The flexible intermediate bulk container (FIBC) industry is a growing industry in the country of Turkey; yet for those who would consider entering this emerging market, many factors need to be taken into consideration before just jumping in. Tarik Candar, the sales coordinator for GCC Protek in Istanbul, Turkey, has over eleven years of experience in the FIBC market. He also has over seven years of experience working in sales in Europe. While performing his duties, Tarik has taken the time to earn an English proficiency certificate from Cambridge University so that he can better navigate the international communications waters within the FIBC fields.
In a recent interview, Tarik shared some thoughts regarding the importance of language training, cultural sensitivity, timeliness in production and shipping, and quality products within the FIBC industry. He also shared his thoughts on the future of the big bag industry in Turkey.
Turkey’s integration into the European market often requires higher English levels to communicate. What steps must a growing company take to ensure that both the predominately English and the non-English speaking customer markets feel included?
When operating in the global market, you need to keep in mind that knowing the language of the target market is the “license to trade.” You need to be proficient in the market language just to get through introductory meetings; but in order to grow your market, you will need to progress past proficiency and become fluent in the market language. Taking the time to learn the language shows both respect and commitment to potential and existing clients. Since creating a good relationship in business is necessary to growing your business, having fluency in the target market language is critical to building that good relationship.
In order to encourage employees to improve their language skills, your company should consider offering bonuses or raises to those who take the time to improve their abilities. Offering to pay for language education would be a wise investment for any international company as a return on that investment would be seen as the employee’s fluency increases. Because the FIBC industry is a highly technical industry, being able to accurately communicate the customer’s needs and specifications on an order is critical. The highly technical nature of the industry also makes the language skills that are developed by the employees pretty much nontransferable, so you want to cultivate employee loyalty. Once the investment of training an employee has been made, losing him or her is too costly and should be avoided “at all costs.”
Just knowing the language of the target market is not enough, though. You must also be sensitive to the culture of the region. Being sensitive to the differences in how things are said and in how the people within the customer’s country operate can mean the difference between your company going broke or succeeding. Expecting your customers to adapt to your way of doing business is presumptive at best and can be destructive to your bottom line at worst. Understanding, for example, that Germany is very punctual and adheres to guidelines and rules whether they are necessary or not and that Turkey is far more flexible and laid back in its approach to deadlines will save you a lot of grief and headaches. Having employees that are both fluent and adaptable to the target country’s culture sets you up to succeed.
What are the largest challenges when shipping dense products via FIBC throughout Europe? Given the weight of some of the products, how does a company compensate a customer for a defective order since industries such as construction and pharmaceuticals require time-sensitive material?
Learning to be on time, to be punctual, and to deal with problems quickly and efficiently is the heart of the FIBC business. Certainly, any company needs to have an excellent quality assurance (QA) department that performs a final quality check before shipping the goods to the customers. If a problem arises, your QA department should have adequate authority to be able to deal with the problem and offer a satisfactory solution to the customer within twenty-four hours. Having your products split into simple products and detailed products makes quality control much more manageable. At the very least, products should be classified as simple grade, food grade, and pharma grade in terms of hygiene. You should then further break them out according to the technology which is required to make them: simple, moderate, complicated, essentially sensitive (baby food, drugs, contaminants, UN bags).
Unfortunately, many claims regarding defective products arise from the improper handling of the products by the transportation companies and not from faulty products. If too much pressure is applied to pallets during transit, the padding inside of the bags will fail, not because the bag is faulty, but because the transporter placed too many pallets on top of each other. To circumvent this issue, your company needs to choose its transporters with care and needs to give clear, detailed instructions to the handlers as to how to properly handle, load, transport, and unload the products.
When dealing with time-sensitive material, you not only want to choose your transporters wisely, but you also need to be sure to ship out your goods within the confirmed, written lead time. “A lot of companies go bust in Turkey for not being able to keep the lead time.” The shipping department must be responsible and relay optimal lead times to the customers, along with the quantity of FIBC product that is being shipped. Since problems arise even in the best run companies, spare capacity should be earmarked for sensitive products. This ensures that customers will receive their orders on time. A good FIBC company will have ten percent of its production capacity kept for taking care of emergencies.
In order to ensure that goods arrive on time, an FIBC vendor must factor in the fact that to ship products from Turkey to Europe by road will take, on average, five to eight days of travel time. If the customer has an emergency need of certain products very quickly, a company may choose to ship a minimum quantity to the customer by airplane with the rest to be delivered by truck. Decisions like this tend to be made on a case-by-case basis and based upon the priority and importance of the customer.
With a lot of economic upheaval in the European region, what are the biggest challenges in predicting the changing marketplace, and what do you foresee the future of the FIBC industry being in Turkey?
Some of the biggest challenges to the industry are due to high transportation costs, high labor costs, high costs of living, and high research and development costs. Vendors who want to stay alive must continuously invest in new product development and technology. They must stay ahead of the market. Obviously, with increasing costs for research and development and raw materials, FIBC vendors have to increase the cost of their end products or decrease their profit margins. Decreasing the profit margin will, in the end, adversely affect the industry overall as it slows down the future development of goods.
Besides increasing research and developmental costs, labor costs are rising in places like Germany, along with the cost of living. The world has been undergoing an economic recession which impacts all industries. Top this off with high prices for petrol, and you have a difficult situation. Since Turkey has the most expensive petrol of all of Europe, it is the most affected by the increasing prices.
Rather than letting these difficulties deter Turkey from producing FIBCs, the country is instead focusing its attention on producing high-end products that are second to none. Because Turkey has the knowledge and experience to produce these high-end FIBCs, it is not going anywhere. With its focus narrowing to specialize on the quality, high-end big bags, the low-end products are expected to shift to China and India.
With the opportunity for growth and specialization within Turkey in the FIBC industry, companies should take the time to set themselves up for success before entering the market. Learning the target market language and culture should take precedence. Being sure to locate reliable transportation for goods should fall in as the next piece. Lastly, companies need to be sure they have contingency plans in place to ensure timely delivery to their customers. With these basic principles to help guide the way, an FIBC company can succeed.
Featured image was taken by Leandro Centomo in Cankurtaran, Istanbul, Turkey.
This article was written by Ms. Stacey M. Ms. Jessica H also made some contribution to it.