Zorlu Holding And Vestel Electronics Essay

This essay has a total of 5602 words and 31 pages.

Zorlu Holding And Vestel Electronics

Zorlu Holding


The Vision Of The Company

Mehmet Zorlu, established their Group's first company in the early 1950s, he laid the
ground rules for the Zorlu Group's subsequent growth: integrity, perseverance' and
unconditional commitment to quality. Integrity is the Group's cornerstone value and they
expect it to govern every aspect of their business. Hard work and perseverance are
essential for the day-to-day success of their enterprises as they are for the undertaking)
of a new venture. Quality is the key to customer loyalty, on which the long-term
prosperity a f all ventures depends. With these ground rules, the Zorlu Group has sought
to develop solid and profitable businesses that contribute to the welfare of the Group;
its customers, business partners and employees; as well as the larger community. Until the
early 1990s, they focused their investments in home textiles, an activity the Zorlu family
has been involved with for several generations and in which they have a particular
expertise. In 1994, they saw the opportunity to employ their strong capital and human
resources in the consumer electronics sector, through the acquisition of the Vestel
electronics Group. This was followed, in 1996 and 1997, by investments in the fast-
growing energy and financial services sectors.

Between 1990 and 1997, they tripled the number of their operations, increasing their total
assets to just under US$ 1 billion, excluding the assets of five of their six subsidiaries
incorporated abroad. They invested in state-of the-art spinning, weaving and textile
technology that has made them the world's largest; vertically-integrated polyester curtain
producer and will propel them to the forefront of the international home textile industry
in the years to come. They acquired the Vestel Group of consumer electronics companies,
pushed its balance sheet from an undeserved red into the black, and set it on course to
become a leading contender in the international consumer electronics markets. They
established a bank, a leasing company and o factoring firm and they penetrated the power
generation and electricity distribution sectors with the construction of two plants and a;
competitive bid for o state- owned, plant slated for privatization.

The Zorlu Group's rapid growth since 1990 reflects the vast range of opportunities that
have emerged from the unique juncture of Turkey's Customs Union with the European

Today, their operations include 32 companies in Turkey, France, Germany, Holland and South
Africa in the textile, consumer electronics, finance, energy and tourism sectors. In 1997,
their key operations achieved net sales of almost US$ 750 million and after tax profits of
just under US$ 80 million.

That the Zorlu Group was able to choose its projects well and bring these to successful
fruition during a period of significant economic and political uncertainty is a reflection
of their strategic corporate vision, their sound business principles and their strong
management capability.

Mehmet Zorlu, a textile manufacturer with a vision of Turkey's textile potential long
before their country had made its mark on international markets, founded the Zorlu Group
of companies in the early l950s. At an early date, Mehmet Zorlu endowed the Group with o
rare combination of values honesty, dedication to quality, commitment to long-term goals
and the courage to take calculated risks that reward hard work. Today; these values are
the foundation o f their corporate culture and constitute the basis for their key business
principles unconditional customer satisfaction and mutually beneficial partnerships.

The Zorlu Group is committed to constantly improving the quality and enhancing the range
of its products and services. That is why they have sought to expand their product range
in the consumer goods categories where they are active and to ensure, through ceaseless
research and development, that their products best reflect the demands of their consumers
and the latest technological developments. Likewise, they are committed to developing
strong and long-term relationships with their customers, their employees, their suppliers
and their shareholders. Their aim is to provide their customers with high quality products
and services, to exact specifications and on competitive terms, and they expect their
suppliers to do the same for us. They also expect their human resources to be the very
best in their areas of expertise, so they have set an unlimited budget for training to
help them achieve this performance. First-class human resources are essential if they are
to achieve the strong financial results that their shareholders deserve and which their
recent performance confirms they can attain.

They are proud of their achievements over the last decade, but they are not prepared to
rest with these. (Zorlu Holding Company Profile)

The Goal Of The Zorlu Group

To strengthen their global reach, from the Far East to the American continents, through
strategic and long-term partnerships, care fully planned investments at home and abroad
and focused research and development.

