Valued shareholders,

The year 2011 was one in which we achieved accomplishments well beyond our expectations, both in terms of our country and Company.

With an economic expansion rate of 8.5% Turkey was one of the most flourishing countries in the global economy, second only to China.

The companies of Borusan Holding successfully managed to achieve an even higher growth rate during the past year. Our cumulative turnover, which stood at $3.5 billion in 2010, soared over $4.3 billion as we effectively overcame all the effects of the economic crisis and outperformed even our own targets. In all, we completed $300 million worth of investments. As the first year of our new five-year strategic plan, 2011 was a good 12 month period in terms of its contribution to the attainment of our 2015 objectives.

For this reason I would like to begin by congratulating all my colleagues in the Borusan family.

Our plans for this year, however, were made with cautious optimism. The most important reason for this is the continuing increase of uncertainty and the downward risks which became apparent in global markets after the first half of 2011. As we moved into 2012, we began witnessing the fact that the slowing economic growth and mounting uncertainties pertaining to the future of countries, especially the developed ones, was resulting in a substantial contraction trend in the domestic demand within these countries.



It is possible to cite numerous factors as the primary cause of this situation. The increasing public sector debt and budget deficits of developed countries in the Euro zone and the surrounding countries should be emphasized as two of the leading reasons. Some of the most striking developments of 2011 include the fact that Greece reached the brink of declaring bankruptcy, and turmoil dominated the economies of Italy and Spain.



The political and social turbulence that characterized the Middle East and the North Africa region during the first quarter of the year certainly had an adverse effect on the global economy. In addition to these developments, the anticipated low level of economic growth in the U.S. resulted in a reduction of that country’s credit rating for the first time in its history. There was also no discernible improvement in the overall global employment figures.

As a consequence of these factors the average level of economic growth in developed countries was limited to 1.6%, while it went as high as 6.2% in the rising and developing economies.

There is still quite a bit of uncertainty as to just how much of an economic recession or how significant a contraction will be experienced in the overall expansion of the global economies during 2012. The most important topic here, of course, is the situation in Europe. There has been serious financial instability over the past few months in various countries, including France. Although there have been numerous encouraging developments since the start of last year, including the search for financial solutions to save Greece from imminent bankruptcy, uncertainty is still prevalent.

There is no doubt that Turkey will be adversely affected if there is a substantial fiscal collapse in Europe during 2012. Historically speaking, the impact of a financial crisis taking place in Europe has been greater on the economy of Turkey than the effects of a turmoil dominating the U.S. since we have much closer economic relations with countries in the Euro zone.

Regardless of these facts, we must also take into consideration that Turkey is in a relatively powerful state as we make plans for the future. Personally, I believe that Turkey will not be experiencing a sharp contraction by the end of the year. An atmosphere of optimism has already prevailed across the globe during the first few months of 2012 and we at Borusan share the same sentiment. In any case, we continue to remain cautious. While making our plans we kept in mind that the challenges in 2012 will likely require us to be more guarded.



As we celebrate the 67th anniversary of the foundation of Borusan I believe that we have developed certain features that distinguish us in terms of strength.

It is becoming evident that we have been able to create efficiency and performance results that are on par with some of the leading global companies through our strategic planning abilities, as well as the implementation of our methodologies such as Value Based Management and Voice of Customer (VoC).

As of the end of 2011, Borusan was providing jobs to 5,559 employees in seven different countries in which it is actively involved. When I assess the position we have reached today it has become apparent to me that the decision to implement the Lean 6 Sigma methodology over a decade ago constitutes the basis of Borusan’s strength.

After a 10 year span of learning and succeeding with this methodology, this year we have set a target of reaching 4 Sigma or a level of 99.38% in terms our service quality. This stage of excellence is one that is attained by only a few companies across the globe.

However, we are also aware of the following:
Turkey has, to a large extent, also experienced the same great transformation process as Borusan has over the past 10 years. Today Turkey is no longer the wounded economy that it once was after barely overcoming the great economic crisis we experienced back in 2000.

The per capita national income level has grown by three times over the course of the past decade. This is an astonishing feat and, most importantly, it is indicative of the emergence of a new middle class. Presently, there are 10 times as many companies operating in Turkey as there were back in 2000. A “new economy” that is based on fresh information and communication technologies has come into existence. Today innovative entrepreneurs and new thriving companies have begun to take the stage. Companies that were virtually unknown 10 years ago have emerged by following correct strategies and investing in the right sectors, just like what we at Borusan have been doing. Some of these companies have even succeeded to the point of being ranked among the top 100 businesses in Turkey.



Thus, now in 2012 we are quite aware of the existences of both a substantially different atmosphere of competition as well as unique threats and opportunities.

I am confident that we will be able to overcome any impending threats by offering innovative products and services, in particular, while simultaneously penetrating new markets. I also have faith that Borusan’s vision of “being one step ahead of our competitors” will afford us a significant advantage in terms of the future success of our companies.

A high level of achievement always requires the strength to make a difference at any time and under any and all circumstances. Borusan and all the members of our Group have the necessary tools to create this difference. With best regards,

A. Ahmet Kocabıyık
Chairman of the Board
Borusan Holding