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Mobility Solutions - 2022 General Overview


Sabancı Holding’s industrials business unit delivered solid profitable growth in 2022 despite the negative effects of Russian-Ukraine war coupled with ongoing energy crisis and supply chain disruptions. The industrial companies gained significant market share on a global basis while entering new markets. During the year, Sabancı Group’s industrials business unit reaped the benefits of its global operational model: Above 70% of total revenue was generated in foreign currency bases originating in 125 countries around the world.

Ingenuity, hard work and courage of our people constitute the foundation of Sabancı Group’s success. The ‘Reveals’ platform of industrial business unit is a sharing event for the best practices, success and failure stories. The concept and continuity of “Reveals” has been acclaimed by prominent HR institutions.

The Group’s industrials business performed with executional depth and navigated the year’s challenges while laying a strategic foundation for the future and taking major steps toward new growth platforms in Advanced Materials and Equipment for Climate Technologies.

Protect and Grow the Core

Capitalizing on its long history of success in its home country, Sabancı Group’s international operations model in the industrials business consists of manufacturing and service centers located in North America, South America, Europe, Asia and Türkiye. Thanks to its sales and service hubs around the world, the Group’s industrials companies have significant market share in the tire reinforcement, tire and commercial vehicles business lines. In line with its strategic business model, Sabancı Group’s industrials companies focused on depth of execution in every respect which has taken results to an unmatched level of performance.

Key moves to grow in current businesses are shaped by three themes: Customer Experience, Digitalization and Changing Operational Models. The aim is to boost growth at Sabancı Holding industrial companies in the direction of an integrated Advanced Materials and Mobility Group.

Kordsa, Sabancı Holding’s tire reinforcement company, is a global leader in cord fabric production, supplying this key material for 1 out of every 3 automobile tires and 2 out of every 3 aircraft tires worldwide. Currently, Kordsa is focused on offering green products to replace those manufactured with conventional chemicals developed jointly with global tire manufacturers. Aiming to share its innovative approach while improving industry standards, Sabancı Group’s tire reinforcement company has made its Cokoon® solutions available to all interested tire builders on an open patent platform freeof-charge. In 2022, Kordsa commenced a recycled polypropylene production project in conjunction with Sabancı University. This effort aims to reduce the environmental impacts of plastic.

In another demonstration of its commitment to a greener future, the tire reinforcement company’s R&D center in Türkiye developed a bio-based resin formula from sugar cane wastes. This next generation material was designed for aerospace and railway usage and is exported to US.

In construction reinforcement, Kordsa’s Kratos brand has become the solution partner of infrastructure, superstructure and mining projects with its environmentally friendly solutions and high-performance products. Kratos solutions are widely known for providing significant labor, cost and time advantages.

In the tire business, Sabancı Group’s industrials unit is actively protecting its strong position in both domestic and international markets with 7,300 points of sales in 87 countries worldwide. Brisa, the Group’s tire company, is already supplying energy efficient products compatible with electric vehicles. By acquiring Arvento, a company servicing more than half of Türkiye’s vehicle fleets using telematics, Sabancı Group’s tire business took a major step forward into the mobility ecosystem. Together with the Otopratik network, Arvento is playing a key role in new offerings in tire business for fleets to achieve fuel savings.

In commercial vehicles, Temsa operates under the Sabancı Holding and Skoda Transportation umbrella. This year, it restructured its international network and bolstered Sabancı Group’s electric bus journey by providing eBuses to Sweden – a major showcase market. In 2022, Temsa reached 18% market share in North America, one of the most important and competitive markets worldwide. Temsa also became one of the world’s leading manufacturers by providing five electric vehicle models to the US and European markets. Temsa’s TS45E model was successfully tested in Silicon Valley (California, USA) over a two-year period. Sabancı Group’s commercial vehicle manufacturer also boosted the electric vehicle transformation in Türkiye with Avenue EV, the country’s first domestically produced electric bus.

In manufacturing, our Industrial Group’s companies have taken their sustainability performance to globally acclaimed Leadership-A levels in water management category, Industrials’ two companies and in climate leadership category one company recognized with A level in international environmental reporting platforms such as the Carbon Disclosure Project’s (CDP) 2022. Moreover, our all three companies’ long-term emissions targets were approved by the global organization of the Science Based Targets Initiative.

Operational excellence in internal processes is a strategic priority across Sabancı Group’s industrials business. Over the last three years, the Group’s industrials companies have taken major steps forward with digitalization in this key area. Currently, over 200 processes are managed with RPAs (Robotic Process Automation) and grey collar robots support employees in focusing on more value added tasks and direct innovation by taking over repetitive tasks. By using integrating market screening and artificial intelligence, all possible scenarios are conducted quickly starting from demand to all cross-function operations. In today’s volatile and uncertain environment, this approach helps the Group’s industrial business unit to foresee coming challenges and respond quickly.

Digitalization is not just a tool that facilitates Sabancı Group industrials companies’ production and operational processes but also stands at the forefront of customer experience. The digital tire assistant application eliminates difficulties faced by consumers in the tire purchasing process. An effort is currently underway to standardize the websites of all Sabancı Group’s tire dealers to provide a unique and seamless customer experience. At Arvento, digital fleet and IoT solutions have become an integral part of consumers’ everyday lives.

