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n°22 February 2011

Investment Supoort And Promotion Agency of Turkey (ISPAT) France, Belgium, Luxemburg, and Principality of Moncao office For any contact : François BERNARD Permanent Representative fbernard@invest.gov.tr DR

GSM : +33 631 272 572

TURKEY TO START THERMAL POWER PLANT PRIVATIZATIONS

ABOVE THE THERMAL STATION ´AFSIN-ELBISTAN LEFT HEM AHMET AKSU

TURKEY LEADS EUROPE IN CEMENT PRODUCTION Turkey’s cement producers have surpassed their European peers in terms of output and turnover, according to Turkey’s Cement Manufacturers' Association (TCMA). The increase in production also lifted Turkey up to 4th place in the world after China, India and the USA. “Turkish cement producers have reached a total turnover of EUR 4.5 billion, while exports exceeded EUR 1 billion, reaching over 90 countries,” said TCMA Board Chairman Adnan Ignebekcili adding that West African states are becoming a bigger market following the global financial crisis. Turkey’s century-old cement production sector has grown 15 percent to a capacity of 50 million tons in 2010. “The cement production sector has two major advantages: a strong start to the 21st century and the skilled labor force that Turkey offers,” said Ignebekcili, setting the industry’s 2011 target at a growth rate of 6-8 percent, depending on the housing and infrastructure investments in Turkey. (Hürriyet 06.01.2011)

FIRM IDENTITY TEXTE

INVEST.GOV.TR INVESTMENT SUPPORT AND PROMOTION AGENCY OF TURKEY (ISPAT)

Turkey will start privatizing its thermal power plants, generating more than 16,000 MW, in the coming days. According to the Acting President of the Privatization Administration (OIB) Ahmet Aksu, the 2011 phase of privatization operations will begin with Hamitabat Thermal Power Plant in Thracia, part of a batch that consists of four large thermal power plants and a number of smaller plants to be privatized in nine groups. The Privatization Administration will privatize Hamitabat plant by selling its shares, as it is a joint stock company. “The Administration will transfer operating rights when selling hydro power plants, whereas in thermal power plants it will hand over property rights,” said Aksu and added that some of the power plants may also be offered to the public. Turkey privatized almost all of its power distribution grids past year, aiming for a more efficient and higher quality service for tens of millions of subscribers. The Privatization Administration will first sell power plants that can be upgraded for increased output and wants the private sector to improve the plants by investing in modernization. (Türkiye 17.01.2011)

127 Billion $

NUMBER OF THE MONTH Turkey's Exporters' Association set Turkey's export target for 2011 at 127 billion USD. Mehmet Buyukeksi, Chairman of the Turkish Exporters' Assembly (TIM), said he was optimistic about 2011, and expected Turkey to grow by 5-6 percent this year. (Today´s Zaman 04.01.2011)

« INVEST IN TURKIJE » IS DE TURKSE OFFICIËLE INSTANTIE DIE DE LEIDING VAN DE STEUN EN VAN DE BEVORDERING VAN DE INTERNATIONALE INVESTERINGEN WE KUNNEN JULLIE HELPEN TER WERELD, MET NAME IN FRANKRIJK, IN BELGIË EN IN HET LUXEMBURGSE OM TE INFORMEREN. ALS JULLIE WILLEN ONS KENNISMAKEN, KUNNEN JULLIE ONS BEREIKEN MET VERSCHILLENDE WIJZE. VOOR EEN PERSOONLIJK EN VERTROUWELIJK BIJEENKOMST, KUNNEN JULLIE BEREIKEN DE PERMANENTE VERTEGENWOORDIGER VOOR FRANKRIJK, BELGIË,LUXEMBURG. MOBIELE : 00 33 631 272 572 (AFGEROEPEN EERST EN VOORAL) ADRES : 55 AVENUE MARCEAU 755116 PARIJS FAX: 00 33 170 248 761

