The company was founded by Garip Yildirim in Samsun’s wheat market, engaged in the sale of construction materials. Today, the company is a global one, challenging the world’s largest companies.
Yildirim Holding started container terminal operations in 2004 by acquiring Sedef Port from STFA Holding, and in 2005 by acquiring Alemdar Port. Yilport Holding was established in 2013. Today, the company is among the world’s top ports and terminals operators by 21 operations on 3 continents in 8 countries. Yilport truly has become a global company from Turkey.
Yildirim Holding holds the number four position in global chrome industry, and 15th in port operations. It is preparing to move to higher positions by acquisitions. Yildirim Holding’s turnover is USD 1.5 billion by operations in 21 countries. The company aims for the top ten in the global league by new acquisitions. Yilport Holding targets doubling the current terminal portfolio in conjunction with the acquisitions.
Group is active in mining, ports, maritime, energy, fertilizers, chemicals, industrial construction, shipbuilding, and real estate development. Robert Yuksel Yildirim has the lion’s share in Yildirim Holding’s global growth. He is the mastermind behind the success. He was born in 1960 in Sivas. He is acclaimed as the world’s most visionary names in port industry.
We sat down with Yilport Holding Chairman of the Board Robert Yuksel Yildirim at Malta Maritime Summit. It is impossible to not get excited by the projects Robert Yuksel Yildirim talks about. With his humble personality and great self-confidence, he has a charm on people. He attributes his success in trade by controlling risks and analyzing the economy well. “My goal is to show the world how intelligent and successful Turks are in business,” he sums up.
Robert Yuksel Yildirim underlines that major projects started by President Recep Tayyip Erdogan’s vision. He is sending a message to President Erdogan by saying “Our President is looking for brave ones. Here we are. If our country is supporting us, we can bring forth at least three global brands attracting worldwide investments.”
Deniz Haber Ajansi interviewed Robert Yuksel exclusively at Malta Freeport, and we talked about Yildirim Holding’s 2025 vision.
Mr. Yildirim, your first name is Robert. You are originally from Sivas. So can you tell us the story behind the name Robert?
I studied mechanical engineering in the United States. During my studies, I also tried to find a job. However, due to my Turkish name Yuksel Yildirim, nobody hired me. My Chinese and Indian friends showed me how to get hired in the US. I was not a US citizen. I did not have residence permit. That was the problem. The Chinese told me that they changed their first names. “They think we are Chinese Americans,” they said. I checked the list of Silicon Valley companies, and I looked for the founders of those companies. Most of them had Robert as their first names. I picked Robert, and sent my resume as Robert Yuksel Yildirim. Then came interview calls. I first started working at a Japanese company called PACECO. They called me three months later and said “We try to deposit your insurance pay, but the checks keep bouncing back.” I convinced them that I had a one year internship work period. I contacted my lawyers and received my working permit. After that I continued working as Robert Yuksel Yildirim. There, I received a patent for a crane design project I worked on. I worked there for five years in the design and production of container port cranes. At the time, port operations business had entered my mind. I earned a salary of USD 39,000. My family was calling me back. I returned to Turkey for my military service. After America, Samsun was like a small village to me. My father and my brothers were in trading. They were dealing with iron, cement, and coal trading in the Black Sea Region. I knew that I could not do engineering in Turkey. So I thought, at least I could utilize my English knowledge. The first thing I did was to import coal from Russia. That was an area my father already had stakes in. The year was 1993. I earned USD 50,000 in a month by importing 10,000 tons of Russian coal. The money was much higher than from my gross salary in the United States. This motivated me, and I stayed in Turkey not returning to the US.
You started port management in 2004 with Sedef Port. Today you are a global port operator. What is the secret behind this success?
We acquired Sedef Port in 2004, and Alemdar Port in 2005. We established Yilport Container Terminal and Port Management Inc. company in 2006, beginning our first container terminal operations. But before that, we won the tender of Privatization Administration for Port of Trabzon. Some parties called us “coal traders” and dealt business behind my back. They conducted black propaganda. Because of the turmoil, the tender was cancelled. We were eliminated in the second tender. Back in the 2001 crisis, we evaluated the conditions in Turkey. We acquired Eti Krom for USD 58 million, Gemlik Gübre for USD 83 million, and Sumerbank’s shoe and leather factory Beykoz Kundura for USD 30 million.
