Page 1

YOUR COMPLIMENTARY COPY

8

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BRIEFING The Only Thing We Need: Innovation IN DEPTH Invest in France BRANDS Arzum: A 50-Year Brand In Household Electrical Appliances

JANUARY 2018 ISSUE 54

ECONOMY BUSINESS FOREIGN TRADE ANALYSIS

TURKISH EXPORTERS: We’re grateful for your confidence Turkey has a “breakthrough year” in 2017 and gained the confidence of all world.


The Turkish Perspective

Contents 05 FIRST 05 | Boosting economic and political cooperation with Sudan 06 | $400 million loan from China 07 | Marble Producers Enjoy Sales Boom 09 | New Record in Automobile Production 10 | Positive perceptions about Turkey

28

SectorAL EXPORTS REPORT

2017 Panor Solid Tama of Economurkish A very st y in economrong side of the2017 ic s Tu

rki financia tructure is its solidsh l system and its e xport.

10

52

11 BRIEFING 11 |READY FOR GLOBAL The first solar panel plant in Ankara as the country makes significant progress in domestic renewable energy resources.

59 BRANDS

13 | Delphisonic: Disrupting the Railway Industry

22

52 | INVEST IN FRANCE

France is an important trade and economic partner as well as one of the leading allies of Turkey, based on our long-standing relationship and hosting a Turkish community.

COMPETITION

Since 2016, Delphisonic has been developing AI (Artificial Intelligence)-based instruments and measurement applications and cloud-based software solutions.

52 INDEPTH

61 | Leading Regional

Logistics Service Provider

16 | TURKEY INNOVATION AND ENTREPRENEURSHIP WEEK This year very valuable names of innovation and entrepreneurship world took part in the event.

22 |Turkish Cargo Aims For The Top Turkish Cargo received its first Boeing 777 Freighter with a ceremony on its way to becoming one of the top five cargo companies in the world.

24 | ISPAT ELECTED TO NEXT TERM PRESIDENCY OF WAIPA

Under ISPAT’s presidency, WAIPA will continue to put full effort on the further expansion of membership and the integration of international organizations.

Netlog is a specialist in cost-effective, secure, and environmentally responsible international road freight services across Turkey, Europe, the Middle East, and Central Asia.

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

63 FIGURES THE BASIC INDICATORS OF TURKEY IN THE December 2017

1


2 Online

Online

MANAGEMENT

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Arda Ermut

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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GRAPHIC DESIGNER UMUT DURUTUNA YOUR COMPLIMENTARY COPY

7

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BRIEFING Turkey the Champion of Diplomacy Traffic

YOUR COMPLIMENTARY COPY

IN DEPTH A New Era For Investors: Super Incentive System

7

TH YEAR

BRIEFING National Era In File Transfer: Filegoes

AUGUST 2017 ISSUE 49

ECONOMY BUSINESS FOREIGN TRADE ANALYSIS

7

YOUR COMPLIMENTARY COPY

TH YEAR

IN DEPTH All For A Smile

BRANDS Assan Foods: Grow In Industry Scale Continuously

SEPTEMBER 2017 ISSUE 50

ECONOMY BUSINESS FOREIGN TRADE ANALYSIS

IN DEPTH The Rise of the Heritage BRANDS Innovative Brand In The Sector: Seramiksan

OCTOBER 2017 ISSUE 51

ECONOMY BUSINESS FOREIGN TRADE ANALYSIS

key ur ot

#co me tot u

EX ORIENTE LUX

ey rk

Turkey is a vulnerable actor when it comes to energy supply.

#c om et

TURKEY FORENERGY:

AN AMBITIOUS CANDIDATE

#cometoturkey

*

TURKEY RISES THE HOPES OF THE REGION AND SHAPES A CONCEPT THE SOCIETY INTERNALIZES MORE AND MORE DAY BY DAY.

Turkey,

a key NATO member, has always held an important position in global affairs. Turkey has become a more prominent player on the world stage as both an economic force and a power in the last decade.

etoturkey om #c

key tur eto om #c

* The sun rises from the east.

YOUR COMPLIMENTARY COPY

7YEAR TH

YOUR COMPLIMENTARY COPY

BRIEFING Connecting East And

West: “Startup İstanbul”

8

YOUR COMPLIMENTARY COPY

TH YEAR

BRIEFING Export Week 2017: Breakthrough Year of Exports

DECEMBER 2017 ISSUE 53

JANUARY 2018 ISSUE 54 ECONOMY BUSINESS FOREIGN TRADE ANALYSIS

LEGAL FRAMEWORK OF

INVESTMENTS IN

F

O RISK PSROTRY INDU MEETING AND EXCEEDING INTERNATIONAL QUALITY AND SAFETY STANDARDS, TODAY’S TURKISH AUTOMOTIVE INDUSTRY IS HIGHLY EFFICIENT AND COMPETITIVE THANKS TO VALUE-ADDED PRODUCTION.

RECENT CHANGES

JANUARY 2018 ISSUE 54

8

TH YEAR

BRIEFING The Only Thing We Need: Innovation

BRANDS Arzum: A 50-Year Brand In Household Electrical Appliances

BRANDS Beyoğlu Gazozu: Taste From The Past

BRANDS Pharmactive: Begun to Export to European Countries

ECONOMY BUSINESS FOREIGN TRADE ANALYSIS

IN DEPTH Invest in France

IN DEPTH The Country of Northern Lights: Finland

IN DEPTH Brand Country in Sport Organizations: Turkey

NOVEMBER 2017 ISSUE 52

JR. GRAPHIC DESIGNER ÖZCAN AYHAN

BRIEFING Art, Stories, Istanbul… Contemporary Istanbul

BRANDS The Largest Simulator Training Center of Europe and Middle East

ECONOMY BUSINESS FOREIGN TRADE ANALYSIS

TURKISH EXPORTERS: We’re grateful for your confidence Turkey has a “breakthrough year” in 2017 and gained the confidence of all world.

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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The Turkish Perspective

Editorial MEHMET BÜYÜKEKŞİ PRESIDENT (TIM)

BEGINNING 2018

68 of the 692 R&D centers and 19 of 109 design centers operating in Turkey were opened as a result of our R&D and Design Center Consultancy service.

2

017 was a year of recovery

for the global economy. With the efforts of our exporters and the support of our government, Turkey has benefited greatly from this recovery. With a strong display of export performance, we proudly exceeded Medium Term Programme (MTP) targets twice in 2017. The strong and stable performance of our exports in 2017 was reflected in our growth data as well. In 2017, Turkey’s GDP has risen by 5.3% in Q1, 5.4% in Q2 and 11.1% in Q3. When we look at the contributions to growth, we see that 2.3 points of the Q1 growth and 1.8 points of the Q2 growth was due to the net exports. Net exports contribution to growth was 0.34 in Q3, however this was caused by the rapid increase in imports. Overall, net exports contributed by 1.45 points to the 7.4% growth in the first nine months of 2017. In other words, 20% of Turkey’s growth was thanks to net exports. This success naturally forced many international organizations to revise their growth estimates for Turkey. The World Bank has raised their forecast for 2017 from 2.7% to 4%, IMF raised their estimate of 2.5% to 5.1% and the OECD revised their estimate from 3.4% to 6.1%. We believe that we will be at the top of the fastest growing countries with a growth rate about 7% in 2017, and we will see a growth rate of 5.5% in 2018. As Turkish Exporters’ Assembly (TİM), we have worked hard for this accomplishment. In 2017, we organized trade delegations to 28 countries; from Africa to the Far East, from Europe

to the Middle East. In 2018, we are planning to organize trade delegations to at least 30 countries; including Chile, Senegal, Japan and Ukraine. In addition to this, we will continue to inform our exporters about potential markets with “Export Compass” programs about 10 new countries with a lot more detail. More on market penetration, we begun opening Turkish Trade Centers (TTC) with Tehran, New York, Chicago and Dubai Trade Centers. In 2018, we will continue opening new TTCs in the UK, Japan and Indonesia. Additionally, we will open two more TTCs in the US; one in Miami and one more in New York. Following these countries, we are planning to open TTCs in Russia, Germany, and Qatar. Moreover, we continued to invest in R&D and innovation as TİM. 68 of the 692 R&D centers and 19 of 109 design centers operating in Turkey were opened as a result of our R&D and Design Center Consultancy service. 96 more centers are in the final phase of opening. In 2018, we believe that we will come closer to our target of 500 R&D and 500 Design Centers. Furthermore, about 8,000 exporters benefited from the incentives given by the Ministry of Economy and TİM for e-commerce portal premium membership. We are planning to end the year with 10,000 companies and reach 25,000 companies by the end of 2018. Along with these, we have create a new unit called “Country Desks” in order to meet the information

demands of our exporters about the markets and economies of their target countries. We also have a “Sector Desks” unit, which serves our exporters by resolving or collecting and relaying problems regarding their industry to the appropriate ministries. In addition to these new practices, we are also carrying out our signature events. In 2017, we have improved our events greatly, reaching more companies and more entrepreneurs. We hosted “Brand Turkey” event on 25-26 May with more than 2 thousand guests. “Turkey Export Week 2017” -in which we address all aspects of exports- was held on 1-3 November with about 5 thousand participants. On 8-12 November, we organized “Design Week Turkey 2017” with 42 thousand participants. And lastly our flagship event, “Turkey Innovation and Entrepreneurship Week 2017”, was held on 6-9 December. This year, we added “Entrepreneurship” to our event by including “Born Global” within the organization. The event was a great success with more than 80 thousand visitors. In short, the year 2017 was full of success for us. Now we are preparing for the New Year, with excitement and hoping for new records. We believe 2018 will be a year where Turkey continues its strong growth, with fewer risks and higher exports and employment. I wish you a happy New Year with hopes of peace, friendship and solidarity in the whole world.

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The Turkish Perspective Content: $400 Million Loan From China P06 Marble Producers Enjoy Sales Boom P07 Raising Hopes For Turkish Tourism P08 New Record in Automobile Production P09 Positive Perceptions About Turkey P10 Editor: Ramazan Güzyurdu

First

ENERGY, TOURISM, DIPLOMACY, DEFENSE, EXPORT, ECONOMY, AUTOMOTIVE, BUSINESS, FINANCE... President Erdoğan said Turkey wants to boost the two countries’ bilateral trade volume.

afrıca tour

boosting economic and political cooperation wıth sudan

President Recep Tayyip Erdoğan arrived in Sudan marking the first time a Turkish president visited the country.

A

t a joint news conference following a closed-door meeting with Bashir, Erdoğan said Turkey wants to boost the two countries’ bilateral trade volume. “We need to raise our trade volume to $1 billion and then to $10 billion. We have to take appropriate steps for

this,” Erdoğan said. The current trade volume between Turkey and Sudan stands around $500 million, according to the Turkish Statistical Institute (TurkStat). Erdoğan also said the two leaders agreed to set up a high-level strategic council to increase the economic

cooperation between the two countries. He said that his country was aware of the economic potential of Sudan. “We encourage businessmen to invest in Sudan,” he added. Turkey’s exports to Sudan amounted to $328.5 million in January-October 2017,

while imports from the country stood at $78.3 million. Both countries signed 13 agreements pertaining to defense cooperation, mining, agriculture, forest, science, education, tourism, environment, support for mall businesses support and establishment of a

strategic council. Erdogan said he also spoke with al-Bashir on the issues related to Jerusalem. “Jerusalem is an issue that concerns all of humanity... We will continue to support Palestinians. The U.N. must monitor the issue of Jerusalem,” the Turkish president said.

5


6

First

tourısm

35 million foreign tourists expected in 2018

energy

More world gas exporters to benefit Turkey IEA Executive Director Fatih Birol has said that Turkey should benefit from diversified channels, taking stock of global developments. Turkey should benefit as much as possible from a more diversified global natural gas market with the U.S, Canada and Australia becoming major LNG players, Fatih Birol, the executive director of the International Energy Agency (IEA), he said. Birol, speaking during the Turkish National Committee of the World Energy Council’s DEK Speeches event in the Turkish capital Ankara, indicated that the LNG market would become more competitive with more players involved. He explained that the market has moved on from the early 2000s era, when there were only five LNG importing countries to a market in which by the end of the next three years, figures of around 50 will emerge. JANUARY 2017 ISSUE 54

Culture and Tourism Minister Numan Kurtulmuş said the ministry expects to close 2017 with 31.4 million tourists and around $26 billion in tourism revenue.

I

n tourısm, one of the leading industries to have been heavily affected by the security concerns and the jet downing crisis with Russia, the number of foreign visitors, which was 36.8 million and 36.2 million in 2014 and 2015, respectively, dropped to 25.3 billion in 2016. Turkey’s economy lost revenue with a decrease of 11 million tourists and $8 billion in revenue in 2016 due to the Russian crisis and security concerns. “We are planning to close this year with 31.4 million tourists and a tourism revenue target of around $26 billion,” Kurtulmuş said. Regarding 2018 tourism targets, Kurtulmuş said they aim to attract at least 35 million tourists next year, adding that a

bigger figure is also possible. Kurtulmuş noted that they will spread tourism incentives they have to 12 months. “We will invite Chinese, Indians and Indonesians to Turkey. We will further expand the scope of tourism,” he added. As relations with Russia have normalized, the sector has experienced a rapid recovery. The increase in the number of Russian visitors is also the biggest contributor to the recovery of tourism figures. According to Culture and Tourism Ministry data, 4.57 million Russians visited Turkey with an increase of 495 percent in the first 10 months of the year. Meanwhile, Turkey had seen about 767,000 Russians in the same period of the previous year.

ECONOMY

$400 million loan

from China

Turkey’s İşbank announced on Dec. 21 that it has secured a $400 million loan agreement with the Export-Import Bank of China.

T

he three-year loan will be used for financing imports from China, according to a statement. Turkey’s private lender Ziraat Bank also signed a $600-million agreement with the China Development Bank. Turkish Deputy Prime Minister Mehmet Şimşek

sought Chinese investment for infrastructure projects in Turkey during an official visit to Beijing. Deputy Prime Minister Şimşek held meetings with representatives from People’s Bank of China, the Industrial and Commercial Bank of China and the Bank of China.

dıplomacy

Uzbekistan seeks to boost trade volume Uzbekistan is seeking opportunities that will increase trade relations with Turkey, the country’s foreign trade minister said. Khodjaev Jamshid Abduhakimovich’s remarks came during a meeting with the Turkish Cooperation and Coordination Agency (TIKA) President Serdar Çam, who is visiting the Uzbek capital Tashkent. Recalling Uzbek President Shavkat Mirziyoyev’s official visit to Ankara in October after a nearly 20-year pause, Abduhakimovich said there is a lot of work needed to further enhance business relations. “We want to increase the trade volume between Uzbekistan and Turkey to $5 billion,” he said, remarking that the current $1.2 billion trade volume is far below the potential. For his part, Çam said, “We, as TIKA, always stand with you, and we are very happy to share all the opportunities with you.” On Oct. 25, Turkish President Recep Tayyip Erdoğan and his Uzbek counterpart Mirziyoyev met in Ankara, marking the first presidential visit in 18 years. Both leaders expressed interest in expanding economic and cultural partnerships between the two countries.


The Turkish Perspective

defense

export

economy

Marble Producers Enjoy Sales Boom Turkey’s processed and uncut marble exports reached around $2 billion in last year, exporter says.

S-400 missile system deal

Russia said on Dec. 21 that it had completed negotiations with Turkey for the sale of an S-400 air defense missile system, with delivery scheduled for late 2019. “Practically speaking, the contract is entering the phase of realization,” said Vladimir Kozhin, a presidential aide who oversees matters of military cooperation. “All parameters, all technologies, the entire deal has been agreed,” said Kozhin. “The first deliveries are likely to begin at the end of 2019, beginning of 2020,” Kozhin was reported as saying by Russian news agencies. Russia’s President Vladimir Putin and his President Recep Tayyip Erdoğan had discussed the deal during Putin’s visit to Ankara last week. The agreement to purchase the latest Russian surface-to-air missile defense batteries is Turkey’s most significant deal with a non-NATO military supplier, and comes amid strained relations between Ankara and several Western countries.

A

s the construction industry continues to grow rapidly in emerging economies, Turkey’s marble sector may benefit. “Turkey has rich and various marble reserves. Twenty five percent of all marble trade in the world is Turkey-led,” a marble exporter, Silkar Mining’s CEO Erdoğan Akbulak, said. Silkar, which has factories in Turkey and China, said increasing demand for all kinds of materials, including marble, needed for top-tier residential and commercial projects led him to invest more, especially in Chinese demand. Akbulak said: “In the 1990’s, Turkey’s exports were $200-

300 million but they reached $2 billion in 2016, The country wrote a success story in this field.” Referring to the importance of the branding of Turkish companies in the world, Akbulak said Silkar --established in 1990 -- exports marble to 40 countries with Turkey’s branding support program named Turquality since 2009. He said: “Turquality provides discipline to companies. It supports our institutionalization works.” Silkar Mining is in the top five brands in the U.S. in floor and wall materials with 400 branches under the AKDO brand, he highlighted.

success story ın marble fıeld Mrble producers’ association chairman Erol Efendioglu said Turkey’s processed marble exports reached $1.2 billion and uncut marble exports reached $800 million in the last year.

$2

40

bıllıon

countrıes

%10

marble export ın 2016

marble export wıth turqualıty program

ıncrease ın marble export ın 2017

a ‘domestic, national stance’ President Erdoğan says businessmen need to show a “domestic, national stance” as Turkey is under attacks aimed at the economy. President Recep Tayyip Erdoğan said that he was not requesting a limit on capital flows, and that businessmen need to show a “domestic, national stance” as Turkey is under attacks aimed at the economy. “Our businessmen must demonstrate a domestic, national stance at the moment as there are attacks trying to suppress our country economically,” Erdoğan said. “We have nothing to say against anyone who transfers resources abroad for investment purposes, or who is seeking export opportunities, or engaged in trade activities,” Erdoğan said.

