Zafer Sönmez, the General Director of Turkey Wealth Fund was Hosted in ICI September Assembly
September Assembly of Istanbul Chamber of Industry was held as a video conference on the date of September 23rd, 2020. The main agenda of the ICI Assembly chaired by Ayhan Yavrucu, the Deputy Assembly President was the “To Fund for the Investments and the Importance of Turkey Wealth Fund in terms of Industrial Development”. Zafer Sönmez, the General Director of Turkey Wealth Fund and Board of Directors Member participated in the Assembly meeting and shared his opinions.
Erdal Bahçıvan, the President of Board of Directors who made a speech at the ICI Assembly said that: “We believe that the financial capacity and opportunities of Turkey Wealth Fund have a potential to provide solutions for the important structural problems of our country if used in a proper and efficient way for the major-scaled project.”
In his speech, Zafer Sönmez, the General Director of Turkey Wealth Fund stated that: “Turkey Wealth Fund is the strategical investment branch of Turkey. We firstly prepared our business authorization certificate and drew our route map when took the office. Accordingly, our priority is to increase the value of our portfolio companies, to provide capital for the domestic strategic investments, to make investments that support the Turkey's foreign strategy and competitive companies and provide improvements and deepening in financial markets.”
The September Assembly meeting was opened by Ayhan Yavrucu, Deputy President of the ICI Assembly. Following the opening, Yavrucu, the Deputy President of ICI Assembly gave the floor to Erdal Bahçıvan
ICI Board of Directors President to make his speech. Bahçıvan expressed that it is very difficult for private sector to demonstrate the dynamism that will make major-scaled investments to encourage the growth on its own in today’s world, which is different from the previous years. Stating that this situation increased the need in guiding and leading role of the public in the investments and underlying an investment understanding where the risk and yield are shared between the public and private sector, Bahçıvan also expressed that wealth funds and similar entities have gained value in this regard.
Recording that not only the structures and organizational form of wealth funds but also the investment strategies and components have changed in time, Bahçıvan expressed that while investing in wealth funds in the past years has been directed towards high return areas in international arena, domestic investments have increased especially in recent years.
Mentioning about the attention-grabbing changes in the sectoral distributions of wealth fund investments, Bahçıvan emphasized that the investments of wealth funds have been mostly centered on especially recently, biotechnology, software, fintech, data science, mobility, e-commerce and health instead of classical sectors.
Reminding that Turkey Wealth Fund was established in order to increase the value of its portfolio companies, to provide capital for the domestic strategic investments, to make investments that support the Turkey's foreign strategy and competitive companies and provide improvements and deepening in financial markets, Bahçıvan stated that Turkey Wealth Fund acts as a strategical investment-focused development fund which is different from the traditional examples.
Underlying a facts that they have been expressing for a long time as ICI, Bahçıvan emphasized that Turkey has to take a new industrialization step at this point in order to have a key role in the transforming global value chain, to increase its competitive capacity, to switch to a production structure focused on high technology and added value, which is fact.
Stating that this fact imposes the implementation of large-scale and strategic industrial investments that will mobilize domestic resources and reduce import density, Bahçıvan pointed out that it is very obvious that these investments require long term and large amount of funds. Bahçıvan added that the inadequacy of domestic savings and the current traditional structure of the financial system resulted in financing the large-scale investments by means of foreign and foreign currency loans generally.
Underlying that the banking sector and intensive credit-weighted financial system of Turkey is not adequate to meet the long term and cost-effective fund needs, Bahçıvan recorded that they could not provide the necessary financial depth and diversity especially as the capital markets.
On the other hand, pointing out that foreign-dependent production structures, especially raw materials and energy, prevent the reduction in current deficit permanently, Bahçıvan expressed that they expect that the contributions and investments of Turkey Wealth Fund will be of high significance for the development of Turkish industrialists in their way to the qualified goals. Bahçıvan continued:
“As it is known, Turkey Wealth Fund aims to further grow our companies and raise regional and even global leaders in their sectors with investments in companies large and powerful companies. If this could be realized, recognition and reliability of Turkish companies will enhanced in the international arena and trade volume will increase. It is aimed that Turkey Wealth Fund will reduce the foreign dependency of our country with the investments for the sectors which have significant level of contributions to the current deficit. In this way, it will be possible for our industrialists to access high quality and reasonable-priced products domestically, to increase their profitability by reducing their costs, and to become competitive in international markets with cost advantage. The requirement that the investments for products with high added value produced by the industry sector in Turkey should be supported. It is very promising that Turkey Wealth Fund aims to support industry sector in this regard. Increases to be resulted from Turkey Wealth Fund in R&D capacities of its partner companies will create a potential to produce products with higher added value in our country. We believe that the financial capacity and opportunities of Turkey Wealth Fund have a potential to provide solutions for the important structural problems of our country if used in a proper and efficient way for the major-scaled project.
Bahçıvan stated that they believe that all contributions should be provided for the development of qualified and sustainable industry to pave the way for the private sector, to enhance the international competitive capacity of the economy and the industry without going beyond the free market rules. Bahçıvan continued:
“We all need to trust in the future of our country all together. In this regard, I invite Turkey Wealth Fund to contribute to the investment targets with very bright dreams for the future of our economy and which includes high added value products of our industrialists produced by advanced technology, and to further develop all together. I wish this meeting will become a result-oriented collaboration with mutual sincerity and dialog in the future.”
Zafer Sönmez, the General Director of Turkey Wealth Fund made a speech for ICI Assembly members.
Sönmez who stated that Turkey Wealth Fund is the strategical investment branch of Turkey also said that they firstly prepared our business authorization certificate and drew our route map when took the office. Sönmez expressed that their priority is to increase the value of their portfolio companies, to provide capital for the domestic strategic investments, to make investments that support the Turkey's foreign strategy and competitive companies and provide improvements and deepening in financial markets.”
Expressing that the definition of state is being made from scratch in today’s world and it is not only regulative but also has an entrepreneur identity, Sönmez expressed that they have taken steps to establish a structure where the state undertakes both the risk and the yield. Mentioning that they have carried out projects for the current deficit and saving which are the prioritized structural problems of Turkey, Sönmez expressed that they will establish facilities to provide the products which Turkey mostly need by means of the investment for 10 billion dollars totally in petrochemistry which is a sector where they import 9 out of 10 products. Sönmez said that they will generate energy out of domestic coal by protecting their environmental and social sensitivity, and added that they gained the mineral sources to the economy.
Reminding that they united the public insurance companies under Turkey Insurance and Turkey Life Retirement in order to enhance the saving basis in Turkey ad contribute to the structural transformation in insurance sector, Sönmez stated that they produced a solution for three issues which are National Lottery, Istanbul Finance Center and Turkcell and had been on the agenda for a long time. Sönmez emphasized that they created the infrastructure which is necessary to manage Turkey Wealth Fund in the highest corporate governance standards.
Sönmez said that: “We cannot make the economy survive by using only the investments of public or private sectors, both parties should collaborate. We will continue to make capital investments in strategical matters of Turkey, and we welcome anyone in this regard.”
And then ICI Assembly members took the floor and shared their opinions regarding the agenda.