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100% SUCCESS
CALIK COTTON CORPORATE PROFILE 2014
ÇALIK COTTONHEAD OFFICE
Keresteciler Sitesi, Fatih Cad.Ladin Sok. No: 17 34169 Merter/Istanbul
Tel: +90 212 459 26 26Fax: +90 212 459 26 77
Mail: calikcotton@calik.comwww.calikcotton.com
COTTONC
ALIK
CO
TTO
N C
OR
PO
RA
TE PRO
FILE 2014
ABOUT USÇALIK HOLDING IN BRIEFOUR VISION, MISSION AND VALUES FINANCIAL AND OPERATIONAL INDICATORS ÇALIK COTTON IN BRIEFTHE YEAR 2014 AT A GLANCE
MANAGEMENTMESSAGE FROM THE CHAIRMAN THE CEO'S ASSESSMENT OF 2014SENIOR MANAGEMENT
OPERATIONSTHE COTTON SECTOR IN THE WORLD AND TURKEY IN 2014 OPERATIONS IN 2014
MARKETING AND SALES PRODUCT DEVELOPMENT
HUMAN RESOURCES
121216182022
24242628
303034343640
100% SuccessWe qualified in just three months for the
AQSIQ certificate, granted to only one or two out of 10 applications received each year.
In 2013, we set the vision of starting to sell in China, and we achieved it.
In 2014, we became a member of the Better Cotton Practices Association (IPUD), the
Turkish branch of Better Cotton.
In 2014, we became the first company to export Turkmen cotton to Egypt.
We transported cotton from Turkmenistan to the Lloyd market in UK, under an insurance
policy that also covered Iran.
Capitalizing on the support of international powerhouse
Çalık Holding, we reinforce our successful and stable position in the
cotton trade, day by day.
We believe that accessibility is of primary importance, and strive to
stand by our clients whenever they need us. As such, we serve our clients with local employees in
every country where we operate.
TRUST
As a highly-skilled and specialized, yet young and vibrant team focused
on success, we have a dynamic structure. We consistently take swift action through employees who inspire trust, respect their work, and share a team spirit.
We go beyond borders with our rhythm and pace, and complete our
overseas operations successfully.
EXCITEMENT
Çalık Cotton, with cotton trade as its core business, runs its operations with a view to strengthening Turkey’s position in the world cotton market.
As such, Çalık Cotton has become the first company to receive the
AQSIQ certificate, required to export cotton to China, and has obtained the increasingly esteemed Organic Cotton Certificates issued by the
Better Cotton Initiative (BCI) and the Control Union (CU).
QUALITY
We have a superior performance, as one of the companies least affected
by exchange rate fluctuations.
In 2014, we expanded our market share by a significant margin.
By focusing solely on cotton trade, we continue to work towards our
goal of finding new suppliers, countries and markets.
PERFORMANCE
CORPORATE PROFILE 2014 ÇALIK COTTON 10
ABOUT US MANAGEMENT OPERATIONS
ÇALIK COTTON CORPORATE PROFILE 2014 11
FOR DETAILS, CALIKCOTTON.COM
CORPORATE PROFILE 2014 ÇALIK COTTON 12
ÇALIK HOLDING IN BRIEF
ENERGY
Çalık EnergyYEDAŞ ARAS EDAŞ Keds
MINING
Lidya Mining Polimetal Mining
CONSTRUCTION AND REAL ESTATE
Gap ConstructionÇalık Real Estate
FINANCE
Aktif BankBKT (Banka Kombetare Tregtare)
TEXTILES
Gap Güneydoğu Textile Gap MarketingÇalık Cotton
TELECOMS
Albtelecom Eagle Mobile
A pioneering corporation that continues its ascent with a strong performance in a number of sectors…
AMERICATEXTILES (GAP MARKETING, ÇALIK COTTON)
ABOUT US MANAGEMENT OPERATIONS
ÇALIK COTTON CORPORATE PROFILE 2014 13
5Continents
6Sectors
USD 7.5 Billion Total Assets
24,000Employees
A local force which extends across 5 continents:Çalık Holding
KOSOVO
LIBYA
UZBEKISTAN
KAZAKHSTAN
TURKMENISTAN
GEORGIA
RUSSIA
ENERGY (ÇALIK ENERGY-EPC)FINANCE (BKT)
IRAQENERGY (ÇALIK ENERGY-EPC) CONSTRUCTION (GAP CONSTRUCTION)
ALBANIA ENERGY (ÇALIK ENERGY-EPC)
TELECOM (ALBTELECOM)FINANCE (BKT)
ENERGY (ÇALIK ENERGY-EPC)
CONSTRUCTION (GAP CONSTRUCTION)
ENERGY (ÇALIK ENERGY-EPC)CONSTRUCTION(GAP İNŞAAT)
CONSTRUCTION (GAP CONSTRUCTION)FINANCE (İJARA LEASING)
ENERGY (ÇALIK ENERGY-EPC) CONSTRUCTION (GAP CONSTRUCTION)TEXTILES (GAP MARKETING, ÇALIK COTTON)
INDIATEXTILES (ÇALIK COTTON)
DUBAICONSTRUCTION (GAP CONSTRUCTION)TEXTILES (GAP MARKETING)
ENERGY (ÇALIK ENERGY-EPC)
S.ARABIACONSTRUCTION
(GAP CONSTRUCTION)
CONSTRUCTION (GAP CONSTRUCTION)FINANCE (AKTIF INVESTMENT BANK)
ITALYTEXTILES
(GAP GÜNEYDOĞU TEXTILE)
BANGLADESHTEXTILES
(GAP GÜNEYDOĞU TEXTILE)
QATARCONSTRUCTION
(GAP CONSTRUCTION)
FOR DETAILS, CALIKCOTTON.COM
CORPORATE PROFILE 2014 ÇALIK COTTON 14
ABOUT US MANAGEMENT OPERATIONS
Established in 1981 by Ahmet
Çalık of the Çalık family, which
has held an active track record in
commerce since the 1930s, Çalık
Holding currently has operations
in fields such as energy, mining,
construction and real estate,
finance, textiles and telecoms.