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First

economy

energy

economy

$20 bln for Akkuyu Nuclear Plant With the incentive certificate, the project has also gained VAT and customs duty extensions.

a

‘strong interest’ from investors Turkish Treasury says ‘strong interest’ from investors reveals positive perceptions of Turkey. The Turkish Treasury finalized a Japaneseyen market bond issue transaction for an amount of 60 billion yen ($533 million), a coupon rate of 1.81 percent and a maturity of three years. “With this transaction, the amount of funds that has been raised from the international capital markets in 2017 has reached a total of approximately $9.7 billion,” the treasury said. The Turkish Treasury also said “the strong interest from investors is an important indication of positive investor perception towards Turkey in the Japanese yen market. JANUARY 2017 ISSUE 54

N ınvestment incentive certificate was granted last month for the Akkuyu nuclear power plant project, being built in southern Turkey, with a fixed investment sum of 76 billion Turkish Liras ($20 billion), Turkey’s Official Gazette said on Dec. 22. With the incentive certificate, the project has also gained VAT and customs duty extensions, according to the list on the gazette. The project, which will have an installed capacity of 4,800 megawatts, will create 2,764 jobs and will pay $4.5 billion to import machinery and equipment, the list showed. A total of 639 companies and projects were granted investment incentive documents in November with several tax exemptions. Russian President Vladimir Putin said last month the Russian state nuclear agency Rosatom would begin work at the Akkuyu site in the near future and that the first reactor was planned to be launched in 2023.

great source for employment

A total of 639 companies and projects were granted investment incentive documents in November with several tax exemptions.

2,764

$4.5

jobs opportunıty

import machinery and equipment

bıllıon

4,800 megawatts ınstalled capacıty of the project

raising hopes for Turkish tourism TAE The United Federation of Travel Agents’ Association officially opened a global tourism office in Istanbul. The inauguration ceremony enjoyed the participation of Culture Minister Numan Kurtulmuş, UFTAA President Sunil Kumar and other TÜRSAB executive board officials. Speaking at the opening ceremony, TÜRSAB board secretary general and UFTAA board member Çetin Gürcün said the opening of the tourism office represented the culmination of Turkish efforts to actively contribute to both Turkish and global tourism. UFTAA has determined the tourism sector at the global level for the past 50 years and has members from 65 countries.


The Turkish Perspective

economy

12.7 percent in 11 months Turkey’s crude steel production surged 12.7 percent to 34.2 million tons in the first 11 months of 2017. In November, the country’s crude steel production also rose 7 percent to 3.1 million tons year-on-year, according to worldsteel’s world crude steel production report. Turkey’s production in the first 11 months of 2016 and just in November stood at 30.3 million tons and 2.9 million tons, respectively. Total crude steel production worldwide - including 66 countries - was 136.3 million tons in November, up 3.7 percent compared to the same month in 2016, when it was 131.5 million tons. During the JanuaryNovember period, world production climbed 5.4 percent to 1.54 billion tons, from 1.46 billion tons in the same period last year.

autumotıve

New Record in

Automobile Production The Turkish automotive industry, which exports 79 percent of its production, started December by breaking historic records for exports and production.

T

he total automobile production by the automotive industry in the January-November period of 2017 increased by 16 percent to 1.5 million compared to the same period of the previous year, while automobile production reached 1 million units with a serious increase of 24 percent. The OSD announced the production, export and market data for the January-November period this year. According to these figures, entering December with record figures, the Turkish automotive industry exceeded the 1 million mark in the first 11 months in automobile production for the first time in its history, while total automotive production and exports surpassed the figures of 2016 before the end of the year and broke the all-time record. The OSD data reveal that total production increased by 16 percent and automobile production by 24 percent in January-November 2017 compared to the same period of the previous year. In this period, total production was 1.5 million,

while automobile production hit 1 million units. In the same period, production in the commercial vehicle group increased by 2 percent, light commercial vehicle group by 1 percent and heavy commercial vehicle group by 18 percent. Because of the base effect, production declined by 31 percent in the heavy commercial vehicle group compared to JanuaryNovember 2015 as a result of a 45 percent shrinkage experienced in the market over the last two years. According to the OSD JanuaryNovember 2017 data, the total automotive market contracted by 3 percent to 840,000 units, while the automobile market shrank by 4 percent to 623,000 units. In the same period, total automotive exports increased by 21 percent in dollar terms and by 20 percent in euro terms. Compared to the same period of the previous year, total automotive exports increased by 19 percent in the JanuaryNovember period of 2017, while automobile exports increased by 28 percent.

dıplomacy

TurkeyMoldova trade ties ‘soar in 15 years’ The volume of trade between Turkey and Moldova rose by nine times in the last 15 years, Turkish Deputy Prime Minister Hakan Cavuşoğlu said on Dec. 19 in the Moldovan capital Chisinau. He met Moldovan Economy Minister Octavian Calmic at the Joint Economic Commission meeting in Chisinau. Speaking at a joint news conference after the meeting, Çavuşoğlu said bilateral trade volume with Moldova was at $45 million in the first years of the new millennium, but reached $419 million in 2015. “Our goal is to reach a volume of $1 billion in a short period of time,” he said. The minister added that the culture Turks and Gagauz people share should turn into future projects that will foster investment, employment and welfare. Calmic said the two countries signed a freetrade agreement last year and it had a positive impact on relations. He also said the Turkish Cooperation and Coordination Agency’s (TİKA) investments in Moldova contributed to bilateral relations.

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10

First

fınance

positive perceptions about Turkey TürkEximbank General Manager Adnan Yıldırım said that finance and export credit agencies they have met abroad have positive perceptions of Turkey. “There is a strong belief in Turkey and the Turkish economy both in Japan and here in London. I foresee this will continue to rise in 2018,” Yıldırım said. Yıldırım met with representatives of the Turkish business world in London. Yıldırım explained that they discussed the steps to be taken next year at the meetings they attended in London, saying that they plan to raise $4.4 billion in funds. According to Yıldırım, Türk Eximbank provides financing not only to exporters residing in Turkey, but also to their foreign buyers abroad in return for purchasing goods from Turkey.

JANUARY 2017 ISSUE 54

busıness

Strong Rise in Shipbuilding Export The Turkish shipbuilding industry, which saw exports soar by more than 50 percent to reach $1.2 billion at the end of November.

T

he turkısh shipbuilding industry, which saw exports soar by more than 50 percent to reach $1.2 billion at the end of November, secured sales worth $100 million in the first two weeks of December, Chairman of the Ship and Yacht Exporters Association (GYİB), Başaran Bayrak has said. Bayrak told the Turkish language daily, Dünya that they were expecting to close 2017 with around $1.4 billion in sales. The industry was on course to overcome the crunch last year when it failed to exceed the $1 billion-threshold. In comparison, this year, especially in the second half of the year, it reported record growth and achieved the highest increase in exports successively. The industry also saw its share of Turkey’s total exports exceed 1 percent for the first time. Even though the sector suffered a decline in November

compared to the same month of the previous year, total exports in the first 11 months of the year increased by 50 percent to hit $1.2 billion, Bayrak said. “We reached $125 million in exports in November and sales in December were also good,” he said and noted that even though they experienced a decline compared to the previous year, they achieved $1.2 billion in exports in 11 months on a year-on-year basis, which corresponds to an increase of about 50 percent compared to 2016. Last year, the industry reached $815 million in exports. “This year we have been one of the most successful industries. We have reached $86 million in exports by Dec. 14 and hope to close 2017 with a total export figure of $1.4 billion,” he said. Bayrak said that ship-owners selling their second-hand vessels have also been influential in the increase of exports.

tourısm

30 percent

growth ın tourısm

World Tourism Organization (UNWTO) Secretary-General Taleb Rifai has praised the 30 percent growth of Turkey’s tourism sector in 2017. Turkish tourism has recovered “impressively” this year following the coup attempt and terrorist attacks in 2016, Rifai said in a news conference in Geneva. “The recovery is incredible. This year is particularly incredible. We have seen 30 percent growth from January to October this year, which means the recovery is impressively strong,” Rifai said, referring to the problematic year of 2016, when Turkish tourism was hit by a series of crises. “Tourism is a sensitive industry. It is affected by any external shock. But it is also an exceptionally resilient industry. The effects are short-term. If the destination has a strong tourism tradition, it never gets completely wiped out. The sector regenerates quickly. This trend applies to Turkey, a country that has developed a strong tourism standing over the last 30 to 40 years,” he said. The UNWTO has predicted that next year Turkish tourism will reach the same high levels as two years ago.


The Turkish Perspective Content: Delphisonic:Disrupting the Railway Industry P13 The Only Thing We Need: Innovation P16 Turkish Cargo Aims For The Top P22 ISPAT Elected To Next Term Presidency of WAIPA P24 Editor: Mustafa Yiğit

Briefing

energy, STARTUP, ınnovatıon, avıatıon, ınvestment...

ENERGY

READY FOR GLOBAL COMPETITION

The National Energy and Mining Policy was the realization of a very significant idea to save Turkey from its dependency on external resources in energy.

After a solar power plant contract bidding in March, Turkey held the groundbreaking ceremony for the first solar panel plant in Ankara as the country makes significant progress in expanding its domestic renewable energy resources. By MUSTAFA YİĞİT

photograph byLOREM IPSUM

T

he ground-laying ceremony for the Renewable Energy Resource Zone (YEKA) Photovoltaic Cell and Solar Module Plant and Research and Development (R&D) center was held Thursday in Ankara with Prime Minister Binali Yıldırım and Energy and Natural Resources Minister Berat Albayrak in attendance. The plant, which is considered a milestone in

the development of domestic energy technologies, will have a capacity to manufacture 500 megawatts of ingot casting, 650 megawatts of solar cells and 800 megawatts of solar panels. Speaking at the ceremony, Albayrak said that the National Energy and Mining Policy was the realization of a very significant idea to save Turkey from its dependency on external resources in energy.

“Once we get rid of external dependency, which costs us $55 billion annually, we will reduce energy costs and provide affordable and uninterrupted energy supply for our people and industry. The current account deficit will also be decreased and we will raise the level of welfare,” Energy Minister Albayrak said, explaining the benefits of an energy sector that relies on domestic resources.

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Briefing

The National Energy and Mining Policy devised by the Energy and National Resources Ministry under the guidance of Albayrak outlines an expansive plan to reduce Turkey’s external dependency in energy. To that end, the ministry launched a new energy model with YEKA. The first YEKA project was a 1,000-megawatt solar power plant in Karapınar in the central Anatolian province of Konya. Last March, Turkey held bidding for contracting of the project, which a TurkishSouth Korean consortium won. It stipulates that the winning consortium should also establish a solar panel production plant and an R&D center for the efficient and utmost technology transfer. The contract specifications stipulate that the construction be completed within 24 months and the consortium operationalize the factor within 12 months. The total investment cost is estimated around $500 million. The plant will be built on 20 million square meters. Albayrak also said that the investment will create more than 1,000 jobs.

Immense Growth He also said that the Turkish energy sector has recorded immense growth in accordance with the expansion of the Turkish economy and a total of $100 billion was invested in the industry by the public and private sectors. Albayrak also said that the installed capacity in electricity increased to 85,000 megawatts from 32,000 megawatts, and that the ministry has re-evaluate the energy strategy with a view to ensuring a second leap in the sector. “Considering the regional and global developments we face, we realize that energy JANUARY 2018 ISSUE 54

Prime Minister Binali Yıldırım said, “Our abundant natural resources continue to gain value and return to our country as new projects and services.”

never solely means energy. It also encompasses diplomacy, economy, investment and national security,” he said to indicate the importance of an inclusive energy strategy. Albayrak emphasized that the YEKA solar power project in Karapınar will decrease dependency on external resources in energy technologies. The ministry is devising an energy sector that will render Turkey an exporter by exploiting the available resources.

Groundbreaking Ceremony for Turkey Saying that it will be an exciting groundbreaking ceremony for Turkey, Prime Minister Binali Yıldırım added the factory, which is a continuation of renewable energy move that started with Konya Karapınar, will begin operations. Yıldırım also said that this investment will enable the country to be a step closer to

1,000

JOBS OPPORTUNITY

$500 MILLION

TOTAL INVESTMENT COST

85,000 MEGAWATTS

THE INSTALLED CAPACITY IN ELECTRICITY

its goals, adding that both the base of the future of energy technologies was laid and the renewable alternative energy sources were enriched. Turkey is mobilizing each of its existing resources one by one, Yıldırım said. “Global and domestic investors believe in Turkey. Our abundant natural resources continue to gain value and return to our country as new projects and services.” Recalling that Turkey achieved the fastest growth in the last six years at 11.1 percent in the third quarter of the year, Yıldırım emphasized that the Turkish economy grows in an environment of confidence and stability. He also stressed the great contribution of the private sector to the Turkish economy. “When we look at the investments, we see the large contribution from the private sector. Therefore, the dynamic structure of the Turkish economy and the lion’s share in the development of Turkey lies in the entrepreneurial spirit of the private sector,” he said, adding that joint efforts from the public and private sectors are needed to compete in global markets. In that regard, Yıldırım said the YEKA-Photovoltaic Cell and Solar Module Plant and R&D center is an exemplary project to prove the public sector’s contribution. The project, the prime minister continued, is the one of the best examples portraying the accomplishments of Turkish firms with their South Korean partners.

photograph byLOREM IPSUM

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The Turkish Perspective

STARTUP BUSINESS HOUSES

Delphisonic:

Disrupting the Railway Industry

Since 2016, Delphisonic has been developing AI (Artificial Intelligence)-based instruments and measurement applications and cloud-based software solutions for railways, wind turbines, marine industry and industrial manufacturing process. Delphisonic is utilizing the industrial internet in the digital world for better,safer and cheaper travel experience.

By RAMAZAN GÜZYURDU

photograph byLOREM IPSUM

D

elphisonic focuses on their customers who benefit from the technical expertise as well as the more than 7 years of tried and tested experience they have gained in the field of industrial measurement technology. It is important for Delphisonic to work closely with customers to determine their precise needs and requirements. This approach is reflected in their product range as well as in the long-term customer relationships they have established. A multitude of medium-sized companies, world renowned industrial

groups as well as research laboratories, authorities and universities place their trust in Delphisonic and benefit from their many years of experience. Delphisonic provide them with services ranging from pre-engineering through to training, whether for standard measurement systems or custom-made complete solutions. We made an interview with Gökhan Çelebi, who is Chief Marketing Officer (CMO), from Delphisonic and we had a few questions their products, R&D works, support of TİMTEB Startup Business Houses and moreover…

87

Satisfied Clients

45

Projects a Year

5

Country

8

Global Awards

How did Delphisonic born and how did it develop? Could you tell the process a bit? Long story, to be brief. The official establishment was on Feb 2016. However, we had 5 years of engineering and business experience in a very similar field with a focus more of on robotics. Then we decided to pivot and put all our attention to I would define “Science-based future telling” for which the technical or engineering definition is “realtime condition monitoring with predictive maintenance based on artificial intelligence algorithms”. This was a new tech field that IoT, Big Data,

13


Briefing

Telematics and industry 4.0 applications can be utilized. We thought we could be among first-movers both in Turkey and in the World in that field and with our business mindset could also penetrate into the market easily. We are now so happy to say that it has been proven so. Despite being a platform established in 2016, there is a serious road that is shortlived. What do you depend on this? I believe in entrepreneurship there is a positive correlation between the hard work and the results you gain. In fact, and statistically speaking this correlation is very close to 1 and I have to say that it is more of like a cause-effect relationship. In other words, the more for efforts you put the merrier the results are. Each and every member of our team works at least 24+ hours per day and any less will definitely put us back. In addition to this, our technology is very cutting edge with which we can be in the upper limits and push the boundaries for industry 4.0 (or industry 5.0). We are constantly improving the technology to respond to current and emerging global trends with taking customer feedbacks into account. Also, there should be a real market need for your product/service and for this you need to solve a real and life problem. We are saving people’s lives, are providing money and time saving for our customers as well as accessibility of our solution regardless of place and last but not the least are increasing the reputation of our clients. These are all of great significance to meet the clients’ and users’ needs and to be heard in the market. To sum all, dedicated team who effectively utilize its resources and prioritize the related tasks, JANUARY 2018 ISSUE 54

great technology and as a result of this having state-of-the-art products as well as being cure for clients and users are key elements that have brought us to this level and have helped us to grow quickly.

Delphisonic provide them with services ranging from pre-engineering through to training, whether for standard measurement systems or custom-made complete solutions.

DelphiSonic has been developing pioneering, artificial intelligence for instruments and measurement applications and cloud-based software solutions for railway, wind turbine, marine, aviation, oil&gas and industrial manufacturing process. Could you tell about your projects? Sure. We call it solution. Terminologically hybrid system, including hardware

and software, can also be said. Railway is our pioneering segment, but as you have said we operate in several other major verticals such as wind turbine, maritime, aviation and industrial assembly lines. Currently, railway operators are only aware of problems after an incident occurs because they’ve only been able to employ a run-tofailure strategy. Delphisonic is enabling them to detect problems in advance and avoid this type of catastrophic accident. Our solution includes both Hardware and Software. In hardware we have speed, temperature and vibration sensors that attach to the mechanical system of the train (or wind turbines, engine of the ship etc.) and listen for problems in a train’s mechanical system and can predict when and where a failure or breakdown will happen. And with a software, engineers can monitor the health of their systems. The data you monitor thru our cloud-based app is real-time and we have an alarm system immediately ringing alarm bells if there is any defect in the system. Hence, there is no chance for failure to damage train’s mechanical system. What contributions did TİM-TEB Startup Business Houses have to you, could you tell about this support? Words remain inadequate to define such. TİM-TEB Startup Houses, in particular the one located in Istanbul out of 10 others, is a gamechanger for us. We learnt the basics and in particular the core of entrepreneurship there. We used to be a hardcore engineering company whose attention was to develop extraordinary products with blue chip

photograph byLOREM IPSUM

14


The Turkish Perspective

photograph byLOREM IPSUM

technologies. We have limited understanding of embracing market needs, defining value proposition, developing financial modelling, expanding customer base, establishing partnerships for high growth etc. before them. Then they touched us with a magic wand and as a result we turned to become business-focused company rather than being a hard-core engineering one. Thanks to all these amazing mentors and their extraordinary efforts. Without their technical know-how for every aspect of the business including the product, technology and guidance for business development, things might not be easy or even might be impossible for us. TİM-TEB Startup Business Houses have provided all the opportunities for the young entrepreneurs to be successful since it was established. How do you evaluate TİM-TEB Startup Business Houses’ success in this regard? They are providing all types of infrastructure support for startups in early stages. But they see them necessary but not sufficient conditions on the way create successful techbased startups. To raise the bar high and when compared to other similar institutions they have an amazing mentorship mechanism. It is not mentorship mechanism you might be familiar or come across so far. They have follow-ups which I think is a real competitive advantage for them. With the help of follow-on mentorships based on regular meet-ups with high-caliber mentors, they behave like an employee of your company and sometimes know your company better than you know. This is great and in early stages as you have

limited knowledge as to your road map and is highly needed to look up your business in every angle. What recommendations would you like to have for young people who would like to do this kind of work like you? Customer is the king. Keep that in mind. The top reason regarding the failure of startups is developing products/services for what there is no market need and in particular for what the timing to the market is wrong. The only way you can learn about the need and the timing, even if it is not explicitly described by customers, is thru meeting with customers. From the first moment of your business idea ask them, talk them, check with them. Do not leave it the later stages as many tech-based startups are in the idea of bringing the product/service to the market and start talking or introducing the product/ service to the customers. This is definitely a wrong way to do business. Getting feedbacks from customers and shaping your business based on this may help you to be successful but without customer insights, I bet you to the moon, you will be unsuccessful.

