Forbes Magazine Interview

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One should give Emin Hitay the credit. He seeks to earn his keep through innovation and establishing new businesses all the time. Are all his enterprises successful? Certainly not but this is just what we call entrepreneurship…

emin hitay forbes


If the things shared by people in Instagram give clues about their lives, we can say there are three things Emin Hitay, chairman of Hitay Holdings likes best: Traveling, Indonesia and art… You can see him on Safari in Kenya or while he is in Tataristan or Venice in the photographs he shared and sometimes he appears in motorcycle taxis named “Gojek” in Jakarta or in rafting in Bali or while cutting the cake to celebrate the fifth anniversary of Hitay Energy Holdings and sometimes with students he sent to Art Basel or in 50th art life anniversary celebrations of Devrim Erbil… Also some of his photos are from his personal collection that he does not disclose the size publicly.

In the meeting hall in the headquarters of Hitay Holdings in Istanbul 4. Levent; he explains that he is so ‘in love’ with Indonesia that he had tattoo of “Garuda”, emblem of the country on his back with his ‘gentleman’ smartness, suave Turkish and his handkerchief. Emin Hitay had the tattoo composed of Indonesia’s national bird “Garuda” and the “five principials” logo and paw on it done in Brazil. This ‘extreme’ love goes back to a DEİK tour in 2006. He remembers “I thought ‘I can go to China after the tour and see those places as well.'” This habitual business trip went to another direction with the proposal for honorary consulate general he received from a bureaucrat named Ramli Saud, the regional official working for undersecretariat of foreign affairs of the country at the end of the conversation he had with him when he went out to smoke during a dinner organized in their honor.

Emin Hitay has been the Honorary Consulate General of Indonesia since 2008 (in Istanbul till 2013, later in Antalya). He utilized his title and started doing business in the country. The main business performed by Hitay Energy Holdings he established in the country is geothermal energy. The company has no actual production in the country but it has already created a seriously large license portfolio. Hitay does not give much detail about the issue but the news in the Internet site of the company tell that license has been received in nine region of the country. Furthermore photographs and news about reserve researches performed in various periods are available. He says “This is a business of millions of dollars. Today we are just at the stage of business development but we will be a great actor in the future.”

Indonesia is a geothermal energy-rich country. He makes reference to the data of Indonesia Ministry of Energy and Mineral Sources in the joint report of World Bank and Asian Development Bank and it is specified that the sources in the country are between 27 and 29,1 thousand MW and that this makes up 40 percent of the geothermal sources in the world. In return only 4-5 percent of the electricity requirement in the country is responded by geothermal energy (-1.197 MW). Indonesia is the third country following USA and Philippines under these conditions however Indonesia came to a deadlock and even retreated particularly in the last five years whereas the top five countries continuously increased their capacity; in 2012 it was 1,335 MW. However Indonesian Government plans to increase the capacity up to 6 thousand MW in 2020 trough its strategy in this regard. For this purpose it distributes licenses successively. But the most serious problem is financing. The World Bank calculates that capital of 4 billion dollars and debt financing of 9,5 billion dollars were required for additional 3 thousand MW. Besides, the bank defends that the price of 9,7 cents given by the state per KW/hour needs to be revised.

Emin Hitay waits for realization of regulations in order to start investment beyond license collection and preliminary surveys. Because it is an expensive business to produce geothermal energy, particularly for drilling… “Besides it is risky as well” says Hitay, “You may drill your wells but this does not mean you will find steam. Then will have a minimum loss of 5-6 million dollars. Furthermore you should drill 30 wells for a proper investment and this will cost very high.” He calculates that the regulations are just at the stage of renewal and the business will boost when they are renewed. “The government shall determine a fixed price in August. If you do not know your sales price, you cannot make investment and you cannot find loans. But if there is any fixed purchase price, you can know how much you need to invest and how much you will earn in turn. Certainly when fixed price mechanism is created and legalized, all will flow in the market but then we already will have received our licenses.”