One of the largest industrial
corporations in Turkey, Çalık
Holding provides employment to
24 thousand people in around 17
nations. As a pioneering Turkish
investor in Central Asia, the
Balkans, the Middle East and
Africa, the Çalık Group has total
annual consolidated assets of
USD 7.5 billion.
Displaying a consistent growth
performance in Turkey and other
countries since its establishment,
the Group acquired the Albanian
telecom operator and Internet
provider Albtelecom in 2007;
the Yeşilırmak Electricity
Distribution Company (YEDAŞ)
providing electricity to five
Turkish provinces, in 2010; the
Kosovo Electricity Distribution
Company in 2012; and ARAS
EDAŞ, operating in seven
provinces, in 2013.
Çalık Holding’s Energy Group,
which maintained its business
volume in 2013, due to its
credibility in the world energy
One of the largest industrial corporations in Turkey, Çalık Holding provides employment to around 24 thousand people in 17 countries.
ÇALIK HOLDING IN BRIEF
ÇALIK COTTON CORPORATE PROFILE 2014 15
FOR DETAILS, CALIKCOTTON.COM
the first prize winners in the
“Best Commercial Renovation/
Redevelopment Turkey”
category of the European
Property Awards 2013,
among the most prestigious
real estate awards in Europe.
Çalık Real Estate is active in
land development and urban
transformation.
Carrying out its operations
in line with proven growth
strategies, Çalık Holding’s
subsidiary Lidya Mining
increased its stake in Polimetal
Mining to 80% from 50% in
2013; Polimetal’s other parent
company is Alacer Gold. In the
same year, gold production at
the Çöpler Gold Mine - which
belongs to Anagold, another
Lidya Mining subsidiary
-increased by 43% over the prior
year to exceed 270 thousand
ounces.
Conducting projects from
an innovative, sustainable
perspective, Aktif Bank
established Aktif Bank Sukuk
Asset Lease Company in 2013 to
issue lease certificates. With the
“Active Point” project, Aktif Bank
shot ahead of numerous global
giants to win the first prize
in the “Physical Distribution”
channels category of the
European Financial Management
& Marketing Association
(EFMA) awards. Çalık Holding’s
subsidiary BKT, which operates
in Albania and Kosovo, won for
the third time the “Best Bank”
award bestowed by The Banker,
a highly-esteemed international
financial markets magazine.
In line with its strategy to focus
on its core businesses, the Group
divested itself of the Turkuvaz
Media Group.
Renowned for its authority,
strong reputation and robust
financial structure due to its
worldwide operations, Çalık
Holding cooperates with the
globe’s prominent companies.
Çalık Holding stands out as a
strong leading player in its core
businesses for its deeply-rooted
institutional structure, rich
corporate culture, highly skilled
human resources, pioneering
enterprises, innovative approach
and sound strategies. The
Holding continues its operations
in all business lines with the
target of attaining sustainable
growth.
sector and a work ethic that
sets it apart from competitors,
is among the most-preferred
companies in the energy-rich
regions of Central Asia, Middle
East and Africa. Çalık Energy
continued the construction
of three power plants begun
in 2013 in the Turkmen cities
of Ahal, Lebap and Mari.
Additionally, the Group signed
agreements for the construction
of two new power plants in Ahal
and Derweze. Having become
the biggest EPC contractor in
Georgia with the Gardabani
project in 2013, the Group
completed two more power
plants with a total capacity of 2
thousand MW in Iraq in the same
year. In 2013, the Adacami HEPP
Project was also completed in
the Turkish city of Rize.
GAP Construction has become
the EPC contractor of the
“Turkmenbashi International
Seaport,” worth USD 1.5 billion,
and consisting of six ports and
one shipyard. The Seaport was
designed in 2013 as a logistics
hub on the route connecting
Asia to Europe.
The project “Tarlabaşı 360”
by the Çalık Group subsidiary
Çalık Real Estate, was among
CORPORATE PROFILE 2014 ÇALIK COTTON 16
ABOUT US MANAGEMENT OPERATIONS
Our Group derives its strength through its business perception shaped by courage, innovation and prudence. Drawing on this fact, the vision of Çalık Cotton is composed of three components.
