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BRIEFING Strong Growth In National Defense Industry IN DEPTH Top 500 Industrial Enterprises BRANDS Ganjan New Town

JULY 2017 ISSUE 48

ECONOMY BUSINESS FOREIGN TRADE ANALYSIS

a New Form of Revolution Explore the achievements of Turkey’s service sector explained by the skilledworkforce, cost effective service compared to international standards.


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BRIEFING

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SPECIAL REPORT

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BRANDS

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EXCLUSIVE INTERVIEW

APRIL 2017 ISSUE 45

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ECONOMY BUSINESS FOREIGN TRADE ANALYSIS

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The Turkish Perspective

Contents 32 COVER 05 FIRST 05 | Turkish economy grows by 5% in Q1 of 2017 06 | TAV to expand operations in Saudi Arabia 07 | Turkey most active in encouraging FDI 09 | Turkish Defense industry projects strong growth 10 | Megabank project to support Turkey’s aim

a New Form of

Revolution

08

11 BRIEFING

57

11 | mega project for whole world

44 | LEADERS OF Exports

2016 results for the research of top1000 exporters of Turkey, which is conducted by Turkish Exporters Assembly for 15 years and covers 26 sectors, are announced by a press conference.

CIGA Airport Construction CEO Yusuf Akçayoğlu told the story of Istanbul Grand Airport in the OECD.

15 |Double Support for Exporters from TİM

50 | The Top 500 Industrial Enterprises

TİM has launched a new support to exporters on June 5, 2017 regarding target markets and sector problems.

23

44 INDEPTH

16 | Removing the Obstacles

26 | Turkish Airlines Opens

21 | Strong Growth in National Defense Industry

The airline known for its best-in-class catering and in-flight entertainment, allows its passengers to enjoy theatre plays during their journey.

Mehmet Büyükekşi attended to the “Turkey-Russian Federation Business Forum”

With the influence of growth in the domestic market, increased by 21.6 percent last year compared to the previous year.

Curtains in the Sky

28 | WORLD INVESTMENT REPORT:

TURKEY MOST ACTIVE COUNTRY IN PROMOTING INVESTMENTS

Turkey ambitiously sought out FDI by signing seven treaties in 2016.

Attracting an intense national and international attention, Turkey’s Top 500 Industrial Enterprises study greatly contributes to the efforts for tracking the development of Turkish industry and setting a course for its future.

62 AGENDA FAIRS, EXHIBITIONS, SUMMITS, MEETINGS IN THE NEXT MOUNTH

63 FIGURES THE BASIC INDICATORS OF TURKEY IN THE MAY 2017

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2 Online

Online

MANAGEMENT

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The Turkish Perspective Digital

The Turkish Perspective website is to be launched soon. A new medium to learn, analyze and monitor everything about Turkish economy and business, is born. The Turkish Perspective Digital will share the latest news, interviews with decision makers, provide in-depth analyzes and will be the foreigner’s guide in Turkey regarding regulations and legislations.

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Business Culture t Investmen ce S and cien Innovation ay D e th Video of News keting d B r a n Ma r

european COORDINATOR İnanç atılgan GULF COORDINATOR FEYZA GÜMÜŞLÜOĞLU contrıbutıng reporters İLHAN ALPAY OGAN RAMAZAN GÜZYURDU ALPEREN ÇEVİKASLAN design CREATIVE DIRECTOR AHMET SAİD ÇELİK

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PaNORaMa Tailor Made Incentives for Project Based Investments

YOUR COMPLIMENTARY COPY

ExCLUSIvE INTERvIEw

The Minister of Economy expresses his views on economic developments in Turkey.

BRIEFING Turkish Bureaucracy Concentrates on Energy IN DEPTH Trumponomics, Turkey and Infrastructure Investments

FEBRuaRy 2017 ISSuE 43

ECONOMy BuSINESS FOREIGN TRaDE aNaLySIS

APRIL 2017 ISSUE 45

ECONOMY BUSINESS FOREIGN TRADE ANALYSIS

TuRKEy’S TOP

SERVICE EXPORTERS Explore the achievements of Turkey’s service sector explained by the skilledworkforce, cost effective service compared to international standards.

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panoraMa Q&A on Turkey’s Attraction Centers Program

Discover your own story with Turkish economy’s comprehensive transformation process.

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BrieFing Startup Business House Project By TİM and TEB

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econoMy Business Foreign Trade anaLysis

BrieFing Strong Growth In National Defense Industry in depTh Top 500 Industrial Enterprises Brands Ganjan New Town

in depTh Invest to learn, Learn to invest

May 2017 issue 46

JuLy 2017 issue 48

econoMy Business Foreign Trade anaLysis

a New Form of Revolution Explore the achievements of Turkey’s service sector explained by the skilledworkforce, cost effective service compared to international standards.

More than a magazine, the Turkish Perspective will now be more interactive and responsive, as expected from Turkey’s main voice for international audience.

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JULY 2017 ISSUE 48


The Turkish Perspective

Editorial MEHMET BÜYÜKEKŞİ PRESIDENT (TIM)

TURKEY’S SHARE IN GLOBAL TRADE IS RISING

As Turkish Exporters’ Assembly, the representative of 67 thousand exporters, who employs more than 3.1 million people, we will continue to guide our exporters towards the future.

W

orld Trade Organization

recently announced their April 2017 global trade newsletter, which includes about 70 countries’ data and covering roughly 90% of the global trade. According to WTO data, global trade recorded an increase 6 months in a row, and Turkey’s share in global trade increased to 0.90% from 0.89% in April. In addition to this, our share in USA’s imports rose to 0.31%, share in UK’s imports to 1.72%, and share in EU’s imports to 1.29%. Since Turkey’s exports were increased by 9.5% in May, we expect our shares in those economies to further increase.

Positive developments in foreign trade affected GDP growth as well. In 2017 Q1, Turkey’s GDP growth was 5%, which is also the highest Q1 growth figure since 2014. In line with our expectations, net exports contributed by 2.2% to growth; in other words, about half of our growth was originated from net exports, ending the negative contribution streak of net exports of the last 5 quarters. As the dedicated exporters of Turkey, these developments are the proof of our vision in declaring 2017 the year of breakthrough. At this point, I would like to mention the recent increase in

Turkish Lira’s share in both our exports and imports. Since last year, starting with the President Recep Tayyip Erdoğan’s call to support Turkish Lira in exports, Turkish Lira’s share in the total has been steadily rising. According to the latest TUIK data, Turkish Lira denominated exports increased by 127% in the first 4 months of 2017, reaching 4.9 billion USD. Similarly Turkish Lira denominated imports also reached 5.2 billion USD with an increase of 21%. With these 2 developments, Turkish Lira’s share in Turkey’s international trade reached 8.5%. In June, we announced the results of our “Top 1000 Exporters of 2016” research, which we conduct with aims of analyzing our exporters’ profile, R&D spending, employment, branding, investment and profitability data. We are hoping to set role models for all of our exporters with this study and guide them in global markets. Another important even in June was TİM’s 24th Regular General Assembly. With the attendance of the President and Ministers we had a chance to relay our proposals and requests to the government from the first hand. We also rewarded top 10 firms in total exports, 26 sector champions and the firm which recorded highest increase in their exports. As Turkish Exporters’ Assembly, the representative of 67 thousand exporters, who employs more than 3.1 million people, we will continue to guide our exporters towards the future. Together with our Exporters’ Associations and all of our exporters, we will continue to produce more, employ more, export more and carry Turkey higher in the ladder. With the help of the latest export incentives and our hardworking exporters, we believe Turkey’s exports will continue to rise and contribute to Turkey’s growth on a greater level.

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The Turkish Perspective Content: Vote of Confidence to Turkish Stream P06 Turkey Most Active in Encouraging FDI P07 Turkish Tourism Industry Continues to Heal in May P07 A New Chapter for Turkey P08 Update of Customs Union P09 Turkey: A Natural Hub For Transport P09 Megabank Project to Support Turkey’s Aim P10 Editor: Mustafa Yiğit

First

economy, energy, textıle, avıatıon, fdı, tourısm, automotıve, defense, fınance, technology ...

ECONOMY

Turkish economy grows by 5% in Q1 of 2017

“The quarter growth was 0.5 percentage point higher compared to 4.5 percent growth in the same quarter of last year.”

Gross domestic product with production method increased by 14.3 percent, reaching 641 billion 584 million Turkish Liras at current prices.

T

urkey’s Gross Domestic Product (GDP) growth rate has increased by five percent in the first quarter of 2017 compared to figures in the same period last year, data from the Turkish Statistical Institute (TÜİK) showed on June 12.

Total value added increased by 3.2 percent in the agricultural sector, 5.3 percent in the industry sector, 3.7 percent in the construction sector, 5.2 percent in the services sector (wholesale and retail trade, transport, storage, accommodation and

food service activities) compared to the same quarter of 2016 in the chained linked volume index, TÜİK stated. Calendar adjusted gross domestic product meanwhile increased by 4.7 percent while seasonally and calendar adjusted gross domestic product

was increased by 1.4 percent compared with the previous quarter. Household final consumption expenditure increased by 5.1 percent, government final consumption expenditure increased by 9.4 percent and gross fixed capital

formation increased by 2.2 percent, it said. In addition, exports of goods and services increased by 10.6 percent while imports of goods and services increased by 0.8 percent in the first quarter of 2017. The growth forecast for the country was four percent.

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TExtıle

Have You Ever Heard of Vegan Fabric?

energy

VOTE OF CONFIDENCE TO TURKISH STREAM 75 percent of Turkish public supports TurkStream gas pipeline project, new polls say. The TurkStream project, which will carry Russian gas to the vast European market and increase Turkey’s energy supply security, continues garnering support from Turkish public, with the latest poll showing a 75 percent approval rate. According to StratejiCo, an independent corporate and public affairs consultancy firm, the poll results demonstrated the Turkish public’s belief that the TurkStream project would benefit the country. The poll, conducted via telephone interviews with 2,407 participants, showed that 68 percent of the local community in the Turkish northwestern cities of Tekirdağ, Edirne and Kirklareli approved of the project, while the approval rate for it stood at 65 percent in 2015. JULY 2017 ISSUE 48

energy

World’s first vegan fabric produced in Turkey’s Bursa by Ipeker Textile.

I

peker Textile based in the northwestern Turkish province of Bursa has become the world’s first producer of vegan fabric. After completing an approval process in Switzerland and Germany, the company’s fabric was granted the ‘V-Label’ from the European Vegetarian Union (EVU). The company’s global brand will be sold on market with a certificate code starting with ‘TR.’ The company was certified to with the V-Label May 2, a member of the board of directors of the Ipeker Textile Ihsan

Ipeker said. According to Ipeker, the certification process was thorough because EVU-given V-Label is the most trustworthy vegan/vegetarian certificate. “We have documented that there are no animal ingredients or proteins in the 146 different types of fabric we produce. In our production process, we provide continuity without harming nature and life,” Ipeker said. Ipeker Textile is a Turkish company that exports its products to more than 100 clients in 52 different countries.

avıatıon

TAV to expand operations in Saudi Arabia Turkish airport operator TAV inks deal to operate three more airports in Saudi Arabia.

T

AV has signed a deal with Saudi Arabia’s civil aviation authority to operate three airports in partnership with the Al Rajhi Group. The TAV would operate airports in Buraydah in central Qassim province, northwestern Ha’il city and western port

city of Yanbu for 30 years. “The number of airports we operate and passengers we serve will reach 17 and 110 million with Yanbu, Qassim and Ha’il airports,” TAV Chief Executive Officer Sani Sener said in the statement. Sener said the company

remains keen to utilize different opportunities in different parts of the world, especially in developing countries. Yanbu, Qassim and Ha’il airports are expected to serve 11.5 million passengers with $400 million investments.

Interest income from Turkish banks rises to $21.2B BDDK relesead new data about Turkish Banking Market.

The total interest income from Turkey’s banking sector reached TL 75 billion ($21.2 billion) in the first quarter of 2017, according to data released by the Banking Regulatory and Supervision Agency (BDDK). The interest income rose 20.3 percent compared to TL 61.8 billion in the same period last year, the data showed.The interest income for banks from loans in the first quarter of 2017 was TL 59.7 billion.The total interest expenses for banks, paid to deposit holders, increased during the same period to TL 37.9 billion from TL 33.9 billion last year, up 11.7 percent.Meanwhile, the net profit of Turkish banks climbed 59.2 percent in the first quarter, reaching TL 17.5 billion, up from TL 10.9 billion in the same period last year.


The Turkish Perspective

AVIATION

THY denies claims of its interest in Alitalia purchase Turkish Airlines (THY) press counselor denied claims that the Turkish flag carrier was interested in acquiring Alitalia, as reported in the Italian media According to the Italian daily Il Messaggero, THY was among 32 companies that expressed potential interest as a buyer, but it was reported to be only interested in acquiring some of Alitalia’s assets, rather than the entire airline. Another Italian news platform, ItalyEurope24, also claimed that multivariate names of potential buyers had circulated. Meanwhile, THY Press Counselor Yahya Üstün disputed these claims.“We are not interested, we have no meetings. The claims are completely unfounded,” Üstün said. The struggling airline kicked off its sale process in May in a bid to save the company. Alitalia was once a symbol of Italy’s postwar economic boom, but now is having difficulty competing at home against low-cost carriers and high-speed trains.

FDI

TOURISM

Turkey Most Active in Encouraging FDI The World Investment Report 2017 disclosed says that Turkey, which attracted $12.3 billion of FDI in 2016, was the most active in promoting investments by signing seven treaties.

O

ver the last 15 years in

particular, Turkey has been focusing on increasing foreign direct investments (FDI). Despite the global decrease in investments and a tumultuous 2016, the country drew in $12.3 billion of FDI in 2016 and actively engaged in investment treaties with countries around the world, according to the World Investment Report 2017 prepared by the United Nations Conference on Trade and Development (UNCTAD), highlighting countries with diversified industrial

manufacturing despite having no oil resources. Report found out Turkey to be the most active country in trying to attract FDI due to the fact that it signed seven international investment agreements in the area of mutual encouragement and protection of investments. Turkey was followed by Canada, Morocco and the United Arab Emirates with four international investment agreements each, and then Iran and Nigeria with three international investment agreements each.

rısıng of foreıgn dırect ınvestment Turkey is the most active country in trying to attract FDI.

$759

BILLION amount of foreıgn dırect ınvestments made ın developıng economıes

12%

$140

foreıgn dırect ınvestments made ındeveloped economıes

dırect capıtal ıncome came to turkey

THe rate of

BILLION

TURKISH TOURISM INDUSTRY CONTINUES TO HEAL IN MAY

According to the data of ATOR, number of Russian tourists came to visit Antalya in May hit a record.