The Zorlu Group is always open to exploring strategic partnerships that will expand their
international markets, enhance their product range and contribute to their technological
know-how. Currently, they are considering several long-term partnerships in consumer
electronics for research and development, technology transfer, customized production and
manufacturing facility sharing in international markets.

The Zorlu Group's investment strategy

To reinforce its capacity, technological lead and vertical integration in its primary
areas of activity while creating new capacity in selected high-growth sectors.

In the textile sector, they hove invested more than US$ 500 million in several projects
that will more than triple their polyester yarn capacity and double their curtain fabric
output, These include a vertically-integrated, cotton-based home textile plant that is the
world's third largest in terms of capacity and unparalleled in its cutting-edge
technology. In South Africa, they initiated construction o f a manufacturing facility that
will come on stream in 1998 and supply the fast-growing demand for curtain fabric in the
region. In France, they acquired majority shareholding of Bel-Air Industries, one of the
largest home textile producers in Europe. Bel-Air has three manufacturing facilities, a
wide range of internationally renowned brands and a distribution network of 5,000
dealerships in France and Germany. In the consumer electronics sector, they have expanded
their television production capacity four-fold since 1995 and more than doubled their
capacity for television components tuners, remote controls and satellite receivers. At '
the same time, they have incorporated new technologies that have enabled them to launch
innovative products; such as. wide-screen televisions and information appliances, They
have also initiated construction of a new manufacturing plant that will produce static and
no-frost refrigerators under Sanyo license in-early 1999.

While deepening their traditional lines of business, the Zorlu Group has expanded into new
areas of activity where they believe they have a competitive advantage. Their decisive
entry into the financial sector reflects their conviction that they have the human
resources; the international standing and the capital strength to become one of the top
five mid-sized financial groups in Turkey. Their US$ 150 million investment in power
generation, motivated by the Group's large demand for high quality and economical energy,
has prepared them to compete for Turkey's large-scale energy privatization projects.

"The Zorlu Group is not afraid to grow because they believe they choose their projects
prudently, but they also recognize that growth must be managed. That is why they are
investing in their human resources, reinforcing their management capability with
integrated business software and drawing heavily on external consultancy."

They are not embarrassed to learn from others how to strengthen their business. Nor do
they shy away from licensed technology. On the contrary, they prefer to learn as much as
they can from others because they can then focus on what they do best; making better
products, providing higher quality services and improving the return for their

Turkey is a country, which has an incredible opportunity, though its potential has
recently been clouded by economic and political instability and one of the highest
inflation rates worldwide. Having confirmed what they can achieve in this difficult
environment, they are confident in the Zorlu Group's future and look forward to sharing
this with the customer. (http://www.zorlu.com.tr)


The VESTEL Group

In 1994, the Zorlu Group became a leading contender in the consumer electronics market
when it acquired, Vestel Electronics. Founded in 1984, the Vestel Group comprises four
manufacturing and six marketing and distribution companies in the consumer electronics,
white goods and information technology sectors. The Group's products include color
televisions, personal computer monitors, set-top- box satellite receivers, personal
computers, television tuners, remote control units, remote control converter kits and
Internet boxes. In 1999, the Group will initiate production of no-frost and static

The Vestel Group has been at the forefront of Turkey's consumer electronics sector since I
984, when it established Vestel Electronics, currently one of Europe's leading color
television producers specialized in OEM. In the following years, the Group expanded
vertically into television components, and horizontally into information technology and
white goods. Vestelkom, the Group's components producer, is Europe's fourth largest
manufacturer of television tuners.

In 1987, Vestel established one of Turkey's first computer assembly operations and
subsequently initiated the design and production of monochrome and color PC monitors for
export. Vestel's history in the white goods sector dates back to I 988, when the Vestel
Group established a joint venture with a leading Asian durable goods manufacturer to
produce microwave ovens, later expanding into production and marketing agreements for
refrigerators, washing machines, dishwashers and mini electric ovens.