We began to search for global opportunities in September 2008, during the global economic crisis. Our President was the Prime Minister at that time. He said that the crisis would pass Turkey. Therefore, we have closely studied the world by establishing an opportunities desk in the company. We as the Yildirim Group, entered the crisis with USD 500 million in cash. We were a small chrome producer in the global industry with Eti Krom. There was strong competition. We believed that this crisis offered an opportunity for the chrome industry. So chrome became our priority. Thus, we acquired our competitor Vargön Alloys in Sweden in February 2008. With this acquisition, we have entered the European league. Europe’s largest steel companies that have never bought from us have become our customers. We become a forerunner high carbon ferrochrome supplier in the stainless steel sector. We are a family company. In Vargön Alloys, we started to sit on the board for the first time, dealing with labor unions. In 2010, we undertook the most important event in the maritime industry in the world. In exchange for French shipping giant CMA CGM’s 20 percent stake, we paid USD 500 million to the company. I became a 5-year financial investor in the company. Then we got an additional 4 percent shares for USD 100 million. Our mission was to help restructure CMA CGM’s USD 6 billion debt. At that time, everyone in the shipping finance talked about us and said “What a waste of money.” Now they say that I did the greatest investment of the year, and shipping industry tells me how visionary I was.
Finally, we acquired Tertir the port management company. There are a total of 10 ports under Tertir’s umbrella which are part of Yilport’s portfolio right now: 7 ports in Portugal, 2 in Spain, and 1 in Peru. I spent two years to conclude this acquisition. My target is to be listed among top 10 international terminal operators within 10 years. I was aiming to acquire 2 ports every year. However, the opportunity emerged in Tertir. We have paid 300 million euros. Therefore, we did 5 years’ worth work in a year by acquiring Tertir in one fell swoop. According to Drewry, we are ranked 15th in the international ports operator list by our 21 ports and terminals in 8 countries.
MALTA FREEPORT IS THE FIRST PORT INVESTMENT ABROAD
The first port management investment abroad started with Malta Freeport. What is the story behind this investment?
The third largest container operator in the world France’s CMA CGM had leased Malta Freeport in 2004 for 35 years from the Maltese government. The concession rights were extended for 30 more years in 2008 with the promise of an investment to be made to the port. We acquired the 50 percent of the shares in Malta Freeport in 2011 from CMA CGM for 200 million euros. Under our agreement, CMA CGM has an 11-year obligation to bring cargo to the port. CMA CGM’s share in the total volume was 90 percent in the beginning. Now it fell to 55 percent. We as Yilport began to attract Maersk, COSCOCS, UASC and other liners. Malta Freeport indeed became free for every liner to call. When we signed the agreement, 2,400,000 TEU was handled at the port. Now this figure has rose to 3,200,000 TEU by Yilport’s synergy. We aim to reach 5 million TEU handling capacity at Malta Freeport by new investments in the upcoming period.
Thanks to our investments, the world’s largest ships which carry 18,000 TEU containers can call at Malta Freeport. The first terminal has 1000 meters of main berthing quay, and 290 meters of west quay. The draft is 17 meters and total area covered is 540,000 square meters. The second terminal has 513 meters of north quay, 660 meters of south quay, 118 meters of west quay and 220 meters quay allocated to ro-ro operations. The total hinterland is 232,000 square meters in the second terminal. As a result of negotiations with the Government of Malta, we have decided to expand the port area.
OUR EQUITY IN CMA CGM EXCEEDED 2 BILLION DOLLARS
You acquired 24 percent of CMA CGM’s preferred shares between 2010 and 2013. You invested USD 600 million into the company. You made the headlines in global marine industry by becoming partners with a line operator that controls 10.4 percent of the market. Can you give me information about the details of the privileged partnership agreement with CMA CGM?
In 2010 we have had a cash surplus. We invested USD 500 million in January 2011 in exchange for 20 percent of CMA CGM’s preferred shares. In the year 2013, we injected USD 100 million dollars for 4 percent of additional shares. CMA CGM is returning 12 percent coupon payments for our preferred shares annually. According to the agreement, we were to sell the shares back to the Saadé family, and exit CMA CGM investment. However, due to economic conditions, we have decided to stay 2 more years in CMA CGM as a privileged partner. On the other hand, if Saadé family does not buy 24 percent shares back until 1 January 2018, we will become minority partners of CMA CGM. Yildirim Group’s 24 percent shares in CMA CGM has roughly reached to an estimated USD 2-3 billion in market value. According to the privileged partnership agreement, we have the right to veto any subject including investments in CMA CGM. In addition, we have the right to protect our minority partnership. For example, this year’s CMA CGM acquisition of the APL brand, which is listed in Singapore as Neptune Orient Lines (NOL), took place with our consent. If we did not approve of the acquisition, CMA CGM would not complete the purchase.
WE ARE INTERESTED IN PORTS AMERICA
Yildirim Holding controls about USD 10 billion equity investments around the globe in 21 countries. Currently you are looking after new acquisition opportunities. Mr. Yildirim, can you tell us how you finance these projects?