Following the normalization of ties with Russia, Mediterranean coasts saw a record increase in Russian tourists. In May alone, 505,000 Russians visited Antalya and its neighboring areas, corresponding to a 5,000 percent increase compared to last year, an Association of Tour Operators in Russia (ATOR) report published revealed The report said: “The record in the number of tourists that visit Turkey in May belongs to Russians.” The official data shows the number of Russians visiting Antalya recorded a 5,315 percent increase,” and added that the number signifies that 48 percent of tourists visiting Turkey’s Mediterranean coasts in May were Russian citizens. The association forecasts that 3 million to 3.5 million Russians will visit Turkey this year.

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ENERGY

A New Chapter for Turkey

A New ındustry gıant borns

Minister Albayrak announced that Turkey plans to drill a well in the Mediterranean by the end of the year.

Turkey’s industrial output up 6.7 percent in April.

AUTOMOTIVE

LEADER INDUSTRY CONTINUES WITHOUT A HESITATE

INDUSTRY

Turkey’s auto exports up by 77 pct in first five months of 2017. Turkish auto exports grew by 77 percent over the first five months of 2017 reaching $5.69 billion, the country’s Automotive Manufacturers Association (OSD) said Thursday. According to the OSD’s statement, during the period between January and May 2017 overall automotive production grew by 22 percent and reached 728,000 units, while vehicle production increased by 41 percent and 507,000 units compared to last year’s volumes. The U.S. dollar-based automotive exports increased by 23%.

T

urkey will increase

its investment in seismic exploration and oil and natural gas drilling, Energy and Natural Resources Minister Berat Albayrak said during a fast-breaking dinner with the crew of the Barbaros Hayrettin Paşa vessel, a seismic surveying vessel that is conducting seismic research off of Cyprus. Albayrak indicated his hopes that the activation of a drilling vessel off the coast of Cyprus by the end of 2017 will allow for the start of drilling operations in the Mediterranean and Black Sea, announcing that Turkey will drill its first well in the Mediterranean by the end of

the fourth quarter of this year. Indicating that Turkey will make investments in drilling and seismic exploration in the scope of the its national energy and mining strategy, Albayrak said he hopes that negotiations will soon be completed and that use of the Turkish vessel will speed up drilling and backup drilling rigs will facilitate drilling to begin in the Mediterranean and Black Sea. The Barbaros Hayrettin Paşa vessel was purchased in December 2012 for $130 million and is capable of conducting two- and three-dimensional seismic surveys at a depth of 8 kilometers. The vessel is also environmentally friendly.

Turkey’s calendaradjusted industrial production rose 6.7 percent in April compared to the same month last year, the Turkish Statistical Institute (TurkStat) announced. On an annual basis, all three main sub-indexes increased and the manufacturing index experienced a 7.3 percent rise, according to the report. The production of capital goods increased the most among the main industrial groupings, up 24.7 percent, compared to figure from the same month last year. All main industrial groupings, except non-durable consumer goods, were up in the same period, according to the report. The report also showed that production level was up 2.3 percent on a monthly basis.

increasıng the investment in seismic exploration Turkey aims to boost its position to become a major energy player in the region.

$44

84

$55

4.711

an average of annually in energy investments over the last 10 years.

the span of the barbaros hayrettin paşa in length

annual budget for energy and mining imports

the shıp’s capacıty of measure

bıllıon

JULY 2017 ISSUE 48

meters

bıllıon

tons


The Turkish Perspective

TRANSPORT

DEFENSE

Vital Capillarirs of Turkish Export: Defense industry

TURKEY: A NATURAL HUB FOR TRANSPORT Turkey’s shipbuilding industry sees steady growth. Transport, Maritime Affairs and Communications Minister Ahmet Arslan noted that increased investments in the Turkish shipbuilding industry have allowed it to gain remarkable momentum over the last 15 years with an annual turnover of $2.5 billion. Speaking at the launching ceremony of the MV Jambo Ferryboat at the Özata Shipyard in Yalova, Minister Arslan said, “The number of shipyards has risen from 35 to 79. We have 585 locations for boat production, with the capacity to produce 700,000 tons of steel every year and build 4.5 million deadweight tons of ships.” He added that Turkey’s shipping industry is one of the major sectors experiencing growth in the country.

Companies partnered with the Turkish Armed Forces Strengthening Foundation are focusing on technological innovation.

CUSTOMS

update of Customs Union Turkey prepares to negotiate expanding the scope of the Customs Union of the EU.

T

he TSKGV’s (Turkish Armed Forces Strenthening Foundation) connected companies ASELSAN, TAI, ROKETSAN, HAVELSAN, İŞBİR and ASPİLSAN are committed to research and development in their fields, and have produced many innovative products in recent years. ASELSAN, one of the fastest growing defense companies, has jumped from 93rd position of the world’s top 100 defense companies in 2006, to 58th position in 2016. By conducting applied research into developing areas of technology that are relevant in the medium and long term, the companies meet the military demands that are foreseen in future. The patents and design details of these products add to their military arsenal and expertise. As well as contributing to the military’s effectiveness with their products, the Turkish defense companies also adapt their

technologies to civilian uses, providing commercial benefits and contribution to the industry and economy as a whole. The companies aim to increase their R&D efforts, with ASELSAN, TUSAŞ, ROKETSAN, HAVELSAN, İŞBİR and ASPİLSAN, with the aim to obtain 373 patents and petty patents between 2017 and 2021. ASELSAN is aiming to singlehandedly obtain 213 patents and petty patents for various products and solutions in the five-yearlong period. HASELSAN follows with an aim of 61 patents, TUSAŞ with 54, ROKETSAN with 36, ASPILSAN with five, and IŞBIR with four. The TSKGV was founded after the Cyprus Peace Operation, when the U.S. placed an arms embargo on Turkey. The organization aimed to reduce the defense industry’s dependence on imports, with investments made to form the TAI, ASELSAN, İŞBİR, ASPİLSAN, HAVELSAN, and ROKETSAN.

Ankara, which made comprehensive preparation ahead of a meeting in Brussels, will discuss a number of topics including agriculture, e-commerce, public procurement, trade agreements, road transport quotas and livestock obstacles. Within the framework of the update, Turkey aims to provide access to the restrictions on public procurement in European countries without any obstacles. Thus, Turkey will gain preferential access to the public procurement market which is worth 422 billion euros. Turkey has prepared a comprehensive file for the reorganization of the Customs Union agreement signed with the EU 21 years ago. Negotiations will be held at the level of political directors in coordination with the Ministry of Foreign Affairs.

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FINANCE

Megabank project to support Turkey’s aim

Turkey and Indonesia, to that end, join talks to establish a megabank project that will act as a central bank for lenders in global Islamic banking.

MegaBank will significantly contribute to the development of Islamic finance.

T

urkey and Indonesia are working on a lender project that will operate in compliance with Islamic law. Though talks are ongoing, the project titled “megabank” is expected to contribute to Turkey’s aim to expand the share of participation banking in the Turkish financial sector. Deputy Prime Minister Mehmet Şimşek, who held a meeting with the Indonesian Finance Minister Sri Mulyani Indrawati, said that they discussed the megabank idea, which was launched by Indonesia as an Islamic bank project, while stressing the importance of accelerating the process at the same time. Şimşek also highlighted that the project will strongly support the goal of increasing the participation banks’ share in the sector to 25 percent. Pointing out that many bilateral talks were held as well as meetings, Şimşek said that they met with Kuwait’s Deputy Prime Minister and Finance Minister Anas Khalid al-Saleh and Saudi Arabia’s Finance Minister Mohammed bin Abdullah Al-Jadaan alongside the finance ministers from many African and other Islamic countries. Noting that they held bilateral talks with many countries, Şimşek said it was very productive in that respect, adding that the small,

JULY 2017 ISSUE 48

$300 bıllıon

Turkey’s initial contribution to the bank’s capital

25%

targeted share of the partıcıpatıon banks in the sector

The megabank should actually be seen as an initiative to provide the sector with liquidity and to contribute to its development.

263 Mıllıon

the current populatıon of ındonesıa

narrow meeting spaces at the venue were a real advantage enabling many issues to be discussed with several countries at the same time. Pointing to the fact that IDB’s president sides with the acceleration of the process, Şimşek said that the issue of the megabank needs more time due to its significance, adding that the project is a platform that will make a significant contribution to the development of Islamic finance, interest-free finance, interest-free banking and interestfree capital markets in terms of liquidity and resources. Şimşek said the megabank project will strongly support the goal of increasing the participation banks’ share within the sector to 25 percent and continued: “As Turkey, we are pushing hard to improve participation banking. There is a goal that President (Recep Tayyip Erdogan) has put forward. We have a very serious and ambitious goal to increase the share of participation banks in the sector up to 25 percent. That is why we have put forth a strong effort in this direction and we continue to do so.” He also added that the megabank should actually be seen as an initiative to provide the sector with liquidity and to contribute to its development, both locally and globally.


The Turkish Perspective Content: Mega Project For Whole World P13 Double Support for Exporters from TİM P17 Turkish Marbles and Minerals Eye Middle East P20 Influencer Marketing Vs Celebrity Marketing P21 Strong Growth in National Defense Industry P23 The Charm of Turkish Natural Stone P25 Turkish Airlines Opens Curtains in the Sky P26 Editor: Mustafa Yiğit

Briefing

avıatıon, support, marble, marketıng, defense, fashıon, LOREM, LOREM...

The Istanbul Grand Airport, which is an important mega project not only for Turkey but also for the region and even the whole world.

AVIATION

The International Transportation Forum

mega project for whole world

CIGA Airport Construction CEO Yusuf Akçayoğlu told the story of Istanbul Grand Airport in the Organization for Economic Co-operation and Development (OECD) International Transportation Forum in Germany to the 57 countries’ Transport Ministers. By ramazan güzyurdu

T

he forum, one of the most important events of the transportation in the world, focused on effective and safe transport infrastructure projects that improve environmental performance. The International Transportation Forum (ITF) 2017 Annual Summit took place in Leipzig, Germany, from 31 May to 2 June. The Transport Ministers of 57

countries in the International Transport Forum, where the representatives of the global transport sector gathered, listened the story of Istanbul Grand Airport. IGA Airport Construction CEO Yusuf Akçayoğlu talked about the Istanbul Grand Airport project at the sessions entitled “Management of Mega Project Transportation” and “Management of

International Transportation Connections” at the ITF Forum. Turkey Transport, Maritime and Communications Minister Ahmet Arslan also attended to the forum. The Istanbul Grand Airport, which is an important mega project not only for Turkey but also for the region and even the whole world, has received a great attention from forum participants.

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Briefing

Yusuf Akçayoğlu, who joined the Forum as one of the two invited CEOs of the Organization for Economic Co-operation and Development (OECD), noted that important developments have taken place in the transportation and aviation sector over the last 15 years and that many important projects investments are put into practice. Akçayoğlu continued: “We foresee that the Istanbul Grand Airport

Important developments have taken place in the transportation and aviation sector over the last 15 years.

Yusuf Akçayoğlu added that Istanbul Grand Airport project is an important BuildOperate-Transfer project.

JULY 2017 ISSUE 48

will increase the share of the transportation sector in the world. When the first phase will be opened in 2018, the airport will serve 90 million passengers and 100 thousand people will work in there. By 2025, the number of people to be directly or indirectly employed at the airport will reach 225, and the airport will make 4.9 percent contribution to the gross output of the country.” Yusuf Akçayoğlu added that Istanbul Grand Airport project is an important Build-Operate-Transfer project. Pointing to the importance of political stability in such BuildOperate-Transfer projects, Akçayoğlu stated that important projects have been completed in a timely and effective manner. A joint statement was also made, including the necessity of taking into account the rules set out in the framework of the Paris Climate Treaty and the United Nations Sustainable Development Goals. According to the Joint Declaration, the Ministers

will always keep an eye on the need to regulate existing legislation and the financial framework to further develop innovative mobile solutions and have called for a regulation that will accelerate innovation and respond to needs. The ministers also signed a joint declaration, drawing attention to high-quality transport infrastructure projects that provide effective and safe transport and improve environmental performance.

A Unique Experience It is put significant care into creating a passengerfriendly environment in Istanbul New Airport, with departing and arriving passengers sharing similar positive experiences. It simplifies passenger flow with easy-to-see transit routes, legible signboards and comfortable walking distances. Arrivals and departures will be organized in two different flows that will render orientation more intuitive, simple and clear.


The Turkish Perspective

The ministers also signed a joint declaration, drawing attention to highquality transport infrastructure projects.

Istanbul New Airport has a total of more than 100,000 m2 retail spaces. The airport’s retail space and food services will cover an area of 1,450 m2 per million passengers annually, thus maximizing passenger comfort and experience. We will thereby offer travelers more space, more options, more comfort. It is the biggest Duty Free zone in the world as the New Airport boasts more than 400 national and international brands over an area of 53 thousand square meters. Unifree Duty Free, 60% of which is owned by German Gebr. Heinemann, has won the operating rights for 25 years in the Duty Free zone.

Plaza, Parking Garage and Station The Plaza will be situated between the passenger transit unit and the terminal where visitors and those who meet passengers can roam freely. The area will include stores, eating and drinking facilities, and access to all means of transportation. The parking garage will be equipped with smart systems and a capacity of 24 thousand vehicles, the biggest in Europe. The New Airport’s Passenger Transit Unit will have a station in the terminal to connect integrally with subway and express trains.

Architectural Design Working on a terminal design that highlights Istanbul’s unique cultural

Working on a terminal design that highlights Istanbul’s unique cultural and architectural heritage while prioritizing passenger comfort.

and architectural heritage while prioritizing passenger comfort with the help of cutting-edge technology. The world’s most experienced national and international architectural firms will conceive a passengeroriented project, with special attention to motifs drawn from Turkish-Islamic art and architecture. Istanbul New Airport will not only demonstrate aesthetic quality but will function with a simple, useful system and a flexible, spacious design destined to stand out from all others around the globe.

90 million

Passangers will use the airport in 2017

100 thousand

People will work at the airport

100

thousand m2

Total retail spaces of the airport

%percent 4.9

Contribution to the gross output of the country

13


The Turkish Perspective

respond to the information requested by our exporters who reach them via phone or e-mail within 3 working days at the latest.”