Delphisonic is enabling them to detect problems in advance and avoid this type of catastrophic accident.

Read as much as you can and in any field. Elon Musk is my role model for reading. Think global from day 1. You need more geographies and need to reach more people. Each new country opens a new line of problems as well as opportunities. You need to grasp these differences and learn from different dynamics. Also focus on problems.

What new projects do you have for the coming years? What is your goal? Recently, we appeared on the headline for wamda.com as the “Must-watch” startup on the way to becoming a success story for the region. Wamda.com- techcrunch. com of META (Middle East, Turkey and Africa) region- is one of the largest, biggest and the most important tech publication platforms for our region. Moreover, according to startUS magazine, Delphisonic is one of the 9 startups who will disrupt the railway industry in the world. We made Swiss National Railways our customer which is quite prestigious. This is a giant leap for expanding our footprint to international markets. More impactful ones are on the way. These are amazing for a startup like us who established less than 2 years ago. Keep watching us. We aim to be a role model for tech entrepreneurs in our country. Most of the successful exits have been from internet and mobile businesses. There were a handful of exemplary startups focusing on deep R&D and had great exits. We are here to achieve one of the biggest exits in Turkey in hightech and who knows may be in the entire region.

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Briefing

INNOVATION

THE ONLY THING WE NEED:

INNOVATION

The first event that comes to mind in the name of innovation is “Turkey Innovation Week”, which contributes greatly to the settlement and development of the concept of innovation in our country and as of 2017; it is meeting you as

“TURKEY INNOVATION AND ENTREPRENEURSHIP WEEK”. By ramazan güzyurdu

A

rçelik, Çalık Holding, Sabancı Holding, TEB, Turkcell and Turkish Airlines as strategic partnerships, with the participation of 200 invited speakers from 31 foreign countries and more than 200 institutions and reaching the number of 60.000 visitors last year,

JANUARY 2018 ISSUE 54

and this year very valuable names of innovation and entrepreneurship world took part in the event. This year the event, which was held at the Istanbul Congress Center between 6 and 9 December 2017, brought together all the colors of the world of innovation and entrepreneurship.

Turkey Innovation and Entrepreneurship Week, was held by Turkey Exporters Assembly in coordination with the Ministry of Economy, which plays a major role in the spread of culture of innovation in our country, held this year in Istanbul Congress Center. President

of TİM Mehmet Büyükekşi, Deputy Prime Minister Mehmet Şimşek, Deputy Minister of Economy Fatih Metin, TIM Innovation Committee Chairman Tahsin Öztiryaki and numerous exporters, companies and students was attended the opening ceremony of the event.


The Turkish Perspective

It’s All About “Imagination” Speaking at the opening ceremony, President of Turkey Exporters Assembly Mehmet Büyükekşi noted that innovation can develop modestly in micro fields, not only in the monopoly of scientists or companies with huge budgets. “We expect new steps from you guys, about innovation and entrepreneurship; we want you to get new tricks to old dogs. The only thing we need is imagination. It is our greatest desire that our young people realize their dreams and transform their ideas into reality with entrepreneurship. If we could inspire a person here today, that’s enough for us. If we can direct a young person to think differently, we will come closer to our goal. Throughout history many scientists have grown up in this land like Hezarfen Ahmed

Molestem con pra cus nobit molor ant volores sintem dolora quas milique excero et qui sedio. Et velia everianim et faccae eaturis et omnis ipis quodi a

Çelebi, who made the first flight between the continents, is like Hüseyin Haki Efendi, the owner of the idea of the world’s first Arab ferry. These examples address us as follows: Important steps were taken towards innovation in this geography in our history. These steps will be taken today. Our biggest strength in this area is our young people,” he said.

Important steps were taken towards innovation in this geography in Turkey’s history and these steps will be taken today with the strength of young people.

17


18

Briefing

reform to ıncrease ınnovatıon capacıty Mehmet Şimşek, Deputy Prime Minister attended the opening ceremony, said, “We are 36th out of 137 countries in this area. We are in the 43rd place in Global Innovation Index but we have to be at least in the first 20. As Turkey, we need to increase the resistance to shocks. We will reform it to increase innovation capacity, unemployment, current account deficit and inflation. We have been having the latest mass funding for R&D commercialization. We complete the entire ecosystem. We are restructuring TUBITAK. We will restructure the Development Bank,” he said. Şimşek, “Perhaps 70 thousand people will visit the Turkey Innovation and Entrepreneurship Week. But if we could raise awareness about innovation by encouraging only a few thousand of them at the point of entrepreneurship, it will reach its purpose,” he said. 60 national and 60 global entrepreneurs to be selected after pre-evaluation, presented their projects in the presence of jury and investors under the Pitching Competition and the top 3 entrepreneurs on both platforms was entitled to receive an investment prize in the award ceremony on the main stage of Turkey Innovation and Entrepreneurship Week. Within the concept of general area, there were various topics about the process from creative ideas to investments such as; workshops, panels, interviews, leading incubation centers, universities, technoparks, technology companies, entrepreneurial stands, investor networks, fund organizations and country stands. JANUARY 2018 ISSUE 54

New Era for Money: Bitcoin On the second day of the event, Jon Matonis, Founding Director of Bitcoin, the digital currency that is sweeping the world, was the guest. There is a statement in the “Throne Games of Bitcoin” conference from the Chairman of the Central Bank of the Republic of Turkey, Murat Çetinkaya,

“If we could raise awareness about innovation by encouraging young people at the point of entrepreneurship, it will reach its purpose.”

that ‘digital currencies like Bitcoin is a risk for the money suppliers like Central Banks that controls the money.’ In fact, it also brings possibilities. Bitcoin is useful for providing individuals and financial sovereignty. It is also important for countries. The Central Banks will also start competing to provide assets based on bitcoins. Today and in the future, the prospect of the Dollar and the Euro will decrease. There will be no currency like the Euro in 50 years. The monopoly will eventually be eliminated,” he said. “Money is an illusion.” Matonis emphasizes that the states or royals have been printing money for hundreds of years in the world and Bitcoin has proved that no rules are needed to print money. We have all joined together in a big illusion. Bitcoin is being discussed so much for this, “ he added.


The Turkish Perspective

Within the concept of general area, there were various topics about the process from creative ideas to investments such as; workshops, panels, interviews, leading incubation centers, universities, technoparks and country stands.

More Secure Than Central Banks’ Systems Matonis said that Bitcoin, which was first implemented in 2009, has been the world’s largest data processing project in 2013. “It is much safer than the systems of Central Banks. The computational power in a second is measured by hash. Bring 10 thousand of the most powerful computers in the world together, even more than they are. For Bitcoin it is not possible to reach 1 billion now, but in a few years these figures will be possible. JP Morgan, Goldman Sachs, and so on are trading by using bitcoin,” he said. As for the advantages of Bitcoin, Matonis said: “As individuals, you are controlling assets on their own. It protects you against identity theft and financial surveillance. Bitcoin is popular in China for this reason. In China, which impedes the movement of capital, private

and legal entities against the state can take their assets abroad. It protects you from the foreclosures. The Netherlands is perhaps not one of the top five countries in the world. But the Netherlands is the first in the use of bitcoin per capita,” he added.

Innovation Activity Rate Doubled In The Last 10 Years Minister of Development Lütfi Elvan said that in 2014-16, the proportion of innovators in new entrepreneurs with 10 or more employees increased to 62 percent. “This rate was 30 percent 10 years ago,” said Minister Elvan. There has been a double increase in ten years but not enough. It should be more. We are in 68th place in 2013 and 43rd in 2017 according to Global Innovation,” he said. Minister Elvan also stated that up to now over 1,000 entrepreneurs have been supported by the Development Agencies in 26 regions and supporting R & D and innovation. He also noted that Development Agencies, KOSGEB and public institutions have trained over 800,000 entrepreneurs.

The number of people using social media in the US has increased Another key speaker of the event, Twitter Social Innovation Director Claire Diaz Ortiz, noted that while Twitter users initially shared breakfast views, they eventually began using this platform in communication and goodwill. Ortiz, “2008 was the turning point for Twitter. Student activities in summer in Moldova are important because of being organized through Twitter. Again in the Haiti earthquake, it was used to help the area. When a US Airways plane landed on the Hudson River

19


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Briefing

Twitter Social Innovation Director Claire Diaz Ortiz emphasizes that Twitter desires to be used for good and for the good change of the world.

in 2010, a twitter user’s tweet tweet showing the airplane in the water was used in all the world’s newspapers. We have never seen ‘citizen journalism’ until that day,” she said. Ortiz, who underlined the fact that this year’s social media has caused depression, said: “It’s a fact. Recently there has been an unbelievable increase in suicide rates in the US, doubling. When looking at girls who commit suicide, the rate of using social media was 50 percent in the past, but this rate has risen to 85 percent recently. Sometimes I even feel sorry for sharing someone else’s. Z generation is fully socialized. So social media is a real problem to cause depression,” she said. Ortiz emphasizes that Twitter desires to be used for good and for the good change of the world. “Social media is a tool for doing good. We go through hard times. I believe that goodness and truth will rise with social media,” she added.

“Let’s give incentives for young people to raise the level next year” Youth and Sports Minister Osman Aşkın Bak said, “In our 2018 budget, young people will make serious investments in technology, innovation and entrepreneurship. We need to JANUARY 2018 ISSUE 54

pave the way for these young people. I invite you to work together on this issue. Let’s encourage our young people to raise the level in Innovation and Entrepreneurship Week. Not only in the sport, we will raise champions in innovation, science and technology. It must be your self-confidence. In a very short time, I believe that you will be among the global brands,” he said.

‘’Innovation is Essential For Being Competitive in Global Market’’ Speaking on the last day of the event, Economy Minister Nihat Zeybekci noted that they had visited the pre-event stands and started discussing whether the innovation with a staff member was merely technical, physical, hand-held and visible.

“It is important to identify the need and find a practical, viable, cost-effective, sustainable solution to this.”

Zeybekci stressed that they now become a country that has its own technology as export, foreign trade, production family, producing knowledge, making innovation, producing brand and patent, dominating distribution and control. Zeybekçi expressed that Turkey has come as a bit of contract manufacturers in the country so far but a miracle of advanced amateur at which point he can be evaluated. Zeybekci said that Turkey is the world’s 17th and Europe’s 6th largest economy. “From now on it is not possible for us to go further without controlling our journeys of innovation, science, development, understanding, control


The Turkish Perspective

Minister of Economy Nihat Zeybekci stressed that they now become a country that has its own technology as export, foreign trade, producing knowledge, making innovation, producing brand and patent, dominating distribution and control.

“Our Place is the Advanced Country Class”

of raw materials, energy, brands, patents, technology, production areas controlled by sovereign nations in the world. That’s why innovation is very crucial for us,” he said.

“Small-Mindness is Standing in front of Growth as an Obstacle” Prime Minister Recep Tayyip Erdoğan joined the closing ceremony of Innovation and Entrepreneurship Week organized by TİM. President Erdogan made a speech at the ceremony held at the Istanbul Congress Center. Erdogan said that Turkey is supporting important initiatives to increase its strength in international competition. President Erdogan said that in addition

80.000

people Attendence to the Innovation and Entrepreneurship Week

43rd

Turkey’s Rank in the Global Innovation Index

242

Countries and Region – Export of Turkey

to public support, venture capital funds should be mobilized to reach the target. President Erdogan pointed out that the number of private equity funds in the world, which was around 4,700 in 2008, increased to over 7 thousand today and that these funds managed a source of approximately 4 trillion dollars. He expressed that he needed entrepreneurs and successful fund managers in hopes of getting more share from this cake. President Erdogan said, “We should traditionalized our understanding of growth and greater economic value by sharing in our country. The mentality of ‘I get small’ is like an obstacle in front of growing up by doing innovations as it is in the word ‘new invention’.”

President Erdoğan, who expressed that innovation and entrepreneurship are very suitable for the nature of the Turkish nation, conveyed the stories of the emergence of the “dolmus” and the “ferryboat” as examples. He showed them as an examples of entrepreneurship and innovation. “It is important to identify the need and find a practical, viable, cost-effective, sustainable solution to this,” said Erdogan. Our human being has such practical solutions in such impossibly difficult circumstances that it is not really reasonable that they cannot move to the commercial dimension,” he added. President Erdogan used the expressions “We have to do these things as other countries do,” and gave the example of China. President Erdogan said, “We do not have a problem with neither production, design, innovation nor entrepreneurship. Allah has given us all these skills, as a nation, with this youth in a way. It is now time to pass them on to the force. Turkey can be saved in this way and go further. Our place is not a developing country but the developed country class,” he said.

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Briefing

AVIATION

Turkish Cargo Aims For The Top

Turkish Cargo received its first Boeing 777 Freighter with a ceremony on its way to becoming one of the top five cargo companies in the world. Closing the year with 73 service destinations, Turkish Cargo aims to increase this figure to 86 in 2018.

“T

of our first 777 Freighter is a milestone event in our cargo business,” said M. İlker Aycı, Chairman of the Board and the Executive Committee of Turkish Airlines. “As a prominent subsidiary of Turkish Airlines, Turkish Cargo increased its freighter destinations served from 55 to 73 from the beginning of this year, reaching to approximately 1 million tons of cargo with %29 percent increase compared to the previous year. It is surely beyond doubt that this a remarkable success.” he delivery

JANUARY 2018 ISSUE 54

Turkish Airlines Chairman M. İlker Aycı also pointed out that with Istanbul New Airport, the city will play a critical role in delivering goods, services and goods to the world. “We will be at Istanbul New Airport on October 29, 2018. We are looking forward to it. And we will utilize the time since then; we will work hard and be ready.”

M. İlker Aycı: “We’re sure that this significant delivery will bring great value to our rapidly growing cargo operations.”

photograph byLOREM IPSUM

22


photograph byLOREM IPSUM

The Turkish Perspective

“We are on our way to becoming one of the top five cargo companies in the world. We are sure that this delivery of Turkish Cargo’s first Boeing 777F will contribute greatly to our rapidly growing cargo operations and it will enable Turkish Cargo to further compete, expand and reach new destinations from Istanbul. We are looking forward to this successful period with our management, colleagues and business partners,” Turkish Airlines Chairman of the Board and the Executive Committee M. İlker Aycı added. The 777 Freighter, the world’s longest-range twinengine freighter, is based on the technologically advanced 777-200LR (Longer Range) passenger airplane and can fly 4,900 nautical miles (9,070 kilometers) with a full payload of 112 tons (102 metric tonnes or 102,000 kg). Based in Istanbul, Turkish Cargo is one of the fastest

The ceremony was held at the Turkish Technic hangars for the first of two Boeing 777Fs Turkish Airlines ordered.

growing cargo companies in the world and currently has the 4th largest flight network globally. Having carried approximately 1 million tons of cargo this year, Turkish Cargo has also increased its market share and received many awards for its service quality. Chosen to be the “Fastest Growing International Cargo Carrier” in both South Korea and by international air cargo news publication Stat Times, Turkish Cargo is also chosen as the “Overall Carrier of the Year” by Payload Asia and “Air Cargo Carrier of the

1million Turkish Cargo carried approx. 1 million tons of cargo in 2017

86 TURKISH CARGO aims to increase ITS DESTINATION NUMBER TO 86 IN 2018.

Year” at the Ghana Shippers Awards.Receiving excellence award in Kathmandu for its service quality and “Special Project Award” in Logitrans for its 3CS system project, Turkish Cargo has ended the year with more enthusiasm for 2018. Turkish Cargo received the second Boeing 777 Freighter also in December, and with its enhanced capacity it plans to increase its freighter destinations to 86 in 2018. With its two Boeing 777 Freighters Turkish Cargo now reached to 17 aircraft and aims to increase its share in the international cargo sector. With Istanbul New Airport becoming operational on October 29, 2018, the anniversary of Turkish Republic’s foundation, both Turkish Airlines and Turkish Cargo will have an edge in contributing to 2023 vision, laid down to coincide with the centenary of the Republic of Turkey. Turkish Cargo aims to become one of the top five cargo carriers in 2023.

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Briefing

INVESTMENT

ISPAT ELECTED TO NEXT TERM PRESIDENCY OF WAIPA

T

he 22nd Annual WAIPA (World Association of Investment Promotion Agencies) World Investment Conference (WIC17), held on November 27-28 in Dubai, brought together a number of experts to discuss the future outlook for FDI. JANUARY 2018 ISSUE 54

Today, almost the entire international investment community is aligning with the United Nation’s Sustainable Development Goals to address economic challenges in the global arena. WAIPA is perfectly positioned to integrate investment

promotion with the United Nations Sustainable Development Goals due to its linkages with Investment Promotion Agencies, international organizations, and investors. During his address at the conference, ISPAT and

WAIPA President Arda Ermut underlined that the international investment community is aligning with the United Nation’s SDGs to deal with global economic challenges. “We commit to shouldering all of the additional responsibilities

photograph byLOREM IPSUM

Under ISPAT’s presidency, WAIPA will continue to put full effort on the further expansion of membership and the integration of international organizations.

photograph byLOREM IPSUM

24


The Turkish Perspective

ISPAT President Arda Ermut underlined that the international investment community is aligning with the United Nation’s SDGs to deal with global economic challenges.

that come with our role in effectively empowering investment promotion agencies and supporting the global community in driving FDI. We commit to playing our role in using FDI as a driving force for sustainable development. We are here to set the tone that partnerships and cooperation form the core of this goal. Global businesses, investment promotion agency professionals, and international organizations can together create opportunities that can cover the annual 2.5 trillion dollar funding gap for achieving Sustainable Development Goals,” said Ermut.

