Emerging EMEA Companies Show Resilience in the Face of Generational Turmoil

During the last few years the world faced unimaginable earthquakes, wildfires and a pandemic – alongside a disruption of decades of global stability, and macroeconomic turmoil. This is the backdrop for emerging EMEA companies, which are on the frontline of some of the world's greatest challenges.

However, members of Institutional Investor’s 2023 Emerging EMEA executive team have proved their resilience in the face of disaster and come out the other side all too aware of the extreme threats facing humanity. “I believe we should all be fearful [of the] impact of global warming on our daily lives and our businesses,” says Cenk Alper, chief executive of Haci Omer Sabancı Holding. Alper was voted first place in the industrials sector by buy and sell side participants in II’s survey. Alper says Sabancı Holdings is on track to hit net zero in its operations by 2050, but that urgent, collective efforts are necessary to stop the devastating effects of climate change. “Hopefully, we can adopt a global initiative against such risks and protect the future of our planet,” he says.

The ability to recover quickly from natural disasters and economic instability depends on having a strong corporate culture, according to Burak Basarir of Coca-Cola Icecek in Turkey. Basarir, who was the top-rated chief executive in the consumer category, says strong, shared values within his organization have been the key to survival.

“Thanks to this spirit, our people in 11 countries immediately united to support each other, heal together, and emerge stronger,” from challenges including wildfires and earthquakes, he says. That same strong corporate culture has helped Coca-Cola Icecek grow from a single company operation to an international bottler across multiple countries, including the recent integration of facilities in Uzbekistan. “By integration, I don’t only refer to operational integration but also cultural alignment,” Basarir says.

Elsewhere in Turkey, Ibrahim Yelmenoglu, who was voted the leading chief executive in the oil and gas sector, says solid finances and a long history have helped Turkiye Petrol Rafinerileri adapt to the challenging conditions of the last few years. “The world has gone through a prolonged recovery [from the] pandemic and, soon after, the Russian-Ukraine war broke out. Our well rooted history of nearly 70 years has equipped us with the adaptability to weather any challenges that we might endure in 2024.”

Yelmenoglu says Turkiye Petrol Rafinerileri is doing its part to address crises in the energy industry by expanding its zero-carbon electricity portfolio and exploring the production of green hydrogen. He also identifies the company’s efforts to reach beyond the Turkish border as essential in an era of high inflation and political challenges at home. Turkiye Petrol Rafinerileri has collaborated on projects and pilots with start-ups from more than 10 countries across North America, Europe, and Asia.

For Georgios Stassis, the top rated chief executive in the utilities sector, powering through with foreign acquisitions, despite economic uncertainty, underpins the success of Greece’s Public Power Corp — and its strategy to become a leading clean utility provider to the whole of south-east Europe. In the last year, the company brokered a deal with Enel to acquire its platform in Romania. Stassis said the deal was “a unique opportunity and a perfect fit to our strategy in terms of geography and business, at an attractive valuation, too.”

For Odisseas Athanasiou of Greek property developer Lamda Development, the scale of recent disruption in emerging EMEA economies – from supply chain issues to the energy crisis to instability in global politics – is a sink or swim moment for chief executives. “Many times, the size of the accomplishment is strongly related to the nature of the challenges,” he says. Athanasiou, who was the top ranked chief executive in the construction and real estate sector, says that Lamda’s portfolio of malls suffered from a triple threat of inflation, recession, and then interest rate rises, all after Covid had already hit footfall. Nonetheless,

Lamda added to its portfolio with the acquisition of McArthurGlen Designer Outlet Athens last year, which Athanasiou sees as a way to capitalize on pent-up demand for in-person shopping. For Athanasiou, a keen understanding of the domestic market is key to success. He says Greece is bucking the global trend for lower office demand since Covid, thanks to higher disposable income in Greek households and falling unemployment – indicating a more robust real estate market than elsewhere. These encouraging economic signals are helping to draw Greeks back to their homeland to work for Lamda. More than a fifth of Lamda’s team are returning expats. “It’s a testament to the fact that what we’re doing is incredibly novel and inspiring for Greeks,” Athanasiou says.

