Play it cool
Hasan ├ûnder fits every definition of a real entrepreneur. A Turkish project engineer who likes to innovate, he anticipates growth in markets that he knows well. John OÔÇÖHanlon speaks to the general manager and founder of Airfel Isitma.
Turkey stands at a moment of great opportunity, Hasan ├ûnder believes. The effect and timing of its accession to the European Union are unpredictable, but whether or not this comes off, its geographical and cultural proximity to the growing markets of the Middle East, the CIS nations and the Indian subcontinent conspire with its political independence to make it the object of intense interest from West and East alike. US President ObamaÔÇÖs visit in April, during which he claimed Turkey as a critical ally, was an important confidence booster to the entire nation, he says.
 
When ├ûnder, then just 30, returned from the Far East in 1999 seeing the need for an independent supplier of heating and cooling products in Turkey, he set up a marketing company to distribute domestic boilers and air conditioners from the Chinese manufacturer Haier. Keen to set up local manufacturing facilities, he put together a team of 13 mechanical engineers from his network at Istanbul Technical University, where he qualified, and he was soon in talks with the Ôé¼2.5 billion Turkish industrial group Sanko. SankoÔÇÖs base had been in the textile industry, but it was keen to diversify and to pick ├ûnderÔÇÖs brain on the heating and cooling market that he knew well.
Following these discussions, Sanko decided that it would rather invest in this fast-moving company than any existing player, so it took a 75 percent stake in Airfel and put up the financing to enable it to establish itself as a manufacturer of central and domestic heating and air cooling equipment and in 2002 to build a factory near Hendek, 90 miles east of Istanbul.
ÔÇ£Then we built three more factories from the ground up,ÔÇØ says ├ûnder, ÔÇ£a radiator factory, a combi boiler factory, and an air conditioner factory.ÔÇØ The radiator plant at Hendek has a capacity of 1.5 million linear metres, making it a major supplier to the 5-million-metre Turkish market; it also exports to Europe, South America, Middle East, Russia and China, he says.
Airfel-branded radiators to China? Yes indeed. Airfel has an office in Guangzhou where it employs two Turkish engineers and six Chinese staff members, visiting the factories and working with universities on product development. Steel has halved in cost over the last two years, but the main reason Airfel can sell its radiators in China is the manufacturing efficiency and quality built into its production plants.
ÔÇ£Nearly 95 percent of the world air conditioner market, more than 65,000,000 sets, belongs to China,ÔÇØ ├ûnder says. ÔÇ£Although we do source some components from China, we donÔÇÖt plan to move production there because our logistics base in Turkey is so good. We use Japanese-based production systems, such as 5S and continuous improvement, and are introducing six sigma, which will be rolled out in all our factories by the end of this year.ÔÇØ In addition, two years ago Airfel implemented an Oracle database in all its operations, and now uses it to manage materials, production management and service.
AirfelÔÇÖs boiler factory is also at Hendek. With an annual capacity of 300,000 units, half the total Turkish market, most of its production is sold locally, with some going to former Soviet states such as Turkmenistan and Azerbaijan. However, this is a rapidly changing market. Environmental legislation already makes it impossible to sell traditionally vented central heating boilers in the UK, and the rest of the EU is expected to follow soon in insisting on low-emission condensing boilers. ÔÇ£We will start producing condensing boilers by the end of this year and will eventually make them exclusively,ÔÇØ ├ûnder says.
Air conditioning and commercial cooling systems from the companyÔÇÖs Tekirdag plant west of Istanbul normally bring in the greatest portion of AirfelÔÇÖs Ôé¼115 million annual turnover, though in 2008 this business was outstripped by the innovative Mitsubishi FRS chiller systems supplied by Airfel to food industry clients throughout Turkey. Both these businesses are holding up well as the recession deepens, but ├ûnder does expect a decline after the end of 2009, as projects already in construction are completed. ÔÇ£Air conditioning is one of the last things people install, but not much new construction is taking place just now, so demand is bound to fall off next year.ÔÇØ It is at times like this, he admits, that he is glad he took his company into a diversified group: an independent producer might not have the resources to survive this downturn.
├ûnder intends to be around to take advantage of new opportunities once the economic climate improves. He is very excited by the potential for the solar energy market in Turkey and is convinced that it will be the next big thing. ÔÇ£I already have five project engineers working on this; we have visited lots of companies, and weÔÇÖre working out the best way to invest in photovoltaic solar panels. After all, Turkey has the ideal conditions for solar power generation. Although itÔÇÖs in its infancy at present and will only grow slowly at first, I am convinced it will start to boom in two or three yearsÔÇÖ time and that it will be a very good investment.ÔÇØ
In this he is very much on the same page as his parent group Sanko, which has already made investments in wind and hydro power generation. However, his research team is taking a cautious approach. ÔÇ£Solar panel technology is developing very quickly. Everything is in place now, but we will probably not make any investment this year beyond importing product, maybe from Suntech, which is one of the market leaders in China, and doing some project contracting.ÔÇØ
Of course, solar energy is a core business for Airfel. In a hot climate, air cooling is required when the sun is out, so the two go hand in hand. But the appliances need to be adapted; low-power compressors need to be developed, as well as specialised controls to make efficient use of solar energy. A large part of AirfelÔÇÖs R&D capacity is currently devoted to solving these problems and developing new-generation products in time for the boom in the market.
Airfel is a young, aggressive, dynamic and very professional player in the market, with a very strong emphasis on engineering, product development and innovation. ÔÇ£We do have competitors, but most of them are involved in other business and not focused, as we are, on heating and cooling technology. And we are definitely the only manufacturer with its entire shareholding located here in Turkey, with more than 600 dealers and service centers throughout the country covering the whole territory.ÔÇØ Airfel also represents many famous global brands such as MHI, McQuay and Hoval exclusively in the Turkish market.
Önder is leading his company successfully in this challenging sector where many brands are competing for better market share, but he believes that challenges create opportunities, and he sets the strategies and puts sound processes in place at the right time. His greatest asset, Önder concludes, is his team of 68 highly qualified and specialised mechanical engineers and his dedicated 380-strong workforce.
