INTERVIEW: Alarko's forward-thinking chief

By bne IntelliNews September 27, 2011

David O'Byrne in Istanbul -

At 84, veteran Turkish businessman Ishak Alaton could be forgiven for putting his feet up, avoiding controversy and reflecting on a life of success conjured from the most unpromising of beginnings and achieved very much on his own terms. Instead, ensconced in his office overlooking the Bosphorus, he shows little sign of either his age or of eschewing his reputation as a maverick prepared both to say what he thinks and to act on it.

"Did you hear I'm donating $1bn to Somalia?" he booms. "Actually it's only TRY1m - they mistranslated me," he laughs, referring to a German TV crew who interviewed him the previous week.

But even that lower sum is surprising enough given that Alaton is a prominent member of Turkey's tiny Jewish community and his donation has gone to a fund established by Turkey's most successful Islamist politician, Prime Minister Tayyip Erdogan, aimed specifically at alleviating the plight of starving Somali Muslims.

The more so when considering Alaton's own history. His comfortable middle-class existence was thrown into poverty by a punitive tax imposed on non-Muslims by the Turkish government during World War II. Alaton himself was forced to abandon plans for university, and moved to Sweden to train as a welder.

From there it would have been easy for him to follow friends and relatives to the nascent state of Israel. Instead, he chose to return to Turkey and establish his own company, Alarko, of which he is still chairman, and which over the past 60 years has grown to become one of Turkey's biggest and most reputable conglomerates - founded on engineering contracting, but with interests in everything from construction to tourism to seafood. "I've known Tayyip Erdogan since he was mayor of Istanbul - he's a practical and intelligent person and very efficient leader," he says, pointing to his government's excellent record of handling the historically fragile Turkish economy.

Alaton even has praise for Erdogan's hardline against Israel, criticising Tel Aviv for destroying relations with Turkey - it's only ally in the Middle East - and for its intransigence in dealing with the Palestinians. "I've completely lost hope for the simple reason that the Israeli government doesn't want a solution - they think the best solution is no solution," he says.

As such, he's lending his support to the campaign at the UN, backed by Erdogan, to grant statehood to Gaza. "At least it will stir controversy and be a warning to Israel they have very few friends left in the world."

Home truths

But Alaton's taste for controversy isn't confined to regional politics. In 2010, he weighed into the debate on proposed changes to the Turkish constitution, criticising Turkey's influential business association, Tusiad, for failing to back what he saw as a straight choice between more or less democracy.

He then celebrated the referendum vote in favour of constitutional change by announcing that Alarko was planning to go ahead with $3.5bn of new investments. The bulk of that, he explains, will be in constructing new power plants aimed at supplying Meram Edas, the power distribution company for the Konya-Nevsehir region, which Alarko bought with partners Cengiz in a privatisation sale in 2009. With 1.5m subscribers (11% of Turkey's total) and a turnover of over $1bn, the $440m that the partners paid looks nothing short a of a bargain compared with the prices paid for other distributors in later sales.

First in line is a 1200-megawatt (MW) coal-fired plant that Alarko plans to build on the south side of the Sea of Marmara, complete with port facilities to import coal from global markets. "It will have all the necessary equipment to protect the environment," he explains, pausing to complain about Turkey's rigorous environmental legislation that has kept the project on hold for over a year.

Equipment for the plant is being brought in from China, but the actual construction will be done by Alarko's contracting arm. "We have plenty of experience in that area," says Alaton, adding that they are already scouting for sites for a second plant of the same size.

But while energy is the current focus of Alarko, Alaton himself admits to a growing passion for the cutting edge of the biotechnology industry, having taken a 5% stake in a $100m biomedical venture Alvimedica, established by a consortium of Turkish doctors and other professionals based in Scandinavia.

Operating from a purpose-built biotech park in Turkey's European backwater of Thrace, the company has in only four years established the biggest "clean room" manufacturing site in Europe and becoming one of the world's leading manufacturers of balloon catheters and drug eluting stents (a device inserted into narrowed, diseased arteries).

Far from meeting an arcane medical niche market, Alaton points out that while global energy markets are set to double over the next 50 years, the growth of the global medical market is expected to exceed 1,800%, with the Thrace biotech park already attracting interest from established European manufacturers. "In the near future, people will be living to over a hundred," he says. "We have to learn to cope with change and if not take part, at least understand what's happening."

INTERVIEW: Alarko's forward-thinking chief

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