Asım Kocabıyık

Founder and
Honorary Chairman,
Borusan Holding

There are many similarities between the business world and the game of chess. It is vital for a company to always think a few moves ahead. Those who are unable to do so, or who misjudge the future, will pay dearly during this economic crisis.

Valued shareholders,

In this year's Annual Report I would like to express my views and thoughts on global developments and their influence on Turkey. The year 2008 will be remembered for its severe economic crisis, which started as a result of the unregulated race for growth in the U.S. financial sector and rapidly spread throughout the world. As we have seen, this crisis created great difficulties for large financial institutions and manufacturing companies. Consequently, many countries were forced to intervene and provide bailout assistance.

It is my conviction that this crisis will trigger a significant system change across the globe in the days ahead. In other words, after the effects of the crisis have dissipated it willnot be possible to return once again to the old way of doing things.

It has become quite obvious that the measures initiated by the G7 countries, which have been commissioned to find solutions to the world's economic problems, will not be enough to provide the needed answers. In addition, we have witnessed the formation of the G-20 Group. However, as these countries have a multitude of differences in their structures and traditions, as well as in their financial strength, it does not seem likely that they will be able to reach a consensus on any topic. Regrettably, as long as these nations are not able to reach an agreement it will be very difficult to overcome the present crisis. In any case, the intervention and control of governments is likely to continue. Public sector spending will need to be increased in order to stimulate the markets.

It is my heartfelt belief that these initiatives will not provide the solutions needed to solve the problems of the global economies. Unemployment is likely to rise as economies continue to contract. Therefore, it is quite likely that social problems may develop in certain regions of the world. During the months and years ahead all governments will be required to provide wise assistance and guidance to their countries.

It would be unrealistic to presume that Turkey will not be affected by this financial crisis. Currently, the problems that need to be remedied include the decrease in sales, increasing inventories and the need for greater financing, as well as declining exports, production and profits, or even losses.

As in the past, our nation will require foreign financing in the form of loans or new investments in order to help the Turkish economy to recover. I do not feel that there will be much difficulty in securing this aid. All public and private organizations will need to work in harmony in order to provide solutions to Turkey's problems.

Amazingly, this crisis has not had an overwhelming effect on Borusan. There was a decline in our profits from activities at the end of 2008; however as a result of the internal preventive measures we implemented Borusan did not experience any institutional problems. I mentioned above that the economic system will need to be changed. Managers at Borusan will not have any problems adapting to these changes. Despite all these adverse conditions I am confident that all Borusan investments and activities will continue without hindrance.

Finally, I would like to especially extend my sincere appreciation to all our friends at Borusan for their efforts and self sacrifice during these challenging times.

Warmest regards.