Hakan ilhan tells James Morgan about Hidromek’s ambitious 10-year plan to grow exports to the point where they account for the majority of the Turkish manufacturer’s sales
Having stepped off his plane from Turkey just hours before, Hakan İlhan could have been excused for feeling slightly weary when we met at INTERMAT Middle East 2014 in Abu Dhabi. However, Hidromek’s marketing and sales development manager seemed anything but.
As soon as I arrived at the firm’s extensive outdoor stand, İlhan began enthusiastically showing off the Turkish manufacturer’s latest models. And this is just the beginning, according to İlhan.
Hidromek has big plans: the kind that cannot be realised through high-quality products alone. If the company is to meet its ambitious global targets in less than a decade, it needs to establish strong roots in multiple markets.
“We are looking to carry the Hidromek brand into new markets,” İlhan began. “The Middle East is not – technically speaking – a new market for us, but we need to strengthen our dealer network across the region.
“We have benefitted from the local success of a number of Turkish contractors; they frequently opt for Hidromek construction equipment. However, they tend to purchase machines directly from Turkey.
“In order to gain a better footing in the Middle East with non-Turkish customers, we must establish effective channels for parts and service support. We want local customers to know that we look after our machines.”
This, in a nutshell, could be extrapolated to describe Hidromek’s global strategy. As İlhan explained, the Turkish construction equipment manufacturer is not interested in short-term, flash-in-the-pan profits. Instead, Hidromek is encouraging long-term growth by investing people, time, and money into new regions.
Hidromek took some significant steps forward in this regard during 2013. Not only did the manufacturer acquire Mitsubishi Heavy Industries’ (MHI) Motor Grader Business Division, but it also committed more than $100m to the construction of a manufacturing facility that – once finished – will be the largest in Turkey.
“Our new factory is scheduled for completion in 2015, and will more than double our excavator production capabilities,” ilhan explained.
“This forms part of Hidromek’s 10-year plan to increase its overseas activities. We want to build upon the domestic success that we have enjoyed. Hidromek, for instance, was recently named the best-selling manufacturer of both backhoe loaders and excavators in the Turkish market. In fact, the company has received these plaudits for a number of consecutive years.
“In Turkey, we are operating very successfully under tough conditions; not only in terms of the commercial market, but also in relation to the physical environment,” he continued.
“The Turkish construction terrain is unforgiving, but our machines have proven capable of standing up to nature’s harsh conditions. Again, this fills us with confidence when it comes to expanding into new territories.”
Last year, Hidromek announced a 10-year plan to compliment Turkey’s long-term economic goals. In 2023, the republic will celebrate its 100th anniversary, and to mark this occasion, the government outlined a range of ambitious financial targets. One aim of ‘Vision 2023’ is for Turkey to achieve a 10% increase in its construction equipment market.
“Hidromek wants to reach a position whereby exports account for the majority of its sales,” said ilhan.
“This will not be a case of haphazardly entering new markets and trying to sell a few backhoes and excavators. We need to invest in regional partners and facilities. For example, Russia is now our second biggest region; we enjoy a double-digit market share in terms of backhoe sales.
In order to achieve this situation, we sent parts ahead, we dispatched Russian-speaking product trainers, and we opened a completely new Russian-speaking office. Such measures are important if you are serious about instilling confidence in local dealers.
“We are now following a similar strategy in Thailand as part of our motor grader deal with MHI,” he continued.
“We are working hard to give Hidromek a foothold in the Asian market. Naturally, we have no intention of missing out on other market opportunities in the meantime, but we want to grow in the right way.”
Hidromek also plans to transfer its long-term philosophy to operations in the Middle East. Again, the manufacturer intends to build a strong base capable of supporting sustainable regional growth.
“When we engage with potential partners, we consider how they are likely to collaborate with the Hidromek family,” İlhan explained. “When all is said and done, people buy from people.
We are in discussions with a number of partners across the GCC, and our technicians are working to develop machines to suit the particular conditions of the region. Of course, what is effective in Turkey, Russia, and the rest of Europe will not necessarily be the right fit for the Middle East.
“We are also in the process of finalising our strategies for different countries within this region,” he added. “At present, interest is good. People seem impressed by the quality of our products and the professionalism of our approach. I am confident that Hidromek will make good progress in the GCC during 2014.”
Success in the Middle East will play a crucial role in the delivery of Hidromek’s 10-year plan. As such, İlhan and his colleagues must locate and court the local dealers that best suit their company’s strategy for growth.
“If I’m not mistaken, the Middle East represents approximately 15% of the global construction equipment market outside of China,” he explained.
“In terms of strategically important areas, Hidromek simply cannot afford to ignore this region. As you might expect, a large proportion of the dealers operating in GCC countries are already committed to particular manufacturers and lines.
Most offer specific types of construction machinery produced by particular brands. Ideally, Hidromek would like to secure relationships whereby dealers focus exclusively on our products. This certainly represents a challenge for us, but we believe that it is the best way to cement customer relationships in new markets.
“As such, we are committed to becoming a full-line manufacturer,” İlhan continued. “We want to offer a product range that caters to the majority of customer requirements. Of course, there is no point in developing new lines if we don’t encourage market awareness. Our marketing strategy will contribute significantly to the achievement of our long-term goals.”
The strengthening of its dealer network – both in the Middle East and across other regions – will no doubt assist Hidromek in its bid to transform domestic success into global exports. Even so, the firm cannot afford to take its eye off the ball in terms of product quality. As İlhan explained, Hidromek’s push for international sales will not come at the expense of innovation.
“We not only offer top-quality machinery, but we also continue to innovate technologically,” he said.
“For example, our excavators now come with the SmartLink GPS tracking system as standard. This provides operators with detailed information about a machine’s activities: temperature levels, crawling hours, hammer usage, etc. It is an immensely useful tool for fleet managers, who need to constantly monitor the performance of their staff and machines.
“It’s all about productivity and speed,” he continued. “Hidromek builds machines using the best components on offer, and with the latest technology. We have around 70 in-house engineers working with the latest research tools and software systems, and this is just the beginning.
Hidromek started producing backhoe loaders around 35 years ago. It is less than 10 years since the firm added the excavator to its range. As we speak, we are finalising the handover of the former MHI grader operations, and we intend to launch new lines over the coming years.”
For now, Hidromek will continue to lay foundations for growth. İlhan and his colleagues are confident that today’s groundwork will help them to meet their 2023 export targets. When you consider the company’s recent performance, you’d be brave to predict otherwise.
Ready for round two
As director of exports, Anil Bingol has a huge role to play in delivering Hidromek’s 10-year plan. As he explained, the firm has learned from its previous experience in the Middle East.
“In the past, we have enjoyed success in this region,” said Bingol. “Unfortunately, we were unable to sustain this situation because of the global crisis.”
Even so, Bingol says Hidromek will come back fighting in the GCC. The manufacturer, he contends, is here for the long haul.
“The market is still competitive, but with its quality machines, Hidromek stands an excellent chance of capturing a significant share,” he said. “However, we will not be drawn into competing on the same terms as Chinese or Korean manufacturers. Hidromek will find its own way.
“We are engaged in ongoing discussions with dealers across the Middle East,” Bingol concluded. “We came here to demonstrate our strengths and to encourage potential partners to come along and meet with us. In this respect alone, it has been a successful exercise.”
Hidromek HMK 300
LCEngine: Mitsubishi 6D16-TLU2J
Maximum power: 216HP
Maximum torque: 854Nm
Swing speed: 10rpm
Gradeability: 35°
