Ozdisan Elektronik, founded by two brothers in 1980, started its operations by manufacturing rectifiers, regulators, and uninterruptible power supplies initially, and then started importing and selling electronic components. Ozdisan, the leader in electronic components distributorship in Türkiye, has now made its mark with consecutive investments in China and Iran. Ozdisan Elektronik General Manager Mustafa Yurttas explains the company’s growth processes, new investments and objectives, as well as assessed the industry
First of all, can you please tell us a little about yourself?
I was born in Samsun in 1960. Since my father was a trader and saw a commercial potential in Istanbul, we moved to Istanbul in 1966. I completed my educational life in Istanbul. I started to gain ideas and experience about business life by helping to my father during the summer holidays. With my passion and talent for football, I was continuing my football career at Istanbulspor. While continuing my language education, I found myself in business life at the age of 20 with the mediation of my father. Together with my brother Davut Yurttas and a German engineer friend of mine, I started my business life by leading a new formation.
How were the foundations of Ozdisan Elektronik laid?
Starting with the idea of establishing a company that meets the materials needed by the industry, we founded Ozdisan Elektronik in 1980. We started our activities in an area of 60 m2 in the basement of College des Freres Saint Pierre, an old French School in Galata, Istanbul. We have recorded a significant growth in a short time as we managed to analyze the needs in the industry correctly. Our commercial activities, which we started in a basement, expanded to the whole building after a while. After that, this building was not enough for us and we moved to our headquarters in Dudullu. The fact that we divided the company into 2 separate divisions as production and commercial in 1985 also made a significant contribution to our growth. Inform Elektronik A.S., which undertakes the production activities, has continued its operations as a market leader in the field of uninterruptible power supplies for the last 10 years. In 2010, we sold it to the French company Legrand with a perfect timing and valuation. Ozdisan Elektronik A.S., which undertakes the commercial activities, on the other hand, continues to maintain its position as the largest electronic components supplier in Türkiye. Despite competing with the leading companies in the U.S. and Europe, Ozdisan managed to preserve its market leadership, and continues to lead the market with semi-conductors, active & passive electromechanical components, PCB, PCBA and cooler (partial) production in Türkiye.
Can you give information about your organization in Türkiye?
Ozdisan operates under DMY Group, which consists of 32 companies, 11 of which are energy companies. At DMY Group, we operate in a wide range of fields such as electronics, electricity, energy, automation, maritime, pharmaceuticals and tourism. Many of these companies started operating as new entities in the form of Franchising after the sale of Inform in 2010, or embedded in our structure through purchase of shares from existing companies. Our objective was to utilize our knowledge and experience also in these companies. 6 of these companies operate abroad. Our main objective is to contribute to our country both locally and globally with correctly structured companies.
Which are the sectors you mainly serve to?
In this age where technology has taken over, electronic devices have become indispensable in our daily life. At Ozdisan, we offer the newly developing technologies to all industrial organizations, especially those in the electronics industry in Türkiye. In this way, we also support the research and development activities of companies. For instance, semiconductor production technologies are at a level that Türkiye has not yet reached. As a result of this, we have to buy these technologies from countries such as America, Germany, Japan, England, France, Italy, the Netherlands, China and Taiwan. Manufacturers are also developing their own unique devices using these technological parts. Our team provides services to companies operating in other sectors, especially electricity and energy, as well as the universities, Tubitak, and the companies and individuals engaging in research and development.
“Ozdisan.com is not only an e-commerce platform, but also a virtual library.”
Can you tell us about your e-commerce investments and the contributions of your website to the industry?
At Ozdisan, we are trying to keep up with the digital age and making huge investments in this field. We decided to invest in e-commerce field about three years ago. During this time, we have reviewed the examples in the industry, created ideas about the overall infrastructure and developed an internet portal by bringing together the aspects that we liked. The internet portal we have established is not only an e-commerce platform, but also an information repository.
Any person or institution from Türkiye or the remotest corner of the world can find the data and product they want on our e-commerce platform. They can examine the technical characteristics of the products, compare them and place orders easily. The platform we have established plays a major role in filling a very important gap in the industry. Apart from Türkiye, we sell our products to 153 other countries and this number is increasing every day. There are more than 100,000 products on our website, each product has its own data, and the number of products is constantly increasing. Our objective is to become an internet portal hosting 500,000 products by 2023. In addition, almost all of the products offered for sale on our website are in stock. Thanks to this, when the consumer places an order we can ensure that the product reaches them within 1 day. We utilize a special and unique search robot that we have recently developed. With this PCB robot, users can place an order by creating the necessary PCB board for the product they want to manufacture, with the guidance of the system.
Can we get information about your foreign markets?
