Kordsa Continues to Grow

Reinforcement leader Kordsa continued its investments in composite technologies while closing another year with successful financial results. In 2019, Kordsa's revenue increased 30.2% year-on-year to TRY 5,137 million, while net profit rose 11.8% to TRY 378 million. In the same period, earnings before interest, taxes, and amortisation reached TRY 747 million. Through investments made in the United States in 2018 and 2019—the hub of the composite market and aerospace sector—Kordsa added the capability to produce advanced composite materials for the space and aerospace industries. The companies acquired in 2019 contributed TRY 737 million to Kordsa's revenue growth. With its developed portfolio and accumulated knowledge, Kordsa now produces high-technology materials across a broad spectrum ranging from tire reinforcement to space industry applications. Kordsa, a subsidiary of Sabancı Holding, continued its growth this year with four composite companies in America that it incorporated into its operations in 2018 and 2019. Seeking to establish itself as a technology leader in the composite sector and witness rapid translation of its investments into revenue, Kordsa pursued growth by investing in established companies based in the United States—the hub of the composite market and aerospace sector—that had completed approval processes. The TRY 737 million revenue contribution from these US investments had a positive impact on 2019 year-end financial indicators. In 2019, the company's total revenue increased 30.2% compared to the previous year to reach TRY 5.1 billion, while period profit rose 11.8% to TRY 378 million; core operating profit increased 16.9% to TRY 614 million. Exporting to 38 countries in 2019, Kordsa increased its total export value by 14.6%.

"Our passion is strengthening life"

Kordsa CEO Ali Çalışkan, expressing satisfaction with the growth shown in 2019 and the sustainable technologies the company had championed, assessed year-end results as follows: "As Kordsa, 'Our passion is strengthening life'. We strive to create value for our country, stakeholders and investors by growing, and while doing so, by developing sustainable technologies to lead the sectors in which we operate. As Kordsa Reinforcements, to apply our accumulated knowledge and competencies in different fields, we have established a 'Flexible Electronics' research and development platform in partnership with Sabancı University to develop next-generation flexible wearable sensors. We took the journey we started with tire reinforcement into space through our investments in 2018 and 2019, and now with this new R&D platform we are ready to expand our technological breadth further and work to produce the technology of the future. I thank our employees and stakeholders for their contributions to all our successes." At the beginning of the third quarter of 2019, the company took an important step on its path to creating a second Kordsa by incorporating Axiom Materials, a US-based company with a significant position in advanced composite technologies and the aerospace sector that had completed original equipment manufacturer approval processes, becoming a major supplier of heat-resistant oxide-oxide ceramic composites used in aircraft engines. Reinforcing one in every three automobile tires and two in every three aircraft tires globally, Kordsa now also reinforces the motors of the aircraft it reinforces the wings, fuselages and internal components of. In addition to its growth in composites, Kordsa maintained its leadership in the tire reinforcement sector and, to meet rising demand in this business line, made the investment decision in 2016 and commissioned its new line at the Izmit facility in 2019, which will provide an additional 7,000 tonnes of polyester yarn capacity. With this new line, Kordsa gained the capability to produce next-generation polyester yarn products with very high strength and better dimensional stability in addition to standard HMLS polyester yarn.

CoKoon adhesive technology was used

At every step and in every investment on its path to strengthen life, Kordsa worked to produce sustainable technologies, and in 2019 signed off on an innovation that will shape the tire industry through open innovation principles. By combining research and development strengths with tire manufacturer Continental, Kordsa developed CoKoon, a new and environmentally friendly adhesive standard free of resorcinol and formaldehyde, for bonding rubber-based compounds with textile reinforcement materials. By creating a free licensing pool for access to this new formula, Kordsa aims for it to serve as an alternative to technology that has been the industry standard for nearly a century. Production of the first 250,000 tires using CoKoon adhesive technology began in the fourth quarter of 2019. Raising its rating to B in the 2019 Carbon Transparency Project Report—the only independent organisation globally reporting carbon-related risks for companies—and ranking among the leading companies with above-average ratings for lowest carbon emissions, Kordsa added another technology to its sustainable technologies portfolio in 2019 through cooperation with Ford Otosan. Within the scope of this cooperation, Kordsa developed e-glass prepreg aimed at reducing by 80% the steel spring systems used in heavy commercial vehicles, one of the most significant sources of carbon emissions. This innovative leaf spring, developed for heavy commercial vehicles over 16 tonnes and currently in the commercialisation process, also includes structural health monitoring systems used for process optimisation, component qualification and online health monitoring.