Ask questions to relevant ministries

Support

Double Support for Exporters from TİM

The Turkish Exporters Assembly has launched a new support to exporters on June 5, 2017 regarding target markets and sector problems. By ilhan alpay ogan

T

wo different working groups,

named as Sectorial and Country Helpdesks, will be able to answer the questions of exporters quickly. Helpdesks will answer exporters’ questions regarding market analysis and sector specific problems. In addition to these duties, Sectorial Helpdesk will also relay exporters’ questions to Ministry of Economy, if needed. Mehmet Büyükekşi, President of the Turkish Exporters Assembly (TİM), explained that two different working groups, Sectorial and Country Helpdesks, will answer exporters’ questions quickly. Büyükekşi said the application entered into force on Monday, June 5, 2017. Büyükekşi made the following assessments for the Sectorial and Country Helpdesks: “With the Sectorial

Communication info for TİM Country Helpdesk: ulke@tim.org.tr +90 212 454 08 66 +90 212 454 01 87 Sectorial Helpdesk: sektormasasi@tim.org.tr +90 212 454 02 23 +90 212 454 07 99

General information on potential countries and the recently announced statistics will be accessible.

and Country Helpdesks, exporters will be able to learn about the markets they are planning to enter, which sectors and products have the potential to export, and will be informed about the ease of doing business in that country. In addition to this, general information on potential countries and the recently announced statistics will be accessible. If necessary, it will be able to communicate with the Embassy, Trade Counselor in the country through the Sectorial and Country Helpdesks.” Büyükekşi also stated that the Sectorial Helpdesk will collect the exporters’ sector specific problems and demands and relay them to the relevant ministries if necessary. “The only thing that our exporters need to do is to communicate with the Sectorial and Country Helpdesks. Our friends will

Büyükekşi stated that problems and requests of 67,000 exporters operating in every sector will be collected. Some of the problems and requests will be answered by TİM. “If we are not able to solve the problem TİM will forward these demands and problems to relevant ministries and agencies.” Said Büyükekşi Büyükekşi continued his words as following: “With our Ministry of Economy we declared the year of 2017 as the year of exports. In the first five months our exports increased by 10 percent. Our goal is to get our exports up even faster by solving the problems of all sectors faster. We hope to make it easier for our exporters to enter new markets with Sectorial and Country Helpdesks.”

About TİM Turkish Exporters Assembly (TİM) as the roof organization of the exporting firms around 67,000 was established in 1993. It continues its studies on legitimate basis as the professional organization of the firms involved in foreign trade. TİM organized as a general secretary organization as the Chairman represents being the upper organization of the associations of exporters. The primary reason of existence of TİM is to determine the issues related to the export, conduct improvement studies, and to insure the transfer of the problems of the exporters to the highest competent authorities.

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Briefing

Removing the Obstacles Mehmet Büyükekşi attended to the “Turkey-Russian Federation Business Forum”

Turkey - Ethiopia Business Forum Organized Successfully Turkish and Ethiopian business leaders met in Ankara to open a new chapter in bilateral relations.

W

ithin the coordination

of our Ministry of Economy, Turkey – Ethiopia Business Forum organized by the Turkish Exporters’ Assembly Ankara Representative with the participation of 26 companies on the 26th of May, 2017 in Ankara. During the Forum, Representatives from the Ethiopian Embassy in Ankara made a presentation about trade and investment opportunities in Ethiopia. Following the informations given by the presentation, Turkish companies asked JULY 2017 ISSUE 48

their questions about all they intererested in this country. From Ethiopian Embassy in Ankara, His Excellency Mr. Ambassador Ayalew Gobezie Workneh and Mr. Tesfakiros Hailu Gebremariam Minister Counsellor in charge of Business and Economy Diplomacy Affairs and Investment Affairs, Mr. Terefe Haile Eggu – Counsellor in charge of Investment and Trade Affairs Affairs, Mr. Abdela Gultamo Nuri – Minister Counsellor in charge of Investment and Tourism Affairs have been participated to our forum.

M

r. Büyükekşİ, who

made a speech in “Turkey-Russian Federation Business Forum”, mentioned that our export to Russia increased by %30 in the last four months, whereas our import from Russia also increased by %15 in the same period of time. Mr. Büyükekşi also added that it was expected to have a greater increase in our export to Russia in May. The Memorandum of Understanding that was signed between Turkey and Russia on 22 May 2017 during the Black Sea Economic Cooperation Forum held in İstanbul is considered a new page in the economic relations of the two countries. Business networks of the mentioned two countries came together in the TurkeyRussian Federation Business Forum, organized by Turkish Exporters’ Assembly (TİM) and took place on 23 May 2017.

Addressing that they are working to bring the TurkishRussian trade relations to the level that was experienced in the past, Mr. Büyükekşi also emphasized that the problems with visa process, customs entry, high sum insured and deposit values must be avoided for our trade relations to grow stronger.

“Now it is the turn of businessmen.” Consul General of Russian Federation in İstanbul Mr. Podelyshev said “During the last period of time, our Presidents came together for five times. We do not hold meetings with any other leader such often. Now it is the turn of businessmen.” Mr. Podelyshev, who put an emphasis on the Memorandum of Understanding, signed between the two countries, did also call attention to the investment opportunities, provided by Tatarstan.


The Turkish Perspective

TİM Taking Initiative Turkey Exporters Assembly will offer suggestions about VAT system.

T

urkish Exporters Assembly started to work

for “Reforming VAT System” to offer exporters’ suggestions to the government. TİM started to prepare a report on the VAT system, which is one of the most important complaints of exporters. The study will present the suggestions for reform. TİM Chairman Mehmet Büyükekşi said: “As Turkish Exporters Assembly, it is our priority task to remove the obstacles in front of our exports and exporters, to identify and solve all the problems of our exporters, especially the sectoral and structural problems. In this sense, one of the important issues that our exporters demanded is reform in VAT system. From the point of view of our exporters, the most important troubles in the process are the delays in VAT returns. In the Exporters Tendency Survey, which we announced last month, our firms also revealed the problems they have experienced about delays. Due to the delays, the financial burden of our exporters is increasing. Besides these, the intensive bureaucracy experienced during the transactions is also an important problem. As the Turkish Exporters Assembly, we are also preparing a report for the solution of these problems. With this study, we will present our reform suggestions by making a comparison with the sample countries. In this work, we will present our final suggestions at the beginning of July to the

Minister of Finance. Then, we will share it with the public. As exporters, we are working hard to reach our goals. While we work in line with our targets, our government also opens the way for our exporters. Within this scope, we believe that the reforms to be made in our VAT system will provide very important benefits for our exporters.”

Half of the Growth Comes From Net Exports Büyükekşi evaluated the growth of the first quarter of 2017.

P

resident of Turkey Exporters Assembly

Mehmet Büyükekşi stated that net exports contributed 2.2 points to growth within the expectations, said: “Turkey’s economy began 2017 with a strong growth data after 2016, a tough year. The 5% growth rate we caught in the first quarter of 2017 was the highest first quarter we have seen since 2014. Now in 2017, that we declare “Breakthrough Year in Stability”, with the recovery of the global economy and the end of the troubled periods for our country, Turkey is making great progress both in growth and in exports. Our exports increased by 8.9% in the first 5 months with 5% GDP growth in the first quarter. The strong increase in our exports contributed significantly

With the support of our government to exporters, I believe that in the rest of 2017, net exports will make a greater contribution to growth.

to growth. In this period, we anticipated 2.2 points contribution of net export to the growth. That means half of our growth is originated from net exports. Thus, net exports, which has been negative since the last quarter of 2015, contributed positively to the growth again. In this sense, I congratulate all our exporters. Nevertheless, the revitalizing steps of the internal market that our has taken also created a significant revival in domestic demand in the first quarter. In addition to the increases experienced in consumption, investments also increased by 2.2%. On the other hand, industry sector also achieved a strong growth of 5.3% in the same period. With the support of our government to exporters, I believe that in the rest of 2017, net exports will make a greater contribution to growth. We hope that, in the upcoming period, we will see higher growth rates in investments as well as increased confidence and stability in our country”

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Briefing

MARBLE

Turkish Marbles and Minerals Eye Middle East

Middle East Stone-2017 Fair including marble, granite, travertine, natural stones and decorative products such as mosaics was held in Dubai. By MUSTAFA YİĞİT

D

ubai Middle East

Stone-2017, the largest marble fair in the Middle East, which offers the opportunity to introduce Turkish marble and natural stone and lasts 4 days, has ended. Dubai Middle East Stone-2017, the largest marble and natural stone fair in the Middle East, was held between May 22-25. Turkish marble firms, which aimed to have a strong participation in all international related fairs with the announcement of Turkish Natural Stones Promotion Year of 2017 under the leadership of Turkish Marble Mining Foundation and Istanbul Mineral Exporters Association, were represented in Dubai. Nearly 30 Turkish firms, including marble, granite, travertine, natural stones and decorative products such as mosaics, were exhibited. Speaking about the fair, Turkish Marble Mining Foundation Chairman Ersoy Erol, said that the fair didn’t meet the expectations of the sector. “The stagnation experienced in the Middle East reflected to this fair, and the exhibition where very few visitors came from abroad was generally faint.” Erol, indicating that the exhibitors were disappointed added, “However, the season started with the China Fair İzmir Natural Stone Fair was

JULY 2017 ISSUE 48

investments, expects natural stone imports to increase in the coming years and this fair is good in terms of introducing Turkish natural stone to UAE firms. “ Erol said: “We will introduce Turkish marble to the world with stronger participation in the coming international fairs and we will increase the competitive power of Turkish natural stone producers on the international market.”

About Turkish Marbles and Minerals Foundation

“The stagnation experienced in the Middle East reflected to this fair, and the exhibition where very few visitors came from abroad was generally faint.”

mobilized. The Coverings Fair, which was held in America after, was also very good in terms of Turkish companies.” Ersoy Erol, who reminded that they declared the Turkish Natural Stones Promotion Year in 2017, said, “Dubai is the most important door to open up Turkish companies to the Middle East, UAE, which has completed many sub and superstructure

Aiming to contribute to the business operations and commercial activities of marbles, minerals and natural stones, which provide a great amount of added value to the economy of Turkey, the Turkish Marbles and Minerals Foundation was established in 2010. Making great efforts to increase the exportation and use of the Turkish natural stones and minerals, which is a significant contributor to the exportation volume of Turkey, in the international markets, the Turkish Marbles and Minerals Foundation, is involved as an umbrella organization of the industry, in all processes to support both employers and employees. Aiming to contribute to the research and development activities of the companies operating in the marble and mineral industries and, ensure that the projects developed are in compliance with the respective European Union legislation and international regulations, the Foundation leads the development of the industry by means of providing the stakeholders in the industry with training activities in respect of foreign and domestic threads, opportunities, new technologies and new ideas.


The Turkish Perspective

MARKETING

INFLUENCER MARKETING VS CELEBRITY MARKETING

Marketing industry is chasing the answer for this question: Which one is more effective? Influncer marketing or celebrity marketing? By MUSTAFA YİĞİT

I

nfluencer marketing’

is a range of promotional and marketing activities aimed at influencing a target consumer group and encouraging it to buy a good or service, performed by individuals with the power to sway a specific group in social networks through their social media accounts. Also referred to as ‘influential marketing’ in Turkish, ‘influencer marketing’ consists of celebrities or well-known personalities promoting a brand’s

products, commercials or messages to their followers directly or indirectly via their own digital channels. On the other hand, influencer marketing is more than just the direct promotion of a product or service. It also creates an experience between the followers and the brands via the desired message and forges a connection with the brand. Therefore having a message with a fun and creative content directly impacts the message’s engagement rate, distribution

and reach. In short, influencer marketing creates rapid brand recognition and reach for brands.

Who is an internet sensation? The promotion of various brands’ products by celebrities or well-known personalities was a strategy that was in use before. Back then, they could be athletes, singers, musicians, businessmen or political figures recognized by society. Nowadays, with the popularity of the

internet and social networks, a new brand of internet celebrity has emerged. Today, in addition to socially recognized celebrities; a high school student with a knack for playing video games, a housewife whipping up excellent recipes or a traveler over 50 years-old sharing pictures and videos of his travels are all able to have millions of followers on the internet through their social media accounts and become worldwide internet sensations.

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Briefing

How do they help brands? An influencer marketing campaign is a measurable marketing strategy. The data on views, shares, comments and redirects generated by the content pertaining to the campaign, and their impact on the target audience are measured with ‘engagement level’ rates. Moreover, all leads and redirects can be easily monitored through follow links embedded into campaign posts and costs per user can be calculated. As such, influencer marketing campaigns are very advantageous for brands and companies. Güven Çelikkaya who is the director of Influencer Marketing Network CC Media House operating in Turkey and Middle East pointed out that Influencer Marketing is a fast popular marketing method and occasionally confused with Celebrity Marketing. “Influencer Marketing and Celebrity Marketing are quite different. Celebrity marketing tries to promote products using the popularity of a famous person, especially in traditional circles. Promotions in high-reaching parcels, especially TVs, are perceived as direct advertising by consumers and their ownership is limited. Influencer Marketing is a completely advice-based marketing method. Influencers’ promotions are perceived by their followers as sharing experience and advice, so they are much more successful. Research shows that young people, especially Youtube viewers, are 70 per cent more confident than Influencers’ recommendations, compared to the ranks of traditional venues.” he said. JULY 2017 ISSUE 48

Influencer Marketing’s budget is 10 times less than TV

Finally, Güven Celikkaya added that all brands today are focused on campaign investment returns (ROI), which is very easy to measure the effect of campaigns on digital platforms. “Investigations of influential marketing campaigns are 6 to 10 times more effective than traditional media,” said Celikkaya. Güven Çelikkaya noted that the differences between influencer marketing and celebrity marketing practices has a direct impact on the campaign’s goals and success.

1. Celebrity Marketing is a

marketing method in which famous people promote a product or brand. In Influencer Marketing, Influencer does not have to be a million fans. A person with limited influence and access in their own neighborhoods and social networks is also

All leads and redirects can be easily monitored through follow links embedded into campaign posts and costs per user can be calculated.

an Influencer and may be included in Influencer Marketing campaigns.

2. In Celebrtiy Marketing, people Güven Çelİkkaya Operations Director at CC Media House

About CC Media House CC Media House is an Influencer Marketing Network operating in Turkey and Middle East regions in Influencer Marketing and Online Video Content. CC Media House is working on social media such as Youtuber, Twitch TV Broadcaster, Instagram celebrity, which have contractual relationships, with internet talents with high follower numbers and “natural advertising content” and “brand integrated video content” studies for branding.

are expected to acquire the famous person idol and associate themselves with the brand and purchase the product. In Influencer Marketing, there are trustbased relationships. Shares are advisory and share experience. A perception about the brand / product is created through the contacts. This perception is aimed at sales or reputation as a result.

3. Celebrity Marketing is a

strategy that aims to reach as many people as possible. It is designed to be heard, to be heard, to be heard but not to interact. In Influencer Marketing, influencers are in constant dialogue with followers. Such interaction is more prevalent than access. For this reason, sharing is more obvious with feedback. In the successful Influencer Marketing campaigns, Influencers are not only the advertising face of the brand but also the brand ambassadors of the continuous dialogue with the consumer.

4.

