Our target: Competition in Europe …

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Mr. YILMAZ, will you tell us a little bit about yourself for our readers?

I was born in Adana in 1978 as the third generation of railway staff family. My father Ömer YILMAZ retired as Regional Manager and my grandfather Osman YILMAZ retired as Track Investigator from TCDD. After I graduated from the Department of Civil Engineering at Kocaeli University in 1999, I completed master’s degree on Railway Division under the Head of Department of Transportation Science in Yildiz Technical University. I started my business life as a design engineer and I was involved in the design and feasibility studies of various highway and railway projects. I started working in Yapıray in 2004 and my first assignment was the Marmaray BC1 Track Works as Design Coordinator. I have been working in YAPIRAY for 14 years, a leading construction company in railway industry. I am married with two children; one son and one daughter. In addition, I am a good supporter of Beşiktaş JK.

When was YAPIRAY, which continues the railway construction and sleeper manufacturing in 3 continents and many countries today, established? What kind of development has YAPIRAY got from the establishment so far? Can we hear the story from you?

Yapıray is a company which was established in 1998 in Yapı Merkezi Group. Prior to that, it was the railway department within the body of Yapı Merkezi. Then, Yapı Merkezi realized the need in the sector and established Yapıray as a specialist company constructing only railway and engaged in the construction of the superstructure of the rail system. It is a company that makes $1 million turnover in the first several years of establishment. It continues to work in these figures until about 2008. When Yapı Merkezi was awarded with the contract of Ankara-Konya High Speed Line in 2008, Yapıray undertook the works of sleeper manufacture and construction of track superstructure in the project. For the installation of 400 km-high speed train line and manufacturing of 750.000 sleepers, YAPIRAY made an investment in heavy machinery in the years of 2008-2009 and that leaded in a huge growth of the company.  From those days until today, at the point where YAPIRAY reaches together with Yapı Merkezi, it became a company which has approximately $ 100 million turnover, 600-700 employees and which does businesses in 3 continents in different countries. Today, we have 4 sleeper manufacturing factories. With R&D studies, beyond sleepers, we manufacture prefabricated concrete track slabs that we named “PANELRAY”, which is the first in Turkey. Our PANELRAY product is applied in high speed tunnel passages in Turkey today and it can be used for 320 km/h of maximum speed.

If you would like to, let’s talk a little about your main company YAPI MERKEZİ.

YAPI MERKEZİ is an engineering company which was established by Dr. Ersin ARIOĞLU and Köksal ANADOL in 1965. Within a few years, they considered that the engineering must be transformed from design to restoration, from restoration to construction and contracting, and then they transformed it themselves.

Since there was no contractor who was able to apply the project they had designed in those years, that works was offered to them. So, they realized the design and the application of the restoration of the Galata Tower in Bosphorus and by this way Yapı Merkezi was born.

In recent years, only Turkish companies have been participating in the tenders of high-speed train lines and at the same time, the requirement of using domestic good for certain materials was written in the tender specifications. What is the advantage of using domestic goods?

In fact, we can say that the reason why only Turkish companies participate in the recent tenders is the presence of 15% domestic advantage. This is an advantage given by the ministry. We can give such an example to this; suppose you offered as a domestic company, and a foreign competitor offered as well. Even if you are 15% more expensive, those two prices turn to be equal by the 15% advantage of being a domestic company. Nowadays, Turkish companies participate, take and realize railway tenders not only in our country, but also all over the world. Yapı Merkezi has become the 9th in the ranking of railway transportation projects, in the list of “The Biggest 250 Foreign Contractors of the World” published by ENR, which is New York-based international construction magazine. Yapı Merkezi is the 9th biggest company realizing railway transportation projects on the world and we are also in every project which they are performing. For example; today, Yapı Merkezi has a work of $3 billion in Tanzania, about $300 million of which is the railway superstructure works, and YAPIRAY is responsible to complete these works. We are developing a project in Zambia with Bombardier, which is world’s another giant company. In South Africa, we are collaborating with the South African Railway (TRANSNET). In Senegal, we are carrying out projects with French companies. In addition, we are also collaborating with Yapı Merkezi in Tanzania, Ethiopia, Dubai, Algeria, Saudi Arabia and Morocco.

And one of these materials is sleeper. What would you like to say about manufacturing of sleepers?