After nearly a decade of rapid growth, the Vestel Group suffered a brief period of decline
under- its previous owner in the early I 990s. This situation was rapidly and decisively
reversed by the Zorlu Group, which brought to the Vestel Group new capital resources, an
experienced, and entrepreneurial management team and a new focus on quality and customer
satisfaction. Between 1995 and 1997, Zorlu Group invested more than US$ 40 million in
expanding and modemising the Vestel Group's capacity and in business reorganization. Over
the same period, the Vestel Group raised its consolidated net sales and exports by
respectively 148% and 190% in US$ terms and its after-tax earnings by more than 500%. The
Vestel Group's rapid recovery reflects its majority shareholder's commitment to
unconditional customer satisfaction through new and improved products, greater product
features and accessible prices. It also reflects the far-sighted manufacturing strategies
of its management team. (http://www.vestel.com.tr)

Vestel's manufacturing strategy

"Quality, innovation, and quick response."

To support this, the Group is continually investing in new technologies, new capacity and
greater production flexibility. At the same time, it has pursued vertical and horizontal
integration to enhance its control over the final quality of its products and to optimize
scales of production. This strategy has enabled Vestel to secure its position as a
first-class original equipment manufacturer. Vestel has the production flexibility to meet
a wide range of specialized needs and the strict quality controls to ensure consistently
high quality products. Because it is continually investing in new technologies, Vestel is
able to launch new products and product features that reflect the very latest trends in
the international markets. The Vestel Group's technological park includes state-of the-art
surface mounting and plastic injection machinery, nitrogen-environment automatic soldering
machines, quick proto-type machinery and automatic micro-controller software. This
advanced technological base is buttressed by the Group's engineering expertise and in
particular, the technical know-how of its research and development teams. Vestel's
research and design team was the first in Turkey to develop its own television design and
the only one to develop micro- controller software for application in its production
processes. Currently, it is focusing its efforts on flat panel (plasma display)
televisions, line flicker and noise reduction, Dolby sound systems, digital interactive
television units, digital video disk players, digital video disk broadcasting decoders,
multimedia monitors, video conferencing and chip design. Vestel Electronics The Zorlu
Group's principal operation in the electronics sector is Vestel Electronics, one of
Europe's leading manufacturers of color televisions. In 1997, Vestel Electronics produced
2,200,000 color televisions and supplied respectively 7.5 % and 32% of the European and
Turkish color television markets. In 1998, the company is increasing its capacity to
4,000,000 units. Vestel Electronics 'is also the largest producer of personal computer
monitors in Turkey, with an annual capacity of 1,000,000 units, and the only manufacturer
of desktop personal computers with ISO 9002 certification. (Zorlu Holding Company Profile)

Vestel Electronics' goal

Become one of the world's top three consumer electronics companies. Vestel Electronics is
a publicly traded company with 33% of its shares traded on .the Istanbul Stock Exchange;
The Zorlu Group owns the remaining 67% shareholding. In 1997, Vestel Electronics ranked
among Turkey's top 10 private enterprises with a turnover of US$ 516 million.

Since its establishment in 1984, Vestel Electronics has pioneered the development of the
Turkish electronics sector with innovative and high quality products and internationally
competitive prices. After its acquisition by the Zorlu Group, Vestel Electronics embarked
on a new period of growth, raising its color television capacity from 400,000 units in
1994 to 2,200,000 units in I 997 and 4,000,000 units in 1998. This rapid expansion has
enabled the company to incorporate the latest technological developments in its production
processes and to reorganize its productive capacity to best meet the demands of its
international clients. Vestel Electronics' I 00,000 m2 television plant is located in the
Organized Industrial Zone of Manisa, 30 kilometers from the Aegean port of Izmir. The
plant employs over 3,000 people and encompasses, all phases of the television production
process: research and development; production of printed circuit boards (PCBs), chassis
and cabinets; testing and mounting of the final product; production of packaging material
and after-sales services. Vestel Electronics sources its chip tuners and remote control
units from Vestelkom, another Vestel Electronics Group company. (http://www.vestel.com.tr)

Vestel Electronics' production lines incorporate state-of-the-art surface mounting
assembly technology and fully automated testing processes. Advanced production technology,
strict production process controls and a high degree of vertical integration ensure that
Vestel's television sets are of consistently high quality that meet or exceed
international standards. Vestel Electronics has a first-class manufacturer's return rate.

