Interview with Timur Karaoğlu, General Manager of Kalekim

In an interview we conducted, Kalekim General Manager Timur Karaoğlu answered our questions. Karaoğlu emphasized the importance Kalekim places on R&D and provided information about innovative brands developed in line with consumer needs.

Could you briefly tell our readers about yourself, your educational background and professional experience?

I graduated from Yıldız Technical University Civil Engineering Department in 1998 and completed my Master's degree in Civil Engineering at Istanbul Technical University in 2000. After military service, I immediately started working at Kale Pazarlama, one of the Kale Group companies. Two years later, the company underwent a restructuring and the Manufacturing Companies Sales and Marketing Department was brought in-house. Since I was working with Kalekim at Kale Pazarlama, I was transferred to Kalekim as sales manager following the restructuring. As a result of my sales-focused responsibilities, in 2008 I joined the Kaleseramik team as Distribution Channel Sales Manager. In 2013 I became Sales Vice President, in 2017 Sales General Manager Assistant, and in 2018 I returned to Kalekim as Sales and Marketing General Manager Assistant. Subsequently I began my duties as Kalekim General Manager, a position I have held for over 2 years.

Could you provide information about Kalekim's founding process, investments made, and its current structure?

Kalekim was founded in 1973 by Dr. Ibrahim Bodur, founder of Kale Group Companies and a pioneering industrialist who made very important contributions to Turkey's development. Today we have production facilities both domestically and internationally. We carry out our production in 9 factories, two of which are located in Balıkesir, and the others in Istanbul, Yozgat, Isparta, Mersin, Erzurum and Mardin as well as in Tirana, the capital of Albania. Eight of these facilities produce dry mortar, and one (Balıkesir) produces paints and plaster. As of 31 December 2020, our dry mortar production capacity reached 930 thousand tons, and our paint/plaster facility capacity reached 50 thousand tons.

What types of products does Kalekim primarily supply to which sectors? What are Kalekim's products, brands and services?

As the leader of Turkey's building chemicals sector, Kalekim has become a generic brand in the building chemicals industry with its innovative, environmentally-friendly and sustainable products. Having started its operations within the Kale Group with the production of ceramic adhesives and grout fillings, our company today manufactures a wide range of products used in the construction sector, from thermal and water insulation products to decorative plaster and paint, and all types of building chemicals from flooring solutions to other applications. Within our company, we have the innovative brand Bi'Boya, developed in line with consumer needs. With our young brand Bi'Boya, launched with Kalekim's guarantee, we add color to our customers' living spaces. The latest product we have added to our extensive product range is our new brand Visuelle, which we design-developed in line with changing market needs and launched in September. We believe that Visuelle, which is a combination of Kalekim's strong roots and innovative spirit, will bring dynamism to the decorative coatings sector.

Could you tell us about your domestic and foreign sales activities? What types of products do you primarily sell to which regions domestically and internationally?

Kalekim considers exports and foreign investments as important points for us. Particularly as of 2020, foreign sales constitute 29.6% of the company's total turnover, and we view increasing our international sales further in the coming period as a priority strategic target. The Middle East forms an important market for us due to logistical convenience. We are particularly strong in Iraq, especially in Northern Iraq in that region. Although our presence in Southern Iraq is relatively limited, we are still active there. We have directed our growth plans and investments in this region and the Middle East together. Additionally, we have taken various steps to increase our export markets. Some of these are currently underway. We have an investment in Mersin that serves export markets. Besides Iraq, our activities to expand production capacity to meet potential demand from regions such as Syria, Egypt, and Libya continue.

What kind of work do you conduct at Kalekim in the areas of innovation and R&D? Do you have projects developed within university-industry cooperation, and if so, what are they?