Celebrity Marketing, the famous person is the face of the brand message. The scenario and content specified by the brand are shared by the famous person or distributed through the brand. The brand uses reputations as a message tool. In Influencer Marketing, influencers are creators of content. They produce content by using their own creativity and acting in accordance with followers’ liking. This makes the content unique and natural, so the effect is much higher than the scripted ad content prepared by the brand.


The Turkish Perspective

“Turkey’s security, which is in the middle of a geography that resembles a fire circle, comes before anything else.”

defense

Strong Growth in National Defense Industry With the influence of growth in the domestic market, increased by 21.6 percent last year compared to the previous year. By alperen çevikaslan

T

he turnover of the

defense industry, with the influence of growth in the domestic market, increased by 21.6 percent last year compared to the previous year, reaching about $6 billion, according to a Defense and Aerospace Manufacturers Foundation (SASAD) report. The said report analyzed the performance of the defense industry in 2016. Increasing by 55 percent in 2016, the amount of orders received by the sector were around $12 billion. According to the association report, which represents more than 90 percent of the sector, significant improvements in sector performance data such as turnover, orders received,

Foreign sales revenues and a small increase in exports were reported to have grown in the domestic market.

product and technology development expenditures and employment have been observed. While the sales revenues and exports in the sector reached the same levels as the year before, the increase in imports showed a parallel development with the turnover. The defense industry’s turnover figure for last year, when compared to 2015, rose by 21.6 percent to $5.97 billion. In the breakdown of the sales volume of the technology segments of the sector, land platforms and systems reached the highest sales volume with $ 1.7 billion, followed by military aviation with $888 million and the army-ammunition and missile with $844 million.

Furthermore, C5ISR (Operations research and analysis, military operations analysis, strategic level analysis capabilities, business development analysis, knowledge management) and information technology lagged behind expectations. The turnover of operations in this segment, which constitute the biggest slice in the world defense market, are in the process of being evaluated. As for the revenues from overseas sales, they increased by 1.24 percent to $1.95 billion. It was indicated that the increase in overseas sales revenues and a small increase in exports has resulted from a growth in the domestic market. Foreign sales revenues and a small increase in exports were reported to have grown in the domestic market. Furthermore, the compound annual growth rate of the sector for the 20112016 period was calculated as 6 percent. Accordingly, although the turnover in 2016 could be seen as good, the compound annual growth rate for the period of 20112016 was not considered sufficient for the sector’s 2023 targets.

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Briefing

It is also necessary to think of the defense industry not only as weapons, ammunition and military vehicle production.

institutions that can see this “interface” function at the point of development of cooperation in the field of defense industry. With 18,000 members, the ISO is the right adress” he said.

R&D Oriented Growth The monthly meeting of the Istanbul Chamber of Industry (İSO) was held on the main agenda of the meeting, “The Quest for New Vision in Our Defense Industry, Recent Developments in the Sector and the New Business Alliance Possibilities”. Chairman of the ISO Erdal Bahçıvan made the opening speech. Undersecretary of Defense Industry Prof. Dr. Ismail Demir attended to the meeting as a guest. İSO Chairman Erdal Bahçıvan described the high performance of the Turkish defense industry in recent years as “a surprise”. “The defense and aerospace sector has grown to 5 billion dollars and our exports have doubled in the past five years to 1.7 billion dollars and the sector’s R & D expenditures have increased to 900 million dollars. The most important point in this success story is that the domestic production rate in our defense industry is increased to 60 percent. “ Underlining that Turkey’s geostrategic position makes security and defense matters much more important, Bahçıvan said, “Turkey’s security, which is in the JULY 2017 ISSUE 48

900

MILLION DOLLARS the sector’s R & D expenditures

%60 domestic production rate in the defense industry

1,68 BILLION DOLLARS

industry’s overseas sales revenue came from export

12 BILLION

amount of orders received by the sector in 2016

middle of a geography that resembles a fire circle, comes before anything else. It is a vital condition for an independent national defense concept that the industrial and technological infrastructure in the background of this defense should be met from domestic and national sources.”

ISO may be the interface for the public-private business association According to the 20172021 Strategic Plan of the Undersecretariat of Defense Industry, ISO President Bahçıvan expressed that the defense industry needed domestic and quality products. Industrialists also wants use the advantage in this area. It is important for the defense industry bureaucracy and the private sector to come together in a productive manner,” Bahçıvan said.” “Organizations that play an ‘interface’ role at the point of creating a productive and result-oriented business association mechanism will also play an important role. İSO, Turkey’s oldest and largest industrial chamber, is one of the most competent

Defense has a multiplier effect on other sectors It is also necessary to think of the defense industry not only as weapons, ammunition and military vehicle production, but as an organism that covers a wider range of fields such as commercial activities, R&D, building construction activities, food, clothing, Bahçıvan stated, “We see that the current account deficit decreases as the dependence on imported goods decreases. What’s more, the increase in exports of high-tech and high-value-added defense industry products is a big step towards quality export. The defense industry has a multiplier effect on other sectors. The industry has also made important contributions to many industries such as machinery, chemical, textile, automotive, information technology, construction, shipbuilding industry, both through production requirements and technological feedbacks.” Bahçıvan also stated that they are doing important work through the universityindustry business association platform they have established as İSO.


The Turkish Perspective

Ezra and Tuba Çetin, Turkey’s renowned designers, especially in the field of wearable technology in the world.

fashıon

THE CHARM OF TURKISH NATURAL STONE

Istanbul Minerals Exporters’ Association, which determined 2017 as “World Turkish Natural Stones Year”, moved to Monte-Carlo Fashion Week. By ramazan güzyurdu

I

stanbul Minerals Exporters’ Association,

which determined 2017 as “World Turkish Natural Stones Year” in order to promote natural stone, which is one of Turkey’s most valuable export products and to increase its exports, the charm of natural stone moved to Monte-Carlo Fashion Week with the collection of 2018 Cruise named “TURKISH STONES” by Ezra and Tuba Çetin. Monte Carlo Fashion Week was under the auspices of the Principality of Monaco; Monaco Government, Monaco City Council and Tourism Office in partnership between 1-3 June 2017. In this context, Ezra and Tuba Çetin, Turkey’s renowned

designers, especially in the field of wearable technology in the world, have undertaken the presentation of Turkish marble with the support of Istanbul Mineral Exporters Association (İMİB). The collection of 2018 Cruise, named “TURKISH STONES”, inspired by Turkish marbles that have become world famous, was exhibited at Chapiteau de Fontevieille on Saturday, June 3 at 14.30.

Ezratuba in Monte Carlo Fashion Week with Turkish Natural Stones Ali Kahyaoğlu, Chairman of the Board of the Istanbul Mineral Exporters Association (İMİB), stated that they are introducing Turkish natural stones with activities

Ezratuba is the first Turkish design brand in the Monte Carlo Fashion Week, where the 5th edition took place this year.

that raise awareness and that Monte-Carlo Fashion Week is part of it. “We are paying attention to Turkish marble with strategies that we have developed this year beyond conventional marketing methods. We have previously participated in the MIPIM fair with a stand that brought a contemporary interpretation of natural stone and artistic fiction. Now, with the collection designed by Ezra and Tuba Çetin, we will introduce our natural stones with over 400 colors and patterns. “ Kahyaoğlu, who said that they made meaning beyond marble construction materials stated that they acted sensitive about R & D and they made innovative products and added a value of adding natural stone. Ezratuba is the first Turkish design brand in the Monte Carlo Fashion Week, where the 5th edition took place this year. The designers regarded the historical and aesthetic aspects of Turkish marble, which is the starting point of defiance, as an infinite source of creativity, adding to the designs of marble diversity, which is Turkey’s most powerful point in international design.

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Briefing

About

I Therefore, the vision of İMİB Chairman Ali Kahyaoğlu added a great value the collection they said. The “TURKISH STONES” collection was displayed during the Monte Carlo Fashion Week and the 70th Cannes Film Festival, as well as in various communication channels and operations, as well as in the famous Galeries Lafayette showrooms in Cannes.

Naomi Campbell And Victoria Silvstedt Liked The Natural Stone Naomi Campbell, who won a prize for a gala dinner at Musée Océanographique on the evening of June 1, described the participation of a Turkish brand in Monte Carlo Fashion Week as a very nice development and hoped the designers would achieve it during a short conversation with the designers.

JULY 2017 ISSUE 48

After a protest organized on Saturday, June 3, the European community, hosted by Ezra and Tuba sisters and İMİB Chairman Ali Kahyaoğlu in Cafe de Paris’s Bellevue Terrace, attended a special invitation. The European society and the press participated in the conference. Honorary Consul of Turkey Ilhami Aygün and his family, Marseille Commercial Attaché Tuğrul Görgün İMMİB General Secretary S. Armağan Vurdu and İMİB Board Member Yaşar Kohen and his wife also participated the conference. The famous model and actress Victoria Silvstedt, one of the most favorite pieces from Ezra and Tuba Çetin’s 2018 Cruise collection of the night, celebrated IMMOB President Ali Kahyaoğlu and Ezra Tuba and expressed their admiration for the collection.

stanbul Mineral Exporters’ Association

(IMIB) is a professional non-profit association which deals with all export activities in minerals sector. Istanbul Mineral Exporters’ Association was founded in 1976 and has 2.600 members as of 2017. Among the principle areas of business of IMIB are natural stones, borates and concentrates, chromium ore, copper ore, magnesite, ferrochromium, zinc ore and feldspar products. Turkey, situated on the Alpine Belt, where the world’s richest marble deposits are found, is among the world’s oldest natural stone producers with four thousand years of production history that starts with the Marmara Island. With the Marmara and Aegean Regions at the forefront, almost in all geographical regions from the Thrace to the Eastern Anatolia, more than 400 different colors textures and patterns of natural stones are found that are of a quality capable of gaining appreciation in the world markets. Among these, granite, onyx, limestone, basalt, andesite, slate stone and diabase are types of stones that are leading in production with marble and travertine. Turkey is also among the most important natural stone producers in the world, with its developing industry and production technology. Turkish natural stone sector has an important place in the world with is richness of variety and reserves, sector experience, abundance of raw materials, ease of shipment in sea transportation, its dynamic sector structure, the new technologies being utilized and its broad color spectrum. Turkey is today one of the most important countries in the natural stone sector with more than a thousand large and small quarries.


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Briefing

AVIATION

Turkish Airlines Opens Curtains in the Sky

The airline known for its best-in-class catering and cutting edge in-flight entertainment systems, allows its passengers to enjoy theatre plays during their journey.

“Now Available on Turkish Airlines In-flight Entertainment Systems� JULY 2017 ISSUE 48


The Turkish Perspective

T

The plays acted on the stage were recorded with eight cameras from different angles. The recordings were done using special techniques to reflect the gestures and feelings of the actors on the stage.

he accord Turkish

Airlines has signed with the The City Theaters of the Istanbul Metropolitan Municipality has commenced on 1 June. The best theater plays exhibited in City Theaters started to be presented to the passengers in the in-flight entertainment system of Turkish Airlines. The plays will be broadcast on all international flights with Turkish Airlines’ Planet Entertainment System and they are available to foreign passengers with the English subtitle option. The plays of The City Theaters of the Istanbul Metropolitan Municipality, which has been active for more than 100 years, are serving as important cultural mediators by reaching out to the millions of Turkish Airlines passengers. In the Planet Entertainment System, the most popular theater pieces playing at the IBB City theaters are featured under the Theater category besides the movies, TV programs and music content in the in-flight entertainment system. The various contents of the in-flight entertainment system are renewed every month. And now, with the cooperation between The City Theaters of the Istanbul Metropolitan Municipality and Turkish Airlines, known for its best-in-class catering and in-flight entertainment,

About The City Theaters of the Istanbul Metropolitan Municipality

017

2016-2 GUR Süha UY

With the beginning of the collaboration, plays like Saadet Hanım, Geç Kalanlar, Karıncalar and Hayal-i Temsil will be available in the system.

The best theater plays has started to be presented in the in-flight entertainment system of Turkish Airlines. the passengers are able to enjoy theatre plays during their journeys. Along with the beginning of the collaboration, theater plays like Saadet Hanım, Geç Kalanlar, Pollyanna, Karıncalar (Bir Savaş Vardı) and Hayal-i Temsil has become available on the system.

Darülbedayi-i Osmani, meaning ‘Ottoman Beauty House’ was founded in 1914 and is accepted to be the beginning of the city theaters. The institution, which was transferred to Istanbul Municipality in 1931, changed its name to The City Theaters of the Istanbul Municipality in 1934. Darulbedayi-i Osmani, which helped popularizing the theater art in both Istanbul and Turkey was founded in 1914 with the decision of Mayor Cemil (Topuzlu) Pasha and the Municipal Assembly. It was transformed into a professional theater society with the play “Çürük Temel” staged in January 1916. In addition to the Tepebaşı Theater, the society soon opened its curtains on new stages. The City Theaters of the Istanbul Metropolitan Municipality, which took the name of City Municipal Theater in 1934, still continues to be an educational institution. The theater hosts about 3,000 audiences every day on ten different stages.

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Briefing

INVESTMENT

WORLD INVESTMENT REPORT:

TURKEY MOST ACTIVE COUNTRY IN PROMOTING INVESTMENTS Turkey ambitiously sought out FDI by signing seven treaties in 2016.

A

ccording to the World Investment Report 2017, prepared by the United Nations Conference on Trade and Development (UNCTAD), Turkey has noticeably increased foreign direct investments (FDI) over the last 15 years, attracting USD 12.3 billion in 2016 alone. The FDI inflows reflect the country’s diversified industrial structure, with manufacturing accounting for around half of the total FDI. The report also JULY 2017 ISSUE 48

highlighted the reforms that have been implemented and the incentives that have been introduced in Turkey in recent years to attract investments, particularly incentives in R&D and those granting citizenship to foreigners under certain circumstances. According to the report, Turkey cemented its position as the most active country vying for FDI inflows in 2016 as it signed seven international investment

USD 12.3 BILLION

Turkey’s FDI in 2016

55%

Rise in greenfield investments in 2016

USD 1.75 TRILLION

Global FDI in 2016

2%

Decline in global FDI in 2016

agreements in the area of mutual encouragement and protection of investments. Canada, Morocco, and the United Arab Emirates followed Turkey with four international investment agreements each. The report goes on to mention that a total of 37 new international investment agreements were concluded in 2016, of which 30 were bilateral investment treaties and seven were treaties with investment provisions.


The Turkish Perspective

AVIATION A

ENERGY C

urrently, there are seven active crude oil and natural gas pipelines in Turkey. The East-West gas pipeline projects, designed to bring gas from the Caspian Region and the Middle East to Europe via Turkey, are referred to as the “Southern Gas Corridor” (SGC). The Baku-Tbilisi-Erzurum Natural Gas Pipeline and the Turkey-Greece Interconnector are existing pipelines, while the Trans-Anatolian Natural Gas Pipeline (TANAP) and the Trans-Adriatic Pipeline are planned projects within the scope of the SGC. The delivery of gas to Turkey through TANAP will start mid-2018 and to Europe in 2020.

