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Wednesday, 25 April 2012

PFI Black Sea 2012 Special | Exclusive Interview with Robert Yuksel Yildirim

Robert Yuksel Yildirim, President of the Yildirim Group Robert Yuksel Yildirim, President of the Yildirim Group

25/04/2012 Yildirim, meaning ‘thunderbolt’ in Turkish, the nickname given to the late 14th century Sultan Beyasit I, due to his reputation for quick decision-making, seems just as befitting a name for the character of Robert Yuksel Yildirim, President of the Yildirim Group.

Mr Yildirim, is the charismatic man,  who has stayed at the centre of attention of the shipping industry since his move to bail out CMA CGM in 2010.

When I meet him,  he says he is now sitting on a “goldmine of data and information.” 

Mr Yildirim has no doubts over the CMA CGM investment.

“I never regret a decision,” he says.

The Yildirim Group is an energy trader, port operator, Ferroalloy producer, miner and shipbuilder and Mr Yildirim is setting out to control the supply chain, creating new synergies and sharing market information between these activities.

To illustrate his point on strategy regarding investments in CMA CGM he mentions the steel industry.

“We supply the steel industry with raw materials so we know whether they are doing well or not, we see their order books so when they are slowing down or going up, we are talking to them so then that affects the shipping,” he says.

“If we sign a deal, we know what the market will be looking like two months ahead. So when orders are cut that also affects shipping two months later, so we share this market information with CMA CGM. So we are saying we see the market this way and how it affects shipping, we tell them [CMA CGM] when to move their empty boxes - this is happening in the market, be careful, put your empty container in position, the market is going up,” Mr Yildirim explains. 

He claims he is not just a financial investor.

“So we are not a financial investor or private equity investor waiting five years for returns, no, we are also sitting on key market information, that is why we are sitting on a gold mine,” Yildirim says.

This, he says, explains his acquisition of the equivalent of a 20% of the world’s third largest liner for $500m.

It is also a key part of his strategy as he reveals to PFI a new multi-billion spending spree in which he aims to become, as he modestly puts it, a ‘junior’ global port operator but also a ‘junior’ global mining operator.

When I arrive at his office in Istanbul, Yildirim is taking a break from a board meeting with ship management company Chemfleet. 

By the end of the meeting he has bought a 51% share of the company for $3m. “It is a small investment but we will expand it,” he says.

Onto larger fry, Mr Yildirim says he is considering the purchase of a 49% stake in CMA CGM’s port business (see www.portfinanceinternational.com/news,823) as well as bidding for 10 ports in Latin America and West Africa where CMA CGM has a strong footing in terminals and agencies and where Yildirim is now establishing his presence with an office in Gabon. 

Mr Yildirim is currently holding talks with South Africa and Colombia over the acquisition of ports as well as coal mines to feed this new focus on energy ports.

He has recently returned from China with the Turkish PM where new talks have centred on mines and ports, and even the construction of a nuclear reactor.

He admits the CMA CGM bond acquisition was a risk, but he says it was a measured risk. 

“There is no business without risk,” he says. 

CMA CGM remains sunken reporting $30m in 2011 as well continuing to have debt in excess of $4bn. 

Yildirim reckons he will probably leave the company when his bond matures into a 20% stake in CMA CGM in 5 years, by which time the French company may decide to launch an IPO, he says.

Since the initial CMA CGM investment he has also purchased 50% share in Malta Freeport from CMA CGM, which has now become a multi-user port. However he now wants new partnerships with CMA CGM.

“CMA CGM today has more than 400 ports of call, agencies and more than 20 ports, so we learn from them and we also teach them about port business,” Yildirim says.

“We say we can invest globally in their [CMA CGM] future brownfield or greenfield projects. There are synergies and opportunities for both groups. We can use the CMA CGM network to use the right people to reach the right people in other businesses," he says.

"We can use CMA CGM as a logistics partner, it is a win-win investment for both parties, a perfect match.”

“I am happy with my investment in CMA CGM,” he says. 

Yildirim is generally upbeat despite his differences with CMA CGM’s owners, the Saade family, over his much commented decision made last year to prevent CMA CGM from investing in new tonnage a move which Yildirim says was a “crazy idea.”

“It was the wrong time and in the wrong market conditions,” he says pointing out that he would not block a decision in the future if there was not surplus capacity on the market and CMA CGM financial situation had improved.

“You don’t build ships when the prices are low, but when there is a demand for ships,” he says.

The follies of the shipping liners are only too apparent for Mr Yildirim. 

While the Yildirim Group made profits of “over $300million” from a turnover of $1billion, in 2011, world liners turned over ten of billions but made losses, he points out. 

“The entire container shipping industry lost $6billion last year,” he says outraged.

“We are making money in the worst time for the shipping industry, so by the time the markets have recovered I may even be printing my own money,” Yildirim says, provoking laughter. “We know what we are doing, we are not stupid with our money,” he says.

Mr Yildirim says equity for multi-million dollar investments at Yilport, Malta Freeeport and CMA CGM has been generated from mining, fertiliser business and trading.

The container port Yilport in the Marmara Sea is now making money. Importantly, Yildirim Group’s fleet of 19 bulk carriers and chemical tanker are all debt free.

Meanwhile, in Turkey, the Yildirim Group is investing $5bn in a power plant. (See PFI Black Sea Summary)

The Yildirim Group is spending over $1bn on upgrading and expanding Yilport container terminal and Malta Freeport and a fertiliser terminal at Gemlik port, in Western Turkey. 

Mr Yildirim is also holding talks to purchase a 100% share in three Turkish port facilities - a chemical terminal, a bulk terminal and a container terminal worth up $700m. For upcoming investment he says he won assurances from Turkish banks.

“Today I have a very strong feeling that my team can do no less than any other international port operators. I have that much confidence and I want to prove this to the world,” he says.

“As soon as we get the next port investment as majority shareholder so we can get control of port and do what we want, and we will make our impact,[on the market]” Mr Yildirim says.

Despite his ventures into multiple industrial activities, ports remain close to his heart.

“My dream was to build a container port,” Mr Yildirim says.

“I went to my former employees at Pacheco in the United States and they thought I was joking when I said I wanted to buy some cranes,” he says laughing.

Mr Yildirim says his engineering background and crane design talents helped his business decision making, by thinking always about the end result of a move. So what’s the end result of his current strategy?

“We will launch an IPO on mining operations and later the port operations,” Mr Yildirim says.

Mr Yildirim’s two brothers also work in the Yildirim Group. His father was a trader. Although he prefers decision-making in a family run business, he says it looks like the company is not staying in the family, so he will launch any IPO as from 2015, in order to create wealth for the company so that the company can keep expanding.

“I am result orientated. I am a good problem solver, analytical and always trying to find solutions,” he says.

“This gives me a very good capability of being a successful businessman,” he says. 

“When I see results are improving it motivates me to make more investments, the more I invest, the more I earn, it becomes an addiction,” Mr Yildirim says.

“I have to keep investing otherwise I get nervous,” he says.

But it is not only about making money.

"In the end you create employment, people around me are happy they can support their families,” he says.

“I could sell everything and go and put the money in bonds or deposits and go to Hawaii and choose an easy life,” Mr Yildirim says laughing, “but I could never do this, I am a workaholic,” he says.

Contact PFI Editor Barnaby Eales: barnaby@portfinanceinternational.com



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