Voting in WAIPA

photograph byLOREM IPSUM

photograph byLOREM IPSUM

Before WIC17, WAIPA held its General Assembly in Dubai. It was there that ISPAT was elected to the next term Presidency. The newly elected WAIPA Steering

Committee for the 2017-2019 term included the investment promotion agencies of Turkey, Dubai, Azerbaijan, Bosnia and Herzegovina, Poland, Mauritius, Kazakhstan, India, Korea, Mexico, Brazil, and Costa Rica. ISPAT is close to achieving the targets it had put forward in its first candidacy for WAIPA presidency in 2014. The Permanent Secretariat has been relocated to Istanbul from Geneva, and thus it was possible to decrease operating costs by almost half while at the same time quadrupling the number of activities. Since then, WAIPA has been actively contributing as a voice for its members in numerous events and conferences around

WAIPA has been actively contributing as a voice for its members in numerous events and conferences around the world.

the world. The Institution puts a very strong focus on cooperation and is in direct collaboration with UNCTAD, UNIDO, ILO, OECD, ICC, IEDC, and the World Bank, who are also members of the WAIPA Consultative Committee. Under ISPAT’s presidency, WAIPA will continue to put full effort on the further expansion of membership and the integration of international organizations. It will be an even stronger voice and advocate for members, will create even more added value for members, and will expand its role as the Global Reference Point for FDI to ultimately become a Global FDI Platform. WAIPA is an umbrella organization that covers 170 national and regional investment promotion agencies from 130 countries. It engages extensively to find solutions to improve the FDI score for countries and to address economic challenges faced by investment promotion agencies, private sector businesses, and governments.

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Briefing

Ispat’s Swiss Program Unveils New Opportunities I

SPAT did not step off the gas as 2017 drew to an end. The team undertook a very comprehensive agenda in November and December as their investment attraction and promotion activities picked up speed. A main country of interest this past month for ISPAT President Arda Ermut and his delegation was Switzerland, where they held a number of meetings with top management of major Swiss companies in various parts of the country. The series of meetings saw the ISPAT delegation visit

world renowned elevator company Schindler Group’s Executive Committee Member Carlos Guembe at

the company’s head office in Ebikon. The visit also saw Ermut present Turkey’s value proposition to Swiss

Turkey Expands Ties With South Korea O

n the occasion of his visit to South Korea in the first week of December, Turkish Prime Minister Binali Yıldırım and his delegation, including ISPAT President Arda Ermut, met with South Korean businesspeople at a roundtable meeting to discuss opportunities and strengthen commercial ties between the two countries. During his speech at the meeting, Prime Minister JANUARY 2018 ISSUE 54

technology and engineering companies at a roundtable held at the Swiss Chamber of Commerce headquarters in Zurich. Later on, ISPAT discussed collaboration on R&D opportunities with Christof Domeisen, CEO at Swiss Angst+Pfister Group, which supplies products and engineering to top-tier OEMs from its Turkish plant. ISPAT’s Switzerland program also included executive meetings with the Clairant Group in Pratteln and with Novartis Chairman Joerg Reinhardt at the company’s Basel head office. Pharma giant Novartis exports to 100 countries from its four Turkish plants, currently occupying the number one position in Turkey’s pharma exports.

Turkey and South Korea have potential to expand their commercial relations.

Yıldırım said that even with over six decades of strong diplomatic ties, Turkey and South Korea still have potential to expand their commercial relations. Drawing attention to Turkey’s economic performance and stable investment environment, Yıldırım said that the political stability since 2002 in Turkey under the leadership of President Recep Tayyip Erdoğan led the country to achieve almost

6 percent annual growth rate over the last fourteen years. Yıldırım made special mention of the South Korean investors involved in the construction of infrastructure projects in Turkey such as the Eurasia Tunnel and 1915 Çanakkale Bridge, adding that there are still great opportunities to be had with Turkey’s ambitious goals. Relations between South Korea and Turkey have expanded over the past 10

years. The bilateral trade volume was more than 6.9 billion dollars in 2016. Turkey had 6.3 billion dollars in imports from South Korea, and with this figure South Korea was the seventh country in Turkey’s imports in 2016. The FDI stock of South Korean companies in Turkey was at a level of 2.2 billion dollars as of the first half of 2017. ISPAT has had a permanent presence in South Korea since 2008.

photograph byLOREM IPSUM

26


The Turkish Perspective

ISPAT Hosts Consul Generals In Istanbul, Seeks New Ways To Boost Collaboration I

SPAT President Arda Ermut , Senior Advisor to Turkey’s President Dr. Hatice Karahan, and Istanbul Consular Corps (ICC) Chairman Balázs Hendrich led a working breakfast with over 40 consul generals in

Istanbul to discuss ways to boost economic and commercial collaboration. During his opening remarks, ICC Chairman Balázs Hendrich stated that ICC’s primary objective is to build a bridge between

opinion leaders in Turkey and diplomatic missions. Delivering a keynote presentation at the meeting, Senior Advisor to the President Dr. Hatice Karahan pointed out that the Turkish economy grew

robustly over the past 15 years and its rapid recovery in the aftermath of July 15, 2016 events was a clear indication of its resilience. The uptrend in the domestic market, combined with industrial progress, is the driving force behind the spectacular growth in economy, according to Karahan. Meanwhile, during his address, ISPAT President Arda Ermut said that embassies and consular offices in Turkey function as ISPAT’s natural partners in that some investors reach ISPAT through their facilitation. He added, “Since 2003, FDI inflows have topped USD 185 billion, while over 55,000 companies with foreign capital currently operate in Turkey. Our upcoming presidential system will see clear job definitions, which in return will enable more professionals in their fields of expertise to take part in the parliament.” Ermut concluded that ISPAT is ready to give all the support for the investment activities that consulates will organize in Turkey and in their countries.

ISPAT Attends Empea Globalturk Private Equity Event

photograph byLOREM IPSUM

T

he 3rd Annual Executive Briefing on Private Equity in Turkey and its Environs took place on December 7, in Istanbul. Jointly organized by EMPEA and Globalturk Capital, the event brought together private equity executives from around the globe. ISPAT was also a sponsor at the event, and ISPAT Vice President A. Burak Dağlıoğlu gave an address on growth prospects for Turkey and the region and on how to best improve local fundraising

opportunities. He stated that ISPAT has taken solid steps to increase its dialogue with the private equity industry and has participated in various activities over the past year to raise awareness both at home and abroad. “We believe that private equity will make a significant contribution to our endeavors to attract investment into Turkey - this is because private equity is a major source of FDI in the world, as well as in Turkey,” Dağlıoğlu said.

27


#discoverthepotential


SectorAL EXPORTS REPORT

2017

Export fıgures of tHE Sector’s councıl

Pa or a Turkn ish Ecmoa of Solid nomy i A very st n 2017 rong sid e of th econ e Turkis omic str h u c t u financia r e i s i t s so l system and its e lid xport.

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30

SectorAL EXPORTS REPORT 2017

JANUARY 2018 ISSUE 54


The Turkish Perspective

Steadily Towards 2023 Goals

Turkey, caught a strong GDP growth in the third quarter, with the support of incentives applied especially Credit Guarantee Fund (KGF). Turkey, outpacing all countries in the world with this performance and has become the fastest growing economy in Q3 of 2017.

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urkey is a growing and developing country. 10 years ago, employment participation was 45 percent. Today, this rate has risen to 54 percent. On the one hand, participation to employment is increasing. On the one hand, there is an increase in employment. Turkey is a growing country. 10 years ago, employment participation was 45 percent. Today, this rate has risen to 54 percent. On the one hand, participation to employment is increasing. On the one hand, there is an increase in employment. This clearly shows how Turkey is a dynamic and productive country. The growth rate of Turkey in the third quarter of the year is 11.1 percent. It’s a record in the world. Turkey left China and lIndia behind increased its position to first row in the table. In this high growth, the manufacturing industry contributed 15.2 percent. In the coming period we will also see that it reflects employment. This growth trend will positively affect other variables, from inflation to current account deficit, after a while. It is a basic goal to maintain this growth in 2018, which is a strong contribution of exports, investments and industry. This growth in economy also showed its effect in export numbers. 2017 Q3 GDP growth is the highest since 2011 Q3, and 6th highest since 2000. 3.6 points of the 11.1% growth rate was from investments. The upward trend in investments point to a continuous growth in 2017 Q4 and 2018. In other words, investment

incentives of the Ministry of Economy has been effective. In addition to the growth, investments will also boost exports. Exports’ contribution to the growth was 3.5 percent, which is the highest in last 5 years and 4th highest of the last 15 years. It can said that 1/3 of the Q3 growth was due to exports. Last year TİM declared 2017 as the “Breakthrough Year in Exports” and they fulfilled their promise. On the other hand, net exports’ contribution was 0.3 points. In the first 9 months of the year, net exports contributed positively to the

President Erdoğan stressed during a meeting in Ankara on Nov. 27 that a 7 percent expansion of the economy in 2017 would not be surprising as strong inndicators had pointed to an increase.

growth. With this data, it is clear that we will see a GDP growth around 7% for the year 2017, and continue marching towards our 2023 targets. Exports to the EU-28 increased by 11.4 percent and reached $6.9 billion. The share of the EU countries in total exports increased from 48.4 percent to 49.5 percent. The main partner country for Turkish exports was Germany with $1.45 billion, which was followed by the U.K. with $890 million, the U.S. with $771 million, and Italy with $746 million. Automotive and spare parts were the leading sector in exports with $2.17 billion. President Recep Tayyip Erdoğan said that he believes Turkey will break the all-time high records in investments by the end of 2017, and that no one will be surprised if the country’s economic growth reaches 7 percent this year. Erdoğan pointed out that Turkey globally ranks 13th in terms of national income per capita, which is now $11,000. Adding that Turkey’s objective is to rank among the 10 biggest economies, the president said that it will be enough to double the country’s current financial situation to achieve this goal. Erdoğan addressed Turkey’s export, which is “moving toward a record.” The country’s annual export has reached $154.2 billion, increasing by $15 billion as of October, compared to the same period in 2016. Erdoğan robustly stressed that Turkey will continue to accomplish many more mega-scale projects that will boost the country’s economy.

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32

Wood and Forestry Products Sector

Ahmet Güleç Chairman of Council of Wood and Forestry Products Sector

World’s eyes are on Turkey “According to TURKSTAT Production Index, furniture sector grew by 25% in 10 months. The industry grew almost 5 times higher than other industries. In world export rankings, we have risen from 23rd to 12th. Today, Turkey is 4th power in the sector after Italy, Germany and the United with its own brands. We are very successful in design. Our number of studies in this field is increasing day by day. The attention of countries that are interested in furnitures is increasing day by day to Turkey.”

A

ccording to the information received from the Council of International Forest and Paper Associations, which have 43 memeber countries that produce 90% of the world’s wood and paper production; the world forest products industry has a volume of more than $ 470 billion and employs over 14 million people in this sector. Turkey’s forest areas having more assets than the total forest area in many countries is 26%. If such a large resource meets its values and the industry is used effectively, it will be a great advantage for the country’s economy. Approximately 300,000 people are employed in “Turkey Wood and Forestry Products Sector”. The activity of Wood and Forestry Products sector is mainly composed of three sub sector groups.

Wood Based Articles Sector

Turkey is leading the fashion and the trends on the world.

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urkish wood-based products are exported to more than 180 countries. The lumber industry which is raw material-oriented and oldest branch of the forestry products has 68% of the producers which gives to meet potential Small and MiddleSized Enterprises (SME) increase in the world’s lumber demand. The sheet industry, which has an important role in the economies of developed countries, accounts for 11% of Turkish wood and forestry products exports.

$179,6

$66,4

$68,2

$29,7

JANUARY 2018 ISSUE 54

Million $

900,0 800,0

500,0 400,0

2017 (January-May) IraQ

1000,0

600,0

In 2017, the main markets for wood and wooden products exports are Iraq, Turkmenistan, Kazakhistan and Georgia. Iran

While Turkey’s wood and wooden product export of 2016 was realized $731 million, export for 2013 was $783 billion. Wood and wooden products export of January-May 2017 was realized $321 million.

700,0

Main Markets For Turkey’s Wood and Wooden Products Export (Million $)

2016

Turkey’s Wood and Wooden Products Export

300,0

TURKMENISTAN

$45,3 $18,0

KAZAKHISTAN

$2,3

$13,4

GEORGIA

$33,4

200,0

$10,5

0,0

100,0

2013 2014 2015 2016 2017

Jan- May


20

thousand

The number of small and medium sized enterprises in “siteler”

300

33

thousand

Number of people emloyed in the sector

Furniture Industry

In recent years Turkish furniture exporters has entered in many countries, especially to the EU, with new designs and high quality products.

F

urniture production in Turkey is concentrated mainly in Ankara, Istanbul, Izmir, Bursa, Adana, Eskişehir and Kayseri provinces. The largest furniture manufacturing area in Turkey, called “Siteler”, is located in Ankara. The number of small and medium sized enterprises in “Siteler” is about more than 20 thousand. The small sized firms in Siteler produce mostly handmade furniture. Turkey furniture exports more than 200 countries. In recent years Turkish furniture exporters has entered in many countries, especially to the EU, with new designs and high quality products. The textile sector is highly developed in Turkey, and the fact that textiles are used in a wide range of furniture products has given Turkish producers an important competitive advantage. Turkish furniture has modern design and made up of the highest quality materials to ensure comfort, performance and attractive appearance for a long time. Different styles such as classical, traditional and contemporary are produced according to market needs.

Main Markets For Turkey’s Furniture Export

Turkey Furniture Export (Billion $) While Turkey’s Furniture Export Of 2016 Was Realized $1.8 Billion, Export For 2013 Was $1,9 Billion. Furniture Export Of January-May 2017 Was Realized $790 Million. 2,5

In 2017, the main markets for furniture exports are Iraq, Saudi Arabia, Germany, Libya and France. 2016

2017 (January-May)

IraQ

S.ARABIA

Billion $ GERMANY

2,0

$415,7 $175,5 $149,5 $77,5 $131,9 $53,2

1,5

LIBYA 1,0

0,5

FRANCE 0,0 2013 2014 2015 2016 2017

Jan- May

$78,9 $29,6 $62,5 $27,9

Paper-Cardboard Sector

Turkey has a wide range of papercardboard sector market.

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hanks to private enterprises and modern production facilities, a wide range of production and export is realized in the paper-cardboard industry. The papercardboard industry also has an important share, 37,5%, in wood and forestry products exports in 2016. Turkish paper-cardboard products are exported to more than 200 countries.

Turkey’s Paper-Cardboard Export (Billion $) While Turkey’s papercardboard export of 2016 was realized $ 1.8 billion, export for 2013 was $ 1,9 billion. paper-cardboard export of January-May 2017 was realized $ 800 million.

Main Markets For Turkey’s PaperCardboard Export In 2017, the main markets for paper-cardboard exports are Iraq, England, Israel, Iran and Greece. 2016 IraQ

2017 (January-May)

ENGLAND Billion $ 2,0

ISRAEL

1,5

$193,1 $102,7 $159,5 $68,7 $94,3 $48,6

1,0

IRAN 0,5

GREECE 0,0 2013 2014 2015 2016 2017

Jan- May

$94,6 $37,3 $89,6 $35,3


34

Cement Glass, Ceramic and Soil Products

Sector

Bahadır Kayan Chairman of the Council of Cement and Soil Products Sector

A Deep Rooted Sector of Turkish Economy The sector carries a strategic importance for the Turkish economy with its net foreign currency inflow.

C

ement, Glass, Ceramic and Soil Products has a deep-rooted history. The sector provides direct employment for 650 thousand people and continues to contribute towards Turkey’s foreign trade volume by exporting sector’s products to more than 200 countries. Turkey ranks 2nd in cement exports, 4th in ceramic exports and 17th in glass exports in the world. The sector aims to maintain this trend. The target is to achieve exports amounting to $7.3 billion in the year 2023 with an average growth rate of 7% per year. Despite the negative course of events experienced in the Middle East and Russia, our Association’s exports to developed countries such as Germany, England and the USA recorded increases of up to 30% , strengthening the sector’s motivation. Turkish Cement, Glass, Ceramic and Soil Products Sector enjoys a significant position in Europe, America, Middle East, Africa etc. in other words all over the world. Export value of the sector increased by 21,3% in first half of 2017 compared to the previous year’s first half. The sector’s share in Turkey’s total export increased 1,9%. The Turkish cement industry aims to increase exports by 10 percent year-on-year to 13 million tons in 2017. Turkey’s annual cement production capacity is around 110 JANUARY 2018 ISSUE 54

Significant Contribution to Turkey’s Economy “Ceramic, which has a history of 8 thousand years, is a cultural heritage of Anatolia. With the strength we have acquired from this unique accumulation, today we have come to be one of the world’s largest ceramic producers and exporters. We ensure that the facilities, changing spaces and needs of new materials and the structure of the industry are taken into consideration. Thus, we support the emergence of innovative designs that can be applied to new living spaces, environmentally conscious, sustainable, reproducible, and easy to implement. With the unique designs of our young designers, we aim to increase our global market power and make a significant contribution to the country’s economy.

million tons and the country consumes 65 million tons. Exports are mostly destined for African countries including the Ivory Coast, Ghana, Nigeria and Angola. The Turkish ceramic industry employs totally 246,000 people in the field of production, design, sales and marketing. In 2015, the established capacity of ceramic tiles reached to 411 million m2, production is 320 million m2 and the export is 77 million m2. The established capacity of sanitary ware production is 23 million pcs, production is 20 million pcs. and export is 8 million pcs.

8

MILLION

Total pieces of sanitary ware exported to the world from Turkey

Cement, Glass, Ceramic and Soil Products Export of Turkey Turkey ranks 2nd in cement exports, 4th in ceramic exports and 17th in glass exports in the world. 280

Million $ 2016

2017

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200

160 01

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35

Precious Mine and Jewellery Sector Determining the Standarts of World’s Beauty

Ayhan Güner Chairman of the Council of Precious Mine and Jewellery Sector

Export transactions of the Turkish Jewellery and Valuables sector exceeded $3 billion.