FOR ANY CONTACT : DR. François BERNARD PERMANENT REPRESENTATIVE fbernard@invest.gov.tr

NEWSLETTER NO.22 FEBRUARY 2010 P.01


Retail Turkey to drive regional retail growth Turkey will be dominating the market in the Middle East within two years, according to a report by the Indian research and analysis company RNCOS. Analyzing Saudi Arabia, Egypt, Israel, the UAE, Jordan, Oman, Qatar, Kuwait and Turkey, the company reached the conclusion that Turkey will be a model country for growth in the region’s thriving retail sector. Turkey’s growing population with increasing spending power is the main reason behind the findings of the “Middle East Retail Sector Forecast to 2013” report. The region’s retail sector is expected to grow by 13 percent by 2013, amounting to USD 675 billion. The report highlights Turkey’s impressive growth rates in recent years and estimates a 7 percent annual growth for the country in the next two years. “Turkey’s organized retail space availability and diverse retail formats are important factors in making the country a key for growth in the region’s retail sector,” the report stated. Sabah 04.01.2011

Unilever’s success helped Turkey attract investments Multinational consumer products giant Unilever's Chief Procurement Officer Marc Engel said that the company is looking to increase its procurements from local suppliers in Turkey. Operating in 170 countries, the company’s annual global turnover reaches EUR 40 billion. Unilever’s Turkish division manages over TRY 3 billion (EUR 1.3 billion) worth of operations. Engel said that Unilever is currently working with 3,000 suppliers and 20,000 tea farmers in Turkey and that they supported local producers by offering their products to international markets. Unilever’s success in Turkey also had an effect on two packaging companies’ decision to invest in Turkey, he noted. “Turkey remains in the top 10 list of countries Unilever operates in, while over 50 Turkish executives are currently employed in the company’s global operations,” added Engel. Unaffected by the financial crisis, Unilever Turkey managed to grow 9.5 percent in 2009, relying on local suppliers for 90 percent of the goods it offers. Hurriyet 28.01.2011

FOR ANY CONTACT : DR. François BERNARD REPRESENTANT PERMANENT FBERNARD@INVEST.GOV.TR

P.02 NEWSLETTER NO.22 FEBRUARY 2010

INVESTMENT SUPPORT AND PROMOTION AGENCY OF TURKEY (ISPAT) INVEST.GOV.TR


Transports Istanbul Municipality readies for ferry services privatization Istanbul Deniz Otobusleri A.S. (IDO), running ferry services along the coast lines of Istanbul and the Marmara Sea, will be privatized by the first half of 2011. A subsidiary of the Istanbul Metropolitan Municipality, IDO will be up for tender, beginning from January 6 to March 13. The ferry services company has been operating since 1987 and has a fleet of over 52 vessels running a total of 18 lines between 36 sea terminals. IDO’s privatization tender is expected to draw bids from both domestic and foreign companies. Milliyet - Star 05.01.2011

New law to end state monopoly on rail transportation Turkey’s state-owned rail network may soon be available to private sector investments, thanks to the combined efforts of the Ministry of Transportation and the Turkish State Railways (TCDD). To be added to a series of draft laws awaiting the approval of the Turkish parliament, the law regarding the use of Turkey’s 11,000 km-long railway by the private sector grants private companies the right to transport passengers and cargo by rail, even operating high-speed trains. According to the soon-to-be-proposed law, the Ministry of Transportation will oversee the regulations that the private sector will adhere to, including licensing and adjustment of fees. Turkey plans to add some 15,000 km of track to its existing network by 2023.