There are now actively 7 factories manufacturing sleepers. In the line of Ankara-Eskişehir, Turkey brought and used approximately 500.000 sleepers from Bulgaria-Romania. We also had to bring sleepers from Romania for İzmir Metro Project which we performed with Yapı Merkezi. But today, there is no need of this. Because there are now several sleeper manufacturers in Turkey and they can manufacture the sleepers that TCDD needs. It was us who firstly manufactured sleepers as 100% domestic, in the project of Ankara-Konya in 2008. Now we have moved up one more step in the manufacturing of sleepers and produced different types of sleepers in accordance with different railway standards and exported them to Senegal, Ethiopia and France. Also our product “prefabricated concrete track slab, PANELRAY” is being manufactured in our factory in Turkey now and related requests for quotations for this product are received from some foreign countries such as Sweden, Germany, Morocco, etc. and we will be exporting our this product very soon.

Do you only manufacture sleepers in your factory in Konya at the moment?

We have moved our factory from Konya after the completion of Ankara-Konya High-Speed Line. Now we are manufacturing in Karabük, Yerköy and Afyon. We also have production abroad in Ethiopia, Tanzania and Morocco. The biggest difference that distinguishes us from other manufacturers all over the world is that we move the factory instead of transporting the sleepers, so we apply a technology of mobile factory in a meaning.

You have studies not only in the field of sleepers but also in the field of fastening materials? Can you tell us also about these studies of yours?

We have no target as manufacturing fastening materials as a company but we have given a lot of support to the local manufacturing of this material as a main user of it. After the sleepers, the fastening material has begun to be manufactured locally as well. A German Company, who is a world’s giant, has came to Turkey and established a factory. Then a few local manufacturers have followed this. In parallel, also manufacturing of the rail, another major railway material, has become local and this is indeed a very important development. There are 5 or 6 rail manufacturers in Europe, mainly in Italy, Spain, Poland, Austria and France, and the fact of manufacturing the rail material in its extent is a very difficult work. When we look in general sense, the number of the manufacturer companies is really less. The factory in Karabük also imports abroad, also we are collaborating with this company and of course, this contributes to our country’s economy.

As you have just mentioned, you have completed several major projects in Turkey such as Ankara-Konya High Speed Train, İzmir Metro etc. Can you tell a little bit about your studies in Konya Tramway?

The study of Konya Tramway is a special activity for us. Namely; Konya has constructed the tramway line itself as a municipality until today and it was a first in Turkey in this respect. They had brought experts from Germany with the possibilities of the municipality and they had constructed a very long line. Later, they have made a project of renovation of the existing line and extension of 26 kilometers through the tender and it was YAPIRAY to realize this.

Once we were awarded the contract, we made a technical modification in the project. It was block system and a standard tramway line in present, but grass layer on the track was desired and there were problems of insulation. We developed a system without using fastening materials for the first time and we collaborated with a foreign company. In our work, we wrapped around the rail with a rubber material. That rubber material both isolates and carries load of the place where it is wrapped and so you can germinate the middle part easily. We did this and the Employer was very satisfied. We had tried another form of this previously also in Kayseri. There, the line was a standard block line and again the middle part was germinated. We had experience in Kayseri and applied the better one in Konya. Later, also Kocaeli Tramway liked this and also there, they took the blocks out and applied rubber as they wanted. When we look at the picture, a company in Turkey had produced this for a foreign company, later it developed the material itself and now it does manufacturing. We are in contact with that local company also right now and we will collaborate also in later times.

Izmir Metro Project is the first metro project of Yapı Merkezi. And at the end of this project, our company Yapıray was established. It was a good project. With the experience and reference which Yapı Merkezi obtained from there, it completed several tramway work and most importantly, Ankara-Konya High Speed Train Project. And now we are performing the construction of Ankara-Sivas High Speed Line, which is our most important project together with Yapı Merkezi.

You are carrying out the projects abroad with the countries in our south, mainly such as Algeria, Senegal, Dubai, Saudi Arabia, Tanzania and Ethiopia. What kind of collaboration do you have with such countries?

Yes, we are actively working abroad, especially in Tanzania and Ethiopia. In the world, railway investments are gaining importance in Africa and South America, and we are predominantly in Africa. We have not reached South America yet, but we have to go there as well.