You will not have difficulties in loan financing while such assets are in your Group. If you also inject your earnings into the companies as equity, then finance institutions will certainly support you. Herein lies the secret behind our success. We are a profit driven group, not a turnover driven one. As a businessman, I don’t pay attention to the turnover. Of course, turnover is important for many companies. However, most of them are working with very high turnovers by 1-2 percent profit margins, or they are in loss. Yildirim is different. We are an entirely profit driven group. Our financial results for the last 10 years always support this philosophy. This year we expect our group to generate global consolidated turnover of USD 1 billion 500 million and our EBITDA expectance is at the amount of USD 450 million. EBITDA margins in mining and port operations are well above the industry average.
On the other hand, we were contemplating a 10-year financial package when purchasing Solventas terminal. Yapi Kredi Bank offered us a 14-year loan package. This example shows us how reliable Yildirim Group is in the eyes of financial institutions even under current economic conditions. I would like to thank Yapi Kredi Bank for the acquisitions loan facility regarding Solventas terminal. In addition to that, I thank other Turkish banks for their support in our rapid and healthy growth. Yildirim Holding is one of Turkey’s most important brands in the world. Building on the support, our Group will continue to ensure that the flag of our country flies high in the world.
In short, the power of Yildirim Group comes from its own resources and financing provided by long-term loans by Turkish banks. In the last two years, European banks started to provide financing for our purchases overseas. Currently we are interested in Ports America, the largest US port operations company. The company undertakes 80 ports and terminal operations in the United States. We entered the Ports America tender in October 2015. Yilport Holding is among the four companies in the final round. Talks are still underway. If purchased, Ports America will boost Yilport Holding into the list of top 10 global terminal operators. The tender is expected to be finalized by the end of this year.
Yildirim Holding is the most important brand in the world in chrome mining in addition to port management. You are the world’s number four chrome producer. What is the success story behind chrome?
In September 2004, we took over Eti Krom from the Privatization Administration for USD 58 million. It was a small company, with a bad reputation in the foreign market. Production cost was too high, and the selling price was low. It was losing money. We set out with the goal of making Eti Krom a global company. If you want to become a global player, then you have to analyze and research the global competition and global markets closely. We have proven ourselves in 4 years going global. Thus, we acquired Vargön Alloys a century old Swedish company in 2008. We entered the top three in ferrochrome production in Europe. Owing much to the integrated structure we established in Turkey, we started to transport our chrome to Vargön Alloys. As a result of this, our ferrochrome production increased. We started to sell our products to Americas and Asia, not just Europe. We inked long-term contracts by Vargön Alloys’ reputation. We have become the main supplier of Europe’s largest stainless steel producers.
We bought all the assets of Russia’s Mechel Chrome in 2014. We owned Voskhod Mining Plant in Kazakhstan, and in Tikhvin Ferroalloy Plant in Russia. Our consolidated high quality high carbon ferrochrome production capacity reached 550,000 tons annually in Turkey, Sweden and Russia. This allows us to supply our long-term stainless steel customers, regardless of worldwide political, economic and other risks. We are the only global player to produce high carbon ferrochrome in three different countries. In addition, our annual production capacity of chrome ore for our own internal needs and exporting has reached 2.5 million tons in Turkey and Kazakhstan.
WE ARE INTERESTED IN PORTS IN TURKEY
Mr. Yildirim, you currently operate five ports and terminals in Turkey. Are you interested in new port acquisitions in Turkey? Are there new port investments?
Due to Yilport being a global player, we have been watching some ports in Turkey. There are offers from some port owners to sell their ports to us. However, their expectations are too high and the economic values do not support the claims. Therefore, we do not conduct acquisitions. We closely monitor some private ports in Marmara Sea, Aegean Sea and the Mediterranean. I want to underline that we are always interested in port acquisitions that will not impede but support our growth.
Mr. Yildirim, finally what is Yilport’s vision for 2025?
Yılport’s target set in 2015 was to be ranked among top 10 international terminal operators by the year 2025. Nevertheless, I suppose we will reach our target earlier. In 2025, we target capacities of 35 million TEU containers, 50 million tons of dry cargo, 5 million cubic meters of liquid cargo and 5 million CEU vehicle handling. Currently we operate in eight countries through 21 ports and terminals to support this targeted figure.
Our growth vision requires a strong financial structure to become a strong global player. Therefore, we started to create the basis for welcoming financial investors in Yilport Holding in our quest for new port investments and acquisitions. We aim to create USD 10 billion in equity assets for Yilport Holding in port industry. Ultimately, Yildirim Group’s target is to ensure the creation of a USD 30 billion global portfolio, and become a group offered to the public in the long term.
Recep CANPOLAT / Deniz Haber Ajansı - Turkish Maritime