“Attracting the attentions of world”

T

he jewellery sector holds a place in the cultural heritage of Turkey, with her history of more than 5,000 years. Being fostered by the many civilizations such as Lydian, Hittite, Macedonian, Greek, Roman, and Ottoman that existed in the country, the craft of jewellery has been regarded as among the most eminent occupations down through the ages. It is in a transformation process, from being an artisanship to becoming an industry opened to the world after the government’s regulation in the beginning of the 80s. Today, the Turkish Jewellery and Valuables sector turns out to be one of the prominent sectors globally. Over 1,000 large factories, which are equipped with state-of-the-art technology and employ more than 1,000 sta each, are in service in Turkey. Approximately 350,000 people are employed by over 4,000 producers in 40,000 retail stores in the sector. The Turkish Jewellery and Valuables sector has been an arbiter in the export market since 1980. The number of member exporter companies of the Jewellery Exporters’ Association is almost 1,000 as of today. Kuyumcukent, one of the most distinguished production compounds in the world, fosters more than 1,000 producers in one site and employs 20,000

“Turkey’s jewelry exports remains sustainable increase in 2017. Jewelery tourism is very important for Turkey. But there is more to be done. We sell people a two-week holiday for 200 euros. There is no such practice in the world. Jewelry trade in Turkey should be facilitated. Turkey can attract investors by this way.

With the exemption of tax from precious stones’ import, Turkey’s ability to use her advantages becomes possible.

people. The company whose production capacity is the largest in Europe is located in Turkey. Export transactions of the Turkish Jewellery and Valuables sector exceeded $3 billion in the year 2014. The secotor’s export gures increase steadily each year. While the export gure was $200 million in 1998, today it has grown to $3 billion, as ocial records indicate, and this gure comes close to $5 billion when shopping by tourists and shuttle trading are included. Turkey is the second-largest gold jewellery producer in the world, after Italy. More than 90% of the sector’s exports are derived from the category of gold jewellery. Sectoral regulations enforced in Turkey conform to global standards. The

Precious Metals and Diamond Markets founded under the organizational format of Bursa Istanbul have been launched. Turkey has a stock exchange market in service that is run by international standards. With the exemption of tax from precious stones’ import, Turkey’s ability to use her advantages becomes possible. It is foreseen that Turkey is going to be the world’s new stone center because of advantages over

Israel and Belgium. Strong demand in the domestic market Gold ranks rst among the most important investment instruments for the Turkish people. According to World Gold Council reports, total household gold investments, which are called “mattress savings” in Turkey, are approximately 3,500 tons ($145 billion). A $10 billion portion of the “mattress savings” was brought into the economy after the government took steps with regulations on the banking system.

Export of Precious Mine and Jewellery Sector While the export gure was $200 million in 1998, today it has grown to $3 billion. Million $ 400

2016

2017

350 300 250 200 150 100 50 0 01

02

03

04

05

06

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2nd

36

Steel Sector

Largest Rebar Exporter in the World

2nd

Largest Producer of Steel in Europe

Effect of Competitive Prices

Mustafa Çıkrıkçıoğlu Chairman of the Council of Steel Sector

Turkish steel manufacturers export to all over the world, due to competitive prices and effective marketing strategies.

T

oday Turkey has 24 electric arc furnace mill plants (EAF), 5 induction furnace plants and its 3 BOF plants. In 2016, global output increased 1.629 billion tons, up by 0.8% on 2015. She had a 5.2% increase with 33.163 million tons in year 2016. In 1996, The European Coal and Steel Community (ECSC) agreement signed between the EU and Turkey. With signing the agreement, customs duties on bilateral steel trade were abolished. The agreement allows Turkey to trade its iron and steel products without customs duty with all EU member states. Additionally, the Government does not subsidize Turkish domestic steel industry due to the European Coal and Steel Community (ECSC) agreement. All steel companies in the country are privately held, and Turkish steelmakers continue to pursue technological developments to enhance the long-term viability of the industry in the global marketplace. The steel industry has become one of the most developed sectors in Turkey and today counts as the fifth largest contributor to the Turkish economy. Turkish steel manufacturers export to all over the world, due Turkey to competitive prices and effective exports marketing strategies. According steel to to 2016 figures, Turkey’s main 200 export region is the Middle East countries with 5.3 million tons, constituting all over the World. 32.0% of Turkey’s total steel exports. European Union is another main export destination of Turkish steel exports with 3.6 million tons and Turkey’s export to the region increases 29.3% in 2016. Turkey steel exports also increase to North America and North Africa region by 0.8% and 2.3% respectively. On the other hand, in 2016, Turkish steel exports to Latin America and Sub-Saharan Africa region sharply decrease by 23.4%, 23.1%, respectively. JANUARY 2018 ISSUE 54

Turkey’s Steel Industry Overview While Turkey was the world’s 10th biggest steel exporter in 2001, she has become the 8th biggest producer globally and 2nd largest steel producer in Europe in 2016. 2016

While Turkey was the world’s 10th biggest steel exporter in 2001, she has become the 8th biggest producer globally and 2nd largest steel producer in Europe in 2016. In fact, she was the third fastest growing steel producer in the world between the 2001 and 2011, after China and India. Steel production in Turkey has increased significantly since 2001, growing from 15 million tons (mt) in 2001 to 33 million tons in 2016. Growth of the industry has been driven by strong domestic consumption. Turkey’s crude steel consumption per capita has increased to 454 kg in 2016 and is expected to continue to growing in the medium - long terms. In addition to the strong domestic demand and dynamic steel using industries, Turkey’s well placed position also supports exports and production.

Productıon

33.163 Mio Ton

EXPORT

16.514 Mio Ton

$

9.1

BILLION Export Value

6.6%

BILLION Share in Total Export

Turkey’s Steel Map Turkey has increased her steel export to primarily neighboring countries such as Iran, Iraq and North African countries. In the next 20 years, Turkey realized a major production and export boom.


Ferrous

and Non-Ferrous Metals Sector

Key to Success: Marketing Strategies Exports of iron and steel products for scaffolding and molding have increased by 120%.

T

he industry aims to spread the innovative understanding and create a culture of innovation. Ferrous and non-ferrous metals industry includes aluminum, copper, casting, goods made of iron and steel, hand tools, locks, scraps materials and kitchenware made of metal. In this regard, ferrous and nonferrous metals industry have represented their works and Turkey in international organizations, executed technical seminars, buy trade committee actions and supported R&D activities to enable sustainablegrowth of ferrous and nonferrous metals industry. In the period of JanuaryNovember 2017, Ferrous and non-ferrous metals’ total export worth of Turkey was $6.2 billion. Export volume of the sector increased 22% for Italy and 46% for Spain. Since the beginning of 2017 exports to Europe increased by 13% According to the same period of last year, exports of iron and steel products for scaffolding and molding have increased by 120%. In particular, the United Arab Emirates’ 2.7 million dollar export figure was caught. Germany was the country with the largest number of exports in the

37

The Leather

and Leather Products Sector

Tahsin Öztiryaki Chairman of the Council of Ferrous and Non-Ferrous Metals Sector

“Our sector is solid as our products”

“Turkey, as a country that successfully works for the promotion comes to the fore. It produces the world’s most important projects with its own resources. We are producing large projects such as “Third Airport, tunnel under the Bosphorus, channel project,”. The world knows we are so strong in the construction industry. We collect all the attention on us with our projects around the world as well as local projects in Turkey”

period January-September 2017. Exports to Germany increased by 26.08% compared to the same period last year. The amount of exports made per kilogram remained the same as the previous year. Nevertheless, unit value increased in exports and unit prices increased from 3.45 to 3.76.

$

6.2

BILLION Total Export of Ferrous and Non-Ferrous Metals Sector in JanuaryNovember 2017

The Role of Internal Harmony in Export

Mustafa Şenocak Chairman of the Council of Leather and Leather Products

The Leather and Leather Products sector covers many disciplines as sub-sectors.

“The future is bright for Leather and Leather Products”

“In the first 10 months of the year we exceeded the export figure of last year, we saw 1.4 billion dollars. I estimate that we will complete the year with a $ 1.5 billion export. Russia is the largest market for our sector again. Germany, Iraq, Italy and Bulgaria follows her. Export to Russia increased by 89% compared to the last year, with 173 million dollars increase.”

T

he Leather and Leather Products industry has taken on a new significance especially after dissolution of Soviet Union, as former Soviet countries became the main buyers of Turkish leather products. In the last two years, low oil prices and the Russian jet plane crisis had negatively affected the Turkish leather sector. But, after the second period of 2016, Turkey’s leather and leather products export with Russia recovered again. A lso, Turkish leather industry gained different markets during the Russian crisis and will continue increasing its shares in these markets with promotion

campaigns, trade committees, and attending foreign fairs. In order to reach 2023 export goals, the industry set markets with high priority; Italy, China, US, Canada, Japan, South Korea and EU, respectively.compared to the same period last year. The amount of exports made per kilogram remained the same as the previous year. Nevertheless, unit value increased in exports and unit prices increased from 3.45 to 3.76.

Export of The Leather and Leather Products The Leather and Leather Products sector is one of the oldest industries of Turkey plays a crucial role in the country’s export rate. Million $ 200

2016

2017

150

100

26

PERCENT Increase in export to Germany Non-Ferrous Metals Sector

50

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38

Electrical-Electronics

Hazelnut

And Services Sector

and Hazelnut Products Sector

Güven Uçkan Chairman of the Council of Electrical-Electronics and Services Sector

Turkey’s Value Added Sector The sector has increased its export volume by continuing its production-focused and successful performance.

established as an assembly industry in Turkey in the 1950s, has developed rapidly in recent years, has gained a competitive edge and has been one of the fastest growing sectors. Activities such as Turkey Innovation Week events hosted by Turkish Exporter’s Assembly increases the awareness for innovation and companies of all scales begin to embrace innovation as a fundamental part of their business. Today, the industry has reached a point where it can develop its own design and technology. The fact that the Turkish Electrical and Electronics and Services Industry is constantly developing and renewing itself, adapting to world technologies and showing new technologies in its adoption, indicates the bright future of the industry.

C

onsidering the value added Turkey’s industry, the Electricity-Electronics and Services ElectricityElectronics and Services are an important and key sectoral production area that has a close impact on other industries due to their economical and technological characteristics. This sector is one of the largest and leading industries because of the number of workers it employs in the world production volume, the effect on the whole area of the industry and more than 10% of world industrial production. The ElectricityElectronics and Services industry, which started to be

Export of Electrical-Electronics And Services Electricity-Electronics and Services sector are carrying out an intense workload with other sectors. They expect 45billion dollars export in 2023.

EXPORT

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Advantage of Having a Solid Climate Conditions Turkey is using its geographical advantage to lead the sector of hazelnut and hazelnut product.

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he hazelnut, which is known to exist since 2838 years ago, has been described as a natural wonder in terms of its taste and health benefits. The first place where nuts are grown in history is known as China but the homeland of it is Turkey. Besides being the biggest hazelnut producer in the world, Turkey is also the biggest hazelnut exporting country. Turkey as one of the few countries in the world having suitable air and solid conditions for hazelnut growing produces 75% of the world production and exports almost 70-75 % out of total exports in the world. Turkey’s hazelnut export is mainly aimed at the European Union countries and the share of these countries increase in parallel with the increase in our exports. The share of the EU countries in our total exports is about 80-85%, though it changes over the years. As for our hazelnut export to other countries, Turkey exports hazelnut over 90 countries. According to the export figures announced in November, 67 thousand 714 tons of hazelnut were exported between September 1 and November

İlyas Edip Sevinç Chairman of the Council of Hazelnut and Hazelnut Products Sector

30, 2016 and 623 million 203 thousand 22 dollars were provided for this. In the same period of last season, 87 thousand 330 tons of hazelnut were exported and 851 million 874 thousand 746 dollars provided for this. The failed coup attempt against our democracy affected this numbers undoubtedly. It is also expected that this income will increase again in the direction of 2023 targets in the coming years. During this period, standard natural hazelnuts were traded at an average of 872 dollars. And also 53,818.9 tons of exports were made to EU countries. 4 thousand 499 tons of hazelnut were sold to European countries outside the EU. 6 thousand 664 tons of hazelnut were sold to overseas countries and 2 thousand 730.7 tons of hazelnuts were sold to other countries.

75 %

SHARE Turkey’s share in world hazelnut production

2838 YEARS Age of Hazelnut


Ship

and Yacht Sector

Homeland of Luxuries and Beauties Ship and Yacht sector maintains its recovery which was effected from the global crisis took place in 2008 all over the world.

T

urkey, surrounded by the sea on three sides, is a natural bridge between Asia and Europe. It has borders to the Black Sea from north, the Mediterranean from south, the Aegean from west and the Marmara as an inland sea. As a result of Turkey’s geographical location and global developments, Turkey’s shipbuilding and yacht building industry have been boosted. Traditional ship and yacht building skills combined with modern techniques and education has enabled Turkish ship and yacht industry to develop into an international trademark since early 1990s. In 2016, the export rate of industry has decreased because of political and economic crises in the region. All exports are not due to new build sales. The export of second hand vessels is also reflected in export figures. Some of the sales structures may not be real sales. Because

39

Carpet Sector

Selahattin Kaplan Chairman of the Council of Carpet Sector

Başaran Bayrak Chairman of the Council of Ship and Yacht Sector

“We are not going to surrender and maintain over recovery”

“We exported $ 125 million in November. When you look at the year-on-year basis compared to the previous year, we exported 1 billion 217 billion dollars in first 11 months. December is going well. We anticipate that we will close 2017 with an export figure of 1 billion 350 million dollars.”

50

PERCENT Share of second hand vessels in Turkey’s total Ship and Yacht Export there are shipowners who change flags and this can be regarded as exports. When we look at the ratios, it is seen that about 50 percent of the exports made are from producer companies, and the remaining 50 percent comes from second hand vessels sold by shipowners. Ship and yacht industry’s 2023 export goal is to have $1 billion worth export, which will be hard to achieve. However, with the help of its historical and traditional background, industry will recover again in next years.

Sector Taking Its Beauty from Turkish Culture Turkish Carpet Sector aims to expand its market across the globe to reach its 2023 targets.

$

10

BILLION Total volume of Turkish carpet export in JanuaryNovember 2017

industry leader China as of 2015. The industry’s exports make an immense contribution to the Turkish economy. Over the past he Turkish carpet— five years, Turkish carpet exports reached a value of one of the few nearly $10 billion, while the products in which Turkey has made a name for industry’s imports were only one-tenth of this figure. itself globally—is not only Belgium, India and the a product but also a global Netherlands are the other brand name. countries at the top of the Carpet-making is an art list of the world’s machineform that Turks brought to made carpet exporters. prominence and introduced The Turkish carpet to the world. Over time, it industry’s total export is has grown into an industry recorded as of $2 billion that creates many jobs, enjoys great export potential, in the period of JanuaryNovember 2017, to more and contributes to various than 160 countries. The fields. One of the world’s Turkish carpet industry most prominent carpet plans on expanding the manufacturers, Turkey is export market into Africa continuously expanding and the Far East in the its global market share coming period. The with ever increasing export industry is growing steadily potential each year. The with endless investments. Turkish carpet industry is It sets its investments and well-known around the world thanks to the superior development based on the 2023 targets, and in 2018 quality products it creates the initiatives with regard by applying advanced to the target countries technology in production. will be intensified. The Turkey holds a 15 per cent objective is to expand the market share in the world carpet export market across carpet trade, ranking the globe. number two behind the

T


cer

40

Apparel

Apparel

Sector

Sector

The World is Dressed by Turkey Origined Products Apparel sector is among the most important sectors of the Turkish economy, foreign trade and cash inflow.

A

pperal Sector is one of the most core of Turkish economy in terms of GDP contribution, share in manufacturing, employment, investments and macroeconomic indicators. These sectors had a 18,4% share in total export volume in 2016. Turkey is one of the main actors in the world apparel industry. The Turkish apparel industry with a share of 3,39% is the 8th largest supplier in the world, and the 3rd largest supplier to the EU. It has a share of 4,06% in world knitted clothing exports and it ranks 4 th among the exporting countries. With a share of 2,73%, Turkey ranks 9th among the woven clothing exporters in the world. The Turkish textile industry, which is listed 8 th largest exporter in the world and is the 3th largest supplier to the EU.

JANUARY 2018 ISSUE 54

Süleyman Kocasert Chairman of the Council of Apparel Sector

Country of Fashion

8 th

Turkey maintains its steadily rise in apparel sector and isn’t far from reaching its 2023 goals.

3 rd

I

RANK Largest Supplier of World

RaNK Largest supplier to the EU In 36 years from 1980 to 2016, the production and export of the industry shifted from low value added commodities to high value added manufactured items and fashionable goods. With its qualified and educated human resources, design capacity, accumulation of know-how, investment in technology, dynamic and flexible production capacity, advanced sub industry in apparel sector, concern about quality, health and environment; the Turkish apparel industry has a significant role in world trade with the capability to meet high standards, and can compete in international markets in terms of high quality and a wide range of products.

stanbul is proud of its designers, fashion and shopping centers where it has kept its unique Occidental-Oriental, oldmeets-new, and East-meetsWest characteristics. Istanbul is becoming a leading fashion and shopping center due to both foreign and local investments recently. The world’s largest shopping centers are opening in Istanbul. Many tourists have added Istanbul to their itinerary for shopping. As a global sourcing hub for both Asia and Europe, Istanbul attracts a number of international buying offices, trading houses, major retailers and department stores. Istanbul Fashion Week is organized twice a year to gain recognition for Turkish designers and brands in national and international tribunes where they present their latest collections. Since Istanbul is becoming a fashion and shopping center, most of the companies have shifted their production facilities to the inner provinces. Izmir, Bursa, Ankara, Denizli, Gaziantep, Kayseri, Tekirdag, Adiyaman, Kahramanmaras and Adana are now major cities for textile and clothing production. Turkish clothing exports have continued to increase even after the expiration of the global textile quota system at the end 2004, as agreed

Hikmet Tanrıverdi Chairman of Textile and Confection Sector Committee

2023 Targets Aren’t Far

“Today we have $ 17 billion of apparel exports. The $ 2.5 billion portion is made up of branded products. But these numbers are not enough. We will employ at least 1 million people, mainly our young people, in this sector within 5-6 years. We can say that we will catch our target of $50 per kilo in ready-to-wear clothing and apparel in the short term, starting from new markets and rapidly increasing exports.”

under the World Trade Organization Agreement on Textiles and Clothing (ATC). The sector continues to maintain and enhance its competitiveness. In 2014 the total value of clothing exports was US$ 16,26 billion. Approximately 80% of the clothing exported is cotton clothing. Knitted clothing and accessories, with an export value of US$ 10.02 billion, had a share of 61,66% in total clothing exports, and woven clothing had a share of 38,34% with a value of US$ 6.23 billion in 2014. T-shirts and pullovers are the most important export products in knitted clothing sector. Exports of t-shirts and pullovers were US$ 2.93 billion and US$ 1.62 billion respectively in 2016. In addition, as the second largest manufacturer in the world, Turkey’s hosiery exports amounted US$ 1.04 billion in 2016.

