- Created: Wednesday, 22 March 2017 08:18
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In a recent interview Arcelik's (better known here as Beko) CEO Hakan Bulgurlu has said that the company in looking to expand and appears to be very interested in Asian markets.
Beko and it's parent only recently launched a line of small appliances that we reported on a couple of weeks ago but it's got bigger ambitions and if that means mergers or acquisitions (M&A) are what it takes, it seems that will be considered.
"(M&A) is important because we have global ambitions," Bulgurlu told Reuters, "We're opportunistic. We're not restricted on size in any way."
Could we see a sale or a merger as large as the recent Indesit/Whirlpool deal? From Mr Bulguru's comments we wouldn't count out the possibility although, there's not too many big brands left to buy!
Of course there are many that don't even blip on European or North American residents radar such as the $250 million purchase of Dawlance Appliances in Pakistan that Beko bought in 2016 or its purchase of Defy Appliances in Africa a few years ago. It has also expanded through buying brands such as Blomberg and Grundig here in the EU.
It isn't all good news though and while Bulgurlu stood by Arcelik's forecast for revenue to grow 20% this year from 16.10 billion Turkish lira ($4.43 billion) in 2016, even though its overall home market could grow faster than the 3% it had previously forecast.
The stronger market in Turkey is due to a recent government move to reduce a tax on white goods in order to spur demand. However a poorly performing Turkish lira has made imported raw materials such as oil, steel and plastic more expensive, impacting profitability.
"There's a lot of uncertainty in the world," Bulgurlu said, also citing the weak pound that has caused inflationary pressure in Britain, which accounts for 10% of sales.
Beko has had to raise prices on some UK products and expects that to adversely affect demand.
"I think demand will taper off a little," Bulgurlu said, noting however that Arcelik still aimed to double its business in Britain in the next five years, even as the country's exit from the European Union raises questions about the economy and the future of foreign workers.
"It will continue to be our most important market outside Turkey," he said.
Arcelik opened a research and development center in Cambridge, eastern England, last year, in an effort to take advantage of a British tradition for scientific innovation.
"We want to tap into that and take that pure research and make it applicable to appliances," Bulgurlu said, citing potential for smart appliances such as refrigerators that know when food is going bad and ovens that can keep food cool until its time to cook.
However Beko plans to expand, it could be interesting as they are already establishing a presence in the USA and that probably has the long established big players like Whirlpool and Electrolux if not worried, at least concerned.