1. To be the most preferred workplace, employing the best.
2. To be an exemplary Group with its management understanding and systems.
3. To own a superior and high return business portfolio.
To be the most valuable Turkish enterprise in three aspects: employees, management practices and business portfolio.
OUR VISION
ÇALIK COTTON CORPORATE PROFILE 2014 17
FOR DETAILS, CALIKCOTTON.COM
To enrich all stakeholders in Turkey and in other countries we do business in, through our innovative, courageous and prudent business understanding.
OUR MISSION
Çalık Group exists to enrich its stakeholders. The Group undertakes all its operations in line with this goal, with an innovative, courageous and prudent spirit. Çalık is a family, internalizing its country’s high values and paying respect to all colors of the geographies where it has a presence.
OUR VALUES
CORPORATE PROFILE 2014 ÇALIK COTTON 18
ABOUT US MANAGEMENT OPERATIONS
SHAREHOLDERS’ EQUITY SALES TOTAL EXPORTS
2013 2013 20132014 2014 2014
16.0 114.4 8.1
5.7
52.6
0
(USD MILLION) (USD MILLION) (USD MILLION)
2013 2014
34.3
35.9
TOTAL ASSETS
(USD MILLION)
FINANCIAL AND OPERATIONAL INDICATORS
ÇALIK COTTON CORPORATE PROFILE 2014 19
FOR DETAILS, CALIKCOTTON.COM
2013 2014
86%
117%
GROWTH
(USD MILLION)
In 2014, Çalık Cotton’s total
assets reached USD 35.9
million, while shareholder
equity grew by 181% over the
previous year, reaching USD 16
million. The Company employs
a total of 16 individuals.
Cotton prices, set in
international markets, are
subject to fluctuation and,
thus, financial risk. Çalık
Cotton protects its cotton
through hedging mechanisms,
minimizing the potential effects
of these risks.
16
16
2014
2013
NUMBER OF EMPLOYEES
NUMBER OF EMPLOYEES
CORPORATE PROFILE 2014 ÇALIK COTTON 20
ABOUT US MANAGEMENT OPERATIONS
Established in 2011 under the
umbrella of Çalık Holding, Çalık
Cotton conducts national and
international trade in cotton,
and provides consultancy
services in all areas related to
cotton.
Çalık Cotton has become
the first Turkish company to
obtain the AQSIQ certificate,
necessary for exporting to
China
Çalık Cotton’s core business
is cotton trade and the
Company conducts its
business operations towards
supporting Turkey’s position
in the world cotton market.
Within this scope, Çalık Cotton
has become the first Turkish
company to obtain the AQSIQ
certificate, necessary for
exporting to China; and has
also obtained the increasingly
esteemed Better Cotton
Initiative (BCI) and Control
Union (CU) Organic Cotton
certificates.
By capitalizing on the long
term business know-how and
expertise of Çalık Holding, Çalık
Cotton has reached success
in the sector within a short
period. Carrying out operations
in a number of significant
global markets such as Turkey,
Çalık Cotton conducts operations in key manufacturing areas of the USA, China, Turkmenistan, India and Turkey, and in all important world markets.
4Number of Export Destinations
USA, China, Turkmenistan
and India, the Company
continues its efforts
to provide swift, high quality
service to its clients.
Çalık Cotton expanded its
trade network in 2013 by
purchasing cotton and yarn.
The Company bought 12
thousand tons of cotton
from Turkmenistan to sell to
domestic yarn manufacturers.
In 2013, Çalık Cotton also
started to buy yarn from India,
and now the Company offers
yarn alternatives to domestic
fabric manufacturers.
Eco-friendly products
Çalık Cotton forges ahead with
eco-friendly products and a
state-of-the-art technology
infrastructure. Collaborating
with Çalık Denim and Crailar
Technologies Inc., the Company
has implemented an important
project based on a new type
of fiber called “Crailar.” Crailar
is a natural, environmentally-
friendly fiber made with less
water and no chemicals. The
Çalık Denim facilities have
already manufactured the first
examples of this fabric using
two tons of Crailar fiber.
ÇALIK COTTON IN BRIEF
ÇALIK COTTON CORPORATE PROFILE 2014 21
FOR DETAILS, CALIKCOTTON.COM
CORPORATE PROFILE 2014 ÇALIK COTTON 22
ABOUT US MANAGEMENT OPERATIONS
volume, which pushed down
cotton prices globally and in
Turkey. An investigation has
been launched into possible
dumping of US cotton into
Turkey. Turkish yarn factories
should continue to monitor
this situation; if dumping is
confirmed, it is expected that
cotton sellers in the domestic
market will raise their prices.
Cotton prices are witnessing
a downward trend, due to
the decision by China, which
accounts for 60% of the world’s
cotton stocks, to decrease
its cotton purchases. As well,
India’s status as of 2014 as
the world’s biggest cotton
producer, and high levels of
ending inventory worldwide are
driving prices downward.