During 2022, PPC's operating profitability exceeded the target that we had initially set, despite the challenges we faced due to the energy crisis, and the significant support that we provided to our customers to pass through this difficult period. This was an exceptional performance, especially taking into account the unprecedented conditions of volatility and uncertainty that prevailed in the markets throughout the year, and the significant support we provided to our customers as well. These results showcased the resilience of our integrated model despite extraordinary conditions such as the energy crisis and Covid previously.

For 2023, following a year full of challenges, we remain committed to the implementation of our transformation plan, with investments both in Greece and abroad, having as an ultimate goal to become a leading clean utility in the south-east Europe area. We expect to exceed our initial target in terms of profitability, and we have already upgraded our recurring EBITDA target for the full year. Disrupting events during the last three years, such as Covid and the energy crisis, demonstrate the need to be constantly alert for situations that are difficult to predict.

How is your company innovating?

We are convinced that renewables, combined with storage technologies, will form the backbone of the electricity system in the next decade worldwide. The development of the large photovoltaic projects in former lignite areas demonstrates our commitment to the energy transition of both PPC and Greece. At the same time, we are digitizing all our activities, in the distribution network with GIS systems, SCADA, smart meters as well as customer service with the use of chatbots. In addition to our core strategic pillars, we are also spearheading the adoption of electric vehicles in order to become the leading charge-point and EV service provider in Greece, tapping the significant opportunities in increased electrification stemming from the effort to de-carbonize the overall economy.

In the past few years, the global energy industry has faced numerous crises, while concerns around the climate crisis escalated. We are focusing on four business lines: sustainable refining, biofuels, zero-carbon electricity and green hydrogen. This year, I am proud of taking crucial steps to expand our zero-carbon electricity portfolio, initiating studies for a business model to secure feedstock availability and advance Sustainable Aviation Fuel business and launching an initiative to select an electrolyser test site for green hydrogen production.

The world has gone through a prolonged recovery of pandemic and soon after the Russian-Ukraine war broke out. It’s obvious that systemic risks have accumulated which in turn resulted in the adoption of rigorous monetary policies. An inflationary environment with lower economic activities in major economies raises concerns around global recession. At Tüpraş, we continue to operate with strong operational efficiency along with our solid financial policies.

Innovation and entrepreneurship efforts have always been a core element of our intellectual assets since 2017. We have established our subsidiary, Tüpraş Ventures to seize emerging opportunities and cutting-edge technologies. We manage startup programs in Türkiye and take part in start-up programs abroad. Each year, we engage with over 500 start-ups, both from Türkiye and abroad. Tüpraş also plays an active role in the creation of the EU’s R&D and innovation roadmap, within the scope of its goal of becoming a carbon neutral energy company by 2050.

To begin with, I am, and have always been, a proud CCI citizen. I have been lucky enough to experience several different roles within CCI for the past 25 years, ranging from sales to finance, and finally served as CEO in the last 10 years. Our company transformed from a single-country operation to an international non-alcoholic beverages bottler operating in 11 countries. This is the formula that enabled us to successfully surpass the worst storms, ranging from earthquakes to macroeconomic turmoil, from wildfires to epidemics. Having successfully completed the integration of our new operation in Uzbekistan into our business in a very short amount of time also makes me proud.

In the upcoming years, our primary concern is navigating the complex and ever-evolving landscape of global challenges. It is crucial to remember that the world’s resources – especially water – are finite, underscoring the urgency of leaving a more sustainable legacy for future generations. We are concerned that, amidst the geopolitical conflicts and/or macroeconomic turmoil, the sustainability focus of countries and companies may waver. Last year at CCI, we unveiled our 2030 sustainability commitments with nine clear and ambitious goals, underscoring our dedication to safeguarding the world's natural resources for the benefit of future generations.