USD 27.1 BILLION

Energy and minerals imported in 2016

49% Electricity production by domestic resources in 2016

SOCAR plans additional investment in Turkey Azerbaijan’s state-run energy company SOCAR, a majority stakeholder of Turkish petrochemical maker Petkim, is aiming to make a USD 3 billion additional investment in Turkey. Speaking in an interview, SOCAR Turkey Chairman Vagif Aliyev said the new facility that SOCAR is working on may be the second Petkim and that it will be supported through the Turkish government’s investment incentives program. SOCAR is working with Turkey on the TANAP project as well. TANAP will see gas from Azerbaijan’s Shah Deniz field be transported to the western borders of Turkey. According to the officials, 70 percent of the project has been completed and the construction is planned to be fully-completed by the end of 2017.

SOCAR has made around USD 11 billion of investments in Turkey over the last decade. The company will complete the construction of Star Refinery in İzmir in 2018.

fter declines in 2016 and first quarter of 2017, international tourist arrivals to Turkey were up by 18 percent in April 2017. Some of the factors encouraging tourists to come back to Turkey include being able to benefit from lower airfares fed by the depreciation of TRY by 20-25 percent on average year-to-date against EUR and USD, the recovery of global economic conditions that led to rising travel demand, and Turkey’s improving relations with Russia, which is leading to a recovery of Russian tourists. The CIS region therefore accounted for the largest improvement by nationality, followed by the Middle East and Far East. The 7 percent increase in German and 9 percent increase in British travelers in April accounted for the improved European demand.

18% Rise in international tourist arrivals in April 2017

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Briefing

ADP to buy additional stake in TAV F

rench airport operator ADP, operator of the Charles De Gaulle and Orly airports in Paris and the largest shareholder of TAV Airports with a 38 percent stake, announced that it plans to increase its stake in TAV to 46 percent. The USD 160 million transaction is expected to be completed in summer 2017. By the end of 2017 TAV will operate a total of 17 airports. These include five in Turkey, among them Istanbul Atatürk Airport, one of the busiest airports in Europe, four in Saudi Arabia, two each in Georgia, Tunisia, and Macedonia, and one each in Latvia and Croatia.

Mirage Cargo to buy MNG D

ubai-based Mirage Cargo B.V. and Turkish MNG Cargo have applied to Turkey’s Competition Authority for the sale of MNG shares to Mirage. Established in 2009 to improve the aviation industry in its region, Mirage Cargo Services operates in transport and logistics sectors around the world. MNG Cargo is one of the largest cargo companies in Turkey. MNG has 815 branches, more than 9,000 employees, and over 600,000 daily deliveries.

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AUTOMOTIVE P

roven as a production hub of excellence, the Turkish automotive industry is now aiming at improving its R&D, design, and branding capabilities. As of the end of May 2017, 89 R&D centers belonging to automotive manufacturers/suppliers and engineering companies were operational in Turkey. Auto manufacturers are increasingly choosing Turkey as a production base for their export sales. This is evidenced by the fact that around 75 percent of production in Turkey is destined for foreign markets. In 2016, more than 1.14 million vehicles were exported from Turkey. While Germany, France, Italy, the UK, and Spain are currently the major export customers of the Turkish automotive industry, there is a trend of diversification in export destinations with companies looking to break into nearby emerging countries where there is considerably more demand potential for new auto sales.

Turkey’s automotive exports jump 77 percent y-o-y in Jan-May 2017

A

ccording to the Automotive Manufacturers’ Association report, automobile exports posted an increase of 77 percent year-on-year during the January – May 2017 period, reaching USD 5 billion. The report also said that during the same period automobile production rose by 41 percent annually, coming in at 507,000 units.

photograph by ISPAT

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The Turkish Perspective

T

High-Level Meeting on Conference On Turkey’s Outlook Energy & AviationMadrid, SPAIN - May 30, 2017

he Spanish-Turkish Chamber of Commerce and Industry and the Spanish Confederation of Employers Organizations (CEOE) held a seminar in collaboration with ISPAT at CEOE headquarters in Madrid. The seminar focused on the latest outlook in Turkey’s investment environment and recent hot topics that are impacting the country’s economy. Following the opening remarks of Juan Canals, President of

Paris, FRANCE June 8, 2017

CEOE’s Committee for Mediterranean Countries, Esther González, President of the Spanish-Turkish Chamber of Commerce and Industry took the stage. González stated that the primary objective of the meeting was to offer firsthand information about recent events taking place in Turkey and their possible effects on business operations and the investments of companies based in Turkey.

The conference also featured a speech by Ömer Önhon, Ambassador of Turkey to Spain, who touched upon Turkey’s constitutional referendum in April 2017, the outlook in the region, and talks between Russia, Iran, and Turkey. Also presenting at the meeting was Álvaro Ortiz Vidal-Abarca, Chief Economist at BBVA, who spoke on “Why invest in Turkey” while citing data from BBVA research.

On the occasion of the Ministerial Council Meeting at the OECD, Turkish Deputy Prime Minister Mehmet Şimşek attended a meeting organized by ISPAT during his Paris visit. Şimşek came together with high level executives of several major French companies operating in the energy and aviation industries during this meeting, which was followed by one-on-one talks.

Seminar On Turkey’s Investment Climate Rome, ITALY June 12, 2017

photograph by ISPAT

I

SPAT contributed to a seminar held in Rome by the Italian law firm Nunziante Magrone with a presentation on Turkey’s investment environment and opportunities awaiting international investors. During the seminar, Ambassador of Turkey to Italy Murat Esenli gave a speech that focused on Turkey’s recent political

and economic outlook. Participants also had a chance to listen to the success story of Leonardo S.p.A., which has been operating in Turkey for decades through its fully-owned subsidiary. Leonardo is known for the delivery of state-of-the-art communications capabilities in the aerospace and defense industry.

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Cover / Industry 4.0

The Age of Intelligent

Manufacturin Revolution The world has experienced the First Industrial Revolution with the invention of steam engines. The reporter of the Second Industrial Revolution was the mass production and the use of electricity. The Third Industrial Revolution has begun when electronic and digital technologies are part of mass production optimization. Today, the world is now talking about Industry 4.0. In other words, the heartbeats of a new system in which the machines talk about each other are heard at every stage of the production process of the technology. By MUSTAFA YİĞİT

JULY 2017 ISSUE 48


ring

The Turkish Perspective

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Cover / Industry 4.0

I

ndustry 4.0 refers to a period in which communication between machines is started by the internet, robots are engaged in production processes made by human power, and almost all production processes are digitized. It means that the existing production concept in the industry is being reshaped together with the developing technology. It is not possible to explain this new mode of production and its understanding with technology alone. We can perceive it as a new understanding emerged by adding many different concepts and applications such as Cyber-Physical Systems (intelligent electronic systems integrated with various in the production process, equipped with sensors and internet), Internet of Things and Big Data. Industry 4.0 was first introduced in Germany as a concept. It was a project of the German government to encourage traditional industries like manufacturing and to equip them with high technology. According to the Boston Consulting Group (BCG) analysis, Germany has begun to implement Industry 4.0, achieving productivity gains in industrial production, while reducing total production costs by 5 to 8 percent. This decline shows that Germany will have a cost advantage of 90-150 billion euros over the next 10 years. When material costs are excluded, processing costs are expected to decline by around 20 percent. In order to achieve these gains, it is thought that German producers will invest 250 billion euros in the next 10-year period to make their production systems and processes compatible with Industry 4.0. At the same time, it is anticipated that the increase in demand will result in an additional income of 300 billion euros and an

JULY 2017 ISSUE 48

increase of 6% in employment, with the increase in interest of enterprises in advanced technologies and consumers in privatized products. Above all, Industry 4.0, unlike other revolutions, is accompanied by an evolution of sustainability in itself. The financial gain that this revolution will emerge is said to be groundbreaking due to the changes in the workforce profile and the huge investments it will trigger. Countries that are rapidly adapting their manufacturing processes seem to be leaders in the new economic system, as Industry 4.0, along with cost advantage, creates competitive advantage. Industry 4.0 basically aims to bring together information technology and industry.

A New Era in Technology

Among the main components are new generation software and hardware, which is different from today’s conventional hardware, low cost, small footprint, low energy consumption, low heat production, but also high reliability. The most important goal is that the operating and software systems that will run these hardware are sparing in terms of resource and memory usage. If the Industry 4.0 strategy is to take place, the production cycle, costs and energy requirements for production will be reduced, and production volume and quality will increase. In developed economies, where a large part of the energy production is consumed by the manufacturing industry, the idea that


The Turkish Perspective

Industry 4.0 is the age of robots and intelligent machines. It is the footsteps of a technological development that goes right into the days when robots will take command with radio waves.

RFID (radio frequency identification) and improvements in robot technology should be included in the processes is increasing day by day in order to use resources more efficiently. Methods such as gathering data on production processes, integrating them into planning and control processes, modeling and simulation, cloud computing and large data analysis are some of the phases of the new industrial revolution. While globalization offers wider markets for industrial companies, improved purchasing conditions and opportunities for more comfortable production opportunities, it also presents some challenges for the industrial sector. Global competition is more intense and actors must be constantly more flexible

and efficient in order to stand out in this competitive position. In this process, it is a necessity to offer pajara products in a shorter time as well as having the ability to produce new, high quality, efficient and personalized products. Industry 4.0 is the age of robots and intelligent machines. It is the footsteps of a technological development that goes right into the days when robots will take command with radio waves coming from the human brain. The industry standard traditional craftsmanship will leave its place to expert engineers. “Cyber physics systems� are introduced, which can be controlled by a single person against the sophisticated structure equipped with sensors. It is known that with Industrial 4.0, which

is presently on the agenda of developed countries, especially Germany and USA, physical parts, vehicles and machines communicate with each other via internet. In this way, the logistics services can be operated more efficiently, in a timely manner, or prevent machine failures. With all these changes, the idle time in production is reduced and, as a result, resources are being used more efficiently. Future factories are beyond imagination, as it will be a necessity. Demand for changing consumer behavior and specialized products prevents an enterprise’s success from being measured only by high productivity. Now, success makes it necessary to produce specialized and differentiated products in the same manufacturing process. The manufacturing process envisaged by Industry 4.0 is possible by fully automatic production. It is expected that a production process using robots in smart factories is expected to begin in the new industry era, which requires analysis of production to be more productive in line with data collected from customers and suppliers. Intelligent robots know what to do with the sensor technology, such as the RFID tag, and how to handle the materials moving in the traditional production band. Thus, each differentiated product can be processed and followed with zero errors in the same production line. At the next stage, the connected machines talking to each other can check the quality of the product and detect errors in the production process more quickly. All of this process is planned to be managed by cyber-physical systems (CPS) linked to each other.

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Cover / Industry 4.0

It is envisaged that the production process in which supply chain and consumer data are used will be more coordinated and integrated. Another feature of the imagined factories is that they can speed up the design process of prototype products using 3D printers.

HOW WILL SMART FACTORIES WORK?

No More Human in Production Process

It is a reality that the human factor, which has an important role in the production processes in the industry up to now, has left its place to the intelligent machines to a great extent with the passing of the industry 4.0 fully. The use of intelligent machines in production processes leads to a significant loss of employment, but with Industry 4.0 it is thought that the need for more qualified human power will increase. Industry 4.0 also opens the way for the creation of a qualified human power to adapt to the process and to support training models with new technologies. The increase in the quality of all economic returns, including production in industry, is supported not only by technological adaptation but also by the increase in qualified human power and quality of life. The development of training models, the implementation of vocational and technical schools and universities at the point of responsibility is also a great responsibility. It is another reality that in the new world created by Industry 4.0, when humanity and intelligent systems are integrated with the education system which has a good infrastructure, it goes to an unmanned industrialization.

What is the Situation in Turkey?

TÜSİAD and Boston Consulting Group prepared a joint report on “Transformation of Industry in Turkey” in order to show importance of Industry 4.0 and where Turkey is. This report contains striking information. Accordingly, Turkey is positioned in a highly competitive position in the global value chain, thanks to its geographical location providing logistical advantage and the relatively low cost labor that enables flexible, low cost production. In the BCG Global Production Cost Index, which is formed by considering production costs, efficiency, energy costs JULY 2017 ISSUE 48

Autonomous robots

BIG DATA

SYSTEM INTEGRATION

ADDITIVE MANUFACTURING

AUGMENTED REALITY

and exchange rates, Turkey produces at an average unit cost of 98, while the US produces 100 at an average unit cost. In other words, the average direct production costs in Turkey are 23 percent below Germany and 2 percent below the US.

INTERNET OF THINGS

SYBER SECURITY

SIMULATION

CLOUD COMPUTING

This analysis shows that Turkey has a competitive advantage to gain share from the global value chain and to strengthen its export platform. In order to calculate the effect of Industry 4.0 on Turkey, TÜSİAD and BCG worked in partnership with 25 Turkish manufacturing


The Turkish Perspective

companies operating in six different sectors in Turkey. While six pilot sectors were selected for the study, the manufacturing industry sectors included in the policy documents prepared by the public were primarily evaluated. Six pilot sectors were identified on the basis of various socio-economic assessments, including competence areas within the context of the Industry 4.0 transformation, technology perspective, employment size, economic magnitude, and role within the supply chain. These sectors are; Automotive, machinery, white goods, food and beverage, textiles and chemistry.

New Labor Force

With Industry 4.0, low-skilled workers, especially those working in production, quality and maintenance functions, will be replaced by systems with automation. Increasing automation will help employees by making ergonomic improvements in physically challenging operations. Removal of heavy parts or assembly of parts requiring precision can be done by robots, which will direct both worker capacity to higher valueadded jobs and raise overall health and safety standards. In the next 10 years, about 500 thousand jobs are expected to decline in need of nonqualified labor, and about 100 thousand new, high-qualified employees will be needed. In addition, employment growth can be created in a new business

Turkey has a competitive advantage to gain share from the global value chain and to strengthen its export platform.

area of about 500 thousand as a result of the growth trend brought by the industrialists. Based on the modeling of the manufacturing sectors in Turkey, Industry 4.0 is expected to generate an absolute increase of 5 percent in employment over the next 10 years. At the same time, it is foreseen that the infrastructure of income pyramid and Turkey know-how will develop with high quality work force structure. Experts say that Industry 4.0 will magnify the country’s economies, coupled with increased customer demand for products, timely availability of products, increased global integration and a greater share of the global value chain as the driving forces behind this growth. These developments are expected to generate an annual increase of 3 per cent in industrial production. This growth is 1 percent in Turkey’s

GDP and it means an additional growth and an additional income of 150-200 billion TL. However, in order for these achievements to take place, Industry 4.0 seems to have to be addressed by a holistic industrial strategy and transformation program, rather than by some companies. It is estimated that Turkish producers need to invest approximately 10-15 billion TL (about 1-1.5% of the producers’ revenues) per annum over the next 10 years to include Industry 4.0 technologies in the production process. Now companies have to follow faster, more flexible and smarter processes of producing serial from the first draft design. The integrated products, ranging from design and engineering software to automation systems, servisten technical and logistic support, help to improve all production steps as well as linking the value chain of industrial production together. With advanced simulation techniques, it is possible to test production process changes, cost improvement and material utilization reduction. This, in turn, reduces the resources used and opens the way for efficient production. New production technologies allow efficient and rapid production of products that can be produced in a mass production format. Companies that react immediately to the changes and produce with short delivery times promise to be competitive on the international market.