Zaman 13.01.2011

INVEST.GOV.TR INVESTMENT SUPPORT AND PROMOTION AGENCY OF TURKEY (ISPAT)

FOR ANY CONTACT : DR. François BERNARD PERMANENT REPRESENTATIVE fbernard@invest.gov.tr

NEWSLETTER NO.22 FEBRUARY 2010 P.03


Industry Turkish government industry roadmap revealed Turkish Industry and Trade Minister Nihat Ergun has revealed the government’s “industry strategy document”, which focuses on increasing Turkey’s competitiveness in global markets. The detailed plan foresees the establishment of giant ports and logistics bases and the construction of railroads. It also focuses on knowledge-based industries, technology transfers and energy efficiency. The plan covering the years 2011-2014, consists of 72 key points and foresees more government support of research and development activities by the private and public sectors. It also says access to financing for small and medium enterprises (SMEs) will be made easier while credit guarantee systems will be developed and venture capital will be encouraged. The document also calls for capacity-building measures in nanotechnology and biotechnology in order to ensure the development of knowledge-based industries. The government will work to inform Turkey about industrial property rights and also protect new products. Hurriyet Daily News 06.01.2011

Mercedes-Benz to invest EUR 35 million in Istanbul plant After a year of record sales, Mercedes-Benz has stated its intention to continue investing in its production plant in Istanbul. Germany’s world famous automotive company sold nearly 30 thousand passenger and commercial vehicles in 2010, a record level in its 44 years in Turkey. Mercedes-Benz produces trucks and buses in its Istanbul plant under the name of Mercedes-Benz Türk, with the vehicles being sold to domestic and export markets.

The company produced 2,466 buses and 12,018 trucks in 2010, according to Mercedes-Benz Türk’s Directors’ Council Chairman Wolf-Dieter Kurz, and exported 1,792 buses and 1,679 trucks. Speaking of market recovery and growth, Kurz said that 12-13 percent of growth was expected from the new year, with hopes of annual vehicle sales reaching the 35,000 mark.

“Our investments in 2011 will amount to EUR 35 million” said Kurz, adding that they would focus on increasing exports of buses produced in Turkey. Milliyet 18.01.2011

FOR ANY CONTACT : DR. François BERNARD REPRESENTANT PERMANENT FBERNARD@INVEST.GOV.TR

P.04 NEWSLETTER NO.22 FEBRUARY 2010

INVESTMENT SUPPORT AND PROMOTION AGENCY OF TURKEY (ISPAT) INVEST.GOV.TR


Service Turkish ICT sector reaches USD 27 billion volume in 2010 The Turkish Informatics Industry Association, or TÜBİSAD, reveals 2010 growth data about Turkey’s IT sectors compiled by its official partner, the European Information Technology Observatory. According to the data, Turkey’s technology sector grew to USD 27.3 billion in 2010 and the communications sector had the largest proportion with 73 percent. According to data recently released, USD 20 billion of the volume came from the communications sector and USD 7.5 billion from information technologies, or IT. While in 2009 the main driving force for sectoral growth was 3G investments, in 2010 this position was taken over by software and services. TÜBİSAD forecasted that overall market growth in 2011 would be driven by accelerating growth in these two sectors. According to TÜBİSAD data, the software sector registered 4.1 percent growth in 2010, reaching USD 753 million, and is expected to grow 7.4 percent in 2011. Experts expect the total growth of the telecommunications sector to be around 5 percent in 2011. Hurriyet Daily News 13.01.2011

“Turkish insurance sector received over USD 5 billion of FDI” Turkey’s growing insurance market attracts foreign companies with long-term expectations. Insurance penetration in Turkey corresponds to 1.3 percent of the total GDP which gives the market the potential to grow with an increasing rate over the years, according to German insurer Ergo’s Turkish operations chief Akin Kozanoglu. “The growth potential lures foreign insurance companies to the Turkish market and we see them taking up positions for the long term,” said Kozanoglu, speaking about the future prospects of the industry. “The insurance sector is set to grow with the increasing amount of investments,” he added, noting that the insurance sector has received over USD 5 billion of foreign investment in the past five years. Ergo employs over 1,000 people in Turkey and has invested over EUR 400 million in the country. Zaman 28.01.2011

INVEST.GOV.TR INVESTMENT SUPPORT AND PROMOTION AGENCY OF TURKEY (ISPAT)

