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Istanbul Fashion Week >>
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Bozcaada >>
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1st Istanbul International Opera Festival >>
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Open Air Museums in Turkey >>
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Success Story
Sedat Birol: The Turkish private sector may be small and relatively new compared to the US, but our entrepreneurs and managers are quickly making a name for themselves around the world.
 Eczacibasi Group is a prominent Turkish industrial group with 40 companies, 9,500 employees and a combined net turnover of $3 billion in 2008.Eczacibasi’s core sectors are building products, healthcare and consumer products. Additionally, the Group is active in finance, information technology, welding technology and land development. In Turkey.
This month we would like to interview Sedat Birol who is the Executive Vice President of Eczacıbası Healthcare Division which is one of the earliest companies of the Group.
Born in 1955, Sedat Birol completed his undergraduate degree in Chemical Engineering of Aachen University in Germany and his master’s degree in Organic Chemistry at Florida Atlantic University.
Before joining the Eczacıbaşı Group in 1990, Birol worked respectively at Bayer Türk, Process Products (USA) and ICC Chemicals (USA). At Eczacıbaşı, Birol has served as General Manager of Eczacıbaşı Fine Chemical Products (1990-1994), General Manager of Eczacıbaşı-Baxter Hospital Supply (1994-2001), and General Manager of Eczacıbaşı Pharmaceuticals Manufacturing (2001-2004). Birol was appointed Executive Vice President in charge of Healthcare in January 2004.
TAIK: Would you please give us a brief background information about the Eczacıbaşı Healthcare Division? When it was established? What is its mission?
Mr. Birol: The origins of the Eczacıbaşı Healthcare Division date back to 1942, when Dr. Nejat F. Eczacıbaşı, the Eczacıbaşı Group’s founder, set up a small laboratory in Istanbul to produce vitamin D. Many pharmaceuticals were imported back then, and because of the war, supplies were short. The excellent response to his first products encouraged Dr. Eczacıbaşı to establish Turkey’s first modern pharmaceutical plant, in 1952, with credits from the World Bank and the newly established Industrial Bank of Turkey. This was the first of many initiatives that pioneered the development of the Turkish pharmaceutical industry, which Dr. Eczacıbaşı believed was essential for Turkey’s healthy development as a nation and as an economy. Although the activities of the Eczacıbaşı Healthcare Division have changed over the years, its mission continues to be the provision of products and services that contribute to modern, high quality and healthy lifestyles. Often, this means introducing our customers to products and services that were previously unavailable to them – such as comprehensive home health care services or home delivery of peritoneal dialysis solutions.
TAIK: The Healthcare Division comprises different companies supplying a wide range of products and services. How can we group and briefly describe them?
Mr. Birol: We have two production companies. The first is Eczacıbaşı-Baxter Hospital Supply, an equal share joint venture with Baxter International that is Turkey’s leading manufacturer of parenteral solutions, renal products, and other hospital supplies. It also manufactures pump, infusion and transfusion sets and imports a wide variety of anesthesia and biological products. The second is Eczacıbaşı-Monrol Nuclear Products, the first company in Turkey carrying out radioisotope research and development and producing radiopharmaceuticals for nuclear medicine. This is a new area for us – we became an equal share partner in the company in 2008 – and one that is growing very rapidly. We have four plants in operation in Turkey and are constructing our fifth plant in Antalya. We also have plans to expand abroad. In 2009 we began operating the Cyclotron Unit at the Faisal Bin Essa Diagnostic Center in Kuwait and initiated an investment in Romania to produce radiopharmaceuticals.
We have Turkey’s leading independent marketing and sales company for pharmaceuticals, Eczacıbaşı Pharmaceuticals Marketing. I say “independent “because we sold our remaining stake in Eczacıbaşı-Zentiva in July 2009, so we are no longer involved in generic pharmaceutical production. Nor are we affiliated with a single global player, which leaves us free to collaborate with a wide variety of research-based suppliers, large and small, to supply innovative products to the Turkish market. Currently, Eczacıbaşı Pharmaceuticals Marketing reaches 22,000 doctors, 2,500 dentists and 7,000 pharmacies on a regular basis.
Our third area of operation is healthcare services. Here, we have two companies: Eczacıbaşı-Corridor Health Services and RTS Renal Therapy. Eczacıbaşı-Corridor is a joint venture with The Corridor Group of the US and Turkey’s leading provider of comprehensive home healthcare and support services. The first home healthcare provider to be licensed by the Turkish Ministry of Health, Eczacıbaşı-Corridor offers care planning and coordination, home-based nursing care, physician, therapist and dietician visits; support services; long-term equipment rental; and integrated health management programs for workplaces and individuals. In 2008, the company also opened the Evital Nursing Home in Istanbul to offer hospital-quality healthcare and nursing services in a comfortable, homelike environment. RTS Renal Therapy is a joint venture between Eczacıbaşı-Baxter and Baxter International with 22 clinics providing regular hemodialysis and peritoneal dialysis services to some 3,500 patients with chronic kidney failure.
TAIK: How would you describe the Turkish healthcare market in terms of size, strengths, vulnerabilities and competitiveness etc? Has this market been affected by the global financial crises?
Mr. Birol: The Turkish healthcare system has been the target of major reforms in recent years, in line with the government program of providing broader access to healthcare services, rationalizing the system and expanding the role of private health providers.
Of particular interest to pharmaceutical suppliers have been the changes made to the pricing and reimbursement system which has driven down prices far below the cheapest alternatives in Europe and made reimbursement through the public healthcare insurance system much more difficult. The system is also expanding purchases of generic pharmaceuticals, again at highly reduced prices. Providing broader access to healthcare, which is very laudable, has proven to be an expensive undertaking. Naturally, the government wants to reduce healthcare costs as much as possible, and much of this pressure has been focused on pharmaceutical companies. Unfortunately, only global players with access to markets around the world will be able to survive this highly competitive, low profit environment, and even some of them are threatening to pull out important innovative drugs.
Looking ahead, Turkey’s healthcare market continues to offer great potential. Pharmaceutical sales were growing by 20% annually before the crisis and are sure to return to this growth trend in the years ahead given Turkey’s demographic distribution, rising income levels and expectations, and the low value of the market in international terms – roughly $ 10 billion in 2008.
TAIK: You are one of the executive committee members of TAIK. Would you please share your views about the Turkish-American business relations and your advice to the business people of two countries?
Mr. Birol: There are four main reasons why American businesses should, at the very least, be looking at the Turkish market: it is a large economy, ranked17th worldwide and moving up fast; it is well placed and equipped to act as a production and distribution hub for Eastern Europe, the Middle East and Central Asia; its private sector is very dynamic; and its consumption trends, oddly enough, often resemble more closely those found in the US than in Europe.
The Eczacıbaşı Group currently has four joint ventures with US-based firms, the two I mentioned earlier (Baxter and The Corridor Group); Georgia Pacific, and Lincoln Electric. Our experience with all four partners over many years has been very positive and I think that is because we treat each other with mutual respect. For the American company, partnership or acquisition is an excellent route to gaining a rapid foothold in the Turkish market, but to maximize this advantage it’s important that both parties understand each other’s corporate culture and respect each other’s management teams. The Turkish private sector may be small and relatively new compared to the US, but our entrepreneurs and managers are quickly making a name for themselves around the world.
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