At Kalekim, we place innovation at the forefront in all our processes, from the products we manufacture to the services we provide, and we place great emphasis on R&D activities in particular. In line with our company strategies, developing products that not only complete our product range but could also be firsts in Turkey is seen as an important strategy of Kalekim R&D. Our Kalekim R&D department, registered as an R&D Center by the Ministry of Science, Industry and Technology in 2017, has one of the sector's best-equipped R&D laboratories and operates to European standards with its team of experts in their respective fields and technical equipment and infrastructure worth a total of TRY 9.5 million. The Kalekim R&D department was registered as an R&D Center by the Ministry of Science, Industry and Technology in 2017. This opened the way for the department to benefit from various incentives from the Ministry. In addition to government-supported innovative projects we have developed, within the framework of collaborations with important universities in our country, our R&D department successfully completed 23 product development studies in 2017, 68 in 2018, 53 in 2019, and 67 in 2020.

Could you provide information about Kalekim's environmental policy and sustainability approach? What can you say about your work regarding occupational health and safety?

For 48 years, we have continued to lead our sector with our human-centered innovative products and applications. As a company that respects people and the environment and creates sustainable value for society, we work without compromising on quality at every stage of our production, always aiming to provide our customers with the best and most innovative solutions. A sustainability approach is a perspective that Kale Group and its companies have internalized, prioritized, and implemented through their activities since the years they were founded. The Kale Group incorporated this perspective in its Common Cause, which includes the phrase "respectful of people and the environment." To support Kalekim's strategies and create a common understanding across the entire Kale Group, the '#CareForTheWorld' policy was created. The Care for the World policy has been articulated with the slogan "Your Home is Your World, the World is Your Home," integrated with Kale Group values, and stands out as an approach encompassing all stakeholders. For this reason, the "Care for the World" movement initiated by Kale Group lights our way and illuminates our path in creating a sustainable future. Under the sustainability strategy and Care for the World movement framework, Kalekim's short, medium and long-term targets and action plans were reviewed on the basis of Economic, Environmental and Social dimensions. The targets were determined based on the United Nations Sustainable Development Goals, Global Principles Compact, Organizational Life Cycle, Stakeholder requirements and expectations, Sectoral priorities, etc. As recognition of our work, with our "Leave a Green Trace in Nature" project, we were honored for the second time in September during the VII. Istanbul Carbon E-Summit with the Sustainable Production and Consumption Association (SÜT-D) award for "Low Carbon Champion" of 2021 in the chemistry sector category, the first time being in 2019. Through projects like this one, where we reduce carbon emissions in many areas of the supply chain from procurement to shipping and strive to be a breath of fresh air for nature, our work towards green transformation will continue and increase in the future. Regarding sustainability, we have determined our priorities, short, medium and long-term targets and action plans. We will continue our work at full pace in line with the priorities, targets and action plans we have set. We have established governance mechanisms for this process on the basis of sustainability dimensions (Economic, Environmental and Social). Governance mechanisms include the Management Sustainability Committee, Sustainability Ambassadors, Sustainability Organization, Volunteers Platform, Working Groups Based on Sustainability Dimensions, etc.

What criteria are prioritized when Kalekim formulates investment plans? Does Kalekim have investment plans for the coming periods, and if so, what are they?

As we frequently stated in our public offering process in 2021, our priority goal is to create a larger and stronger Kalekim both domestically and internationally. Up to now, we have led the building chemicals sector with our innovative products and applications, and now we continue to work for even greater success with the strength and energy that our investors have brought to us. Kalekim's success is achieved through correct investments, sound business plans, current technologies and competent human resources. We continue our domestic and foreign investments. With our licensed manufacturing project launched in Kenya in 2016, we established local cooperation and adopted the licensed manufacturing model. This cooperation also represents the company's first production base on the African continent and the first example of this business model. In addition, our facility in Tirana, the capital of Albania, which commenced operations in 2019, with an annual dry mortar capacity of 27,300 tons, is currently in production. For our Algeria investment, we also took our first step this year by establishing a 50-50 partnership with a local company. In Russia, under our operating company OOO Kalekim, we made a warehouse investment in 2020 and began marketing activities. Also this year, we established Kalekim France Company in France. Finally, for our foreign investments, we made an additional line investment of TRY 23 million to our facility in Mardin Organized Industrial Zone to produce concentrated products needed for our investments. Additionally, government credit support for our subsidiary Sarl Ha Building in Algeria has been approved.