$

10.4

BILLION IHKIB’S Export During The Period of 1 January30September


Ornamental Plants Sector

and Products Sector

Osman Bağdatlıoğlu Chairman of the Council of Ornamental Plants Sector

Touching the Lives of People and Trying to Make it Better

important role by supplying high added value (95%) to the economy. In Turkey, approximately 25.000 people are directly employed in the industry. Including domestic market, more than 300.000 people are indirectly employed. Ornamental plants industry is playing an important role in providing more cohesion to the social structure in the country, through employment of unskilled workers and providing them with accommodation and education opportunities. Sectoral target is to reach 500 million dollars of export in year 2023, meaning a 10 times growth in exports.

Turkish ornamental plants sector has a deep root which takes its power from the history.

P

roduction area of ornamental plants in Turkey has increased 30% in last four years. Ornamental plants are produced in 3359 ha of area in Turkey. There are nearly 3500 endemic plant species in Turkish flora. Ornamental plants export from Turkey increased to 69 million $, in first 11 months of 2017 2017, having a growth in exports of more than 20% per annum. The production in the highland area allows to export cut flowers year round to the markets. Turkish ornamental plants are exported to 60 countries in the world. Ornamental plants industry in Turkey has an

INCREASE Export in Ornamental Plants Sector in last 4 years

Flower exports from Turkey began 25 years ago, and the sector has grown steadily since then. Thousand $ 20.000

2016

2017

15.000

10.000

5.000

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03

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10

Abdülkadir Çıkmaz Chairman of the Council of Dried Fruit and Products Sector

The Way of Healing the World with Nature Turkey is the world’s largest producer and exporter of premium quality and unique taste sultanas, dried figs and dried apricots.

D

30 %

Export of Ornamental Plants Sector

01

41

Dried Fruits

11

12

ried fruits have been widely accepted by people around the world in their daily lives. They are small but concentrated packages of nutrition, high in fiber, potassium.. Easy to digest, they are good cleansers of blood and improve our digestive system. The consumption of dried fruits is growing along with the “healthy lifestyle” trend that has taken hold in world market. Consumers are becoming more and more aware that dried fruits can be added as part of a healthy diet. The overall consumption and popularity of “natural” snack products (dried fruits, nut) is growing at a steady pace . Fertile agricultural country produces and exports high quality dried figs, raisins, apricots and pistachios. Turkish Dried Fruits are

exported to 150 countries. Turkish Dried Fruit sector is proud of its high quality products and export experience for more than 100 years. Turkish Dried Fruits exported to more than 150 countries, mainly to the EU countries, the United States and Russian Federation Turkish Dried Fruits sector is proud of its quality products and the experience gained over almost a century of export all over the world. Turkish Dried Fruits sector has the largest dried fruits producing facility in the world and the capacity and flexibility to quickly service customers globally with its unique geographical location. The sector aims to achieve one of the highest numbers of its history in 2023.

150

COUNTRIES Turkey Exports Dried Fruits

100

YEARS Turkey’s Experience in Dried Fruit Export


42

Chemicals and Chemical Products Sector The Industry Strenghtening Its Competitive Skills

Murat Akyüz Chairman of the Council of Chemicals and Chemical ProductsSector

Chemicals and Chemical Products Sector is taking a faster path in order to reach our targets.

B

eing one of the leading power of the Turkish economy, the chemicals industry grew significantly in the last 10 years together with its subsectors. Being one of the top exporting sectors in Turkey, chemicals industry is breaking its own records. Chemicals are indispensable to modern life and the development of the chemical industry has helped to elevate the standard of living, an indicator of the level of industrialization in a country. Chemical industry products contribute significantly to growth in other industrial sectors. At the beginning of the 20th century there were a few chemical establishments, manufacturing soap, liquorice extract, valonia extract, etc, within the boundaries of the Ottoman Empire. After the establishment of the Republic of Turkey till the 1950s, these chemical works passed through a

10 %

SHARE Sector’s share in Turkey’s total export

$

50

BILLION Sectors 2023 Export Goal process of corporation and production began in some fields such as explosives, medicine, agricultural chemicals, detergents, printing ink and textile dyes and involved the final stages only. It was only after the 1950s, especially during the planned economy period, that the development of the chemical industry in Turkey accelerated. Between 1960 and 1980 economic policies were based on import substitution and public sector investments were

A New Era for Chemicals and Chemical Products Sector

directed to petrochemicals, fertilizers and basic organic and inorganic chemicals, the fields which required high investment, with low profitability whereas private sector and foreign investments were directed to pharmaceuticals, synthetic yarns, soaps and detergents. In 1980 Turkey started to follow a new export-oriented economic policy. As a result of these successful policies, production and exports of the manufacturing sector boomed. The chemical industry, likewise, benefited from the new economic policy and showed an impressive increase both in production and exports. Today, the Turkish chemical industry with its modern technology and diversified products is the key component of the industry and integrated into supply chain of national industries, especially, textiles and automotive sectors.

The country we exported the most in November was Egypt. In November, our chemical exports to Egypt amounted to 97 million 397 thousand dollars. The first three products we give to Egypt are ‘glues, glues, enzymes’, ‘essential oils, cosmetics’ and ‘soaps and washing preparations’. Following Egypt, the top ten countries are Germany, Iraq, Netherlands, Italy, USA, UK, Iran, China and Saudi Arabia. Despite political developments, we see a remarkable increase in Egypt, Germany and the United States. We are pleased that the increase in exports in the chemical sector, which is one of the top three exporting sectors of Turkey, continues. As İKMİB, we organize many procurement delegations and trade delegation organizations and provide national participation to the most important fairs abroad. We will continue our work to grow the industry and reach new markets. We are walking steadily to our 2023 goals.

Export of Chemicals and Chemical Products Being one of the top exporting sectors in Turkey, chemicals industry is breaking its own records. 2

Million $ 2016

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Mining

Fruit

and Vegetable Products Sector

and Minerals Sector

Increasing the Competitiveness in Global Market The sector aims to increase the competitiveness of Turkish minerals exporters’ in global market.

T

he minerals sector is one of the leading sectors supplying raw materials to domestic industry. Turkey possesses the largest resources of most minerals in the world and is one of the world’s richest countries in terms of minerals. Excluding petroleum and coal, there are 53 exploitable minerals and metals and 4,500 mineral deposits in Turkey.

3%

SHARE Sector’s share ın total export

$

15

BILLION Sectors 2023 Export Goal

43

Mevlüt Kaya Chairman of the Council of Mining and Minerals Sector

Turkey’s geology is extremely complex and this complexity is reflected in the diversity of its mineral deposits. Best known for its industrial minerals, Turkey is a major producer of boron minerals, feldspar, marble, baryte, celestite (strontium), emery, limestone, magnesite, perlite and pumice. A wide variety of primary metallic minerals are produced as well. Copper and chromite are the most significant minerals in the metals sector. Turkey is a major producer of processed mineral commodities, including refined borates and related chemicals, cement, ceramics and glass. In addition, Turkey is a significant producer of ferrochromium and steel. In recent years, mining activities and the search and production of mainly silver, gold, manganese, copper and chrome ore have increased considerably in Turkey as in the rest of the world. Today, 53 different minerals are produced in the Turkish mining sector. Most of the production is carried out by the private sector. The main producers are Eti Mine Works General Management, Turkish Hard Coal Corporation (TKİ), Turkish Hard Coal Institute (TTK) and private sector companies. The public sector is dominant in fuel minerals and metallic ore production, while the private sector is concentrated in industrial mineral production.

The Sector That Aims the Stars Always The Fruit and Vegetable Products Sector’s future appears to be bright it is not so far from its export goal.

H

ome to the headwaters of the Tigris and Euphrates Rivers, Turkey’s agricultural sector today is echoing the prosperity of ancient Mesopotamia. With its favorable geographical conditions and climate, large arable lands, and abundant water supplies, Turkey is considered to be one of the leading countries in the world in the field of agriculture and food. Turkey has a robust agriculture and food industry that employs almost 20 percent of the country’s working population and accounts for 6.1 percent of the country’s GDP in 2016. The sector’s financial contribution to the overall GDP increased 40% from 2002 to 2016, reaching 52.3 billion dollars in 2016. The strengths of the industry include the size of the market in relation to the country’s young population, a dynamic private sector economy, substantial tourism income and a favorable climate. Turkey is the world’s 7th largest agricultural producer overall, and is the world leader in the production of dried figs, hazelnuts, sultanas/raisins, and dried

Rıza Seyyar Chairman of the Council of Fruit and Vegetable Products Sector

apricots. The country is also one of the leading honey producers in the world. Turkey boasted production of 18.5 million tons of milk in 2016, making it the leading milk and dairy producer in its region. The country also saw production totals of 35.3 million tons of cereal crops, 30.3 million tons of vegetables, 18.9 million tons of fruit, 1.9 million tons of poultry, and 1.2 million tons of red meat. In addition, Turkey has an estimated total of 11,000 plant species, whereas the total number of species in Europe is 11,500. Turkey is looking to position itself as the preferred option for being the regional headquarters and supply center of top global players in the agricultural sector. To encourage investment in the sector, Turkey offers a set of incentives for potential agribusiness investors.

1%

SHARE Sector’s share ın total export

$

4

BILLION Sectors 2023 Export Goal


44

Machinery and Machinery Accessories Sector Riskproof Sector That is Always Safe Machinery and Machinery Accessories Sector never aims to sell more, but sell at a higher price with high added value products.

We believe that we will make a great impact in 2018

P

roduction in the Turkish machinery sector more than doubled in 10 years. With its rapid development and the potential it has, the Turkish Machinery Sector is a sector increasing its share in the Turkish economy and exports. The share of Turkish machinery export is 9,5% in Turkey’s total export. Machinery is the second largest sector in Turkey’s export. Turkey exports to more than 200 countries (including free zones). In 2015, Turkey ranks 27th in world’s machinery export, 24th in world’s machinery import. Although world’s machinery export decreased 22% in 2009, 11% in 2015, 6% in 2016, Turkey’s machinery export increased 31% in the last 5 years. Over the last 15 years, machinery export has increased more than 7 fold. About % 60 of our export is to EU and USA.

By the year 2023, Turkish machinery aims to double their share in Turkey’s total export. Turkey’s machinery export, which was USD 6,5 billion in 2006, has reached USD 12,4 billion in 2016, through an average annual growth of 16 percent, which is above the annual growth rate of Turkey’s overall exports in the same period (8%)

Export of Textile and Raw Materials Turkish clothing and home textile industries have had a significant role in the world’s clothing and home textile markets in the last two decades. 0,7

Million $ 2016

2017

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Adnan Dalgakıran Chairman of the Council of Machinery and Machinery Accessories Sector

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Turkish machinery industry’s can be listed as developed engineering skills and quick adaptation to new technologies, quality awareness, specialized, highly educated and skilled middle and senior managers, young laborforce, sufficient facilities (like industrial zones) and sufficient infrastructure, advanced sub -industry, rapid adaptation to international manufacturing standarts, domestic supply of raw materials, flexible structure of SMEs (Most of the active companies in the Machine Manufacturing Industry in Turkey are SMEs) and high level organization of the sector. The export goal of $100 billion worth total export for 2023 is a proof of its significance in Turkish economy and trade. The industry is expected to lend a fifth of total exports of Turkey in 2023.

By the end of November, our sector, which provided 10 percent export increase, realized total exports in 11 months as 13.4 billion dollars. We reached the export figure realized at the end of last year in 11 months this year. We will work for record in December. The machinery sector is diversifying export markets. Significant activity is taking place in markets such as Italy, Iran, Poland, Russia and India in particular. This is directly reflected in the export figures. We are optimistic for 2018. We believe that we will make a great impact on the domestic market. We see the recovery in the growth in our target markets as a promising development for export. Especially in the US, the acceleration of investments with the new administration and the expectation of faster growth make this market attractive.A robust growth, convenient infrastructure and research and development is required for this goal for 2023. Thanks to innovation, research and development increases the range of products and their quality. In turn, this increases the ratio of profits per unit. To sell at a higher price is the main aim, instead of selling more and this aim only can be achieved by embracing the understanding of high-tech culture. The 2023 goal of industry is a vision, not an ambiguous dream and it needs the visionaries to accept responsibility, improve and improvise at the same time. It will result in success and well-deserved pride when they fulfill the requirements of being a visionary.


Textile and Raw Materials Sector

$

45

7,2

BILLION

Export in First 11 Months of 2017

Expanding Market with New Relations The goal of textile sector is to increase its share in USA, EU and far-eastern markets, to assure its trade and profitability.

İsmail Gülle Chairman of the Council of Textile and Raw Materials Sector

We will continue to work intensely

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he manufacture of textiles is Turkey’s largest industry, very competitive in international markets, and the most important foreign-exchange earner. Domestic cotton and wool provide much of the raw material for the industry, but synthetics production has also expanded. Having the largest share in Turkish industrial production, the textile industry is one of the first established industries in Turkey. The fabric industry as a sub-sector of the huge Turkish textile industry has improved significantly in recent years, since the Turkish clothing and home textile industries have had a significant role in the world’s clothing and home textile markets in the last two decades. The Turkish fabric finishing sector has a level of processing all the capacity

$

20

BILLION Sectors 2023 Export Goal

6%

SHARE Sector’s share ın total export of grey fabric. This sector is equivalent to the European Union in terms of processing capacity, modern technology, qualified workforce, and especially product quality. Today, the Turkish fabric

Export of Textile and Raw Materials Turkish clothing and home textile industries have had a significant role in the world’s clothing and home textile markets in the last two decades. 800

Million $ 2016

2017

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industry has competitive advantages in international markets, particularly in terms of its technology, extensive product range and the quality, design and creativity of its products. In addition to its welldeveloped structure, it employs a highly skilled labor force. Also, the Turkish fabric industry has great flexibility and ability to modernize its production, and adapt itself to new technologies. This ability allows the industry to reduce its reaction time to changes in consumer demand in international markets. Thus, the Turkish fabric industry satisfies its customers by meeting all their needs with the quality of its products together with its strong service ability of quick response and on-time delivery. All these features have enabled Turkish fabric manufacturers and exporters to earn a good reputation in international markets. The sector meets its raw material needs mostly from domestic sources. As an important world cotton grower, Turkey ranked seventh in the world production of cotton with around 738 thousand tons in 2015/16 term. Although Turkey is among main cotton growers in the world, domestic cotton does not meet the production demand of the country. As well as the cotton textile industry, the Turkish man-made textile sector

In 2017, the state issued a green passport to the exporter. Again this year, state aids increased. Credit Guarantee Fund (KGF) and Eximbank have strong and effective solutions for financing needs. All of them were projects that opened the way for export. As textile and raw materials sector, 2017 was a year we broke export records. By the end of the year we will have realized export worth $ 10 billion. Turkey has grown at a record level in the 3rd quarter of 2017. Turkey’s growth is based on solid foundations. This growth is based on a sustainable structure. Growth figures and capacity utilization rates also increased in the textile sector. This is proof that new investments and employment will increase. We are aware that the region and the world economy are having a hard time. However, we continue our work. We attach great importance to research and development. We are making innovative moves in our industry. We are constantly in touch with the world. We strive to use the latest technologies. We believe that we will achive our 2023 target in this way. We will be opened to the world with added value products and we will carry the Turkish brand to the top in our sector.

is also a welldeveloped industry. Having large capacity of synthetics in the world, Turkey has a large production potential for synthetic fabrics based especially on 100% polyester and polyester blends with cotton, viscose, nylon, polyamide, wool, linen and/ or multi-blends of them.


21,5%

46

Automotive Sector

INCREASE In Export Volume of Sector in last 12 Months Ömer Burhanoğlu Chairman of the Council of Automotive Sector

The Shining Star of Turkey’s Export Today’s Turkish automotive sector is highly efficient and competitive thanks to value-added production.

V

ehicle industry production in Turkey dates back to the mid-1950s and the industry gained momentum in the early 1960s. After manufacturing some prototype vehicles during the 1950s, the first vehicle assembly company was established in 1954 (Turk Willys Overland Ltd.) for jeep manufacturing. By 1955, trucks, and by 1963, buses were being assembled in Turkey. Then passenger

$

75

BILLION Sectors 2023 Export Goal

20 %

SHARE Sector’s share ın total export

$

85

BILLION Export in First 11 Months of 2017 JANUARY 2018 ISSUE 54

production lines in 1971. Recently, Japanese and South Korean car manufacturers have established jointventures in Turkey. As to passenger cars and light commercial vehicles, Turkish manufacturers are becoming world production centers of global companies, with whom they have license agreements. At present, Turkey is the biggest light commercial vehicle and bus manufacturer in the European Union. The Turkish vehicle industry’s total capacity is approximately 1,8 million vehicles, of which 1.663.128 (92,6%) is for light vehicles (passenger cars, minibuses and pick-ups). The total vehicle production in 2016 was 1.485.927 units (excluding tractors) which is a record for the Turkish automotive industry. Turkish spare parts industry produces parts and pieces for the vehicles manufactured in our country and in the global market, as well as for the OEM and After Market.

car assembly companies, namely TOFAŞ (FIAT), OYAK (RENAULT) and OTOSAN (FORD) began operations in the next three years. In 1966, the industry also began to assemble its own cars (OTOSAN). The Turkish-made passenger car of those times, “ANADOL”, is nostalgia now. The two major producers of cars, TOFAŞ and OYAK-RENAULT, under Italian and French licenses respectively, established their

Export of Automotive At present, Turkey is the biggest light commercial vehicle and bus manufacturer in the European Union. Billion $ 3,0

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and Vegetables Sector

and Animal Products Sector

On Schedule to Reach 2023 Goals The corporate activities of Turkish and international investors are opening the gates of international marketing and distribution.