Globally, record levels of
beginning inventory in
cotton, and expectations of
few problems in the future
cotton supply create a
certain safeguard for textile
industrialists. For this reason,
purchases are at current need
level as industrialists choose
not to build up inventory levels.
Bangladesh preserves its
prominent position in textile
manufacturing: at the moment,
the country is the world’s
second-biggest cotton
importer.
The USA remained the world’s
biggest cotton exporter in
2014.
The nature of the textile sector
makes it a driving engine of
development and international
trade. As the sector’s
production and consumption
areas are vast, its weight in
global trade increases more
than any other sector’s, almost
year after year. The sector’s
impact on the world and
on Turkish trade is certainly
economic, but also cultural and
social.
Domestic Developments:
Investment in new machines
at Turkish yarn factories have
enabled cotton consumption
to rise from 1.40 million tons in
2013 to 1.44 million tons in 2014.
However, China, the world’s
largest cotton importer, placed
a quota on cotton imports
and decreased its import
THE YEAR 2014 AT A GLANCE
ÇALIK COTTON CORPORATE PROFILE 2014 23
FOR DETAILS, CALIKCOTTON.COM
24 CORPORATE PROFILE 2014 ÇALIK COTTON
ABOUT US MANAGEMENT OPERATIONS
Esteemed stakeholders,
Cotton is a key raw material
in the textile sector, one of
international trades’ main
pillars. This commodity’s
impact on global and Turkish
commerce is not limited to the
economic arena, but also has
cultural and social implications.
With enterprises in nearly
20 countries, in such areas
as textiles, energy, telecom,
construction, finance, the media
and mining, Çalık Holding
stepped into the cotton sector
in 2011. With the Çalık Cotton
brand, Çalık Holding capitalizes
on its years of experience and
expertise, in line with its vision
of becoming the foremost
representative of Turkish
enterprise and entrepreneurship.
As a result of the Group’s
business development
experience, the Company closed
the year 2014 with important
achievements.
Çalık Cotton procures cotton
from Turkey as well as from
regions and countries such
as the USA, India, Central
Asia, Africa and Greece, and
offers these products to
yarn consumers of yarn in
domestic and foreign markets.
In addition to the cotton trade,
the Company is also active in
consultancy services.
As the only company in its field
with 100% domestic capital,
Çalık Cotton has embraced
the twin missions of promoting
and exporting Turkish cotton
across the world. Within this
framework, the Company took
important initiatives in the
export field in 2014, adding
Egypt and Bangladesh to
its already-existing export
destinations, such as China. As a
result, the Company contributed
significantly towards lowering
the Turkish current deficit in
cotton trade. The Company
currently has operations in
the USA, China, Turkmenistan,
Tajikistan and India. In addition,
we strive to expand our cotton
supply network and are pleased
to retain our leading position
among international traders
marketing Turkmen cotton in
Turkey.
MESSAGE FROM THE CHAIRMAN
Çalık Cotton procures cotton from Turkey as well as internationally, from regions and countries such as the USA, India, Central Asia, Africa and Greece; and offers these products to yarn consumers in domestic and foreign markets.
25ÇALIK COTTON CORPORATE PROFILE 2014
FOR DETAILS, CALIKCOTTON.COM
Çalık Cotton forges ahead towards its goal of becoming a leader in all major markets
by capitalizing on its position as a 360-degree service
provider, and its rapid and consistent sector growth.
At Çalık Cotton we believe that
the growth strategy we pursue
will carry us even further in
2015, adding value for all of our
stakeholders. With its young
staff, the Company resolutely
continues its efforts to enhance
the Turkish cotton sector and
carry out manufacturing at
world standards.
With the belief that working
together will yield even higher
achievements, I would like to
extend my gratitude to all the
stakeholders, customers and
associates who have contributed
to our operations, and hope
that 2015 delivers positive
developments in both the
domestic and global markets.
Best regards,
MAHMUT CAN ÇALIK Chairman
Decisively forging ahead with
operations that carry the Turkish
cotton sector forward, the
Company began manufacturing
“better cotton” during the year,
in cooperation with its supply
partners. Çalık Cotton also
offers certification services for
“better cotton,” whose share in
the world market rises daily. The
Company is proud to be the top
seller of Turkish “better cotton.”
26 CORPORATE PROFILE 2014 ÇALIK COTTON
ABOUT US MANAGEMENT OPERATIONS
Distinguished investors,
Esteemed business partners and
associates,
The year 2014 was a period
when Çalık Cotton extended
its footprint in all the areas it
operates, and diversified its
services to step into a number of
areas crucial for the future of the
cotton market.
In this direction, we made
significant process, in particular
in the field of exports. After
focusing on domestic sales in
2012 and 2013, we started to
export products in 2014. We
started our export drive with
sales to China in April, and then
added Egypt and Bangladesh
in May and June. All of these
export destinations were
chosen for strategic purposes.
In order to acquire a prominent
position in the cotton sector,
it is import to be present in
China and Bangladesh, the two
top importers of cotton in the
world. In addition, Egypt, which
we know very well due to Çalık
Holding’s textile investments,
stands out as a safe and
promising export destination.