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Industry 4.0 Cover / Lorem Ipsum

The fourth wave of technological progress in the industry will lead to a new generation of professions. These developments will change our lives and ways of doing business.

Revolution

A New Form of

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The Turkish Perspective

T

he main theme of the World Economic Forum (WEF), held in Istanbul in 2016, where the world’s leading heads of state and global business executives came together was the ‘Fourth Industrial Revolution’ project. Deputy Prime Minister Numan Kurtulmuş, who attended the ceremony on behalf of Turkey, said: “Unfortunately, Turkey lagged behind in the first, second and third industrial revolutions. Unfortunately, Turkey was able to make the revolution 100 years after the first and second industrial revolutions. In the third industrial revolution this period has been reduced to 25-30 years, but this period is still not enough. In Industry 4.0, Turkey will not be behind, but it will be one of the leading countries. We will endeavor to increase the competitiveness of Turkey with Industry 4.0 in the forthcoming period.” The founder of the World Economic Forum, Klaus Schwab’s last book, was discussing the concept of Industry 4.0. The book covers the industrialization impact of developments in 3D printing, nanotechnology and other areas of science within the context of Industry 4.0. Some sources use the concept of the Fourth Industrial Revolution, the Fourth Industrial Revolution instead of the concept of Industry 4.0. Technological advances have made it possible, since the beginning of the industrial revolution, to involve three main strata, indicating a large increase in industrial productivity. At the end of the 18th century, steam powered machines began to be used in factories. By the early 20th century, mass production was possible with electrical energy. From the 1970s automation became widespread in the

industry with electronic and information technology (IT). Today, we are witnessing the fourth phase of the industrial revolution, in which cyber-physical systems and dynamic data processing and value chains are connected end to end. Over the next five years, a third of the jobs that are considered important today in the employment market will have changed. By 2020, concepts such as advanced robotics, autonomous transportation, artificial intelligence, machine learning, advanced materials, biotechnology and genome science will enter our life together with the Fourth Industrial Revolution. These developments will change our lives and ways of doing business. The fourth wave of technological progress in the industry will lead to a new generation of professions. These developments will change our lives and ways of doing business. Some of the professions will disappear completely, some will develop more. Besides this, the professions that we have never known today will appear. Nobody is surprised if we see occupations like space lawyer, drone trainer, robot repairer in the coming years. Accenture CEO Pierre Nanterme, who provides professional services in the areas of international management consulting, technology and outsourcing services with 275,000 employees in 120 countries, is using the phrase for the new industry movement that will lead to significant changes in both our business and personal lives. It is not innocent. “The only reason why more than half of the companies on the Fortune 500 list since 2000 have vanished, is digitalizing.” While the private sector is doing necessary work and regulations for the Industrial Industrial Revolution 4.0, which the

The 4th wave of technological progress in the industry will lead to a new generation of professions. These developments will change our lives.

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Cover / Industry 4.0

Government of the Republic of Turkey has taken for granted, almost 85 percent of the SMEs in the Turkish economy produces low and medium technology. Those who produce low and medium technology in Turkey will be left behind with the realization of Industry 4.0 and the large industrial groups producing advanced technology will be integrated into the world. Those who keep pace with change will remain standing, and those who can not will vanish. So that for Industry 4.0 all parts of society should act jointly. It is inevitable that an Industry 4.0 mobilization will be initiated together with the initiatives of the official institutions, companies, entrepreneurs and non-governmental organizations. Is the collective action of all sectors of society sufficient for Turkey to want to take part in a cluster of highly competitive economies, to follow these global developments and to be among the pioneer economies of Industry 4.0? No. We have to remember, everything starts with education. It is indispensable tool training for industrial development and development. However, the Turkish education system has a second industrial revolution, a model of education organized to meet the needs of the industrial society. In order to establish the technical infrastructure of the fourth wave industrial revolution and the qualified workforce, this education model should be abandoned and the information society education model should be adopted. The educational program of the fourth industrial revolution is based on the knowledge of education, thinking, debate and research environment, lifelong education, teaching of learning, individual analysis and synthesis, problem solving and communication, professional values as well as ethical values, To take responsibility and to obtain intellectual flexibility to find interdisciplinary solutions. In order to reach these goals, firstly an education model should be accepted for the information society and then policies should be developed in harmony with this education model. The Turkish education system must be quickly restructured so that the new employees to be employed are able to meet the expectations of the fourth industrial revolution. JULY 2017 ISSUE 48

The necessity of industrial transformation must be accepted by policy makers, producers and society.

Turkey has to develop serious policies that cover a range of fields from production technology to marketing to educational R&D activities in order to capture this revolutionary change that is happening in the industry. It’s a mindset change. The subject is to be able to recognize a new way of thinking and production. For this, an education starting from primary school is needed. Besides this, the trainers have to comply with these qualifications. Education is no longer just to give information. Education should include design, production and writing of computer programs. According to the International Student Assessment Program, there is a long-term training plan at the core of the educational problem in Turkey, which is particularly subordinate among OECD countries. International Human Rights Violation Monitoring Center, in the 2013 World Human Rights Violation Report has

been noted that the Turkish education and examination system has changed 13 times in the last 11 years and vocational education schools are not productive and it is not enough to introduce the business life of vocational education practices. Despite this, Turkey, which is at the very beginning of the Industrial Revolution 4.0, has not missed the train yet. There is enough time to get her place. For this; We have to open up the moment of potential in our hands and open up the front of our new generation and make them happy by realizing themselves. Turkey is one of the world’s leading production centers, and even if the production capacity makes the Turkish industry attractive, the need for human power will be reduced by taking over production of robots in the future and will enable foreign companies to invest in their own countries. For this reason, our country needs to find its place in the global market, which is developing as the innovation center instead of the production center. Turkey should be in a position to catch and compete with the developing technology in the world. A basic strategy to follow in order to adapt to the industrial transformation that Turkey faces is to be determined first. The necessity of industrial transformation must be accepted by policy makers, producers and society, and care should be taken to put a common mind in search for solutions. We must identify the sectors in which industrial innovations can be applied and focus on these sectors instead of changing the entire economic system. The education system should be restructured according to the education model of information technologies in order to provide the information, technology and qualified human infrastructure that the sector needs. If Turkey fails to transform its industrial and educational infrastructure within the context of information processing and communication technologies, it will face the danger of losing global competitive power with increased productivity in developed countries. If we succeed in structuring the information society that the century needs, Turkish economy will reach the targets with the help of increased productivity, growth, employment and investment.


What does market expect from

Industry 4.0?

The Turkish Perspective

TÜSİAD has prepared a report on the Industry 4.0: Emerging Economy Perspective as a Necessity for Turkey’s Global Competitiveness.

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Industry 4.0 Cover / Lorem Ipsum

T

he report prepared by TÜSİAD aims to attract the attention on digitilization and the new revolution in industrial production process. “With the Industry 4.0 our lives will change and nothing will be same.” says the report. The reports underlines the following. Technology’s relentless advance has made it possible to significantly boost industrial productivity, especially since the late 18th century in three main waves. Steam-powered machines, the introduction of electricity in production and increasingly widespread robot automation movement after 1970s triggered these three trail-blazing revolutions. Today, we are in the midst of a fourth industrial (r)evolution, triggered by digital technologies. Nine technologies—including smart robots, big data, the Internet of Things, 3-D printing, and the cloud—have played a critical role in triggering this revolution. We define the Industry 4.0 concept that has emerged as a result of this revolution as the integration of the links in the value chain in a way that goes beyond automation. The most important characteristic of this integration is that all of the steps in the value chain are in constant real-time communication. Consequently, a vision of achieving an intelligent, self-adapting industrial process has emerged. This vision describes an industrial journey that is faster, more flexible, more efficient, and produces goods with higher quality. Industry 4.0 was put forward by Germany and later by other industrialized countries such as the U.S.. Industry 4.0 creates significant opportunities for these countries, which have lost their competitiveness in production over the years, to regain their advantage. For example, according to a detailed study conducted by BCG in 2015, widespread application of Industry 4.0 JULY 2017 ISSUE 48

is expected to have a very significant impact on the German economy in the next ten to 15 years. When we put this impact into numbers, we see that it is possible to achieve a cost-savings effect of up to €90 to 150 billion as a result of increased industrial productivity equivalent to 15 to 25 percent of the conversion costs associated with production. Furthermore, beyond the increased productivity, the Industry 4.0 process is a journey that creates its own higher value-added economy, fundamentally changes the established value chain, and, most importantly, creates an increased demand for skilled labor. It is critical that Turkey not only stay abreast of these developments but also takes its place among the leading economies implementing Industry 4.0. We must anticipate significant pressure on the factors that constitute the foundation of our competitiveness, such as lower labor costs and logistical advantages,

It is critical that Turkey not only stay abreast of these developments but also takes its place In The Process.


The Turkish Perspective

especially at a time when the indicators of competitive strength are so diverse and change so rapidly. In this respect, the goal must be to ensure and enhance the sustainability of our competitive advantage with Industry 4.0, but, beyond this, to create a Turkish industry with greater added value that receives a larger share of the world’s production value chain. We must remember that this will help Turkey achieve its goal of moving from an emerging market to the next level.

About TÜSİAD

TÜSİAD (Turkish Industry and Business Association), which was founded in 1971, according to the principles laid in the Constitution and in the Associations Act, is a non-governmental organization working for the public interest. TÜSİAD aims at enhancing the development of a social structure committed

to the universal principles of human rights, together with the freedoms of enterprise, belief and opinion, secular state governed by the rule of law, participatory democracy, liberal economy and the rules and institutions of competitive market within a sustainable environment. TÜSİAD, in conformity with Atatürk’s principles and objectives, with a view of seizing and outreaching the contemporary civilization level, works for the realization of the above-mentioned objective believing in the pioneer and entrepreneurial nature of business people who consider gender equality in politics, economy and education. TÜSİAD representing Turkish business working for the public interest, strives for entrepreneurs to operate in conformity with the universal business ethics; supports all the policies aimed at improvement of competitiveness of Turkish economy and social welfare in the globalization process through en-

hancement of employment, productivity, innovation capacity and the scope and quality of education. TÜSİAD contributes to the formulation of national economic policies, in an environment with persisting social peace and compromise, for the economic and social development by taking into account the regional and sectoral potentials. TÜSİAD contributes to Turkey’s communication taking into account competitiveness at global level, initiates a range of studies to develop political, economic, social and cultural relations as well as communication, representation and cooperation networks at international level to support the accession process of Turkey to the European Union TÜSİAD conducts researches, generates opinions, develops projects and organizes activities in order to expedite international integration and interaction as well as regional and local development. TÜSİAD, in the name of Turkish business, forms opinions and proposals, conveys them to the national parliament, the government as well as foreign states, international organizations and public opinion directly or through media and by using other means, aims to create a unity of opinion and action in the direction of the above-mentioned objectives. Following the global financial crises in 2008, industry sector has been positioned at the center of economic growth by most of the countries as a leading sector. In this context, productivity growth and innovative technologies became 6 determinant factors for added value increase with the knowledge based society transformation. Those factors, which are also crucial for increasing competitive power of Turkish economy, brought the global developments into the country’s agenda as vital matters need to be monitored rigorously and simultaneously.

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In Depth / Leaders of Exports

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The Turkish Perspective

LEADERS OF Exports

2016 results for the research of top-1000 exporters of Turkey, which is conducted by Turkish Exporters Assembly for 15 years and covers 26 sectors, are announced by a press conference. By mustafa yiğit

According to the research conducted by Turkish Exporters Assembly (TİM) on top-1000 exporting companies of 2016, Ford Motor Company has won the first place with $3, 9 billion among the most exporting companies. Tofaş Turkish Automotive Company became the second with $3, 1 billion and followed by OyakRenault Automotive Company with $2, 8 billion. Total exports have been decreased by 1, 13% and became $81, 4 billion last year. With its share of 27, 2% automotive sector has become the leader sector and İstanbul had become the leading city with 434 companies in it. While the income coming from the most imported country, Germany, has increased 4, 3% and become $14 billion, exports to Iraq became the most shrinking one among the top-10. President of Turkish Exporters Assembly Mehmet Büyükekşi stated: “There are only 10 companies who passed $1 billion threshold. Our goal for 2023 is that 50 companies will pass $1 billion exporting threshold. In able to reach our goal, products with high value-added should be exported and we should invest more on research-development, innovation, design and branding.”

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In Depth / Leaders of Exports

2016

results for the research of top-1000 exporters of Turkey,

which is conducted by Turkish Exporters Assembly for 15 years and covers 26 sectors, are announced by a press conference. According to the statements of President Büyükekşi on the research, Ford Motor Company has won the first place with $3, 9 billion among the most exporting companies. Tofaş Turkish Automotive Company became the second with $3, 1 billion and followed by Oyak-Renault Automotive Company with $2, 8 billion. According to TİM’s top-1000 datum, while the last year’s total exports have become $81, 4 billion by decreasing 1, 13%, their share in total exports has covered 57, 3%. 48, 8% of total exports has achieved by the top-500 exporter companies and 8, 5% of total exports of Turkey has achieved by the second-500 exporter companies. Export income coming from Germany, which is the leading exported company for many years, has increased by 4, 3% and become $14 billion. Among the top-10 exported countries, Iraq’s market has become the most shrinking one due to the conflicts in Middle East. On the base of country groups, European Union has got the first place with $68, 3 billion.

Goal; 50 companies passes the $1 billion threshold

President of TİM Mehmet Büyükekşi stated that their objective is to make Turkey a leading country not only in its natural environment but in whole world. Underlining that this research is clearing up the exports in Turkey, President Büyükekşi says: “There are only 10 companies who passed $1 billion threshold. Our goal for 2023 is that 50 companies will pass $1 billion exporting threshold. In able to reach our goal, products with high value-added should be exported and we should invest more on research-development, innovation, design and branding.” JULY 2017 ISSUE 48

“Our goal for 2023 is that 50 companies will pass $1 billion exporting threshold.”