Ali Can Yamanyılmaz Chairman of the Council of Livestock and Aqua Products Sector

reached a significant market share in the foreign markets supported by a continuously increasing production capacity, Turkish seafood Sector has become an important player in the worldwide aquaculture industry which has been characterized by being the fastest growing food industry y the increasing population of world, sector in recent years. With increasing capitals, production the protein sources become deficient to cover the amounts, laboring, Turkish Seafood has a growing nutritional needs of human reputation in worldwide. being. Urbanization and Today Turkey is the biggest industrialization widen this producer of Sea bream and gab more and more. Sea bass. All the players in After 2008’s strong trend this sector trying to get a big of consolidation, the Turkish share from the export markets seafood industry has realized with value added sales. significant investments It is strongly believed that in processing industries the Turkish seafood will be a (cleaned, filleted, smoked and widely recognized trademark marinated) conforming to in the world with its taste, the EU Standards, enabling quality, sustainable products the sector to aim meeting and services and convenience modern consumer needs and trends. By adopting diversified forms for both customers and consumers. STG is processed seafood product responsible for marketing portfolio (Gutted, scaled, activities relating to Turkish gilled, filleted, IQF frozen), seafood and aquaculture the Turkish seafood sector is products globally, promoting seeking a more wide spread fish-products as one of the appeal in European cuisines cornerstones of the healthy along with the traditional Mediterranean diet. fresh chilled varieties. Having A clear aim of the marketing is to build awareness of the potential of Turkish seafood products, as well as diversifying beyond SHARE traditional markets by Sector’s share İn total focusing on the greater EU, export United States, the Russian Federation, UAE and Balkan countries. Considering the general political and economic situation in the BILLION Sectors 2023 Export world, and particularly the Goal deceleration in Aqua, Turkey stays solid in the sector.

B

1,4 % $

5

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Fresh Fruits

Aqua

Sector with the Widest Product Range The TurkishFresh Fruits and Vegetables Sector has a wide product range thanks to its climate conditions.

V

egetal production is the leading sector of Turkish agriculture, and vegetal perishables constitute the backbone of the sector. The availability of diverse ecological conditions has resulted in growing all temperate, most subtropical and some tropical products. According to the latest forecasts of TurkStat statistics, with a massive amount of 46,3 million tons, around 40% of Turkey’s total vegetative production derives from the fruit and vegetables sector. According to the TurkStat total fresh fruit and vegetable production is 4.6% up from 44,3 million tons to 46,3 million in 2016 mainly due to significant increase in some production such as apple, dry onions, citrus fruits and cherry. Within total citrus output of almost 4,3 million tons, oranges account for 1,9 million tons and the rest of the group; including tangerines, grapefruits and lemons, constitutes 2,4 million tons. Turkey is the leading producer and exporter of fresh figs in the world. “Bursa Siyahi” grown in the Bursa province and “Mut Figs” grown in Mut are the most

Mustafa Satıcı Chairman of the Council of Fresh Fruits And Vegetables Sector

popular varieties in world’s fresh consumption in terms of production and export. In the last five years Turkey’s fresh fruit and vegetables have become very popular and thanks to this popularity, are being shipped to around 120 destinations (including free zones) throughout the world. Turkey has begun to enhance her market shares in the CIS, the EU, Middle East and the Gulf countries. Other principal export product of the fresh vegetables sector are cucumbers-gherkins, peppers and onions. The Russian Federation, Iraq, Germany, Ukraine, Saudi Arabia, Belarus, Romania, Georgia and the Netherlands have been major destinations for Turkish fresh fruits and vegetables. The Russian Federation, one of the leading export destinations of the aforementioned product group, had a 17,1 % share in Turkey’s total fresh fruit and vegetables with 330 million USD in 2016. Iraq is another major market, which has dramatically increased its share in Turkish fresh fruit and vegetables exports in recent years.


48

Defense and Aerospace Sector The Rising Star and the Tuture of Turkish Export Turkey has seen a transformation in its defense industry in recent years, with a remarkable shift.

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MKEK (Machinery and Chemical Industry Institution) became operational in 1950, continuing its economic and commercial activities until now under the legal arrangements made in the years 1983 and 1984. When these developments were taking place, the foreign aid provided by the USA within the framework of Truman Doctrine and Marshall Plan after the Second World War, followed by Turkey’s being a member of NATO in 1952 and the surplus defence equipment being donated to Turkey by the other allied countries prevented domestic production of defence products. Cyprus crises in the years 1963 and 1967 and absolute dependency on other countries thereafter occasioned formation of policies for establishment of a self-sufficient defence industry infrastructure. In order to develop our national

urkish defence industry whose foundations began to be laid during the rise of the Ottoman Empire had a powerful position until the 17th century, but fell outside the technological developments in the Europe from the 18th century onwards. Alongside the renewal attempts of the armed forces, efforts had to be made for many years to recover lost ground due to the Empire lagging behind the technological developments. With the First World War affecting the whole world in the political conjuncture of the period, the Ottoman Empire lost its industrial effectiveness to a great extent at technological level. Small armsand ammunition produced with big sacrifices at simple machine-tools carried off from Istanbul to Ankara during the War of Independence were the most important support for our army.

Export of Defense and Aerospace Sector Today, the defence sector dominated by public producers incorporates private sector investments as well, particularly in the areas of land vehicles, seacraft, electronics and software. 250

Million $ 2016

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aviation industry, Turkish Air Forces Foundation was established in 1970, and Turkish Land Forces Foundation in 1974. On May 31st 1973, TUSAŞ (Turkish Aircraft Industry Corp.) was established to meet national security and civil requirements with the slogan: “Make Your Own Airplane”. The aim was to operate an aircraft industry capable of competing in external markets. Then, investments in the defence industry accelerated withsuch establishments as ASELSAN (1975), ASPİLSAN (1981), HAVELSAN (1982), TAI (1984), ROKETSAN (1988). After 1980, the defence and aerospace industry was reshaped according to current conditions of the period, like many other sectors. The first F-16 Combat Airplane “Şahin” produced with license by TAI was completed at the end of 1987. In 1987, the Land, Naval and Air Forces Foundations merged into TSKGV (Turkish Armed Forces Foundation), with involvement in the joint production of Stinger air defence missiles organized as a European joint production project. Starting from 1990, the countries from which Turkey bought weapons or with which she entered into joint weapon production projects expanded to includeIsrael, Italy, France, Russia as well.

Latif Aral Aliş Chairman of the Council of Defense and Aerospace Sector

We are shaping tomorrow from today The crisis in Middle East and the other regions of the world and international terrorism affect the export of defense industry but on the other hand, increase the demand for defensive structures and devices. This political environment give birth to the opportunities for defensive industry companies in the globe, but Turkish Defense Industry at most: Turkey’s proximity to such regions and stable, trustworthy economic and diplomatic ties makes the country the first target for purchases. The overall aim of the Turkish defense and aerospace industry is to boost exports to $25bn by 2023.

Turkish national defence industry, breaking new ground in every period of its development, could not remain indifferent to the political, economic and military developments taking place in the world. A serious infrastructure in sub-systems as system integration, command control, communications, electronic warfare and firepower began to develope, providing big gains in armored combat vehicles, electronic warfare systems, command control, military ship, crypto and simulation areas as well. Today, the defence sector dominated by public producers incorporates private sector investments as well, particularly in the areas of land vehicles, seacraft, electronics and software. The sector aims to be one of the largest of the world.


HVAC-R Sector

49

Olive

and Olive Oil Sector

Salih Zeki Poyraz Chairman of the Council of HVAC-R Sector

Balancer of the World and Turkish Export

The More Modern Facilities The More Export Volume The production quantity and quality of olive oil has increased with the modernization of olive squeezing facilities.

The increase in population and living standards has resulted in the need to produce more HVAC-R products.

O

T

he Turkish companies involved in HVAC-R (Heating, Ventilation, AirConditioning- Refrigeration) products had started operating in the 50’s. Since the 50’s, except during crisis periods, The Turkish airconditioning sector has been rapidly developing both in production and capacity and the market is growing. In fact, the increase in population and living standards has resulted in the need to produce

Export of HVAC-R In the last decade, the HVAC-R sector of Turkey has turned its attention to exporting its products.

$

3,56

BILLION Total Export in2017 as of November

$

3,85

BILLION Share in Total Export 2016

Mehmet Emre Uygun Olive and Olive Oil Industry Councilman

more HVAC-R products. However, the actual market development began in the late 80’s. The number of companies and the type of equipment available on the Turkish HVAC-R market increased rapidly in the 90’s. This was also in line with positive developments in the economy of the country. Today, Turkey is the fifth largest HVAC-R market in Europe. The percentage of domestic air conditioners being used is assumed to be around 2% of the total population of 73 million people. The Turkish HVAC-R sector has a wide range of products from heaters to split A/C systems, boilers, DX units, fan coils, air handling units, refrigerators, freezers, VRF (Variable Refrigerant Flow systems), cooling towers, chillers, cold rooms, heating and cooling coils and rooftop/ packaged units, heaters and boilers. The product range is wide enough to supply world markets and satisfy sophisticated customer needs.

lives grow best in warm temperatures, and cannot tolerate extreme climatic conditions. The Mediterranean region, owing to its mild climate, contains 98% of the olive harvest and 95% of the olive oil production in the world. Harvesting and processing of olives are carried out between November and March. Around 76% of the olives produced in Turkey are pressed for oil and the rest are reserved for table olives. In Turkey, olive oil production has undergone remarkable developments since the eighties and more and more olive oil plants have either started to produce virgin olive oil or increased their production capacity. Today, Turkey has large-scale olive oil plants with modern bottling lines. Table olives are also produced in modern plants equipped with advanced technology, which enables them to comply with the standards of hygienic packaging. High quality production of table olives is done in retail packs such as cans, glass jars and/or vacuum packed bags. There are compulsory export standards for table olives and olive oil in Turkey, thus, production in all plants conforms to the standards of the Turkish Standards Institute (TSE), which are also consistent with the international standards. Being a net exporter of olive oil, Turkey supplies the variety of olive oil to a wide range of countries including major producer countries that either consume or re-export Turkish olive oil. Turkish olive oil is demanded from every part of the world and there are more than hundred countries that have experienced the excellent taste and fragrance of Turkish olive oil such as the EU, the USA, Saudi Arabia, Japan, South Korea, Philippines, Australia and the Russian Federation.

Export of Olive and Olive OiL Despite production fluctuatiations due to the periodicity of the olive tree, exports of table olives have been continuously growing over the last years. 35

Million $ 2016

30

2017

25 20 15 10 5 0 01

02

03

04

05

06

07

08

09

10

11

12


50

Cereals

Tobacco Sector

Pulses, Oily seeds and Products Sector

Feeding the World with Professional Love Turkey is using the advantages of its climate to grow its agricultural products range and she feeds the world.

T

urkish cereals, pulses, oily seeds and products sector, which has great potential and is among the leading growers of cereals and cereal-based products, has a 30% share in total exports of agricultural products. Wheat has great importance because it is grown in almost all parts of Turkey by a large number of farmers and constitutes the main nutrient for the majority of the population. Cereals are grown on 12 million hectares (50%) of 24 million hectares of arable land in Turkey. The Turkish wheat flour sector has a major position in the world wheat flour export with its high production capacity. Approximately 1.200 wheat flour factories, which are operating in almost every province in Turkey, have the total production capacity around 30 million tons. Quality of pasta produced by the Turkish pasta sector, which is among the most competitive players in the food processing industry, is recognized in international markets. Turkey has a strategic advantage in production of pasta since durum wheat is grown in Turkey. Turkey is among the major producers and exporters of pasta with an annual production capacity of around 1 million

JANUARY 2018 ISSUE 54

Zekeriya Mete Chairman of the Council of Cereals, Pulses, Oil Seeds and Products Sector

5 th

Rank Biggest Pasta Producer of the World tons. Because durum wheat can be produced in our country, Turkey has a strategic advantage. Turkey took 5th place in the world pasta production with 852 thousand tons and the share of production is 6.3%. Biscuit is a product included in the category of flour and products containing flour. With an annual production capacity around 850 thousand tons, the biscuit industry is increasing the varieties and quality of its products while modernizing its technologies as a result of rapid progress it made in recent years. The biscuit sector, which is known to create the highest value added among cerealbased products, especially attracts export-oriented foreign investments. While the export of sweet biscuits and wafers is corresponding to 9% of total sector exports, the major countries in export are Iraq, Syria, Yemen, Saudi Arabia, Azerbaijan, Algeria, Palestine, Lebanon, Germany and Romania.

Rising Star of Turkish Export Turkey maintains its steadily rise in tobacco sector and isn’t far from reaching its 2023 goals.

T

obacco is a significant crop for the agriculture sector of Turkey. It generates employment and represents the primary means of subsistence for about 3.5 million people including 580,000 tobacco farmers in addition to those employed in transportation, marketing and processing. Tobacco arrived in the Ottoman Empire in the early seventeenth century on ships from Great Britain and Venice. In Ottoman Empire, there was no restriction about farming, production and consumption of tobacco but it was only put a customs duty on import until 1633. Turkish Republic took tobacco sector under government control in 1923. Cigarette production in Turkey started in the 19th century in small shops called atalye. The first cigarette factory was established in 1939, and produced hand-made nonfilter cigarettes and packed tobaccos. In 1983, Tekel started to import cigarettes with foreign brand names. Turkey’s tobacco production constitutes 4 percent of global production of 7 million tonnes, placing Turkey fifth after China, India, United States of America and Brazil. The world cigarette market is in general based on blended cigarettes, which include a certain amount of oriental-type tobacco. About 65 percent of

oriental tobacco is produced in Turkey, 25 percent in Greece and 10 percent in Bulgaria and the former Yugoslavia. Production of Virginia and Burley tobacco amounts to little more than 3 percent (8 000 tonne) of total tobacco production in Turkey. The export of tobacco, which is among Turkey’s main export items, exceeded $1 billion in 2016, according to statistics which surfaced on Thursday. With an increase of 10 percent compared to the previous year, Turkey’s tobacco exports amounted to $1.01 billion in 2016, including $652 million worth of tobacco-based products exported and $358 million worth of tobacco leaves exported. Middle Eastern countries rose as the main exporters of cigarettes produced by Turkey. $501 million of the $652 million worth of cigarettes exported by Turkey were sold in Middle Eastern countries. The Tobacco sector, with a 10-percent export increase, headed the list of sectors boosting export in Turkey in 2016 ahead of the automotive sector, among the 26 sectors represented under the roof organization of the Turkish Exporters Assembly (TIM).

$1.2

Billion 2023 Export Goal of Sector

500

million dollars Export of Turkey’s Tobacco Sector


TURKEY EXPORTS AUTOMOBILE TO 96 COUNTRIES

TURKEY EXPORTS CITRUS TO 76 COUNTRIES


52

In Depth / Lorem Invest Ipsum in France

INVEST FR Business France offers free guidance to make your new business in France a success, regardless of your plans: new investment sites, expansions to existing sites, industrial or technology partnerships, acquisitions or financial investments.

JANUARY 2018 ISSUE 54


The Turkish Perspective

ST N FR NCE By RAMAZAN GÜZYURDU

53


54

In Depth / Invest in France

F

rance is an important trade and economic partner as well as one of the leading allies of Turkey, based on our long-standing relationship and hosting a Turkish community of more than 650 thousand. The bilateral trade volume between Turkey and France was 13.4 billion Dollars in 2015 (exports: 5.8 billion Dollars, imports: 7.6 billion Dollars). France, having a 4.1% ratio in Turkey’s total exports and 3.7% ratio in Turkey’s total imports, has ranked sixth both among the most exported and imported countries in the world. Among the main export goods from Turkey to France are road vehicles, clothing and accessories, electrical machinery and devices. Among the main import goods from France to Turkey are planes and air vehicles, iron and steel products and automobile spare parts. Currently 1.366 companies with French capital are operating in Turkey. France ranks 10th country in terms of number of foreign companies operating in Turkey. Between the period 2002-2015, French direct investments to Turkey have reached 6.759 billion Dollars. France ranks 10th in terms of foreign direct investments. Based on the information from Turkish missions in France, there are 47 Turkish companies operating in France. These companies have investment stock worth 750 million Dollars. Turkish companies are concentrated mainly in the fields of energy, furniture and equipment, textile and clothing, transportation, electrical machinery and devices, finance, plastic products, storage, logistics, various services (restoration, repair and renovation), chemical goods (packaging), production of automobile spare parts, marketing of agricultural and food products, glass and ceramics. There are about 650 thousand Turkish citizens living in France. Over 300 thousand of them also hold French citizenship. During the 23-30 March 2014 local elections in France, 200 French citizens of Turkish origin have been elected to provincial councils. 16 out of 200 were JANUARY 2018 ISSUE 54

Among the main export goods from Turkey to France are road vehicles, clothing and accessories, electrical machinery and devices.

elected as deputy mayor and 184 as council members. Compared to the previous local election (103 Turks were elected), the number of successful French citizens of Turkish origin has significantly increased.

Business France: Opening up International Opportunities Business France offers customized support through a step-by-step approach, helping your company to tap into a market or expand its presence. With an 85-country strong network of sector-based experts in regular touch with local decision-makers and with their fingers on the pulse of new opportunities, Business France helps businesses to find prospective clients through its extensive list of contacts. Business France deals with the operational issues facing exporters on a daily basis: how to prioritize markets, test the potential of their products with a panel of buyers, learn local business customs and


The Turkish Perspective

KEY EXPORT FIGURES 600

collective events organized every year throughout the world; 1,800 businesses use the VIE international internship solution every year.

10.000

SMEs and mid-size companies benefit from our export solutions every year

%50

of businesses negotiate or enter into a contract within six months (IPSOS survey, 2014)

8700

interns placed with businesses through the VIE International Internship Program

more than 600

site visits organized for investors throughout France, together with our regional partners

avoid the pitfalls facing newcomers, raise their profile in a market, meet prospective clients, as well as advice on choosing business partners.

Free Guidance To Make Your Business Business France offers free guidance to make your new business in France a success, regardless of your plans: new investment sites, expansions to existing sites, industrial or technology partnerships, acquisitions or financial investments. More than 1,000 foreign investors choose France every year, and more than half of them enjoy active support from Business France. You can create a roadmap for your investments in France in complete confidence. They offer timely success-driven consulting services to get you up to speed on France and everything it has to offer. You can count on any of our Investment

Advisors located in 70 countries (including France!). They act as a facilitator between your teams and the French authorities at national and regional level. They know France’s economy inside out, so we can succeed alongside you. Its close partnerships with every French region, both on the mainland and overseas, means you can make an informed decision about the best location for your business. They speak your language and have supported the best in every industry. Every month, they meet with 600 international companies and you can be next! Let yourself be guided by its investment advisors, whose result-oriented working culture is guided by our three core values: connect, fast track, succeed.