Hitay who is 58 years old gives 2020 as the earliest date for Indonesia operation to produce revenue. But the business he claims to “be worth billion dollars” may start with big targets within the last 10 years and take its place in the portfolio of “enterprises that ended with failure” considering the risks it contains. Particularly including his last enterprise of Milli Piyango in partnership with Net Holdings and American Scientific Games as small partner with a share of 10 percent; Arena Factoring he established in 2009 with capital of 10 million dollars, earlier on Embrio, the incubation center he opened for the purpose of Sotheby’s Turkey operation and Internet enterprises…

Undoubtedly Emin Hitay who established more than 30 companies including big businesses such as Teknoloji Holdings, Inteltek, Bilyoner is one of the most significant entrepreneurs of Turkey of 80’s. Hitay who was graduated from Kabataş Boys’ High School and Ege University, Faculty of Business Administration, Department of Marketing had to begin to work at his early ages when he lost his father when he was 18 years old. He established his first company when he was 22 years old. Following a fluctuating period of eight years in textile, the family business, the ‘great story’ of Exim he established in 1988 with Alphan Manas, his friend upon the opportunity they found in the field of OV/VT technologies with a quite visionary attack which then evolved to Teknoloji Holdings… There have been very few enterprises which have been as much innovative as Teknoloji Holdings and which could succeeded to grow as much as this company within the last 20-year history of Turkish business world. They became the builders of almost all sectors they entered; they defined the relevant rules of the sector and dominated those sectors. However this legendary partnership ended in 2006 (but the harsh discussions carried on via personal blogs six years later revealed the fact that it was not much legendary). Four of the 11 companies within the holding -Teknoser, Exim, Planet and Imex- remained with Emin Hitay (as well as 20 percent shares in Bilyoner). Prior to the disintegration period, 20 percent shares in Inteltek which provided infrastructure of İddaa, the betting was sold to Intralot, the other partner for 80 million dollars. And after disintegration Hitay sold Planet A.Ş. to French Ingenico for 26 million Euros.

Hitay realized Embrio, the incubation center in order to establish Internet enterprises through an innovative action. Under the roof of Embrio; Tio, guide of price comparison and shopping; Kolaytedarik which allows purchasing and sale transactions of companies in virtual media; Belgetürk for paperless document management, Dataprofil, Web-based permitted marketing platform (its current name is Napolyon) and Süperteklif which brings advertisers together with consumers were established. DORinsight, online research company took its place in this list in 2010. “Embrio was a nice idea but I made a mistake” says Hitay sincerely, “If we continued as I has intended, we could be more successful. Our first action was investing in Internet enterprises which had come to a certain point. We had sold Planet and we had approximately 40 million dollars. But the business turned to be performing our own projects. But it is no use saying “if only”. Internet projects cannot be performed within a corporate structure.” Hitay said they lost 5 million dollars in Embrio operation. But he trusts DORinsight dating from that period very much. DORinsight which provides service via Napolyon’s 1,2 million-person database is today the only online research company in the market. Hitay thinks that research business shall be online in the future of and face to face conversations shall decrease.

Arena Factoring which he founded in 2009 failed to respond the expectations as well and he assigned the business in 2015. He was a victim of timing and making investment in a period when profits decreased after 2008 Crisis and rates of bankruptcy increased. “Unlike me, those who perform this business are such persons directly managing their businesses and approving in front of the screen. I never intervened because there was a general manager, the company was managed professionally but there can still be mistakes, false decisions as well” he says and adds: “If it is a virtue to incorporate new companies, create employment and producing value in entrepreneurship, it is similarly a virtue to know how to exit. I gave chance for 6 years; even this is too a long time. If I invested the money in real estate instead, it would rise fivefold.” He did not invest the money in real estate but brought International Reality, the unit of Sotheby’s performing real estate operation to Turkey in 2010. The target of the company which feature luxurious housing sale was achieving an annual volume of 1 billion dollars. The company famous with Zeki Pasha Waterside Residence offered for sale for 115 million dollars does not exist as well.

His partners had trouble with financing in Milli Piyango tender, as we all know. Emin Hitay who had 10 percent share in the consortium says the financing for his share was ready and he wanted to participate in the tender expected to be renewed in August.