Africa has mines, but it does not have ports and railway connections; that is to say, it has no opportunity. Or, it has a port, no connection and the goods could not be transported. It is in such a vicious cycle, but this situation is being overcome recently. When we went to Ethiopia for the first time in the years of 2008-2009, the Chinese were dominating there. 100 numbers of company from the world participated in the introductory meeting. The tender was held and only we and a Chinese company participated in the tender and we were awarded the contract of one of the three sections which were tendered. And this was announced as a great news in Europe. Nowadays, Yapı Merkezi has become a company that is very competitive against the Chinese companies in Africa. We are carrying out the projects at a more reasonable cost and quality, and we are the only company competing with the Chinese.

Another example is that Zambia is the largest manufacturer of copper of the world today. The copper prices have reached the peak and they are at the highest levels of history. Zambia has such a valuable mine, but the closest port is 700-800 km away and it takes almost 15 days to transport the goods from the mine to the port. In any event, the 2% of the load can be transported by the railway, the 98% of it is transported by highway. But the highway transportation is not safe and plannable. Now Zambian government is trying to overcome this problem. How? By rehabilitating the existing railway.

Our relations with the Saudi Arabian railways are very strong and we have been in the market for years. We are now working in an important region of the country, Jubail, which is an oil city now.

In 2004, we completed the Dubai Metro project in GCC zone with the cooperation of Yapı Merkezi and Japanese Mitsubishi and it was commissioned on 09.09.2009. Dubai Metro is the first rail system project of that area. We are also working on railway and tramway projects in Senegal and Algeria. We sent concrete sleepers to Senegal, because of the fact that there is no manufacturer in the country.

Now, by the end of this year, there will be presumably 30.000 employees, 15.000 of which will be Turkish, in the railway projects of YAPIRAY abroad, within the body of Yapı Merkezi Group. This is a very important employment.

What kind of differences do you see when you compare the foreign companies with the companies in Turkey?

I can say that we are more competitive and more intrepid than western companies. The only problem of Turkish companies is that they compete very well among themselves abroad. Unlikely, the western and even Chinese companies do not really enter into competition abroad with each other. But competition is good, it enhances and strengthens quality. I think that the thing we have to do is to compete with western companies in Europe now. To do business in Europe, we need to pay a little bit more attention to environmental awareness, sustainability, green technologies, occupational health safety, carbon footprint and aesthetics, rather than the part of cost and engineering of the work to be done. Because much attention is given to these issues in the west compared to African and Arabian regions. Right now, we are in a good position in this issue, but I think this awareness should be better.

What features distinguish your products from those of the competitors? What kind of studies are you doing on your products in terms of longevity and sustainability?

As we have mentioned previously, we pay much attention to this issue. We have studies in R&D stage right now in the direction of carbon emissions, reducing carbon consumption. We are going to apply these achievements in our project of Yerköy-Sivas High Speed Line. Right now, we are working on converting the reinforced concrete system to the plain (no reinforcement) concrete system.

What is this?

When the reinforcement removed, the iron pulls off from the work. The carbon footprint of the iron is too much because of the fact that the production starts at the mine. Melting that ore, spreading in big ovens, etc. have enormous damages to the environment. We are trying to use more innocent materials instead of them.

You have a lot of studies like this. What does Mr. Bayezid Ozden, who is in charge of the work, want to add to this subject?

Bayezid Özden (Engineering Director):

Especially, as Mr. YILMAZ has stated, since the markets that you are targeting, are have high awareness of environmental consciousness, sustainability, carbon footprint, etc., customers are already pushing you to work on this field. You have to prove them with the technical documentation that we prepare. Therefore, this force increases your conscience and in some way, also you are adapting yourself to it. Firstly, you identify yourself; what do I produce? For how much money do I produce? How much damage do I give to the environment? Then you are trying how you can reduce them. We have 3 works like this. We can say that we are trying to do more on our production stage. As the example given previously by Mr. YILMAZ, using technological products we are trying to change the raw materials that we use. Or, we are also trying to replace some of the pure materials in the products required from us with more innocent materials using other technologies. Maybe it does not give you great benefits in terms of cost, but it can add speed. This is one of the things that we are trying to do in Yerköy-Sivas High Speed Line Project.

Volkan Okur Yılmaz:

While realizing these things, the concern of the cost falls to the second plan. In these times in which we step forward to become a global company, we need to realize sustainable projects in order to be able to get into the new markets and to become permanent.

You are operating in the construction area of the rail transport sector. So, what are your R&D studies that you do in this area?