FOR ANY CONTACT : DR. François BERNARD PERMANENT REPRESENTATIVE fbernard@invest.gov.tr

NEWSLETTER NO.22 FEBRUARY 2010 P.05


Investment Strategy Deloitte: M&A’s in Turkey to rise in 2011 Mergers and acquisitions (M&A) in Turkey have become one of the most risk-free and advantageous business activities for investors, according to a Deloitte Turkey report entitled "Mergers and Acquisitions Report of the Year 2010". The report defined Turkey as an indispensible market for M&A activities and predicted investments to rise in the new year. 203 M&A activities in 2010 reached a volume of USD 29 billion in 2010. Around half of them consisted of privatizations. ”2011 will be a very active year in terms of M&A operations. Privatizations will play a decisive role” said Basak Vardar of Deloitte Turkey. Türkiye 07.01.2011

Argentinian companies seek Turkish partners The Confederation of Businessmen and Industrialists of Turkey (TUSKON), in cooperation with Argentina’s Ankara Embassy, have held a meeting of the “Turkish-Argentinian Commerce and Investment Committee”, formed to facilitate trade and business partnerships between the two countries. Thirty-five representatives of Argentinian companies operating in the fields of food, chemicals, energy, textiles, forestry, pharmaceuticals, and cosmetics, held meetings with their Turkish counterparts on partnership and distributorship deals to enter the Turkish market. Argentinian companies are also seeking to enter markets in the Black Sea and Middle Eastern regions via Turkey. Sabah 21.01.2011

FOR ANY CONTACT : DR. François BERNARD REPRESENTANT PERMANENT FBERNARD@INVEST.GOV.TR

P.06 NEWSLETTER NO.22 FEBRUARY 2010

INVESTMENT SUPPORT AND PROMOTION AGENCY OF TURKEY (ISPAT) INVEST.GOV.TR


Energy 2011 to see nearly TRY 7 billion investment in energy market Turkey’s Energy Market Regulatory Authority (EMRA) President Hasan Koktas has said a total of TRY 6.8 billion will be invested in Turkey's electricity and natural gas sector this year. During a press conference at the agency's headquarters in Ankara on Monday, Koktas said TRY 5.8 billion of that amount will be funded by private interests, while the remaining TRY 1 billion will be invested by the government. “In no other country would the private sector make this level of investment without being provided with a certain set of guarantees. Here, I would like to draw your attention to the fact that the private sector in Turkey will be investing TRY 5.8 billion without any guarantees, bearing the risk on their own,” he said, stressing the profitability of the Turkish energy market. Koktas said that for the first time in Turkey's history, over half the share of energy investments will go toward renewable energy generation. Today’s Zaman 06.01.2011

Turkish-Saudi JV to invest USD 800 million in energy Turkish Eser Holding and Saudi Acwa Power Intl. have signed a partnership deal to build a combined-cycle gas power plant. The USD 800 million plant will be built in the Yahsiyan district of Kirikkale in Central Anatolia. “The Turkish-Saudi project will employ some 500 people and will be operational by 2014,” said Turan Kiratli, Kirikkale Deputy of the ruling Justice and Development Party, who coordinated the efforts to decide on the location of the investment. The power plant will have a capacity of 800 MW. Hurriyet 19.01.2011