On a daily basis, we are innovating new categories and new products, and flavors in all of the countries we operate in. In the mid-term perspective, we are innovating sustainable package types, new route-to-market alternatives such as online ordering, and digitally enabled and AI-based production lines to re-write consumer-packaged goods industry habits. In the long term, we are designing new business models where we can utilize AI and our current distribution outreach to multiply our business via new business ideas. And at all times, we are innovating to improve customer and consumer experience, employee experience, and people development.

I am delighted to say that we, as Sabancı Group, have achieved an exceptional performance both financially and operationally in 2022 despite the challenging local and global macroeconomic environment. Since mid-2021, we have been addressing our intention to double our investments and channel the majority of our resources to new businesses in what we call the “new economy.” In line with that strategy, we have been expanding into technology-focused businesses. By executing such a strategy, we are able to develop an ecosystem in which all business units remain competitive, innovative and disruptive for the years to come. I am proud to say that Sabancı Holding was the first conglomerate in Türkiye to announce its net zero emissions targets.

Slowdown in global economies in the first half of 2023 had some impact on our financial performance. Inflationary pressures both in global and local markets also affected our operating profits. Yet, we managed to muddle through this challenging environment owing to our diversified portfolio and complementary businesses. Continuation of such a challenging environment is clearly a major concern for all businesses globally. Setting aside such temporary macro-related issues, I believe we should all be fearful of the impact of global warming on our daily lives and our businesses. As we are all aware, the latest extreme weather events that hit all around the world proved that urgent and collective actions must be taken.

With the aim of accelerating innovation and technology ideas, and to contribute to the entrepreneurial ecosystem and open innovation, Sabancı Holding implements the

innovation “funnel” strategy, in which selected group employees can contribute, as well as conducting competency development programs in the field of innovation. Sabancı Group has created a set of innovation vehicles. The most important of these innovation vehicles are: X-Lab, an innovation academy finalized with an incubation program; X-Teams, an agile collaborative innovation program to elaborate the growth opportunities for the whole Group; Sabancı ARF or Almost Ready to Fly, an accelerator for our employees with ideas to become entrepreneurs and for early stage start-ups to commercialize; and Sabancı Ventures, a corporate venture capital fund.

On the development front, we made significant steps forward in our emblematic project, Ellinikon, the largest urban regeneration project in Europe and one of the largest in the world, which will benefit the country’s overall economic development, at a time when global activity has slowed. We are now moving on to the achievement of more tangible milestones, like the delivery of the first building of the project, just one year after we started its construction. The Ellinikon has also seen overwhelming success in capital raising over the last three years. We executed two of the most successful bond issues in Greek history since 2020, totalling €550 million, of which 75 percent went to individual investors. If you add to this, the oversubscribed €650 million rights issue in 2019 and the agreement with the banks last year for a €900 million loan, it means effectively that the whole first phase of the project (2021-6) is fully funded.

There are a number of macroeconomic headwinds in the global environment, including widespread capital tightening and an uncertain commercial real estate market, particularly in the post-Covid office area, which have made headlines. Those are however, in contradiction with local fundamentals in Greece where we see both strong macro, as well as real estate fundamentals, especially for higher-end developments. While the rest of Europe and the US enjoyed a preceding decade of growth, Greece suffered from austerity measures and underinvestment. It is only recently that macroeconomic factors have started working in the country’s favor.

The Ellinikon is the flagship of our innovation efforts. It's an ambitious project in its totality, with a total area of 6.2 million square meters, almost three times the size of Monaco. We’ve engaged firms such as Foster + Partners, Kengo Kuma & Associates, AEDAS, and Sasaki, among others. The Ellinikon is employing a climate-positive design that will reduce energy use, increase energy efficiency, and minimize carbon emissions. The districts will be connected by walkable, bikeable pathways, while electric vehicle facilities will be available throughout the development. More than this, we’ve taken an innovative infrastructure approach in order to achieve carbon reduction.