Contrary to the new businesses which failed to satisfy expectations, Teknoser, Exim and Bilyoner businesses of Hitay Holdings (the word Investment is no more used in the trade name) which are from the past have caught a very high rate of growth. One of his critical actions was increasing his share of 20 percent in Bilyoner, the online bet company established in 2003 with partnership of Çukurova Holdings and Intralot up to 50 percent for 30 million dollars in 2013. This operation was somewhat mandatory. Because shares of Çukurova Holdings in Bilyoner were offered for sale when TMSF seized many companies of the holding. “We did not want 55 percent shares to be acquired by outsiders. Consequently my Greek partner purchased 25 percent and I purchased the balance shares.” He says.

Bilyoner is a company large amount of cash gain. Because after increasing shares, Hitay Holdings’ consolidated turnover jumped up from 535 million liras to 1 billion liras in 2015. Indeed the expected value was 1,1 billion liras but disposal of Arena Factoring caused this difference. The turnover of the Holdings shall easily be 950 million liras with the share from Bilyoner anticipated to make an approximate turnover of 1,5 billion liras in 2016 together with Teknoser producing an approximate turnover of 200 million liras. “Add other businesses in this figure” says Hitay, “We will exceed 1 billion liras.”

Undoubtedly Emin Hitay is no longer that ‘ambitious’ businessman who reinvests every coin he earns in the company in Levent, Manolyalı Street no 20. He even regards many of his enterprises as hobbies trying to enjoy them, even they may not be… “I founded more than 30 companies, we build, we found, some succeed, others fail, this is business… Why did you enter, why did you exit, this is our business, we are just entrepreneurs” he says. Although he says he did not intervene in daily operations of holding operations, he did not give up working hard. He says he works all the time when he is awake and he did not have the concept of working timely in his vocabulary. “But this increases stress. You go for holiday, in the morning you check you e-mails, make telephone conversations. I wish I could turn the phone off for a week. But one day I will do so.” He says. And this can only be possible if the works do not go well in Indonesia operation; otherwise he may not be able to have the holiday he dreams for minimum 10 years.

Headquarters building of Hitay Holdings is nothing less than an art gallery. It is full of paintings, photographs and statues purchased by Emin Hitay since 1986. His working office is the same. Almost all objects are design works; there is a statue or painting almost on each wall and in each corner. He does not want to tell how many parts his collection which he says to have insured is composed of, works of which artists he purchased and the value of his collection. “I have no investment purpose,” he says, “it would not even matter for me if its value were zero. But some of them gain value somehow and some have no monetary value…” Hitay who loves contemporary art works tells that now he purchased works of artists who have gained a seat in art and he does not esteem old works much. He has given up purchasing works from auctions following the imitation scandals. He tells that he will not purchase works from workshops as well. He prefers galleries and exhibitions… He has no dream of establishing a museum; he says “I just enjoy”.

Teknoser of Hitay Holdings was incorporated in 1998 for technical services of Exim, their first company. In Emin Hitay’s words, Teknoser which was as small as a television repairer’s when it was incorporated and which performed repair of hand terminals is currently a company with 800 employees having branches in 65 cities. The company with turnover of 200 million liras provides field and technical service in all around Turkey with 450 vehicles. Its turnover may not appear to be high but 40 percent of its revenues are obtained from the service business and the company does not sell in boxes. The system integration market covering Teknoser as well has not invigorated any of its actors since 90’s and many companies bankrupted. System integrators which were considered to be international companies in the future are estimated to produce volume of 3 billion liras level (according to the data of 2014). Emin Hitay considers the reason for this is the fact that large international hardware providers ceased to trust system integrators in time and tried to go to the customers directly as a consequence of failure of local companies to perform their business properly. He says “They started to find the customers themselves and pass works to system integrators. Under such conditions you cannot grow but you will just survive” and adds. “The top 10 companies are in good condition. Teknoser shall continue with annual growth of 30-35 percent. Besides we make profit.”