While making such progress in
exports, we did not omit the
issue of imports. In 2014, we
expanded our sales volume as
regards cotton from all origins.
Çalık Cotton sold 37 thousand
tons of Turkmen cotton in Turkey
in 2014, thus maintaining our
leadership among international
traders in this field.
We took additional measures
to extend our cotton supply
network. The first among
these was feasibility studies
concerning Greece, which
were followed by operational
processes. The Company has
also designated itself the vision
of becoming the company
that imports African cotton
to Turkey. African nations are
relatively new cotton producers,
and five countries account for
900 thousand tons out of the 1.6
million tons of cotton produced
in the continent. As such, the
Company places a special
emphasis on Burkina Faso,
Benin, Mali, Ivory Coast and
Tanzania, which constitute 54%
of the market.
World cotton supply and
inventory figures, and cotton
prices used to follow a normal
trajectory until two seasons
ago. However, the world’s
largest cotton importer, China,
placed a quota on its cotton
imports, thus bringing down
the commodity’s price across
the world. The downtrend in
cotton prices poses a significant
financial risk for the entire textile
sector as well as the Company.
During the year, in order to
protect ourselves against such
financial risks we set up a
hedge mechanism, reinforcing
our resolve for consistent and
safe growth. In this regard, the
Company has hedged against
falling prices via forward
contracts for 6 thousand tons of
cotton. In Turkey, Çalık Cotton
is among the rare pioneering
firms to employ this insurance
mechanism, which is rather
widespread in the world.
A key development in the year
2014 was the production of
“better cotton” jointly with a
local supply partner. As more
and more world-renowned
brands give their support to
THE CEO’S ASSESSMENT OF 2014
27ÇALIK COTTON CORPORATE PROFILE 2014
FOR DETAILS, CALIKCOTTON.COM
Established in 2011, Çalık Cotton adheres to a business
philosophy that prioritizes cutting-edge production
technology and customer satisfaction, built upon the
Group’s more than 30 years of experience in textiles.
BCI and commit to gradually
replacing conventional cotton
production with better cotton,
we expect that the trend towards
“better cotton” production will
head upwards in the coming
years. The Company believes
that “better cotton” will assume
a very significant position in the
global market in the short and
long term, and has redefined
its vision in favor of “better cotton”. As such, Çalık Cotton
is the Company which produces
and sells the highest volume
of “better cotton” in Turkey
through strategic partnerships.
Human resources is another
field where we try to create
a difference. The Company
has developed its Talent
Management Program to recruit
the best talent and gain their
loyalty. Boasting a very young
and dynamic, yet highly skilled
and specialized workforce, we
first strive to ensure employee
satisfaction in all the fields
we operate in, and then to
reach world-class service and
production standards. In
this regard, I believe that our
investments will bear fruit in
2015, a year when we shall
focus on reinforcing our service
infrastructure at Çalık Cotton.
Our mission is to bring Turkish
cotton production up to world
standards and thus to market
more Turkish cotton across the
world. Our clients’ trust, business
partners’ and investors’ belief,
and our employees’ diligence
will be our biggest advantages
in reaching this goal. I hope that
this new period will be one of
success and that the year 2015
will bring peace and prosperity
to all of our stakeholders.
Best regards,
CÜNEYD HARMANŞAGeneral Manager
28 CORPORATE PROFILE 2014 ÇALIK COTTON
ABOUT US MANAGEMENT OPERATIONS
SENIOR MANAGEMENT
MAHMUT CAN ÇALIK Chairman
MEHMET ERTUĞRUL GÜRLERDeputy Chairman
CÜNEYD HARMANŞAGeneral Manager
29ÇALIK COTTON CORPORATE PROFILE 2014
FOR DETAILS, CALIKCOTTON.COM
30 CORPORATE PROFILE 2014 ÇALIK COTTON
ABOUT US MANAGEMENT OPERATIONS
The World Cotton Sector
Global cotton (fiber)
production declined from 28
million tons in 2011-12 to 26
million tons in the following
two seasons. Production is
expected to remain at that level
in the current season. However,
global cotton production fell
to 22.8 million in 2011-12, the
lowest level in the last ten
years, before increasing slightly
from 2012-13 onwards to reach
the order of 23.5 million in the
last season. It is expected that
the increase in consumption
will continue in the current
season to hit the figure
of 24.4 million.
THE COTTON SECTOR IN THE WORLD AND TURKEY IN 2014
World Cotton (Fiber) Data (Million tons)
2011-12 2012-13 2013-14 2014-15
Production 27.76 26.91 26.22 25.99
Consumption 22.65 23.47 23.75 24.22
Exports 9.99 10.18 8.87 7.45
Imports 9.87 10.08 8.84 7.45
Period-End Inventory 16.07 19.59 22.14 23.91
World S/U (excl. China) % 45.9 41.3 41.8 52.3
China S/U % 82 140 182 181.3
COTLOOK A INDEX (US cents/pound) 100 88 91 63-91;75
Parallel to these developments in world cotton production and
consumption, the supply and inventory figures as well as cotton
prices had followed a normal trajectory until two seasons
ago. However, the world’s largest producer and consumer of
cotton, China, abruptly changed its strategy in the last season,
31ÇALIK COTTON CORPORATE PROFILE 2014
FOR DETAILS, CALIKCOTTON.COM
and further unexpected
developments could arise in
the coming period.
