Sabanci's growth to be driven by digitalisation and sustainability

Sabanci's growth to be driven by digitalisation and sustainability
12 April 2024

Turkish conglomerate, Sabanci, is accelerating investments across its business portfolio - including major investments into the cement division. This is comprised of CIMSA and Akcansa - its joint venture with Heidelberg Materials - making it the third-largest player in Turkey. These transformative investments aim to expedite the digitalisation process and to modernise the assets of its cement businesses, as well as improve their sustainability. 

Digital transformation

Digital and artificial intelligence (AI) transformation is one of Sabanci's five strategic priorities. Data is seen as the new raw material in the modern world, but data can only become ‘the new oil’ if it can be supported with the complementary infrastructure. Max Speur, Sabanci Holding digital group president, points out that: “Just like you can power a car with oil, you need the right logistics, operations and delivery infrastructure for that car to go where you want.” 

Therefore, Sabanci is making a significant investment in this direction. While the company says scientific researchers estimate the world needs an additional 38GW of power in the coming decades to accommodate the additional loads brought about by AI, it believes that investing in digitalisation will accelerate its progression as a developer of future technologies.

The cement sector can benefit from cloud technologies, scalable digital technologies and green hyperscale data centres. Sabanci believes these technologies will be the main drivers of the green transformation worldwide. “Moreover, the pathway to truly embedding digitalisation into our business culture, creating digital enterprises and permanently eliminating silos also lies in these investments,” says Mr Speur.

Green energy and CO2 reduction

Sourcing the extra renewable energy will be a major part of Sabanci’s future investment. The company is investing US$6.2bn in Turkish green energy over the next five years. Cenk Alper, Sabanci Holding CEO, said that “In Turkey, within a five-year period, one out of every three wind and solar plants that will be operational will bear the Sabanci signature." The group is diversifying by exploring ways to create hyper-scale green data centres using renewable energy.

In line with the company’s medium-term roadmap announced in 2022, 75 per cent of future investments are being pumped into energy and climate technologies, advanced material technologies and digital technologies. These ‘new economy’ solutions will see Sabanci increase its sustainability-related investments to US$5bn by the end of 2027.

Prioritising action to prevent the worst effects of climate change, Sabanci is committing to cut its COemissions substantially. "In line with Sabanci Holdings 2050 net-zero target, we will reduce our direct carbon emissions by at least 42 per cent by 2030 in coordination with the Science-Based Targets initative (SBTi)," added Mr Alper. "We aim to achieve a reduction of 15 per cent by the end of 2025."

Recently, Sabanci inaugurated the Sabanci Technology Centre – a state-of-the-art research and development facility in Munich, Germany. The new facility is equipped with eight specialised laboratories for researching advanced building materials, composite technologies, and construction reinforcement.

Cement prospects

While Sabanci is diversifying, it is not neglecting its cement business. This growth in investment for digital and green energy comes as Turkey is rebuilding following the devastating earthquakes of 2023. In addition to controlling three plants and 9.51Mta capacity via Akcansa Cimento, Sabanci operates two grey cement plants in the country at Eskishir and Mersin with a combined cement capacity of 3.45Mta, plus the 1.22Mta white cement plant in Mersin. The domestic market offers opportunities for higher cement demand, as Turkey rebuilds its housing stock and infrastructure. According to ICR Research, cement demand in Turkey grew by 19 per cent in 2023 to 64.99Mt.

Moreover, the company started an international expansion of its grey cement business in 2023, agreeing with CIMSA to build a 0.6Mta cement grinding plant in the USA. The US$82m investment sees Sabanci Holding take a 60 per cent shareholding in the joint venture which will be in operation in the 4Q25.

Published under Cement News