Exxon drill ship set sail for Turkish Black Sea coast The Deepwater Champion, a drill ship contracted by the US-based energy giant Exxon Mobil, set sail on Sunday to explore oil in the Black Sea. Mehmet Uysal, Director of the Turkish Petroleum Corporation (TPAO) said Deepwater Champion was constructed in dockyards in South Korea and is expected to be in Bandirma in the western Turkish province of Balikesir in the first half of March. “They are planning to start exploring deepwater prospects off the shores of Kastamonu province by the end of March or beginning of April,” said Uysal. Uysal said the approximate water depth in the Black Sea is 2,000 meters. “Our target depth varies between 3,500 meters or 4,500 meters. Total drilling will reach to 6,500 meters there." The TPAO Director said Exxon Mobil committed to drill two wells in the Black Sea, adding the first well will be drilled off Kastamonu. “The company may drill the second well according to the results it obtains from the first,” he said. “This ship will do its first drilling in Turkey. The average cost of drilling in the Black Sea is USD 200 million. Under the agreement signed with Exxon Mobil, it will meet all the drilling costs. In case oil is found, TPAO will join the investment. Exxon Mobil will get its expenses from the oil recovered.” Hurriyet Daily News 24.01.2011

INVEST.GOV.TR INVESTMENT SUPPORT AND PROMOTION AGENCY OF TURKEY (ISPAT)

FOR ANY CONTACT : DR. François BERNARD PERMANENT REPRESENTATIVE fbernard@invest.gov.tr

NEWSLETTER NO.22 FEBRUARY 2010 P.07


Renewable Energy Italian Enel to invest in geothermal energy in Turkey Italian energy company Enel teams up with Turkish Meteor consortium to invest in geothermal energy sources in western Turkey. A statement from Enel Green Power, a division of Enel Energy, said that the company intends to explore and utilize geothermal energy sources with its Turkish partner, the Uzun Group. Enel Green Power has been granted 142 licenses for geothermal energy investments that cover areas in the Aegean and Marmara regions. Enel and its Turkish partner the Meteor Consortium, part of the Uzun Group, will establish a joint venture for the endeavour. Enel Green Power CEO Francesco Starace said that Turkey has large untapped geothermal energy sources and Enel could build a 100 MW geothermal power plant with a EUR 350 million investment. Sabah 26.01.2011

Turkey plans TRY 2.8 billion of natural gas investments by 2015 Turkey is planning to significantly extend its gas distribution network and reach over 5 million new subscribers by the year 2015. The plans that natural gas distributor companies have submitted to the Energy Market Regulatory Authority (EMRA) include new investments and nearly a million new subscriptions in 2011. The figure is expected to rise to 5 million in 2015. The total investments in planning reach TRY 2.8 billion (approx. USD 1.7 billion) for the next five years, with some TRY 850 million (approx. USD 540 million) to be spent in 2011 alone. Sabah 24.01.2011

FOR ANY CONTACT : DR. Franรงois BERNARD REPRESENTANT PERMANENT FBERNARD@INVEST.GOV.TR

P.08 NEWSLETTER NO.22 FEBRUARY 2010

INVESTMENT SUPPORT AND PROMOTION AGENCY OF TURKEY (ISPAT) INVEST.GOV.TR


Quote of the month Emerging countries will see their contribution to the global economy surge in the near future and will make up the list of world’s top 30 economies by the year 2050, according to a HSBC Global Research report. The report forecasts Turkey’s GDP to 2.150 billion USD in 2050, making the country the 12th largest economy in the world. Turkey is also expected to reach “investment grade” status in the new year, the report states. HSBC Global Research

06.01.2011

Photo credits : ISPAT and Murat ÜLKER

CONTACT For any information or request for an appointment in France, Belgium, Luxemburg ; or if you are in charge of an investment project in Turkey, do not hesitate to contact me :

France, Belgium, Luxemburg, and Principality of Monaco Office

Dr. François BERNARD Permanent Representative INVEST.GOV.TR INVESTMENT SUPPORT AND PROMOTION AGENCY OF TURKEY (ISPAT)

55, Avenue Marceau 75016 PARIS; Fax : +33 170 248 761 @ fbernard@invest.gov.tr Gsm : +33 631 272 572 ; Tél : +33 146 946 725 FOR ANY CONTACT : DR. François BERNARD PERMANENT REPRESENTATIVE fbernard@invest.gov.tr

NEWSLETTER NO.22 FEBRUARY 2010 P.09


ISPAT Business & Investment Newsletter No.22 (EN)