As soon as we entered Merinos Carpet's facilities in Gaziantep with İbrahim Erdemoğlu, Chairman of the Board of Directors of Erdemoğlu Holding, we went on the golf vehicles waiting readily for us, and we went on a tour of the plant, which was established on an area of 900 thousand square meters, under the guidance of Mehmet Erdemoğlu, Member of the Board of Directors of the company.

Ali Yılmaz, General Manager and Member of the Board of Directors, and Erdoğan Şeker, Member of the Board of Directors, accompanied Mehmet Erdemoğlu on the plant tour at Merinos Carpet.

Mehmet Erdemoğlu, the nephew of İbrahim Erdemoğlu, revealed the size of Merinos Carpet, of which he is a member of the Board of Directors, through production data:

- We produce 40 million square meters of machine-made carpets annually. This means 10 million carpets from an average of four square meters.

He stated that they export to 90 countries:

- We produce both under the brand of Merinos and under our own brands for famous chain markets in the US and Europe.

He stated that they renew the technology of their production lines in due course:

- Renewed technology brings along an increase in productivity.

After the facility tour, we went to the terrace of the administrative building. İbrahim Erdemoğlu, Chairman of the Board of Directors of Erdemoğlu Holding, who is the Deputy Chairman of the Board of Directors of Merinos Carpet, asserted his claim:

- We are number one in the world with the size of our production facilities. Turkey is able to get a 1-1,5 percent share in the world in many products it exports. Our global share in machine-made area rugs alone reaches 7 percent.

Mehmet Erdemoğlu specified that in the past, 70 percent of its sales were directed to the domestic market:

- We focused on exports over time. We currently export 90 percent of the production to around 80 countries.

He shared the export addresses and rates:

- 42 percent of our sales go to European countries and the UK, 38 percent to the US, 12 percent to the Middle East and Africa, and 8 percent to the domestic market.

When he conveyed that the average price per square meter of the carpets they export to Europe is 5-7.5 dollars, we asked him about their income per kilo, and he calculated:

- Our export income per kilo reaches 2 dollars...

He underlined the following point regarding the European and US market:

- Americans and Europeans replace carpets frequently. Average carpet replacement times are 6 months.

İbrahim Erdemoğlu drew attention to their assertive position in carpet production:

-The Chinese are unable to compete with us in machine-made carpets because we produce more efficiently.

We wondered about the turnover of Merinos Carpet and he explained:

– We expect Merinos to close this year with a turnover of 530 million dollars. 480 million dollars of it will be provided by exports. We expect EBITDA (earnings before interest, taxes, depreciation, and amortization) of 115 million dollars for 2024.

Merinos Carpet, founded by father Mehmet Erdemoğlu, who started to work as a weaving worker in his birthplace of Besni, then marketed products such as towels he bought in Gaziantep in the region, and started production with two rug looms he bought in 1970, has turned into a world giant in 54 years.

The recommendations of the founding father Mehmet Erdemoğlu, who is known as "The Sage of Besni" in the family and his close circle, to his children and staff in business life, were adopted as a "Constitution" for all companies under the roof of Erdemoğlu Holding, especially Merinos Carpet, over time.

İbrahim Erdemoğlu never forgot the following sentence among the words of his father Mehmet Erdemoğlu, and repeated it frequently in almost every environment:

- May God not grant you the ability to earn easy money...

İbrahim Erdemoğlu also underlined the following point they had adopted:

- 90 percent of our profits are spent on investment…

It is understood that the basic principles determined by the "The Sage of Besni" have played an important role in the success of Merinos Carpet in its 54-year growth journey since 1970

Its Asset Value is 2 Billion Dollars

İbrahim Erdemoğlu, Chairman of the Board of Directors of Erdemoğlu Holding, said that Merinos Carpet produces in 3 different locations:

- Two of these locations are located in Gaziantep and one in Çerkezköy (Tekirdağ).

We wondered about the monetary size of their investment in Merinos, and he made the following calculation:

- Merinos has an asset value of 2 billion dollars. However, we have not had an official valuation of the company conducted yet.

He pointed to employment:

- 4 thousand 700 people work at Merinos Carpet…

We wondered about the capacity utilization rate, he shared:

- This year's average capacity utilization took place at around 85 percent.

Merinos Carpet is Preparing for a Public Offering

During the plant tour, I asked  Mehmet Erdemoğlu, Member of the Board of Directors of Merinos Carpet, about Dinarsu Carpet and he gave the following information:

- Dinarsu Carpet is merging with Merinos Carpet as a company. The brand will continue. We will bring our carpet production business together under a single company and be ready for public offering.

We conveyed the information we received from his nephew Mehmet Erdemoğlu to İbrahim Erdemoğlu, Chairman of the Board of Directors of Erdemoğlu Holding, and asked for details. And he explained:

- Erdemoğlu Holding will offer 25 percent of its 100 percent shares in Merinos to the public. The public offering is aimed to take place in the 5th month of 2025.

He stated that they will apply to the Capital Markets Board (CMB) for a public offering following the clarification of the 2024 balance sheet:

- We anticipate that 50 percent of the shares to be offered to the public will be sold to foreign investors. Work on this is being carried out by HSBC and JP Morgan. A roadshow will be held in London for the public offering.

He provided the following information about the use of the resources to be obtained from the public offering:

-Half of the resource to be generated will be added to the capital of Merinos. The other half will be transferred to our holding, which is the owner of Merinos. The Holding will transfer some of the resources in question to Sasa.

Merinos will put its $220 Million 'Chips' Facility into Service in 6 Months

Mehmet Erdemoğlu, Member of the Board of Directors of Merinos Carpet, pointed to the area under construction during the factory tour:

- As Merinos Carpet, we are establishing our own polyester chips production facility. This place is being realized with an investment of 220 million dollars. We aim to launch it in the second half of 2025.

İbrahim Erdemoğlu, Chairman of the Board of Directors of Erdemoğlu Holding, mentioned that Merinos' chips facility will have an annual capacity of 350 thousand tons:

- We calculate that the annual contribution of the chip facility to Merinos' turnover might be 350-400 million dollars.

Then he added:

- After the chip investment is made, Merinos' turnover will reach 1 billion dollars by the end of 2025.

Akal Textiles Produces 50 Percent of Knitwear Yarn in Turkey

İbrahim Erdemoğlu, Chairman of the Board of Directors of Erdemoğlu Holding, expressed that there are knitwear yarn production facilities in Alaplı and Besni:

- These two facilities under the roof of Akal Textiles produce 50 percent of the knitwear yarn in Turkey.

İbrahim Erdemoğlu gave the following message on questions about investment decisions and venture into new sectors:

- We do not throw the second walnut into our mouth without breaking the one in our mouth because there will be wounds...

- We do not start another business without moving a business to the best point.

- So, we don't have fanciful appetites.

Source of News: Nasıl Bir Ekonomi Newspaper