Reminding that last year with 67000 exporters with them they have provided employment to 3, 1 million people, President Büyükekşi says: “Employment mobilization move of President Recep Tayyip Erdoğan has many repercussions throughout the country. Our government takes every possible precaution to provide a better work life. As Turkish Exporters Assembly, in order to support employment mobilization we have cooperated with Vodafone. With our supporting, Vodafone will provide free communication services of one year to newly hired small and medium sized enterprises. In this way, exporter SMEs would become advantageous in terms of their costs. Thereby, we both achieve to encourage SMEs to be a part of employment mobilization and to reflect their cost decreasing to their exports positively.

2016 “Year of Records”

Declaring 2016 as a Year of Records and 2017 will be a historical year in which Turkey will experience huge leaps, Büyükekşi added: “Last year our exports has reached 104 million tons. This is a record. Our share in world trade has increased 0, 89%. This is a record. Our share in European Union’s imports has reached 1, 28%. This is another record. As the representative of 67000


The Turkish Perspective

exporters who provided employment to 3,1 million people, we worked really hard and took firm steps forward. Reminding that European Union is still a strategic target for Turkey, President Mehmet Büyükekşi stated that updating of Customs Union would provide a turning point for exporters. Büyükekşi also declared that 11 of 48 planned visits of trade delegations had been achieved, that they visited İsrael with broad participation, and they will be visiting Romania and South Africa next week.

14

$

Export Income from Germany in 2016

3.1

Automotive Sector Has the Biggest Share

According to the research data: Producer Exporters had made up 65, 1% of the top-1000 last year. According to sectorial performances of the top-1000 exporters, automotive sector had won the first place with its share of 27, 2% and its volume of $22.184 billion. While Textile and Raw Materials sector has got the second place with its share of 12, 5%, sector of chemical and chemical products placed in the 3rd place with its share of 9, 7%. Top three sectors are made up with 100 companies from automotive sector, 106 companies from Chemicals and Chemical Products sector, and 179 companies from Textile and Raw Materials sector.

BILLION

mıllıon people The Number of Employees Provided by Exporters

155

$

bıllıon

Targeted Export Volume From Top-1000 Exporter Companies in 2017

İstanbul is the Highest Ranking City in Exports

Considering regional distribution of the top-1000 exporters, while Marmara region has the first place with 586 companies, İstanbul become the leader on the province basis with 434 companies. Moreover, İstanbul is the highest ranking city in exports in whole Turkey with its volume of $57, 4 billion. Bursa followed İstanbul with $13 billion, and then Kocaeli with $10,2 billion, İzmir with $7,9 billion and Gaziantep $6,3 billion. Considering profitability analysis of top-1000 exporter companies, average profit volume ratio of top-500 exporter companies has reached 6, 8% continuing its increasing trend. Average profit volume of second-500 exporter companies have decreased and concluded at 5, 52%. İnvestigating capital structures of top-1000 exporter companies, 726 of them have private capital, 108 of them have foreign capital and 3 of them have public capital. Year-end Exports are predicted $155 billion Concerning year-end exports volume of top-1000 exporter companies, President Büyükekşi stated: “Prediction of top-1000 Exporting Companies for Exchange rate of US dollar at the end of the year is 3,86 TL and for Euro it is 4,11 TL. This year Turkey’s exports are predicted as it will become $156 billion by increasing 9, 5%. As Turkish Exporters Assembly we are projecting that we will exceed our $155 billion target at the end of the year.”

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48

In Depth / Leaders of Exports

TİM President Mehmet Büyükekşi said number of R&D Centers will reach 500 at the end of the year.

18 Companies Operating in Full Capacity

According to expounded rates of capacity utilizations of 549 companies from top-1000 exporters, 118 companies are operating in full capacity. Total employment number of top1000 exporters had reached 567.000 last year. There are 174 companies which has Research and Development Centers from the top-1000 exporters, whose R&D expenses reached 5, 2 billion TL in total. Their share of total financial turnover is measured as 2%. Reminding that TurkishExporters Assembly has gave the promise to the government that number R&D Centers will become 500, Büyükekşi says: “In order to achieve our promise we are providing consultancy service to the companies. At the moment, 159 companies have opened or soon will open their R&D Centers.”

7000 Patents Have Been Obtained

Total number of registered trademarks of top1000 exporter companies in 2016 increased to 24,389. Registered international trademarks number is 13.087 and number of obtained patents is 7.019.Number of international fairs that top-1000 exporter companies had attended this year is 1750. They also participated in 273 foreign trade delegation and 859 domestic fairs.

A High Increase for Defense Sector

Turkish defense sector has continued its high rated growth in 2016. The Turkish Aerospace JULY 2017 ISSUE 48

Total number of registered trademarks of top-1000 exporter companies in 2016 increased to 24,389

Industries Inc. (TAI) has become the defense and aviation industry export champion in the country for the sixth time in a row. TAI has also been listed in the top 20 of TİM’s top 1,000 exporters’ list as TAI Chairman Prof. Dr. Oğuz Borat was presented with an award by Deputy Prime Minister Nurettin Canikli and Economy Minister Nihat Zeybekci at a ceremony held in Istanbul on June 17. President Recep Tayyip Erdoğan was also in attendance at the program. TAI aims to increase its exports, which stood at $500 million last year, to $2 to $3 billion by 2023 as a platform maker and integrator. Continuing to expand its scope with new products and growing technological competence, TAI aims to play a crucial role in Turkey’s goal of reaching $500 billion worth of exports in 2023, with an annual turnover of $1 billion and a turnover expectation of $10 billion.

President Mehmet Büyükekşi stated that updating of Customs Union would provide a turning point for exporters.


The Turkish Perspective

49

Numbers from tİm 2016 REport TURKEY’S REGIONS ACCORDING TO FIRST 1000 EXPORT Black Sea 26 Billion $

Marmara 586 Billion $

Eastern Anatolia 2 Billion $

Central Anatolia 76 Billion $

Aegean 156 Billion $

Southeastern

Anatolia 89 Billion $

Mediterranean

65 Billion $

FIRST 1000 EXPORTER COMPANY 2016 AR-GE PROFILE Number of R&D Center Companies Average Number of R & D Staff R&D Expenditure R&D Expenditure / Revenue

174 137 5.2 Billion TL %1,94

FIRST 1000 EXPORTER COMPANY 2016 TRADEMARK REGISTRATION Registered Trademark Number Registered International Trademark Number Patent Number

Number of New Patents

24.389 13.087 7.019 1.237

FIRST 1000 EXPORTER COMPANY 2016 EXHIBITION PARTICIPATION DATA Abroad Number of Exhibitions

859 1.750

International Fair Participation / Total Fair Ratio

%67.1

Domestic Number of Exhibitions

4,16 BILLION LIRAS

2017 Year Plan R & D Expenditure

2.614 NEW BRAND NUMBER

273

Overseas Trade Committee Number


50

In Depth / ISO 500

The Top

50

Industrial Enterprises JUNE 2016 ISSUE 35


The Turkish Perspective

500

al ses

Attracting an intense national and international attention, Turkey’s Top 500 Industrial Enterprises study greatly contributes to the efforts for tracking the development of Turkish industry and setting a course for its future.

51


52

In Depth / ISO 500

According to Bahçıvan’s statement, the employment of the Top 500 Industrial Enterprises of Turkey increased by 2.2 in 2016.

A

veal the present condition of the economy ccording and the problems it is experiencing. The to the Top 500 Industrial Enterprises’ producresults of tion sales increased by 8.8 percent comthe Istanbul pared to the previous year, from 450.505 Chamber billion liras to 490.043 billion liras. The of Industotal operating profit of the institutions try’s (ISO’s) increased by 18.6% to 52.4 billion liras “Turkey’s Top and the operating profitability rate rose to 500 Industrial Enterprises Research 9.4% from 8.7%. The exports of Top 500 2016” survey, Tüpraş took place with 32 Industrial Enterprises gained momenbillion 594 million TL production sales tum again in 2016, rising 3.1 percent to $ this year at the peak of the industry. The 55.1 billion. second and third lists on the list were In the survey, five automotive compaFord and Tofas, which are also Koç Group nies took part in the top ten and 48 new companies. According to ISO 500 results, industrial enterprises entered the list. The industrial gross sales increased by 8.8 first 50 companies of the list achieved percent to 490 billion liras, total operata total of 241 billion liras of production ing profit increased by 18.6 percent to and increased the share 52.4 billion liras and total of 48.8 percent in 2015 to exports rose by 3.1 percent 49.2 percent. to 55.1 billion dollars. Industrial establishments lost more than half of their Industry: Closest profits of 52 billion liras, Companion To which they have achieved, The Economy as financing leave. Explaining the results of Istanbul Chamber the research, the Chairof Industry Chairman man Erdal Bahçıvan said Erdal Bahçıvan recalled that “If the unexpected According to ISO that Turkey had a very negative events in Turkey difficult year in the meet- results, industrial gross were experienced in the ing organized by Turkey most developed countries’ sales increased by to explain Turkey’s Top economies, there would percent to billion 500 Industrial Enterbe more damage in these liras, total operating prises Research 2016. countries. However, the Bahçıvan expressed that Turkish economy, the profit increased by the industry’s data should Turkish private sector and billion percent to also be seen as a proof of our economy, despite all his own prosperity for the liras. these difficulties, did not year 2016. “The Turkish stop their dynamism.” industry has maintained its stability and Emphasizing that the industrial sector is determination to ‘achieve’ within one year, the most qualified contributor to the ecowhich has all the negativities in 2016, nomic growth by performing above the including financial difficulties, exchange global economy and driving the growth rate fluctuations, social, political, terrorist by 3.9 per cent performance, Bahçıvan and geopolitical problems.” he said. said: According to the Bahçıvan’s explana“Our industry shows that in such a tion, this research is very important to reperiod of performance, it is always the

500

490

52.4

JULY 201/ ISSUE 48

8.8

18.6

economy’s closest companion. In this context, it is the industrial sector that will save Turkey from entering the middle income market, create quality and sustainable growth, bring out our economy to the top, and ultimately be the strongest contributor to Turkey’s entry into the top 10 economies in the world. The industrialist has succeeded both in exports, in production and in new jobs, in all of the exams covering his basic responsibilities to his country. This effort and success proved that the industrial sector deserves to receive all kinds of support for the return to the production economy and for remaking the production culture in the economy.”

Criticism of Industrialists on R&D

Bahçıvan pointed out that R&D expenditures dropped by 16.3 percent compared to the previous year to 2.8 billion liras. The ratio of R&D expenditures to sales


The Turkish Perspective

Importance of Debt/ Equity Relationship

According to the Bahçıvan, in the debt/ equity relationship, a balance has been constantly deteriorating over the last 10 years against the equity sources. While the share of debts in the resource structure was 45.2 percent in 2007, this ratio increased to 61.9 percent in 2016. In the same period, the share of own resources decreased from 54.8 percent to 38.1 percent. The results showed the most negative debt/equity relationship in the last 10 years. “Industrial enterprises are not able to use their internal resources to grow because of the great effort and the fact that a substantial portion of their profits. The fact that the new investments to grow due to insufficient and dissolved equity are more borrowingbased, shows that 500 great establishments are in a relatively unreliable financing wheel.” Bahçıvan said. from production decreased to 0.57 percent in 2016. The number of companies making R&D dropped to 239. “The data show that the support and incentives for R&D investments can’t be answered as much as the competitors from the industrialists,” Bahçıvan said. He also stated that they should make a critical share in industrial R&D.

Increase in Employment

Manufacturing Industry Share in GDP

According to the survey, the industrial sector’s structural problem, which lasted for many years, continued. “This is the declining share of the manufacturing industry in GDP. The Turkish economy needs to return to a higher production economy. The share of the manufacturing industry in GDP remained at the same level as last year at 16.7%. It is inevitable to reverse and the need to improve conditions in the industry sector continues, “ Bahçıvan said.

The industrialist has succeeded both in exports, in production and in new jobs, in all of the exams covering his basic responsibilities to his country.

According to Bahçıvan’s report, the employment of the Top 500 Industrial Enterprises of Turkey increased by 2.2 to about 15 thousand. Paid salaries and wages also increased by 15.7 percent. The improvement in favor of assets that have been in recent years has declined by 1 point in 2016. In ISO 500, the number of companies that made profits before tax in 2016 decreased from 400 to 392, while the number of companies that lost was 108. The number of firms with interest, depreciation and amortization (EBITDA) rose to 484 in 2016 and reached the highest number in the last four years, which began to be measured. The number of firms that have been damaged has decreased to 16. The number of foreign capital-invested companies in the Top 500 Industrial Enterprises fell to 123.

53


54

In Depth / ISO 500

“High tech intensive sectors are needed”

The highest share of the value-added created by technology intensities was 39.3 percent, with medium-low technology intensive industries. The share of low-techintensive industries fell by 1.5 percentage points to 37.4 percent in 2016. The share of the medium-high technology intensive industries group rose to 19.5 percent. The share of the group of high-tech intensive industries was also 3.7 percent in 2016 with a very small increase. In 2016, the share of medium-high and high technology intensive industries rose to 23.2 per cent over 21.7 per cent, the average of recent years. According to the data, 192 companies from 474 manufacturing industry companies were operating in low technology intensive industries, while 149 companies in medium-low technology intensive industries, 121 companies in medium high technology intensive industries and 12 in high technology intensive industries.

Export Leaders

Among the top exporting companies of the Turkey’s Top 500 Industrial Enterprises, Ford ranked first with 3 billion 958 million dollars. Tofas with 3 billion 247 million dollars, Oyak-Renault with 2 billion 834 million dollars, Toyota was the fourth largest exporting company with 2 billion 685 million dollars. Arçelik ranked sixth with $ 780 million, Istanbul Gold Refinery was seventh with $ 285 million, and Bosch was ninth with $ 66 billion. ISO 500 establishments exported 76 billion 134 million 703 thousand dollars in total last year.

Among the top exporting companies of the Turkey’s Top 500 Industrial Enterprises, Ford ranked first with 3 billion 958 million dollars JULY 2017 ISSUE 48

Top 500 Industrial Enterprises Started off as the “Top 100 Industrial Enterprises” back in 1968 and frequently cited in various academic theses and research since its inception, our annual study has evolved in time into Turkey’s “Top 500 Industrial Enterprises”. Published every year for almost half a century, each edition of these reports represents a milestone for the Turkish industry. Collectively, they serve as a rich library and a history of economy. The Top 500 Industrial Enterprises research offers a unique and accurate, in-depth look at the industry. Thus, it is only natural for the research to focus on industrial enterprises. Production-based sales are the basic criterion for the ranking. That is, the research covers the sales of products manufactured directly by the enterprises. Attracting an intense national and international attention, Turkey’s Top 500 Industrial Enterprises study greatly contributes to the efforts for tracking the development of Turkish industry and setting a course for its future.