Although production rose and
consumption fell in the season
2010-11, and supply fell by
just 300 thousand tons over
the previous season, cotton
prices showed a higher-than-
anticipated increase due to
a supply bottleneck, as large
amounts of cotton inventory
were not physically released
to the market, triggering
considerable panic. As a result
the Cotlook A Index seasonal
average rose to 164 US cent/
lb. This rise in prices continued
in the first three quarters of the
season 2011-12, then started
to fall rapidly from its peak in
April, down to slightly above
its levels two seasons ago. This
extraordinary rise in prices,
which started in the second
half of the season 2010-11 and
reached a peak in the first three
quarters of the season 2011-
12, is the result of not only the
aforementioned developments
but also speculation. This
assumption is confirmed when
we break down the Stocks-
to-Use (S/U) Ratio into the
categories of “China” vs “world
excluding China”:
In the seasons 2009-10 and
2010-11, S/U ratios for the
world outside China fell by
18 percentage points to 39%,
before increasing to 57%.
The Chinese S/U fell first by
13 points to 26%, and then
dropped further to 22%.
Following the extraordinary
jump in cotton prices, world
cotton production tilted
upwards in the season 2011-12,
which brought up the S/U for
the world excluding China to
59%, and prices dropped down
to the order of 100 US cent/lb.
In the same season, China
pursued a very wise strategy
by importing large volumes of
cotton at low prices, although
its domestic production
increased. As such, it brought
its S/U to the level of 72%. In
the following 2012-13 season,
32 CORPORATE PROFILE 2014 ÇALIK COTTON
ABOUT US MANAGEMENT OPERATIONS
S/U was 49% in the world
outside of China versus 116%
in China. It is being estimated
that, in the last season, as a
result of China’s strategy to
“build inventory at low prices,
dominate the speculation-
prone cotton markets with
this vast inventory and shape
markets in line with national
(Chinese) interests,” S/U of
the world excluding China has
probably fallen to 47% while
China’s S/U has risen to 160%.
In the current season (2014-
15) the S/U of the former is
expected to increase by 7
percentage points to 54%,
and China’s S/U is anticipated
to drop by only 2 points to
158%. In that case, China will
continue to control more than
half (58.4%) of global stocks.
As such, the world’s biggest
producer and consumer of
cotton has also come to hold
over half of global stocks,
which poses serious risks for
the other nations producing
and consuming cotton, and
constitutes an issue that needs
to be addressed urgently.
Indeed, the fall in cotton prices,
despite the drop in S/U for the
world outside of China, should
THE COTTON SECTOR IN THE WORLD AND TURKEY IN 2014
be taken as an indicator of the
risk that countries except China
face due to the aforementioned
strategy. In the current
season, the Cotlook A Index is
expected to fluctuate between
63 and 91 cent/lb to an average
75 cents. Although this picture
seems to be advantageous for
consumers, this unprecedented
abnormality in stocks located in
China and the world excluding
China could be easily upended
by any abrupt change in
Chinese policy.
The Turkish Cotton Sector
In Turkey, the Turkish Statistical
Institute (TÜİK) obtains data
on cotton from the relevant
ministries, and then processes
and publishes them. In this
respect, cotton cultivation
areas and seed cotton field
productivity is calculated by
Ministry of Food, Agriculture
and Livestock via field studies
on the basis of the plots
registered with the Farmer
Registry System, as well as
observations based on Remote
Perception System which will
be extended to cover the whole
country. The amount of seed
cotton by province calculated
in this manner is reported to
TÜİK, which reports three news
bulletins featuring estimates.
The third estimate is later
recorded in annual statistical
tables as the most accurate
value.