In 2013, we established a partnership with China-based SAT Group, which offers LCD screens to the market. After signing the agreement, we also commissioned the company’s second factory building with an investment of $20 million. We manufacture TFT/LCD screens, with a capacity of 30 million pieces, in 2 separate manufacturing plants in Shenzhen and Dongguan on a total indoor area of 26,000 m2. The company, which took the name SATOZ after this partnership, has switched to a more quality, faster and more effective system with our planned new investments. Thanks to this, it also caught a fast growth trend. For example, while the company’s turnover was $28 million in 2012, we plan to close this year with $90 million. Next year, on the other hand, we aim to push the $115 million limit. Following the lifting of the sanctions, we resumed our commercial activities in Iran and successfully completed our structuring in the region. Iran is a country with a dynamic population of more than 80 million, quite rich in natural resources, and have improved their manufacturing capacities especially in the last 25 years.
The country also has a very reputable place in the automotive sector, producing over 1 million units. Despite the sanctions imposed on the electronics industry and smart technologies, the country is in a relatively good position and going through a rapid adaptation process after the sanctions. At Ozdisan, we have taken important steps to take our place in the Iranian market after the sanctions. We have been structured to take a share in this market, with our product availability, quality concept, availability and competitive prices, all of which were lacking in the said market. Considering the size of the market, we have set ourselves a target of $30 million within 5 years. Apart from China and Iran, the main countries we aim to invest in are Spain, Portugal, Greece and Bulgaria. We are planning to put into operation the companies that will be the extensions of Ozdisan in these regions as well.
“We have been the largest supplier of electronic components in Türkiye for the last 10 years.”
Can you tell us about Ozdisan Elektronik by numbers? Your facilities, turnover, sales figures, etc.
Ozdisan’s turnover in 2016 is around 75 million dollars. We aim to increase this number to $250 million by 2023. We have made an investment of more than $1.5 million to launch our internet portal and product management system. However, we need to continue investing further in order to be permanent in the e-commerce sector and achieve successful results. For this purpose, we allocate $300,000 to $400,000 on web investments every year. We are followed on the internet from 153 different countries with about 20 thousand clicks per day. We pride in reaching every point of the world, from America to New Zealand. We trade with many different countries. While our exports account for 2% of our annual turnover, we estimate that this ratio will reach 15-20% this year. In the coming years, on the other hand, we aim to reach 30%. In addition, we have established an aluminum processing and manufacturing facility within Ozdisan this year. I believe that an important gap in the electronics industry will be closed with this facility. We have established this facility in the Dudullu Organized Industrial Zone, in the building of our parent company DMY Group, on an area of 1,000 m2 with an investment budget of more than $2 million.
How would you summarize the benefits that your company offers to its customers compared to its competitors?
We bring high-tech products manufactured in the world to Türkiye by making correct price/performance comparisons. As a result, we are able to offer the most affordable products that the industrialists in our country can access to. Our internet portal ozdisan.com, which we have established with an investment of more than 1.5 million dollars, allows us to differentiate from other players in the sector. Ozdisan takes orders without any amount limitation and ensures that they are delivered within one day provided that they are in our stocks.
What is the most important agenda of the industry now? What are your suggestions and expectations for solving your problems, if any?
Although the Electronic Industry is the most foreign-dependent sector in providing raw materials, the value-added products and the employment it creates plays a major role in Turkish industry. We can divide the sector into three separate groups: large companies, SMEs and R&D companies/individual entrepreneurs. We can say that a maximum of 10 large companies, such Vestel, Arcelik, Aselsan, make up 75-80% of the industry. Many of these companies have become role models in Türkiye with the employment they created as well as their contribution to subsidiary industries. SMEs in our country are quite large in number. They make up 20-22% of the market with their number of employees between 5 to 150. They all have a creative and dynamic structure. They are usually managed by bosses and are semi-professional companies.
“We offer the most affordable and accessible products to the industrialists in our country.”
The main problems of SMEs are;
- The inability of their bosses to hand over the company to professional managers after reaching a certain size,
- Their financial structures and insufficient capital,
- Their inability to see the size of the market, thinking that the competition is only between themselves and another similar company, thus failing to cooperate with each other,
- Being unplanned and unscheduled about investment and production issues,
- Inability to train employees, difficulty in finding talents and qualified employees,
Their resistance to professionalism, even partially sometimes. The companies that are aware of these issues and manage to find solutions will be able to continue their growth. The R&D companies and small individual entrepreneurs may be luckier than SMEs in this regard, since they manage to find support from angel investors when they are working on an innovative product. Many of them, however, are operating in the sector as SMEs with their own resources, and failing to stand out from their peers.
