In order to always stand by
conducted and in-house and
resources policy is to
its employees, the Company
outside training programs are
recruit the right person for
pursues a modern human
organized accordingly. In-
the right job in line with a
resources policy that inspires
house training programs can
customer-focused approach,
trust among them by offering
be divided into two categories:
to promote employees with
information in an ethical
high potential, to measure
manner; remains open to new
a) Corporate Vision and
employee performance with
ideas to enhance its mission
Culture Programs
the performance management
and vision; and continuously
Corporate Vision and Culture
system, to conduct intelligent
empathizes with employees.
Programs offer information
career planning with the right
to newly-recruited personnel
in-house advancements,
All training programs are
as regards the corporate
and to maintain a long-term
developed in due consideration
vision and cultural structure
collaboration with employees
of the Company’s future
of the Company. These
in order to sustain the company
position and growth potential.
training programs focus on
culture.
In order to play a positive role
the Company’s track record,
in the advancement of every
current position, future
single employee, training
plans and service and work
requirement analyses are
philosophy.
40
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b) Professional Proficiency
Talented individuals are those
In line with its mission, vision
Programs
who have the potential to fill
and policy, Çalık Cotton aims
Professional Proficiency
the technical and administrative
to recruit “the very best.”
Programs include training
positions that are of sufficient
All functions are filled by
programs to educate both the
importance and information
highly skilled employees with
newly-recruited personnel and
to play a critical role in
the necessary information
existing employees.
the future of Çalık Cotton.
and experience, who can
Talent management has
represent the Company, fulfill
While well-experienced and
been designed to recruit the
their responsibilities and are
successful personnel play
workforce that Çalık Cotton
good team members. With
a role in almost all training
requires to meet its strategic
an average age below 35, the
programs, the Company
targets, to train employees who
Company personnel consists
occasionally seeks the support
can offer backup for certain
of university graduates, most
of professional training
key positions within the firm,
of whom are fluent in English.
companies.
and to ensure the loyalty of
The Company also has two
critical human resources to the
employees who speak Chinese.
Talent Management
Çalık Cotton family.
Talent management consists of processes such as supporting talented candidates designated to fill managerial positions at Çalık Cotton through career development programs, keeping track of their progress, and assessing their aptitude in new promotions. Career planning provides a crucial input for efficient talent management.
ÇALIK COT TON CORPORATE PROFILE 2014
41
12
ABOUT US
12 16 18 20 22
ÇALIK HOLDING IN BRIEF OUR VISION, MISSION AND VALUES FINANCIAL AND OPERATIONAL INDICATORS ÇALIK COTTON IN BRIEF THE YEAR 2014 AT A GLANCE
24
MANAGEMENT
24 26 28
MESSAGE FROM THE CHAIRMAN THE CEO'S ASSESSMENT OF 2014 SENIOR MANAGEMENT
30
OPERATIONS
30 34 34 36 40
THE COTTON SECTOR IN THE WORLD AND TURKEY IN 2014 OPERATIONS IN 2014 MARKETING AND SALES PRODUCT DEVELOPMENT HUMAN RESOURCES
CALIK COTTON CORPORATE PROFILE 2014
CALIK COTTON CORPORATE PROFILE 2014
COTTON ÇALIK COTTON HEAD OFFICE Keresteciler Sitesi, Fatih Cad. Ladin Sok. No: 17 34169 Merter/Istanbul Tel: +90 212 459 26 26 Fax: +90 212 459 26 77 Mail:
[email protected] www.calikcotton.com
100% SUCCESS
