Çağdaş Demirağ met with members of the press for the first time after the privatization.

Çağdaş Demirağ, General Manager of Turkuaz Petrol and Turkish Petroleum met with members of the press for the first time after the privatization and made important statements about the company’s future roadmap. Demirağ underlined that the merger of the two large companies created a giant national fuel distribution company.  

Çağdaş Demirağ, General Manager of Turkuaz Petrol and Turkish Petroleum, met with members of the press for the first time after the privatization and gave important information about the future growth strategy of the two companies. Drawing attention to the changes in the sector, Demirağ said “we are stepping into a new age using technology and full automation. Our strategy is to prioritize adaptation to technology and create a difference by leading the transformation in the sector.

Çağdaş Demirağ continued; “A Zülfikar Holding company, Turkuaz Petrol, carried out the biggest privatization in 2016 and became the highest bidder with a 490-million TL offer, making us the new owners of Turkish Petroleum Distribution Corporation. We acquired the company as of early April and took over the management. Our goal is to merge the two companies at the end of this year and create Turkey’s giant national fuel company. We know the value of this brand very well and we want to make this a global company by making investments first domestically, and then internationally. We want to carry the brand Turkish Petroleum to countries outside of Turkey.

“WE WILL COMPLETE THE BRAND CHANGES IN TWO YEARS”

Çağdaş Demirağ said; “We will complete the brand changes within the next two years. We cannot transition to a single brand across all points in Turkey overnight. During this phase, we will continue our work with two brands and carry out activities that will implement a project to reinforce the Turkish Petroleum brand.” Demirağ reported that the merger made Turkish Petroleum one of the top 5 companies in the Turkish fuel distribution sector with over 700 filling stations, 10 fuel storage facilities, 4 LPG plants and a fuel storage capacity of over 150 thousand cubic meters, bringing its turnover to 3.6 billion TL.

“A GIANT NATIONAL FUEL DISTRIBUTION COMPANY EMERGED FROM THE MERGER OF THE TWO COMPANIES”

Çağdaş Demirağ, General Manager of Turkuaz Petrol and Turkish Petroleum, underlined that the merger of the two large companies created a giant national fuel distribution company and continued: “This acquisition by Turkuaz Petrol has been a significant leap that will add value to both our national economy and our industry. We will conclude the official merger process until the end of this year. With our experience and accumulation in our sector, we will help further grow Turkish Petroleum, one of the most deep-rooted brands of Turkey. Our priority goal is to make the company enter the top three in the sector in terms of market share. We are considering opportunities for growth to achieve that.

“WE WILL CONTINUE WITH TURKISH PETROLEUM”

Indicating that they now have over 700 filling stations following the acquisition of Turkish Petroleum by Turkuaz Petrol, Demirağ informed: “We plan to continue our path into the future as Turkish Petroleum. As we complete our brand transition, we plan to increase the number of our stations and reach 800 stations by the end of 2018. This will enable us to offer our innovative service approach to our consumers in more points of sale and continue to add value to the Turkish economy with new employment opportunities.” Demirağ said that Turkuaz Petrol and Turkish Petroleum touch the lives of 7.500 families, directly or indirectly, and that this will be joined by 1,000 more families as the number of stations reaches 800 at the end of 2018.

“THE STATE HAS COMPLETELY RETREATED FROM THE FUEL DISTRIBUTION SECTOR”

Noting that the Turkish Petroleum privatization represents the government’s complete retreat from the fuel distribution sector Demirağ continued: “There are now 96 companies in the sector where only 20 distributors operated up until 15 years ago. The fuel distribution sector where there are 12,653 gasoline and 10,000 LPG stations faces new sales networks and a great deal of competition based on growth by acquisition. I think that government’s retreat from this area, assuming the roles of supervision and regulation will create advantages both for the development of the sector and the competition. Acquisitions and mergers are expected in the sector with a view to creating more competitiveness and soaring market shares. I can tell you that acquisitions and mergers will continue in the sector in the near future and big investments are anticipated.”

“TECHNOLOGICAL ADAPTATION WILL DEFINE THE LEADERS IN THE SECTOR”

Demirağ pointed out that 56 per cent of prices in the fuel sector are taxes and concluded: “The total gross profitability in the sector is around 13-15 per cent. We are going through a period where costs are increasing due to regulations, profit margins are shrinking, and operating capitals are rising because of the effect of the global crisis. We can in fact claim that the sector is undergoing a big transformation. We are entering a new period that uses technology and full automation. In this period, those who keep pace with developments and renew their ways of doing business will soar high, while those closed to change will shrink. Our strategy is to prioritize technological adaptation and create a difference by leading change in the sector and to reinforce our leadership claim.”

 “WE WILL TRY TO TRANSFORM OUR STATIONS INTO RETAIL POINTS”

Çağdaş Demirağ stressed that the number one priority for the fuel sector is safety and “If we are on track to become a global player, we have to be at the right location. We will continue our investment policies that keep an equal distance to all regions,” he added. Demirağ went on to say “As markets, we take East Europe and the United States as our role models. When you study East Europe and the US, you see that filling stations are not only points of sale for fuel but also retail outlets for non-fuel products. We will soon set out to transform our stations into retail points that will sell non-fuel products, bringing additional income to our dealers and enabling our consumers to use their time more effectively while at our stations.”

 “OUR GOAL IS TO GROW MORE IN THE FUEL SECTOR”

Çağdaş Demirağ gave information on the distribution of dealers in Turkuaz Petrol and Turkish Petroleum and said: “There are very few locations where stations from the two companies overlap. This was a major factor in our decision to target this merger. Only 5 per cent of the network has an overlap. Turkish Petroleum has a very strong dealership network in Anatolia and Çukurova regions. As for Turkuaz Petrol, they have a wide dealership network in the Aegean and İzmit.  There is an overlap of Turkish Petroleum and Turkuaz Petrol dealers only in Çukurova and the Central Anatolia regions. Demirağ stressed, “Turkuaz Petrol has not displayed an aggressive growth strategy so far. Despite being an old and well-established company, it positioned itself modestly, slightly above market growth. One year ago, the company decided to grow in the fuel sector and set out to concentrate its time and finances on the fuel sector. The holding adopted the goal of growing in the fuel sector for the next one year.”

 “WE BELIEVE IN THE DEALERSHIP SYSTEM”

Çağdaş Demirağ informed that they continued their negotiations with foreign companies in order to serve electrical vehicles and motorcycles in the filling stations and added, “We did our research in this field. We will be investing in some of our stations to serve both vehicles with CNG and electrical vehicles.” Demirağ stressed that they would be continuing with the dealership system and said “There are only two stations operated by the company at Turkish Petroleum, while this is only one for Turkuaz Petrol. We believe in the dealership system and are determined to continue our journey with the dealership system.”