Turkey's Agaoglu snubs crisis, plans to invest $1.7 bln in energy, tourism

A $1 billion investment is planned for tourism projects and the company will build five hotels in Istanbul including a 400-meters skyscraper, consisting of a mall, residences and a hotel, in the newly developing Seyrantepe district, company chairman Ali Agaoglu said.

"We are planning to operate these hotels under the Agaoglu brand. However our doors are open to foreign investors who will add synergy to our projects," Agaoglu told at a press conference held at the Uludag ski resort in the southwestern province of Bursa.

Agaoglu, established in 1985 as a construction company, carries out housing projects which target mid and upper income consumers. The company now plans to expand its operations into tourism and energy.

Although home sales have fallen with Turkish consumers increasingly feeling the impact of the global financial crisis, house prices in the segment that Agaoglu operates are not subject to a decline and demand for new houses will continue, the chairman added.

"In the final quarter of 2008, we had a 40 percent fall in home sales. We anticipate a fall of another 40 percent in sales in 2009. We will not hit the brakes. It is important to stress that not only home sales, but also costs fall due to the crisis," Agaoglu said.

He even went one step further betting the company would sell at least 1,000 residences within two months of the launch of a new project in Istanbul's Bahcelievler district in the coming days.

Turkey should increase its share in the global tourism sector. "Turkey now earns 20-billion-dollars from tourism each year. We believe Turkey has the potential to increase this amount to 50-billion-dollars," he added.

ENERGY INVESTMENTS
Agaoglu said the group also targets energy, while still maintaining construction as the locomotive sector. The company purchased several companies with wind power plant licenses with a total production capacity of 600 megawatts.

"We plan for a 600 million euro ($776 million) investment in hydro and wind power plants during the coming 2-3 years. Naturally we will use our own resources as well as external financing. We plan to finance 60-70 percent of the investment with external financing and the rest with our own resources," Agaoglu added.

The Agaoglu group operates under four companies in the energy sector. According to the information on group's website, the company has already established wind turbines in five different locations in Turkey.

ULUDAG NEEDS A MASTER PLAN
Agaoglu, who owns a hotel in Uludag, extended his support to the government's plans to turn the resort into a winter tourism center like Davos.

"We want the government to keep its promise to turn Uludag into a Davos. Uludag can be a Davos in 3-4 years with a good planning. So that the tourism season in Uludag would be extended to 12 months instead of the existing 2-3 months," he added.

Many of the facilities, including his hotel, in Uludag are illegal and should be first demolished and then rebuilt, Agaoglu said.

"We renovated the hotel (in Uludag) for 11 million TL ($6.7 million) illegally. I am sorry to say that. But under the normal circumstances, I wasn't allowed to renovate the hotel. We even considered not opening the hotel last year. Now I confess my crime," he added.

Uludag, a popular ski resort, was established during 1970s and has 50 percent of the 10,000 bed capacity in Turkey’s winter tourism sector.