Mr. Mehmet Şanal, Our Chairman of the Board of Directors, spoke to the Tesisat Magazine
“We Will Carry Untes Even Further in Terms of Exports’’
Untes, which has been offering its innovative and integrated solutions aiming at sustainable comfort and efficiency, to the service of the sector since 1968, celebrates its 50th anniversary. Expressing ‘‘We have an industrial culture coming from the past’’, Mehmet Şanal, Chairman of the Board of Directors of Üntes, states that they are confident that they will increase the share of exports in the total turnover of the company, which has a 50-year history, to 45 percent.
Can you tell us about journey of Üntes from past to present?
Üntes was founded in İskitler, Ankara in 1968; Later, in the 1970s, we moved our operations to our facility in Siteler. When we were first established, we were producing simple living room type appliances and small-scale industrial fans. In the 1970s, we started the production of cooling towers and air handling units. Industrial ventilator production also increased during these years. In 1970, we started the construction of our factory, which was established on the Istanbul road. In those years, we were making production in our factories both in Siteler and on the Istanbul road. In 1972, we moved all our facilities to our factory located on the Istanbul road. In 1980, we decided to expand our factory once again. At the time of our establishment, we were a general partnership with 5 partners. However, in 1988 we changed the legal status of our company to a joint stock company. In 1993, the second generation took over the production. We opened our offices in Istanbul in 2001, Adana in 2003, and Izmir in 2004. In 2000, we signed a representative agency agreement with Rhoss. In 2006, we made another agreement with Rhoss and moved their entire fan coil production line to Turkey, where we started fan coil production. At the end of the 12-year representative agency agreement with Rhoss, we decided to make production together. We started the production of water chillers in 2012. This was followed by the start of heat pump chiller production in 2016. As a result of the agreement we concluded with Hi-Sense in 2016, we started to sell VRF air conditioning systems. We are planning to start the production of inverter chillers at the beginning of this year.
We had a deficiency only in VRF as an imported product. Based on this situation, we established Üntes VRF company in order to reach our goals in the future. We started the sales of VRF air conditioning systems by drawing a long-term and forward-looking strategic roadmap with our partner Hi-Sense. We are making good progress in this regard. We have created our service network throughout Turkey and now we have over 100 service points. We are also making progress every day in terms of sales points.
What does the name Üntes mean? You are celebrating your 50th anniversary this year, what would you like to say about it?
The name Üntes is an abbreviation of the Turkish words ‘‘Ünlü’’ (Famous) and ‘‘Tesisat’’ (Installation) and means “Famous Installation”. Yes, we are celebrating our 50th anniversary this year. We have an industrial culture coming from the past. Looking at the production facility at the moment, we have the largest facility for central air conditioning systems in Turkey in terms of variety and capacity. The products we produce within Üntes are manufactured in 3 main buildings here. We manufacture air handling units in the 1st building, and rooftop and package air conditioners in the 2nd building. In our other factory, fan coil devices are produced. 30 percent of the products we produce are exported.
Can you give information about your production facilities and laboratories?
In 2017, Üntes became an R&D centre. We have made a serious laboratory investment for package air conditioners in our R&D centre. We commissioned this laboratory in 2015. In 2012, we established our fan coil test laboratory. Currently, we are the only fan coil test laboratory in Turkey. We have a facility that allows chiller production in the most professional sense. In our facility, we are able to produce chiller groups up to 1750 kW. Üntes Rhoss company is under the joint management of Üntes and the Italian Rhoss company, both of which owns 50% of its shares. By making the technological transfers of all products produced in Italy to Turkey, we nationalized the products we had imported. With our test stand in our facility, we can also perform the relevant tests for products up to 1750 kW. In another test stand, tests for heat pump chillers can be carried out. In short, we are able to present the performance verifications of all the devices we manufacture here to our customers, thanks to our test stands. We employ 300 people on the Untes side and 40 people on the Rhoss side.
As of today, we have the capacity to produce 1200 chillers in a single shift. By the end of the year, we will start the production of screw chillers in Turkey. In the new period, we will endeavour to increase our volume here by continuing to bring different products to Turkey.
Could you give information about your export status? Due to the problems faced recently, the importance of heading towards to export has increased. Could you give us your opinion on this subject?
We aim to increase the percentage of our exports in our total turnover to 45 percent within a period of 2-3 years. It seems that there will be some regression in private investments due to the economic difficulties in the construction sector and our country. Therefore, all companies in the sector need to improve themselves in the field of export.
We have offices abroad in Dubai, Kazakhstan and Turkmenistan. The products we produce are exported to approximately 45 different countries around the world. Currently, we deliver the products produced by Üntes to a wide geography from Australia to Chile. Our exports are mainly made to Turkic Republics and Europe. We have also started to create sound locations in the South African market.
It should be noted that we are a company with 100 percent domestic capital. We feel obliged to contribute to the development of our country and our country’s industry. To give an example, we started the production of fan coils in 2006, but at that time, Chinese manufacturers also started to enter our country. As a result, the production of many domestic manufacturers came to a standstill. During these dates, we carried out an intense struggle and ensured the enactment of the anti-dumping tax law against China. By taking the lead in this regard, we have prevented imports, albeit partially. In this way, 7-8 companies in Turkey were able to start fan coil production. For this reason, we have adopted such policies as our mission, and within this context, we are trying to pave the way for the sector.
Can we get your economic evaluations about the sector?
In fact, there was a nice upward acceleration in the sector this year. Considering the first half of the year, sectoral developments were silenced good. However, when we look at the second half of the year, we see a sectoral stagnation in the domestic market. In addition to this, foreign capital companies have also made serious investments in our country. These investments in question have started to make a sound in the air conditioning sector, but we are just at the beginning of the road and we still have a long way to go. Maybe it will be difficult for the next year, but I predict that important investments will come from abroad in 2-3 years. When we look at it as a growth trend, the sector will finish the year in a positive way, despite the loss of blood in the second half of the year. However, from now on, no matter what we produce, we should not develop a strategy focused only on the domestic market. From the point of view of Üntes, ‘‘In which markets can we sell the products we produce at world standards?’’ Based on the question, we continue to carry out our R&D and marketing activities uninterruptedly. Because it is pointless for us to grow too much in the domestic market.
In which direction are the latest trends in products moving?
Trends in the air conditioning sector are moving towards energy efficiency and environmental products. Recently, the development trend of products has moved forward on software and electronic components. There is no change in the main functions of the devices; there are improvements in energy efficiency and, accordingly, in the automation of devices.
Could you please summarize what your next goals will be?
Our investments will continue in the future in line with the needs of the sector. When we look at the last 10 years, we see that we have made a strong development. We have a few projects planned for the next period, but in the next 10 years, our priority is to make Üntes a global brand, by growing much more in exports.
What do you think should be done for the development of industry in our country and what kind of contributions can the government make in this regard?
For the development of the industry, it is necessary to increase the production first. At this point, there is no need to provide some production incentives for production. The state should encourage the producer, especially by using domestic goods in their own investments. Some laws have been enacted in this regard, but there are deficiencies in its implementation. There can be no better incentive than the government’s use of domestic products in its own investments. The stronger the domestic investor is in her/his own country, the stronger she/he becomes abroad. The second problem is that the financing costs have increased significantly at the moment. In these circumstances, it would be very beneficial to offer attractive credit opportunities to the industrialists. Furthermore, when we consider the air-conditioning sector specifically, there are difficulties in collecting the fees for services given to the public. More and more companies are declaring concordat in the construction industry day by day, and subcontractors or suppliers serving in the construction industry are also deeply affected by this situation.