Interview with Cenk Alper

Cenk Alper
President and CEO
Kordsa Global

Nearly all industrial companies are forced to take actions on sustainability otherwise their future presence is questioned.

Cenk Alper, President and CEO of Kordsa Global present his views on sustainability in an interview Fibre2Fashion Correspondent Mary Christine Joy. Synopsis: Kordsa Global is engaged in making nylon and polyester yarn, cord fabric and single end cord production. It supplies heavy decitex industrial nylon 6.6 and polyester yarns, cord fabric, industrial fabrics used in a vast number of applications; most common usages are tires, airsprings, hoses, conveyor belts, V-belts, ropes, cordage, webbing, fiber optics and paper felt. In 2011, Kordsa Global reached a sales figure of 985 Million USD. The company has its headquarters in Istanbul with operations focused in four main regions around the world namely- Europe, Middle-East and Africa, North America, South America and Asia Pacific. Cenk Alper is the President and CEO of Kordsa Global since June 2013. He joined Kordsa Global in 2007 as Global Technology Director. In 2002, he worked at Bekaert Technology Center (Belgium) as a Project Manager. He graduated from Middle East Technical University's Mechanical Engineering Department in 1991 and received his MSc degree from the same department in 1994. Later, he went on to complete an Executive MBA at Sabanci University in 2002. Excerpts:

Kordsa Global is a big name in the field of yarn, cord fabric, industrial fabrics, and single end cord. Are there any expansion plans in terms of products? What other areas is the company looking forward to for expansion?

Our company is the world leader in the production capacity of nylon 6.6 and we rank No.2 in the world in terms of the production of cord fiber. We rank No.4 in the production of polyester industrial y, and we keep growing in this segment. We grow organically with our production facilities across the world and realize our sustainable profitable growth in Indonesia at the Asian region, in which we have been making some $100 million of investment as of now. We aim to distinguish ourselves in the markets in which we have adopted competitive cost strategies by not sacrificing our high quality in products and services in accordance with our operational excellence approach. Kordsa is also distinguishing itself from its competitors by creating value for its customers. Kordsa is always where its customers are, being a perfect business partner, developing the best technologies in the sector, and creating alternatives ways of doings in the sector. We continue our profitable growth thanks to many innovative products for high performance tires and increases in capacity at full speed even at flat times in the sector.

Are the raw material suppliers for polyester yarn limited in the global textile industry? Which countries do you suppose are the best in terms of raw material supply for polyester yarn?

Approx. 80% of the total world polyester chip production is in Asia. With the latest investments and capacity expansions, 65% of the total Asian production share goes to China. Despite of huge volume availability and low cost levels of Chinese suppliers, European sources are still preferable in terms of product quality for high end niche applications.

Being a global supplier for nylon and polyester yarn, how do you find the various markets like Europe, Asia, North America, and others? Which markets hold the maximum scope for the nylon and polyester yarn industry?

There is demand for both yarn types in nearly all regions, but with different growth perspectives. Demand growth is highest in Asia Pacific and lowest in Africa. On the supply side, Kordsa Global is the single global supplier present in all continents; where there are also local smaller suppliers in Europe and America getting rare and rare both due to their comparatively small sizes and also competitiveness. On the supply side Asia Pacific region has a big capacity and is growing rapidly.

Rayon was replaced with nylon initially, and then with polyester of a low cost in the market. Do you agree or not? Please explain your stand. Which one do you think is the best in modern times?

I don’t agree completely. Cost is of course a critical factor, but performance is also as critical as cost for tire. Each material has some specific advantages or disadvantages according to the place of use. For example Rayon has more dimensional stability at high temperatures where nylon 6.6 is fatigue and endurance champion for tire use. Polyester is the cheapest but on the other hand its adhesion and fatigue performance is not sufficient for some applications such as tire cap ply. So, they still can be used together in the tire. I think none of them can be used as single material for tire reinforcement and specific application areas will be there for some more time until a newer generation material is found. Rayon use might further reduce by newer generations of polyester to be developed with higher dimensional stability. Rayon is mostly replaced by the existing polyester HMLS yarns for carcass layers for most of the tires, except some special high performance ones. This trend will continue. Similarly, Nylon 6.6 has superior properties when you compare with Nylon 6 and the shift of Nylon 6 to Nylon 6.6 in our industry for higher performance needs would continue too, in line with radialization increase.

From the looks of it, you seem to have an interesting strategy for holding and transferring inventory? Can you share some of your inventory related strategies with us?

Thanks for asking this question. Actually, we are proud of having such kind of an interesting strategy for holding and transferring inventory. Kordsa Global has 9 production facilities spreading to 5 continents and 9 different countries. In order to execute supply chain management in this giant global footprint, we have flexible and agile Global Sales and Operations Planning process, supporting KG company vision and business strategies. And also this process is fed by our values like customer focused, global collaboration, result driven and continuous improvement. As Kordsa Global, we are focused to provide superior services to our customers. With this approach, we are positioning ourselves in global world near our customers. This gives us a power to be back up for them, with the advantage of having transfer options from inventory and production of different Kordsa Global facilities. At the moment we have a wide range of active product portfolio for more than 150 customers worldwide. In order to increase our responsiveness to our customers, we are using product base inventory management approach. We are applying customer and product segmentation to understand customer behaviors, trends and by using optimization tools we are capable to determine optimum and dynamic inventory levels for each product and keep right amount of inventories for each customer and increase our service level. At the end, our ultimate aim is to create value in short and long term for our customers.

For global suppliers, there is one risk factor that can simply not be ignored. That is currency risk factor! Fluctuating currencies across countries impact the profit margins. What do you suppose in this regards? How can such challenges be overcome?

Kordsa, as a global company operating in emerging markets, faces the challenge of currency risk. However, since the sales and raw material purchases are denominated in hard currencies like USD and EUR, the exposure to the emerging market currencies are not very high. Kordsa Global implemented FX risk management and has a policy in place to measure and hedge FX exposures in order to manage operating profit margin fluctuations due to FX.

How important is sustainability in modern times? Do you think that sustainable actions have become as important as the production process itself in modern times?

Sustainability has become one of the driving forces of global business strategy. Nearly all industrial companies are forced to take actions on sustainability otherwise their future presence is questioned. Today actions are also diversified in different subjects; you need sustainable production, sustainable sales, sustainable products and innovations.

Consumer awareness drives sustainability in modern times. Do you agree? Please explain your answer.

I agree fully. As mentioned in above paragraph, today companies are forced by their 'mature’ customers for sustainable actions. I used the word 'mature’ here just to differentiate customers with more awareness. Today again we notice that this awareness is growing and tomorrow this will be a major factor on competitiveness.

Published on: 24/03/2014

DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.