The Economist
Jan 27 2005

Breaking into a man’s world

Jan 27th 2005
>From The Economist print edition

Reuters
The new boss of the Sabanci group chose to wear trousers instead of
a wedding dress

TURKISH industry is dominated by two vast family businesses, both of
which have recently handed over their top jobs to a new generation of
40-somethings. The Europeanised Koc group passed the reins to Mustafa
Koc, the eldest of the chairman’s three sons, in 2003. But before
Sakip Sabanci died last year, he let it be known that he wanted
neither of his two brothers nor any of their numerous male offspring
to succeed him as head of the far more traditional Sabanci family
business. Rather, he chose his niece, Guler. It was a choice that he
had been hinting at for at least a decade.

Turks were astonished by the appointment of a woman to such a
powerful post in what remains a patriarchal society. But none was
more surprised than Ms Sabanci herself. As her uncle lay dying in an
Istanbul hospital, she recalls thinking that she would quit the
business. `I could not envisage staying on without him,’ she says.

Running a sprawling conglomerate with annual sales of $12 billion and
interests ranging from banking to cars, and from energy to food, is a
challenging task that comes at a particularly challenging time. In
December, EU leaders finally agreed to begin accession talks with
Turkey on October 3rd this year. Over the coming decade, Turkish
companies will need drastically to alter their often unorthodox
business practices if they are to thrive within the EU. Although
TUSIAD, Turkey’s powerful association of businessmen, currently
headed by one of Guler’s cousins, strongly supported the country’s
attempt to join the EU, many of its individual members fear the
abolition of protectionist policies behind which they have prospered
for decades.

Sabanci Holding went through a big restructuring of its operations
before Turkey signed a customs union with the EU in 1996. The process
was designed to prepare it for global competition. Ms Sabanci says
that the EU straitjacket can only benefit honest Turkish businesses.
For a start, it will help constrain the country’s vast black economy
(estimated at anything up to 50% of GDP), making competition for
companies like Sabanci `much fairer’. More companies will be
compelled to pay taxes and follow health and safety regulations.

The EU’s decision to start accession talks is also expected to
enthuse foreign investors for a country that they have to date
noticeably shunned because of decades of chronically high inflation,
political instability and massive corruption. That gloomy image is
slowly being altered under the group of mild Islamists who have been
running Turkey for the past two years. And slowly the world is
noticing.

This newly stable environment has prompted Ms Sabanci to look for new
alliances with foreign partners, a strategy that the group excels at.
She herself masterminded its first joint-venture, with DuPont in
1987, setting up a $100m nylon-yarn producer in the port city of
Izmit. The group’s joint-venture with Toyota, which the Japanese car
manufacturer is said to be well pleased with, was launched in 1994 as
a platform for exporting Corollas to the rest of Europe. Last year it
captured 6.7% of the highly competitive local car market.

Ms Sabanci says acquisitions are also on the cards. They may include
Telsim, Turkey’s number-two mobile-phone operator. It was taken over
by the government after its owners, the Uzan family, stole billions
from their foreign partners, Motorola and Nokia, and the company was
forced into bankruptcy.

Behind her unconventional lifestyle – she lives alone and mixes with
painters and popstars – lies a tough, conservative businesswoman who
takes only carefully calculated risks; one reason, say her business
associates, why her uncle anointed her as his successor. Some of her
male cousins were so offended that one of them, Demir Sabanci, is
rumoured to have sold all his shares in the company last month,
because he could not stomach being bossed by a woman.

>From sharecropper to shareowner
Ms Sabanci’s first brush with industry was at the age of three, when
her grandfather Haci Omer, a rags-to-riches former cotton
sharecropper in the southern province of Adana, took her to the
family’s textile factory there. Ms Sabanci’s parents divorced when
she was eight and left her in the care of her grandfather. `He always
told me that one day I would wear trousers, drive a car and work in
the factory.’

And that is what she did: her career began 27 years ago at the
family’s tyre factory in Izmit. She resisted her grandmother’s
unrelenting demands to `see me in a wedding dress’ choosing, as she
puts it, `my work instead.’ When not working she keeps an eye on the
wine she launched in 1999, under the label `G’, the same year she
launched what she calls `my big baby’: Sabanci University. The
university has matured rather better than the wines – it is already
counted among Turkey’s best privately-owned colleges. Some 40% of its
students are offered free tuition, subsidised by the $20m a year that
the university gets from the Sabanci group.

`Tough’ and `unpretentious’ are the words that employees most
frequently use to describe Ms Sabanci, a reformed chain smoker with a
gravelly Janis Joplin-like voice. Her toughness came to the fore
recently when she withstood pressure from the state to fire Halil
Berktay, an eminent Ottoman historian at the university. He had dared
to suggest that Turkey’s Armenian minority may have been slaughtered
in large numbers by Ottoman forces during the first world war.

Her late uncle similarly angered the authorities when he called for
more rights for Turkey’s Kurdish minority. `His greatest lesson to
me,’ says Ms Sabanci, `was to be a free thinker, to be tolerant,
honest and fair.’ Those who know her say it is a lesson that she has
learnt well.

From: Emil Lazarian | Ararat NewsPress