There are various products that we are trying to develop about construction. We usually make various changes and improvements in concrete sleepers. We have a project together with TÜBİTAK, which is a very important project and very extremely high speeds is to be reached in this project. It is a study that we have done with TUBITAK regarding the defense industry. The vehicle can travel above the speed of 2,000 km/h (1.5 Mach sound speed) on the rail system that we constructed. The project is for defense industry but it can also be developed for other industrial purposes. The system has a rail fastening material that can bear all the loads created by the vehicle travelling 1.5 times faster than sound speed on the rails. This fastening material was designed by us. At the moment, the infrastructure has been resolved. After now, the vehicle shall be installed.

Bayezid Özden (Engineering Director):

We have 3 fields of activity as Mr. YILMAZ has also mentioned; Railway construction, railway renovation and manufacturing. We manufacture the post and pre-tensioned elements etc. of the railway sleepers that we use. In this field, there are two ways of operation; one of them is to buy the designs of the products and make a licensed manufacturing, other one is to develop them by ourselves. At the beginning, we, as YAPIRAY, had bought the designs of other manufacturers, and then for the past few years we have been in the position to design them ourselves. With regard to our products; the sleepers that we manufacture in Ethiopia are a different kind of sleepers that no other supplier manufactures. Likewise, we designed a different type of sleeper for our Yerköy-Sivas High Speed Line Project and the design approval certificate of these sleepers was received from foreign authorities. Apart from that, we developed sleepers with double gauge for North Africa. Finally, we have a sleeper type suitable for heavy-tonnage lines for Tanzania Railway Project. The design of it has also been completed; we are about to get the approval and we will send some samples abroad for the tests. Briefly, we can name our current production as “development” and “very limited R&D work”.

‘We feel the deficiency of qualified staff at the most in our sector’’

What are the subjects that you feel the deficiency of the most in your sector?

We feel mostly the deficiency of qualified staff. Only Karabük University has a department on railway systems in the Faculty of Mechanical Engineering, named Railway Systems Engineering. We wish that some other universities would also open such departments on this sector. In the recent situation, the staff who are trained as a railway system personnel in the department become electronic or mechanical staff, but generally not a construction staff. The locomotive of the sector and many railway system companies in Turkey is the construction. This should be well-understood and the universities should contribute to the sector. For example; when we mention about a “fatigue laboratory”, there is not enough support, resources, trainers, information, tests, articles etc. at the universities. Actually it should be and we are ready to contribute on this as Yapıray. Today, we share this idea in the laboratory of Istanbul Technical University. But I think that this should be done in mainly by the universities.

Not only engineer, but also low level staff also affects the quality of the railway work done.  There should be an institution to educate/train the railway construction staff such as railway machinery operators, railway foremen, rail welding worker etc.

How about your ongoing projects, those on your agenda?

Gökhan ÇINAR (Execution Director):

We have 2 ongoing projects in Tanzania; one of them has been commenced and the other one is planned to be commenced after about 6-7 months. It is a project around 700 km in total. In the same way, we have a project in Senegal. It is being carried out in a partnership with Yapı Merkezi and a French company. And another one is, perhaps we cannot say it is the biggest but we can say it is the most prestigious project of ours, Yerköy-Sivas High Speed Train Project. Because, with this project, a first will happen both for us and for Turkey; we will reach 300 km/h speed on this project. On the 100 km of the line, which are the tunnels, we will apply our own product; prefabricated concrete track slabs “PANELRAY”, which will be applied first time in Turkey. Another project of ours is technically full-featured work that we carry out with TUBITAK. This project is also a turn-key project, that we have undertaken the design and the construction. Besides these, we are carrying out new project researches and studies in Africa. We are very active in the African market. Finally, we have a rehabilitation work. We are providing the continuance of the rehabilitation work that we already completed on Irmak-Karabük-Zonguldak railway line. We are trying to create a new culture in the company. We give great importance to information. With our studies, we continue growing even more and more every day.

Volkan Okur Yılmaz:

Finally, can you briefly mention about your targets?

Our main target is to provide more services to non-group companies besides our works with Yapı Merkezi. We want to do this over Europe because our target is Europe now. Last year, we participated in the tender of Copenhagen Metro. Only 4 companies were able to pass the pre-qualification stage. One of them was us; the others were Italians, Austrians and French. In that tender, we came in second. But we learned a lot from that tender: participating in a tender in Europe and trying to get a contract, documents that you prepare, questions, requests etc. was really very different experience. This is a learning phase for us and we are passing this phase rapidly. Hopefully, we will be awarded with a project in Europe in the up-coming period and we will get closer to our target of becoming a global company as well.