Vestel Electronics' excellent product quality is complemented by an exceptionally high
degree of production flexibility. Vertical integration, a strong research and development
base and in-house engineering expertise enable Vestel Electronics to produce both small
and large batches of customized television sets in record time. Utilizing pro-engineer
CAD/CAM software and prototype machinery, the company can produce full-size models in
three to four days and initiate full production in less than one month.

Vestel Electronics' research and development team is preparing to take the lead
internationally through licensing agreements with some of the world's foremost engineering
firms and strategic collaboration with several of Turkey's top technical universities.
These partnerships have reinforced the company's traditional leadership in Turkey and set
the stage for new product launches on an international scale. Vestel Electronics was the
first producer in Turkey to produce 100 Hz televisions and the only producer of 16:9 inch,
33-inch, Dolby Surround PrologicTM and digital televisions as of end-1998. In 1998, the
company is launching Turkey's first Internet set-top-box television, Internet. TV. All of
these have been designed to meet the technical specifications of Vestel's key export
markets in Europe, Asia, North and South America and Africa, CIS and Australia.

Other areas where Vestel Electronics is focusing its research and development efforts are
flat panel plasma display) televisions, line flicker and noise reduction, Dolby sound
systems, digital interactive television units, digital video disk players, digital video,
disk broadcasting decoders, multimedia monitors, video conferencing and chip design.
Vestel Electronics has established an in-house EMC laboratory for CE testing and its
research and development team works, closely with authorized certification laboratories to
assure that new products meet or exceed. all required international standards. All of the
company's televisions are produced to BEAB, BS, CE, UL, FTZ, LCIE, TUV and VDE standards
as well as to the individual standards of its export markets. Vestel Electronics has been
operating with ISO 9001 certification since 1993. (Zorlu Holding Company Profile)


Vestelkom is a contract manufacturer for the telecommunications industry and Turkey's
leading producer of television tuners, satellite receivers, remote control
receiver/transmitter units. Since early 1998, it is also the only producer of Internet
set-top-boxes in Turkey. Vestelkom's new 20,000 m² plant in the Aegean Free Trade Zone
near Izmir has the largest component surface mount assembly operation in Turkey, Moreover
Vestelkom's 2,400,000 surface mount device (SMD) chip tuner capacity, as of-end-1997,
positioned the company squarely among the top four television tuner producers in Europe.

Vestelkom's leadership in the tuner segment reflects its long experience in the consumer
electronics sector and in-house engineering expertise. Founded in 1975 Vestelkom was
Turkey's first consumer electronics company to produce tuners and remote control unitsfor
both monochrome and color televisions and to introduce surface mounting of components. In
1989, Vestelkom began to produce television tuners under Temic license, exporting 100% of
its output to his company. Today, Vestelkom continues to export all of its tuners and is
forcefully expanding its exports of satellite receivers and remote control units, the
latter to countries in the Middle East and Africa where large numbers of television sets
are still manually controlled.

To respond to the growing demand for its products, Vestelkom is rapidly expanding both its
production capacity and its product range. Vestelkom's production lines utilize
state-of-the-art Fuji and TDK assembly machinery and the latest generation of testing and
alignment equipment. Manual and automatic testing is complemented by statistical process
controls to ensure that every one of Vestelkom's chip tuners are produced in line with FTZ
and CCIR standards. The company expects to reconfirm its high standards of quality with

Continues for 16 more pages >>

  • Zorlu Holding And Vestel Electronics
    Zorlu Holding And Vestel Electronics Zorlu Holding The Vision Of The Company Mehmet Zorlu, established their Group\'s first company in the early 1950s, he laid the ground rules for the Zorlu Group\'s subsequent growth: integrity, perseverance\' and unconditional commitment to quality. Integrity is the Group\'s cornerstone value and they expect it to govern every aspect of their business. Hard work and perseverance are essential for the day-to-day success of their enterprises as they are for the