In tire reinforcement, the innovative patent-pending, compact, flexible RFID tag enables tire manufacturers, distributors and fleet providers to use tires more efficiently. Vendor managed inventory systems were reshaped via digitalization to better serve the individualized needs of customers. Sabancı Group industrials companies enriched their digital efforts with both internal and external collaborations. In addition to their inhouse entrepreneurship programs, the Group’s industrials companies conduct open innovation and startup cooperation programs under TÜSİAD SD2. These programs focus on image processing and artificial intelligence which helps to expand the industrial companies’ customer experience offerings.

Invest in New Growth Platforms

Striving for profitable and responsible growth, Sabancı Group’s industrial business unit has taken on a dual growth strategy in Advanced Materials and Equipment for Climate Technologies realms. Growth in those two domains, which are key to a sustainable, new world economy, suit to technological and operational competencies of Sabancı Group.

In advanced materials, the Group’s industrials business took the first step of its journey to transform its reinforcement unit with composites. Demand to transition from traditional materials to composites grows every day in a wide range of usage areas, from primarily aerospace to automotive, motorsport, sports equipment, marine and wind turbines. In the aerospace industry, Kordsa, Sabancı Group’s tire reinforcement business, offers AX180 flame retardant epoxy resin for aircraft cabin interiors and seats instead of phenolic solutions, which release harmful gases during the production process. In automotives, innovative KCF650 carbon fabrics provide lightening, hardness, and chemical sealing in the event of explosion to electric vehicle battery boxes. While 30% of revenue generation from Sabancı Group’s composites business was non aerospace four years ago, today this percentage has reached 50% by diversifying into automotives.

Kordsa, the Group’s tire reinforcement business, has applied for 43 patents and protected 19 of its projects as trade secrets developed at the Composite Technology Excellence Center (CTCE). By acquiring the Italian composite company Microtex, Sabancı Group’s advanced materials operations are expanding beyond the US to Europe. Combined with the R&D capabilities of CTCE, Microtex will further diversify the Group’s composites product portfolio and extend to strategic segments such as motorsport and luxury electric vehicles.

In equipment for climate technologies, Kordsa recently signed a strategic cooperation agreement with the American company Toledo Solar, a manufacturer of new generation thin film solar panels. Under this cooperation, Kordsa, the Group’s tire reinforcement business, obtained the primary right to manufacture and distribute Toledo’s technology, in Türkiye, Europe and Central Asia.

In addition to manufacturing electric buses, Temsa, Sabancı Group’s bus manufacturer, is diversifying its revenue streams by producing battery packs and battery management systems.

Developed internally by the R&D center, these products have a wide range of usage areas, from storage to marine, farming to refrigeration. These new product portfolios took the Group’s industrials business unit one step further into the fast-growing world of electrification. Moreover, Sabancı Group’s industrials business unit obtained the distribution rights of Kumpan, the German premium electric motorcycle brand, in 2022.

Otopratik and Propratik service points, the best-known domestic brands in the fast-service category, expanded to 112 locations in 43 cities. Customers receive a comprehensive experience with fast‑fit maintenance and eCar charging services. Efforts are underway to expand the Pratik service point network to 150 locations in 2023. At Arvento, many efficiency alternatives are offered to its fleet customers. For example, Arvento provides holistic mobility solutions with a wide array of services, including vehicle maintenance, warning system for tire change, and coating with data analytics.

The Way Forward

Advanced Materials and Equipment for Climate Technologies will be major investment areas for the expansion of Sabancı Group’s industrials business unit over the mid- to long-term.

After entering the advanced materials arena with composites business, to take its performance to the next level, Sabancı Group’s industrials business is focused on achieving further geographic diversification and refining the product mix coupled with making operational excellence a strategic priority. As a key part of the green transformation, internal diversified agile teams across the Group’s industrials companies also plan to move forward with efforts in sustainable chemicals – mainly in biochemicals, compounding and chemical recycling.

In climate technologies, Sabancı Group’s industrials business unit targets leadership in the newly emerging e-mobility market. World class capabilities in electric bus manufacturing and the Arvento acquisition coupled with its current tire, commercial vehicle production and fast-fit service businesses give a strong foundation in this quickly growing sector of the global economy.

The Group’s industrials companies aim to create value for fleets by integrating its systems to address key issues such as tire tracking, fuel consumption, driver behavior and vehicle tracking with Arvento. Plans are also underway to expand the electric vehicle charging station network at Otopratik locations while specializing in maintenance services for the growing EV market.

Sustainable and new energy vehicles are major product lines for upcoming years. To achieve this objective, half of Sabancı Group’s industrials R&D spending will be allocated to new growth areas in the midterm. Meanwhile, cross functional task force teams for equipment for climate technologies have already commenced studies in the burgeoning areas of new energy vehicles, and solar and hydrogen ecosystems.

Sabancı Group’s industrials global business model combines its proven R&D capabilities, operational excellence and highly skilled human resources. These competitive strengths well position the Group’s industrials business unit for breakthroughs in the areas of advanced materials and equipment for climate technologies.

SirA Sira