In this regard, the Ministry
comes up with an estimated
Average Cotton Gin
33ÇALIK COTTON CORPORATE PROFILE 2014
FOR DETAILS, CALIKCOTTON.COM
Chart 2. Turkish (Seed) Cotton Figures
Unit2009-
102010-
112011-
122012-
132013-
142014-
15
Cultivation Area thousand
ha 420 481 542 488 451 490
Seed Cotton Production*
thousand tons 1,725 2,150 2,580 2,320 2,250 2,350
Seed Cotton Productivity kg/da 411 447 476 475 499 480
Fiber Production**thousand
tons 638 817 955 858 878 846
Fiber Productivity** kg/da 152 170 176 176 195 182
Cotton Gin Productivity*** % 37 38 37 37 39 38
*Figures calculated by TÜİK based on Cultivation Area and Estimated Avg. Productivity (Seed Cotton Production Volume = Cultivation Area x Seed Cotton Productivity)**Figures calculated by TÜİK based on Est. Avg. Cotton Gin Productivity: (Fiber Production Volume = Seed Cotton Production/ Avg. Cotton Gin Productivity) (Fiber Productivity = Seed Cotton Production * Avg. Cotton Gin Productivity)***Figures calculated by National Cotton Council (UPK) based on TÜIK data (Est. Avg. Cotton Gin Productivity = Cotton Fiber Production Volume/ Seed Cotton Production Volume)
Chart 3. Turkish Cotton Fiber Data
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
Cultivation Area, thousand ha* 420 481 542 488 451 490
Fiber Productivity, kg/da* 152 170 176 176 195 182
Fiber Production, thousand tons**
638 817 955 858 878 846
Beginning Inventory, thousand tons***
0 12 392 578 585 1186
Imports, thousand tons** 760 895 612 618 877 653
Consumption, thousand tons** 1,300 1,250 1,275 1,350 1,331 1,368
Exports, thousand tons** 86 82 106 119 115 71
Ending Inventory, thousand tons***
12 380 578 585 1.186 1363
Aegean St.1 (TL/kg)*** 2.82 5.74 3.72 3.51 4.10 3.55
Source:* TÜİK, 2013** Ministry of Economy, BİM*** Izmir Commodity Exchange (October-December Avg.)
Productivity for the country
as a whole. TÜİK employs this
figure to calculate the Cotton
Fiber Production Volume, and
publishes the latter figure along
with Average Seed Cotton
Field Productivity in annual
production statistics. The
volume and value of cotton
fiber imports and exports
are published by the Ministry
of Economy; however, TÜİK
statistics feature only the value.
Until recently, Domestic Cotton
Consumption figures were
collected by the rural branches
of the Ministry of Economy in
the form of registered cotton
bale numbers and weight, and
this data was shared with the
relevant institutions. However,
this practice was ended two
seasons ago as the number
of registered bales started
being collected on the basis
of reports by cotton ginning
companies. The data collected
in the light of these figures for
the last six years is as follows
(Chart 2):
34 CORPORATE PROFILE 2014 ÇALIK COTTON
ABOUT US MANAGEMENT OPERATIONS
MARKETING AND SALES
Çalık Cotton’s target audience
in the cotton sector, which
holds an important place in the
national and global economy,
are domestic and overseas
yarn manufacturers, denim
manufacturers, firms involved
in cotton trade and their
agents.
Çalık Cotton carries out
its operations in the major
production areas in the United
States, China, Turkmenistan,
India, and Turkey as well as in
all major global markets.
By capitalizing on its position
as a 360-degree service
provider and its fast and stable
growth in the industry, Çalık
Cotton aims to offer services in
all major consumption markets
so as to become a leader in the
cotton market. In this regard,
the Company also expends
efforts to supply and sell
cotton locally in China.
Via its office in the United
States, Çalık Cotton organizes
the sale of American cotton
through immediate shipment
and advance shipment.
Likewise, it provides local
quality and logistical services
through its Turkmenistan office.
As for the supply of Turkish
cotton, the GAP (“Southeastern
Anatolia Project”) / Urfa region
has become the largest cotton-
producing area in Turkey. Çalık
Cotton’s regional office ships
cotton either directly or from a
warehouse under supervision,
by using experience gained as
a result of its long presence in
the region. Cottons of domestic
and foreign origin are stored
in cotton warehouses in the
OPERATIONS IN 2014
35ÇALIK COTTON CORPORATE PROFILE 2014
FOR DETAILS, CALIKCOTTON.COM
Malatya Organized Industrial
zone, Gap/Urfa Region and
Mersin Free Zone.
Çalık Cotton continues as ever
to offer services to its valuable
business partners, based on its
philosophy centered on trust
and quality in the global cotton
market.
The Company is fully cognizant
of the historical and industrial
significance of cotton. As for
other fibers, the Company
aims for high quality and
distinguished production, price
and service levels in terms of
both product and added value.
Çalık Cotton is aware of the
importance that the products
it markets have on the lives of
customers and, accordingly,
strives to offer added value
to clients with its products
and help them gain time and
value through long-term
collaboration.
As a modern Company which
constantly upgrades and
innovates itself to face intense
competition, Çalık Cotton’s
target is to offer its clients in
the textile market both high
quality products and services
through swift customer
services and sustained quality
standards.
Çalık Cotton continues as ever to offer
services to its valuable business
partners, based on its philosophy centered on trust
and quality in the global cotton
market.
36 CORPORATE PROFILE 2014 ÇALIK COTTON
ABOUT US MANAGEMENT OPERATIONS
Better Cotton Production
Since 2005, manufacturers
strive to correct the
undesirable social and
environmental conditions and
effects associated with the
production of cotton, one
of the most-consumed daily
commodities across the world.
Global stakeholders focused
on making cotton production
environmentally, socially and
economically sustainable,
and on expanding this high
quality production across the
world, established in 2005
the non-profit organization
named Better Cotton Initiative
(BCI) to secure the future of
the cotton sector. Upon the
establishment of the Better
Cotton Practices Association
(İPUD) in 2014, Turkey became
a part of the better cotton
initiative, as part of a strategic
partnership agreement with the
Council. The ultimate goal of
this initiative is to guarantee a
safer future for the sector.
