Borusan Faaliyet Raporu 2010

Founder And Honorary Chairman's Message

Valued shareholders,
In 2010 Borusan celebrated its 66th year in the business world and its 52nd in the industrial sector.

Up until the 1960s the economy was rather constrained and primarily agriculture centered. Subsequently, between 1960 and 1965 Turkish industry began to take shape rather modestly as protectionist measures against imports stimulated industrial development to the significant level seen today.

During this 50 year industrialization period many crises have been experienced. The primary reason behind these crises was, to a great extent, fluctuations in exchange rates. The 2008 crisis, however, occurred on an international scale. As a consequence of the measures implemented by the Turkish government, our nation has managed to pull through relatively unscathed from this most recent calamity. The economic activities of 2010 have not only compensated for the negative effects of the latest crisis but also facilitated the expansion of our economy. Borusan was also able to display a successful performance in line with this development that took place across the country. Nonetheless, despite these positive results and improvements in Turkey, there are still some economic factors that are cause for concern.

As a result of this economic progress Turkey's exports have exceeded the $100 billion mark, but the current deficit, or what is commonly referred to as the trade imbalance, is quite disconcerting since it stands at $80 billion. As approximately 50% of the current account deficit is the result of energy related imports and it appears that the problem will not be resolved in the short term. The other $40 billion of this amount is composed of imports which are necessary for the completion of machinery, spare parts and other goods to be exported. At this point, it is not possible to implement a ban on imports because of the international and customs union agreements we have signed. However, it is possible to rehabilitate domestic competitive conditions to reduce the country's dependence on imports.

In addition, one of the biggest problems in our nation is unemployment. This problem appears to be a common one among all other countries and, even though it will not be easy to solve in the near future, precautionary measures need to be urgently implemented in order to prevent the situation from becoming worse.

That a large portion of the population lives in poverty is partially related to this problem of unemployment. Given the present types and technologies of manufacturing, it will not be possible to grow the economy beyond a certain level. Many segments of industry have reached a saturation point. The only way to remedy this situation appears to be the procurement of technologies that are not present at the moment and investing in new business areas. Foreign investment capital will be of vital importance in terms of providing the funding needed for these kinds of ventures.

Sectors such as agriculture, cattle breeding and aquaculture appear to be the most conducive fields for the development of employment and production in our country. These areas must be expanded as the government currently offers appropriate conditions for long-term rental of agricultural plots. I do not think that these business fields are being developed to their fullest potential.

Since, as an industrial company, Borusan manufactures valuable and high quality products and it continues to contribute greatly to the economy of the country. The Borusan team members who make this possible are quite up to par with their counterparts in more developed countries.

For quite some time now, I have been channeling my energy towards education projects which will be beneficial for our country and society. Besides these, I have also continued to provide financing for the aforementioned ongoing agricultural projects which are necessary for regional development. This Annual Report contains more detailed information elsewhere pertaining to the social responsibility projects in which Borusan is currently involved.

At this point, on behalf of our shareholders and my family, I would like to thank all the members of Borusan who have contributed to the success of our companies.

With best regards,

Asım Kocabıyık
Founder and Honorary Chairman
Borusan Holding

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