The Turkish Perspective

1st TÜPRAŞ - (32.59 billion TL) Respect For The Environment And Life Values

Tüpraş operates four oil refineries, three of which process imported crude. The company’s shares were divided among the shareholders as follows: Koç Holding A.Ş. 75%, Aygaz A.Ş. 20%, OPET Petrolcülük A.Ş. 3%, Shell Overseas Investment B.V. 1.9% and the Shell Company of Turkey Ltd. 0.1%.

2

FORD OTOSAN - (16.31 billion TL) nd Turkey’s Most Valuable and Preferred Industrial Company

Ford Otosan (Ford Otomotiv Sanayi A.Ş.) is a publicly traded company, where Ford Motor Company and Koç Holding have equal shares. Ford Otosan, being one of the top 3 exporting companies of Turkey since 2005, besides its 6 years of consecutive automotive industry championship, became an export champion of Turkey in 2015.

3rd Tofaş - (12.85 billion TL)

4th OYak - RENAULT (11.46billionTL)

5th ARÇELİK - (11.24 billion TL)

6th Toyota - (10.57 billion TL)

The Industrial Giant Of Turkey

One Of The Pioneers In Turkish Automotive Industry

The Leading Brand In Turkey

Producing Quality

Arçelik A.Ş. has 18 production facilities in 7 countries worldwide, with 30,000 employees and in Turkey, Romania, Russia, China, South Africa, Thailand and Pakistan. It provides products and services in more than 145 countries with 34 sales and marketing offices and 11 brands in 32 countries.

Toyota Motor Manufacturing Turkey is one of Toyota’s vehicle production bases in Europe. Located in Arifiye /Sakarya - Turkey, Toyota Turkey manufactures Corolla, Verso and Toyota C-HR models. Majority of the production is exported to 97 countries, which are located in Europe, North America, South and North Africa, Middle East, Central Asia and Caucasus.

8th HYUNDAI - (7.05 billion TL)

9th İÇDAŞ - (6.54 billion TL)

10th İŞDEMİR - (6.49 billion TL)

New Thinking New Possibilities

High Productivity and Investment

A Well-Known, Reputable and Admired Company

ÇDAŞ, have been producing construction steel and alloyed steel since 1970, is the second biggest steel producer of Turkey with its production capacity. İÇDAŞ is the technology and quality leader in the steel industry.

One of the Erdemir Group companies, İsdemir is our country’s third oldest integrated iron and steel plant by its establishment date and the largest by its long product manufacturing capacity.

Turkish automotive company, Tofaş, whose foundations were laid by founder of the Koç Community, deceased Vehbi Koç, in 1968, and which has equal shareholders as Koç Holding and Fiat Chrysler Automobiles (FCA), today is one of the two R&D centres of FCA in Europe.

7th Electricity Generation Company

(7.34 billion TL)

Sustainability and Effectiveness

EÜAŞ is a a state owned company which is founded to generate electricity in compliance with the energy and economic policies of the state and in accordance with the principles of efficiency and profitability.

Oyak-Renault was established in 1969 by Renault, Oyak and Yapi Kredi Bank and starting production two years later. The company originally manufactured various Renault models for the local and international market. Currently some models are exported up to 100 countries worldwide

Up to now, Hyundai Assan Plant, which produces about 1.5 million vehicles and exports more than 1 million of them to more than 40 countries, produces an average of 39 vehicles per hour, and the daily total production reaches about 600.

55


#discoverthepotential


Brands / Lorem

The Turkish Perspective

Content: Ganjan New Town: Large-Scale Architectural Intervention P55 Editor: Mustafa Yiğit

archıtect...

Ganjan New Town, as a neighborhood, was designed in a structure that would contribute to the living habits

ARCHITECT

GANJAN NEW TOWN: LARGE-SCALE ARCHITECTURAL INTERVENTION Designed by Slash Architects, the mixed-use Ganjan New Town project brings together the city’s identity that is being restructured after the war, through social-cultural areas, recreation areas, parks, and market areas. ByRAMAZAN GÜZYURDU

57


58

Brands / Ganjan New Town

Led by Architect Şule Ertürk Gaucher and Architect İpek Baycan, Slash Architects presents the Ganjan New Town project, which considers the local people’s living habits and addresses all kinds of social and cultural needs of the users in Erbil, which has started a rapid process of restructuring following the war. Constituting a subsection of Ganjan City, which started to be established in the outskirts of the city as a self-sufficient unit together with the restructuring that began after the war, Ganjan New Town combines residence, trade, and social areas, representing a formation on a neighborhood scale. Located at a point where the large highways that ensure access to downtown Erbil intersect with Ganjan City, Ganjan Town was considered by Slash Architects as an interface through which Ganjan City will be connected to the city, and the design of this interface in a manner that would provide the most correct contribution to the JULY 2017 ISSUE 48

city was considered as one of the most important inputs. Employing computerassisted calculation methods during the analysis and interpreting urban data phases, Slash Architects aimed to achieve the optimum solution in the most effective way. In Ganjan New Town, which is located on a long, narrow strip of land on which the construction of 380,000 square meters will be applied, a residential texture with secure entrances is created at the rear part of the land, while the active city connection road at the front features commercial units and outdoor shopping facilities. Thanks to this concept, the idea of creating public squares and alleys

Ganjan New Town combines residence, trade, and social areas, representing a formation on a neighborhood scale.

rather than a closed housing estate was made possible. Making an effort to prevent the physical inputs within the blocks from being barred while locating the residential blocks, Slash Architects reduced the number of blocks under the project from 19 to 14 in the light of many analyses and studies conducted on the land and the population in order to deal with the concentration of population and to correctly conceive the commercial, residential, and social center strategies. The architects, creating an alternative solution to the possible problem of dense population, included in the project the ‘terrace houses’ that constitute a key aspect of the problem.


The Turkish Perspective

Thanks to this concept, the idea of creating public squares and alleys rather than a closed housing estate was made possible.

In order to locate the blocks on the land without intersections and to not affect the security of Ganjan City, a ring road was conceived at the rear of the land for the entrances separating the residential areas from the commercial areas. The blocks were located on the rear part of the land, which resulted in the creation of a public area open to utilization by the city population. Indicating that the flexibility achieved during all of these analyses and adaptations, as well as the adaptation of the design to the inputs, were made possible through BIM methods, Slash Architects provided a design that stretches and attenuates the rigidity in mass brought

The privacy of the plot of land against the Ganjan City region was controlled through the single-front commercial bases placed at the rear.

about by high-density construction. Questioning the logic of residential towers on bases, Slash Architects aimed at creating human-scale spaces that take landscaping into consideration, by structuring the high-density and mixed-use land from the road side. In the project, in which zoning and security criteria were considered as yet another design input, the aim was to conceive an outdoor shopping and social spaces complex that would meet Erbil’s need for a social and recreational area, while increasing the motivation of people coming from the city center to the region. At the center point of the plot of land, the recreational spine planned

to extend horizontally, and the social spaces located on this spine, formed the project’s main strategy. The design of a green recreational band extending along the plot, including the social and cultural areas and sports fields, conceived to be combined with the parks, playgrounds, and outdoor organic markets, extended the experience and continuity of the outdoors to the entire plot of land, increasing the surface area of the commercial fronts. Under the project, which prioritizes the ground permeability, the ground floors and the upper floors of the structures conceived as facing the road were planned as social and commercial spaces. In the neighborhood, which was designed as the new social life center of the city of Erbil, considering its location and functions, access to the plot of land from the highway front was achieved by placing heaped masses on the road side. The privacy of the plot of land against the Ganjan City region was controlled through the single-front commercial bases placed at the rear.

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60

Brands / Ganjan New Town

Ganjan New Town Ensures Transformation not only on a Regional scale, but on an Urban Scale... Ganjan New Town, as a neighborhood, was designed in a structure that would contribute to the living habits of not only the residence owners, but also the entire population of Erbil, and would recover public areas for the urban population. The conceived recreational axis and the commercial street located at the beginning of the plot of land are connected through the plot, and achieved a continuity in circulation. With this intervention, the three separate foci on the plot were converted into urban attraction centers. The strategy of horizontal houses and vertical houses, which is embedded in the archetype of the project, led the creation of the forms. The tectonics, soft lines, and perspectives of the structures aim to address the human dimension, while a structuring allowing the use of terraces was targeted by creating a topography effect as one climbs the floors. The continuous eaves appearing at locations where the structures neighbor each other were converted into elements to offer protection against the sun, in accordance with Erbil’s JULY 2017 ISSUE 48

physical conditions. The alleys created through the use of advanced modeling techniques and potentials brought with them a flexible form. In the project designed in the light of user circulation mapping, the continuity of circulation, while mostly foregrounding the surface in commercial terms, also allowed the creation of intermediate spaces with surprises. One of the most important parameters in this rather large project area was the placement of the perspectives within the narrow plot of land in a manner that does not allow intersection. While the interrelationship of horizontal and vertical residences was achieved through common cores,

One of the most important parameters in this rather large project area was the placement of the perspectives within the narrow plot of land in a manner that does not allow intersection.

the use of the base areas of the residence blocks with maximum efficiency was targeted. The profile and purchasing power addressed by Erbil due to the current crisis played a role in the flexible conception in planning the residences. The residences were designed mostly as 1+1, and to a lesser extent as 2+1. While this planning accommodates today’s circumstances, the project was kept flexible to allow for the creation of 3+1 and 4+1 residences should purchasing power increase in Erbil within the next 10 years. The private loft flats at the tops of the towers bring variety to residence types, while having an effect on the termination of the structures.


62

Agenda

FAIRS, EXHIBITIONS, SUMMITS AND MEETINGS IN THE NEXT MONTH

09-13 JUly

22 World Petroleum Congress nd

Istanbul congress center

“This time – Istanbul!” was the motto for the Turkish delegation as they faced the USA with Houston, Kazakhstan with Astana and Denmark with Copenhagen in the election to host the 22nd World Petroleum Congress in 2017.

ISTANBUL KIDS FASHION

JUNIOSHOW

YEŞİLKÖY İSTANBUL FAIR CENTER 19-22 July

BURSA TÜYAP 05-08 July

Organised by UBM ICC, İstanbul Kids Fashion is the Turkey’s must-attend children fashion event for trade professionals. It will feature a complete overview of children fashion and accessories (ages 0-16 years). The event is comprised of an Exhibition, Kids Fashion Show, Fashion Designers Gallery, and Kids Fashion Design Contest. The event is held twice a year – January and July. In January, the event is co-located with the International Children Baby Maternity Industry Expo (CBME Turkey) and in July, as Istanbul Kids Fashion.

06-08

VIV TURKEY İSTANBUL EXPO CENTER

VIV TURKEY, the leading international trade fair of its kind in the region, is an UFI approved event and is recognized throughout the sector as the sole International Poultry Trade Fair of Turkey. VIV’s Feed to Meat concept covers the entire animal protein chain, from primary production to finished products.

JUNIOSHOW, where the trends of autumn-winter season in July 5-8, 2017 in the ready-to-wear sector of baby and kids between the ages of 0-12 will be exhibited, is a significant platform bringing the bests of the sector together. JUNIOSHOW is organized with the cooperation of Bursa Chamber of Commerce and Industry and Tuyap Bursa Fuarcilik A.S., with the significant support of Baby and Kids Clothing Industry Industrialists and Businessmen’s Association (BEKSIAD). Bursa is hosting JUNIOSHOW Bursa Baby, Kidswear & Kids Necessities Fair, bringing together its 3000 years of experience in textile and today’s technology and expertise.

JULY 2017 ISSUE 48

JULY

JUNE

19-22

GAP SHOES GAZİANTEP MIDDLE EAST EXHIBITION CENTER

GAPSHOES Footwear, Slipper, Saddlery and Footwear Industry Suppliers Fair, of which the 1st one was realized in 2003, expanded consistently since that date and turned out to be a fair that directed the sector. In addition to the companies from Gaziantep, the participants from many cities such as Adana, Kayseri, İstanbul, Kahramanmaraş, Şanlıurfa also participate in the fair.


63

Figures The top 10 sectors that increase exports the highest rate

Continuing To Grow Steadily - Turkey’s export are growing with its most prominent sectors in May 2017.

2016 1 - 31 MAY

2017 1 - 31 MAY

Change Rate %

Ship and Yacht

33.872

114.132

237,0

Olive and Olive Oil

13.709

25.559

86,4

Precious Mine and Jewellery

172.098

303.218

76,2

Mining Products

315.281

446.058

41,5

Steel

748.298

966.412

29,1

Automotive

1.998.422

2.565.729

28,4

Tobacco

77.918

98.118

25,9

Defense and Aviation Industry

106.339

133.009

25,1

9.036

10.905

20,7

1.126.967

1.322.924

17,4

Sectors (Thousand $)

Other Industrial Products Chemicals and Chemical Products

Leading Provinces of Turkey

GROWING WITH COOPERATION

According to Turkish Exporters Assembly (TİM) data, Turkey’s export is increasing with contributing these provinces to total export. (Million $) KOCAELİ

5,25 1,05 0,47 İSTANBUL

SAKARYA

BURSA

1,25

ANKARA

0,54

MANİSA

0,33 0,7

GAZİANTEP

0,56

İZMİR

DENİZLİ

0,25

HATAY

0,21

Turkey’s export has increased to selected country groups continuously and reached a good place in the first four months of 2017. (Million $)

Export by Selected Country Group

TOTAL ( 2017)

OECD Countries

25,8

EFTA Countries

0,56

Organization of the Blacksea Economic Cooperation

4,48

Organization for Economic Cooperation

2,595

Commonwealth of Independent States

2,715

Turkish Republics

1,33

Organization of Islamic Cooperation

15,6

D-8 Organization for Economic Cooperation

2,23

GRAND TOTAL

50,67


64 Figures

GERMANY

1,22

BELGIUM

0,25

NETHERLANDS

0,29

FRANCE

0,56

UK

Turkish exports to most prominent 20 markets in May 2017.

0,76 USA

0,68

share of tOP 20 COuNTRIES IN TURKey’s total export (bıllıon $)

SPAIN

0,50

poland

0,26

ITALY

RUSsıa

0,69

0,20

ROMANIA

0,26

BULGARIA

0,25

china

0,23

IRAN

ıraq

0,74

saudı arabıa

0,27

Algerıa

0,15

Data: TİM

JULY 2017 ISSUE 48

0,23

ISRAEL

0,29

EGYPT

0,16

UAE

0,31


PHUKET 20x26cm ING.indd 1

17.05.2017 15:31


LOUNGE 20x26cm ING.indd 1

23/06/17 14:19

LOUNGE 20x26cm ING.indd 1

23/06/17 14:19

LOUNGE 20x26cm ING.indd 1

23/06/17 14:19

THE TURKISH PERSPECTIVE 48  

JULY 2017 ISSUE: 48

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