İPUD defines “better cotton”
as a product cultivated with
the aim of reducing the
environmental footprint, and
improving the living standards
of farmers. As such, it is a
globally recognized standard
for sustainable cotton
production. Farmers
are trained to regulate the
use of pesticides, utilize water
resources more efficiently,
enhance soil quality, and
improve the living standards
of the agricultural workforce,
all in line with internationally
recognized standards.
World-renowned brands’
support to BCI and their
commitment to reduce
conventional cotton production
in favor of better cotton,
suggest that this trend will
continue its ascent and “better
cotton” production will
increase in the coming years.
With the belief that “better
cotton” will hold a crucial
position in the world market
in future years, Çalık Cotton
has redefined its vision to
add “better cotton” alongside
organic cotton. As part of its
strategic partnerships, the
Company offers “better cotton”
products to buyers, already
becoming the biggest seller of
“better cotton” in Turkey.
OPERATIONS IN 2014
PRODUCT DEVELOPMENT
37ÇALIK COTTON CORPORATE PROFILE 2014
FOR DETAILS, CALIKCOTTON.COM
38 CORPORATE PROFILE 2014 ÇALIK COTTON
ABOUT US MANAGEMENT OPERATIONS
39ÇALIK COTTON CORPORATE PROFILE 2014
FOR DETAILS, CALIKCOTTON.COM
40 CORPORATE PROFILE 2014 ÇALIK COTTON
ABOUT US MANAGEMENT OPERATIONS
Çalık Cotton’s human
resources policy is to
recruit the right person for
the right job in line with a
customer-focused approach,
to promote employees with
high potential, to measure
employee performance with
the performance management
system, to conduct intelligent
career planning with the right
in-house advancements,
and to maintain a long-term
collaboration with employees
in order to sustain the company
culture.
In order to always stand by
its employees, the Company
pursues a modern human
resources policy that inspires
trust among them by offering
information in an ethical
manner; remains open to new
ideas to enhance its mission
and vision; and continuously
empathizes with employees.
All training programs are
developed in due consideration
of the Company’s future
position and growth potential.
In order to play a positive role
in the advancement of every
single employee, training
requirement analyses are
conducted and in-house and
outside training programs are
organized accordingly. In-
house training programs can
be divided into two categories:
a) Corporate Vision and
Culture Programs
Corporate Vision and Culture
Programs offer information
to newly-recruited personnel
as regards the corporate
vision and cultural structure
of the Company. These
training programs focus on
the Company’s track record,
current position, future
plans and service and work
philosophy.
HUMAN RESOURCES
41ÇALIK COTTON CORPORATE PROFILE 2014
FOR DETAILS, CALIKCOTTON.COM
b) Professional Proficiency
Programs
Professional Proficiency
Programs include training
programs to educate both the
newly-recruited personnel and
existing employees.
While well-experienced and
successful personnel play
a role in almost all training
programs, the Company
occasionally seeks the support
of professional training
companies.
Talent Management
Talent management consists of
processes such as supporting
talented candidates designated
to fill managerial positions at
Çalık Cotton through career
development programs,
keeping track of their progress,
and assessing their aptitude
in new promotions. Career
planning provides a crucial
input for efficient talent
management.
Talented individuals are those
who have the potential to fill
the technical and administrative
positions that are of sufficient
importance and information
to play a critical role in
the future of Çalık Cotton.
Talent management has
been designed to recruit the
workforce that Çalık Cotton
requires to meet its strategic
targets, to train employees who
can offer backup for certain
key positions within the firm,
and to ensure the loyalty of
critical human resources to the
Çalık Cotton family.
In line with its mission, vision
and policy, Çalık Cotton aims
to recruit “the very best.”
All functions are filled by
highly skilled employees with
the necessary information
and experience, who can
represent the Company, fulfill
their responsibilities and are
good team members. With
an average age below 35, the
Company personnel consists
of university graduates, most
of whom are fluent in English.
The Company also has two
employees who speak Chinese.
ABOUT USÇALIK HOLDING IN BRIEFOUR VISION, MISSION AND VALUES FINANCIAL AND OPERATIONAL INDICATORS ÇALIK COTTON IN BRIEFTHE YEAR 2014 AT A GLANCE
MANAGEMENTMESSAGE FROM THE CHAIRMAN THE CEO'S ASSESSMENT OF 2014SENIOR MANAGEMENT
OPERATIONSTHE COTTON SECTOR IN THE WORLD AND TURKEY IN 2014 OPERATIONS IN 2014
MARKETING AND SALES PRODUCT DEVELOPMENT
HUMAN RESOURCES
121216182022
24242628
303034343640
100% SUCCESS
CALIK COTTON CORPORATE PROFILE 2014
ÇALIK COTTONHEAD OFFICE
Keresteciler Sitesi, Fatih Cad.Ladin Sok. No: 17 34169 Merter/Istanbul
Tel: +90 212 459 26 26Fax: +90 212 459 26 77
Mail: calikcotton@calik.comwww.calikcotton.com
COTTON
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