After 2020, which was difficult due to the Covid-19 pandemic, 2021 started with an optimistic outlook, with the success of vaccination works. As the effects of the pandemic gradually diminished, signs of recovery were seen in economic activities. As a result of this recovery, an impressive global growth rate of around 6 percent was achieved in 2021. However, this rapid growth also brought some negative consequences. Increasing demand could not be met due to disruption in global supply chains and supply-side bottlenecks, and commodity prices, especially energy, rose to record levels. In addition, at the beginning of 2022, Russia’s military operation against Ukraine led to a further hike in prices. As a result, global inflation has become a significant risk factor. Inflation in the US has reached 7% and tested its highest level in the last 40 years. In the European region, inflation rose to 5 percent, the highest level since 1997.

Countries that first applied for monetary expansion to reduce the effects of the pandemic, switched to tight monetary policy from the middle of 2021 in the face of the prevailing inflationary environment. While the central banks of countries such as England, Brazil and Norway were raising interest rates, the American Central Bank (FED), which gave interest rate hike signals for a long time, started to raise at the beginning of 2022. In this context, it is thought that 2022 will be a year when monetary abundance will come to an end and interest rate hikes will be crucial. This situation will pose a risk factor for developing countries like our country. In addition, other steps to be taken around the world in order to solve the inflation problem, which is understood to be not temporary, the security of supply of commodities, the food crisis and the effects of the Russia-Ukraine war will be followed up with priority. Leading indicators point to a serious slowdown in global growth in 2022.

In our country, with the policies implemented by the Central Bank at the end of 2020, 2021 started with a positive economic outlook. However, due to the fragile macro environment towards the end of the year, exchange rates and CDS premiums rose. Inflation, which stood at 36% in December, reached its highest level since 2002. Unlike many other countries, the reduction of interest rates played an important role in this situation. Despite the annual growth rate of 11%, problems such as high inflation, fluctuations in exchange rates and unemployment cause macro fragility and stagflation risk in our country.

On the other hand, in 2021, the importance of sustainability began to be better understood both in the world and in Turkey. It has been seen that critical issues such as the pandemic and climate crisis can only be overcome with a sustainable, environmentalist, innovative and agile approach. The international consensus reached on urgent agenda items such as combating climate change and exiting the pandemic was promising. In this context, the decisions taken at the United Nations Climate Change Conference and the Turkey Green Reconciliation Action Plan prepared by our country, which ratified the Paris Climate Agreement, were among the valuable steps of 2021. As a signatory to the United Nations Global Compact, we will continue to fulfill our environmental and social responsibilities with a global cooperation approach. In line with the ideal of sustainable development, we aim to reach universal standards by always taking Akkök Holding’s performance one step further.

With an understanding of a sustainable world, we prioritize progress with innovative projects and investments in which we can create added value for our country and our stakeholders in all sectors in which we operate, and we carefully monitor development opportunities in these areas. With this approach adopted by our group companies, we closely monitor technological developments. We focus on organic and inorganic investments that are in line with our long-term sustainable growth targets, will add value to the Akkök Group and expand our contribution to the national economy. In this context, we made two strategic acquisitions and included USK Kimya and Epsilon Kompozit, which are the leaders of their sectors in Turkey, into our group. At Akkök Group, we aim to make these companies global leaders, and we are constantly working in this direction. While we are developing new investments we have added to our portfolio, we are constantly reviewing our portfolio and examining many new investment opportunities. In this context, we wish to add synergetic investments that are strategically compatible with our portfolio in the coming years.

As a result of all these efforts, we, as Akkök Holding, achieved a combined turnover of TL 28 billion in 2021, despite macro and micro uncertainties. Our combined EBITDA level grew by 66% to TL 5.4 billion. In addition, our exports increased by 62% in dollar terms and reached USD 613 million. During this period, we were deemed worthy of many awards and we once again experienced the pride of taking part in the research surveys that list Turkey’s largest industrial enterprises.

In line with our goal of creating added value for our country and our stakeholders in the chemical, energy and real estate sectors, our main business lines, I would like to thank our valuable employees who contributed to our growth and carried Akkök Holding into the future, and all our stakeholders who did not spare their support in this difficult year.

Sincerely,

Raif Ali Dinçkök

Chairman of the Board of Directors and

Executive Board Advisor