Constructive And Honest Relationship Business France has 70 investment advisors based in 70 cities around the world. They

recommend meeting one soon at your location either abroad or in France. They represent 50 different nationalities and speak your language! With a thorough knowledge of France and everything it has to offer, they are ready to introduce you to its services and the best approach for locating your investment project in France. Every year, each of them meets with a hundred business leaders, and together they manage a portfolio of more than 2,500 active projects, helping more than 500 investors choose France. They also enjoy strong support from their Business France in Paris and the throughout France’s regions, with direct access to an array of information about the French economy. The aim is to build a lasting, constructive and honest relationship. They recommend organizing an in-depth business meeting with our teams from the outset.

55


56

In Depth / Invest in France

W

e made an interview

with Pascal Lecamp, he is Commercial Counselor in Business France, and talked about relationship between Turkey and France. First of all, can you generally evaluate the economic relations between Turkey and France? France has always given a great importance to its relations with Turkey. Turkey is for us a major strategic partner. That’s why, since his election in May, the new President of Republic of France Mr. Emmanuel Macron has been willing to establish a regular dialogue with his counterpart Mr. Erdogan, in order to reinforce bilateral cooperation in all fields and especially in the economic and trade fields. Even though we have only 14 Billion € of bilateral trade volume between the two countries, it is obvious that we can do much more. As of 2016, 1 434 French companies operated in Turkey. The total value of the French direct investments in Turkey between 2002 and 2016 reached 6.85 billion Dollars. France ranked 10th in terms of foreign direct investments in Turkey during the said period. On the contrary, at the end of 2016, around 100 Turkish firms operate in France. Between 2002 and 2016, Turkish direct investments in France reached 187 million Dollars. This is far below the French direct investment to Turkey. That’s why we are now working on increasing the Turkish investments to France, and to that end, we are trying to convince Turkish companies that it is at their advantages to invest in France. And I must say, the general trend in 2017 is quite positive: as Business France, we helped more than 20 different Turkish holdings and companies to invest in France. Turkish companies are more and more aware of France’s numerous fundamental strengths; on top of them, its central location, excellent communication and transport infrastructure, industrial prowess in a wide range of sectors, high productivity, and a well-qualified workforce. JANUARY 2018 ISSUE 54

With the recent reforms in France, we see great advantages for the foreign investors. Could you talk about some of these reforms? The drive to reform labor and tax laws by French President Emmanuel Macron is expected to help attract more direct investment from Turkish companies. Not less than 36 measures were taken for a profound change to improve the dialogue between employers and employees, and to diminish the costs of dismissals: Labor market reforms are helping businesses to adapt quicker to economic changes by simplifying and consolidating social dialogue and introducing more clear and more predictable rules to govern working relations, or making it easier to carry out restructuring through new collective termination agreements. Tax reforms will increase competitiveness, investment and employment. The main tax reforms consists in decreasing standard corporate tax rate from 33,3% to 25% by 2022, starting in 2018, lower payroll tax for the highest incomes and exemption from social security contributions for overtime. As Business France, what kind of support do you provide to our investors? More than 1,000 foreign investors

choose France every year, and more than half of them enjoy active support from Business France. In 2017, Business France office in Istanbul provided assistance and support for over 20 projects carried out by Turkish investors. Business France offers free guidance to make new business of Turkish investors in France a success, regardless of their plans: new investment sites, expansions to existing sites, industrial or technology partnerships, acquisitions or financial investments. Every year, we meet with business leaders, and Business France manage a portfolio of more than 2,500 active projects, helping more than 500 investors in France. We have a dedicated helpdesk for investors’ questions about moving to and getting settled in France. www. welcometofrance.com, provides information to foreign talent and their families about number of different procedures, including visas, residence permits and work permits, taxation, social security coverage, day-to-day life (schools, accommodation, etc.) We also have team based in Istanbul, speaking Turkish and English, and dedicated to help and inform potential Turkish investors to France. R&D and Innovation are very important issues in recent years. What steps are being taken in this field to develop investment? As Cisco’s President Mr. John Chambers says, « France is the next big thing ». Innovation is recognized by business decision-makers to be a drving force behind France’s attractiveness as an investment location, as is the thriving «La French Tech » ecosystem and France’s 10.000 start-ups. France is becoming a preferred location for startup creation, due to simplified business formation procedures, and a dense nationwide network of incubators and accelerators. The world’s largest startup campus, Station F, opened this summer in Paris, while the French Tech ecosystem is now the focus of major international recognition, as France fully embraces the Third Industrial Revolution.


The Turkish Perspective

Le Port, Reunion Island, France

While none of the ‘GAFAs’ (Google, Apple, Facebook, Amazon) may hail from these shores, France today is making the very most of the environment they have helped to create, filing more patents in ICT than in any other key sector. Along with this entrepreneurial drive are increasing numbers of R&D investments. R&D intensity – the ratio between gross domestic expenditure on R&D and GDP – has been on the rise. Business enterprise R&D expenditure is growing, and the French authorities have also made bold commitments, with the new €10 billion phase of the “National Investment Program” focusing in particular on breakthrough innovation. France’s research tax credit, the most advantageous in Europe, covers 30% of all R&D expenses up to €100 million, and 5% above this threshold. Salaries for research staff are wholly integrated, plus 50% of R&D operating costs and 75% of investments in R&D operations. The results are there to be seen: France outstripped all its European counterparts in the latest Deloitte Technology Fast 500 EMEA for the number of fast-growing technology companies in Europe, the Middle East and Africa. Similarly, France was ranked first in Europe and third in the world in the latest Clarivate Analytics “Top 100 Global Innovators”; 10 French organizations were among the world’s 100 leading innovators in 2016.

“Every year, we meet with business leaders, and Business France manage a portfolio of more than 2,500 active projects, helping more than 500 investors in France.”

Which sectors are more interested in Turkish investors? Globally, we can say that logistic is on the top of sectors in which Turkish groups invest in France: Yildirim (the 24% shareholder of the giant logistic player, CMA-CGM), Ekol Lojistik, UN-RoRo, LAM, Arkas, but also construction with Metal Yapi which undertakes very prestigious projects in France, but also Hasmatik, Metal Yapi, Star group, Formet... Yildiz Holding with BN biscuits, Orhan Holding and Eczacibasi have unit productions in France. Dogus Holding made the latest investment in 2017 with the acquisition of Compositeworks, a composite boat builder, now the pre-eminent refit and repair facility on the French Mediterranean coast. Among other main investments, we can mention Koç with Beko and Otokar, that established its European HQ in Paris, but also Vestel or Martur. Finally, Esas Private Equity is participating to this Turkish Investment wind to France by co-investing with French family funds in existing companies, such as Les Pharmacies Lafayette or Cooper.

Finally, what advice would you give to the investor who wants to invest in France? France is an attractive business destination counting on a number of key strengths, including its large domestic market and central location within Europe, its vibrant demographics, excellent tertiary education system, high labor productivity and a superb quality of life. We want Turkish investors to do benchmark between the different countries before deciding where in Europe to invest so that they can be more aware of France advantages compared to other countries. French language should not be seen as an obstacle as English is generally used in the business life. My main advice would be to well prepare their business plan, with our help, in order to make the process smoother. Going to France to inquire, feeling the environment, planning and meeting with other Turkish or foreign investors in France, observing the potential are important steps to take in order to make sure that your future investment will be successful. France is also, like in Turkey, a country of networking; the high number of clusters boosting innovation thanks to collective actions and exchanges between talented people in France demonstrates it well. We want more Turkish companies and entrepreneurs to take art of this great ecosystem.

57


TURKEY EXPORTS CERAMIC  TO 159 COUNTRIES

TURKEY EXPORTS WOMEN’S SUIT TO 58 COUNTRIES


Brands / Lorem

The Turkish Perspective

Content: Arzum: A 50-Year Brand In Household Electrical Appliances P57 Netlog Logistics: Leading Regional Logistics Service Provider P59 Editor: Ramazan Güzyurdu

small applıances, logıstıcs... Today, the market data indicates that Arzum is the leading small appliances company in Turkey in terms of sold units.

small applıances

A 50-YEAR BRAND IN HOUSEHOLD ELECTRICAL APPLIANCES

ARZUM, Turkey’s leading brand, took the first place in İnovaLig’s this year assessment, which is Turkey’s first innovation development program, in the category of ‘Innovation Organization and Culture’. By ilhan alpay ogan

M

urat Kolbaşı,

Chairman of Arzum, who received his award from President Recep Tayyip Erdoğan, said: “We have been touching the lives of our consumers for 51 years. We combine functionality with ease with our innovative technologies and design to add value to our customers’ lives. The brands touching the heart of the consumer with design and innovation distinguish it from the others by offering it with a unique product experience and recording an

important stage in terms of brand loyalty. As a brand we are aware of, we follow national and international trends and blend them with the needs of our customers. In this sense, our R & D teams are constantly pursuing innovations. How do we make a difference, especially Turkey and care points on the world market, we carry out our work in this direction. In this sense, we will continue to increase our work in the field of innovation in the 51st year of Arzum, which is very valuable for us. “

Leading Small Appliances Company in Turkey The three Kolbaşı brothers laid the foundations of Arzum Electrical Appliances Manufacturing and Trading Company in 1953 when they established the Güney Imports Company, which traded in a wide variety of products such as small appliances; radios, bicycles and TVs. Family members trademarked the “Arzum” brand in 1966, and focused on the small appliances market.

Today, the market data indicates that Arzum is the leading small appliances company in Turkey in terms of sold units. Arzum continues to follow the vision of becoming the most valuable small appliances company for all of its shareholders, and aims to become one of the main actors in the global small appliances market. . Founded in 2008 and based in Hong Kong, Arzum Asia Pacific is in charge of the company’s Far Eastern

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Brands / Arzum

operations. The company imports its products to Europe, Central Asia/ Caucasus, Africa and the Middle East. Located in Skopje in Macedonia, Arzum Adriatic joined Arzum in 2011, and is the company’s first retail store. Arzum owns the Arzum and Felix brands, which collectively house 250 products in 8 categories: food preparation, cooking, frying, beverage preparation, cleaning, personal care, iron, baby products and accessories. Arzum lists its values as innovation, passion, sincerity and diligence, and has been offering the latest technologies and the best products to its customers since it was founded.. Arzum’s marketing, distribution, manufacturing and service networks continue to grow each day. With over 250 authorized services spread around the country, Arzum shows the consumers that the company is by their side not only when they are purchasing products, but also when they are using their products. Following the company mission, Arzum offers JANUARY 2018 ISSUE 54

innovative and trusted products that make its customers’ lives easy. Today, more than 10 million households worldwide use Arzum products. Once the company identifies the consumer needs, it works with industrial design companies as well as national and foreign designers to deliver outstanding products. With award winning designs such as Arzum Cezve, Fritella, Tostino and Fırrın, Arzum not only makes the consumers’ lives easier, but also makes their homes more beautiful. Arzum seeks to increase shareholder satisfaction and to offer higher quality products and services through innovation and sustainable growth. In May 2011, Arzum joined the Turquality Brand Support Program, which is an incentive of the Turkish government. As part of this program, the company will receive a broad range of support for exports, such as marketing, sales, aftersales services and setting up offices, which will constitute solid steps towards making the company a “global brand.”

Arzum’s marketing, distribution, manufacturing and service networks continue to grow each day.

“International Quality Standards” All products that are to be released to the market are periodically tested according to Arzum’s criteria and international quality standards. The primary purpose of the tests is to observe the product’s performance and features prior to the release, to diagnose in a laboratory setting the issues that may emerge once the product is put on the market, and to make the necessary improvements. Another purpose is to assure sustained quality levels for products that are on the market, and continuously to improve the level of quality. Hong Kong and Turkey laboratories and, third party laboratories whenever necessary, are used for testing The reports and certificates that indicate that the entire product line meets national and European quality requirements, especially CE, are tracked and archived. All new directives and similar regulations that are frequently put into execution in the EU are likewise tracked and the necessary certification tests are carried out. Furthermore, the market performance of the products is constantly monitored. Higherthan-expected product returns prompt further research; and the manufacturer is asked to improve the product. With this process in place, Arzum aims to improve both market data and product quality.


The Turkish Perspective

LOGISTICS

: Leading Regional

Logistics Service Provider

Netlog is a specialist in cost-effective, secure, and environmentally responsible international road freight services across Turkey, Europe, the Middle East, and Central Asia. By alperen çevikaslan

N

etlog is a Turkey based,

integrated logistics and transport services provider with operations in three continents. Netlog Logistics is the largest transport company in Turkey, and one of the fastest growing logistics companies in the EMEA region. Netlog has 23 companies and market-leading logistics service brands in its portfolio, and operates an owned network of freight forwarding offices in key markets worldwide, as well as 74 warehouses across the EMEA region. Since 2013, Netlog has been in transition from being the “Lead local logistics player” to the “Leading regional logistics service provider.”

Variety Of Services Netlog is a logistics services conglomerate, offering a variety of services across three regions, ranging from general goods logistics and warehousing to international road, rail, air and sea freight transport services, to temperature controlled logistics and liquid bulk food transport. Netlog serves a number of industry verticals, providing a fully integrated supply chain management system, while offering its customers the tools for better forecasting and inventory management

Full Logistics And Transport Services Netlog offers full logistics and transport services out of its hubs in Turkey, Belgium,

the UK, the Netherlands and the UAE, providing customers around the globe with efficient coverage of 49 countries across the EMEA region. As a global freight forwarding, supply chain management, and transport services company, Netlog is also capable of assisting its customers with services across the globe, using the infrastructures of its local alliances. Today Netlog became the EMEA service provider of multi-billion USD companies, providing them the onestop-shop logistics service set-up for the region. We will continue to invest in growing our services into countries within our close reach where

logistics is still under new development phase. Having completed the first phase of our European, Turkey and United Arab Emirates set up, Netlog is now looking to develop the remaining GCC(Gulf Cooperation Council) region starting with Saudi Arabia, Qatar and Kuwait, as well as India, Egypt and Russia Logistics Networks. We want our customers to think regional service coverage when they think of Netlog Logistics. Netlog is an integrated, international logistics and transport company with services across the supply chain cycle. Due to the nature of Netlog’s concentration on the Middle East, Europe and Central Asia, the services of our global forwarding and international transport division is also focused on offering our customers around the world, Netlog services into this region. Our experienced road, air, ocean and multimodal transport service teams in 62 countries across 212 offices around the world deliver Netlog customers a full line of international transport solutions with intransit visibility through out the process. Netlog Global Forwarding and international transport division is committed to grow its own office network around the Globe and we as management support highly this initiative.

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Agenda

FAIRS, EXHIBITIONS, SUMMITS AND MEETINGS IN THE NEXT MONTH january

12-20

25th International Trade 11-14 january 2018

INCREASE AWARENESS IN THE ENERGY SECTOR İstanbul expo center - İstanbul

The trade show aimed to contribute to the advancement of the energy sector by learning the latest improvements in the energy efficient products industry, as well as to increase awareness of the public.The 2nd Energy Efficient Industry and Products Exhibition (ENIPE) will take place at Istanbul Expo Center on January 11-14, 2018. Following the success of the first trade show, this year’s event is expected to draw huge attention in the energy sector.

Exhibition for Food and Beverage

antalya expo center – antalya ANFAŞ, targeting to bring together international and domestic hosted buyers as well as editors and seniors of the present geography under a single roof, will also host matchmaking and other events during the exhibitions to be held at the same time in 2018, taking into account. Dear exhibitors, we are honoured to invite you to this organization which is going to be held in Antalya Expo Centre on 17-20 January 2018 and let you find all possibilities to help you achieve your targets.

january ANFAŞ Hotel Equipment

antalya expo center 17-20 january 2018

25-28

exponazagro nazıllı center

18 - 21 january 2018

The 22nd East Mediterranean International Tourism and Travel Exhibition tüyap expo center – İSTANBUL

Aiming to be among the first 10 economies in the world till the year 2023, Turkey hosted 25 million 352 thousand tourists and gained a revenue of 22 billion dollars in tourism sector in 2016. ANFAŞ International Hospitality Industry Equipments Exhibition is getting together with valuable exhibitors and sector stakeholders on 17-20 January 2018 for the 29th time. JANUARY 2017 ISSUE 54

Exponazagro Nazilli Agricultural Fair which will mark the Aegean Region’s agriculture and food technology sector, will meet agriculture, cattle and small cattle breeding and food technology industries in Aydın-Nazilli Eşref Private Multi Purpose Closed Area on 18-21 January 2018 with the aim of innovation.

EMITT which is organized with the collaboration of ITE Turkey, TUROFED and TYD will open its doors to its visitors for the 22nd time in January 2018 at TUYAP Fair and Congress Center.The exhibition is organized by the Ministry of Culture and Tourism, TOBB,Turkish Airlines A.O, Istanbul Metropolitan Municipality, 6 chambers and associations, 36 local associations and foundations.If you are a TOUR OPERATOR and are interested in getting your appropriate share in the TURKISH MARKET and in other East Mediterranean Region markets than this is your place.


Figures

63

TOP COUNTRIES OF EXPORT

Turkey’s export growth is shining among these countries according to the same month of the last year and continues to carry Turkey forward with certain steps.

2017 1 - 31 October 11.901 22.277 22.375 11.472 52.529 81.306 13.814 78.183 121.802 45.621

Country (Thousand$) TOGO MARSHALL ISLAND PANAMA DOMINICAN REPUBLIC SINGAPORE QATAR BENIN HONG KONG CANADA BANGLADESH

Value %

Country (Thousand$) Germany United Kingdom Italy United States Iraq France Spain Netherlands Romania Russian Federation

415,0 377,9 337,4 311,4 229,4 167,6 144,7 116,7 110,2 106,7

2017 1 - 31 November 1.354.582 865.360 817.403 721.120 630.591 593.077 537.590 421.191 336.221 333.833

*Among the countries exported over 10 million dollars

GEARED UP IN EXPORT

These sectors are advancing their export volume rapidly and continue to contribute Turkey’s export and reach 2023 targets.

Sector (BILLION $) 2017 1 - 31 October

Value %

Olive and Olive Oil

STEEL

Tobacco

Machine and Accessories

Defence And Aerospace Industry

0,032 63,6%

1,084 46,7%

0,091 44,9%

0,581 28,0%

0,173 27,8%

GEARED UP IN EXPORT These sectors are advancing their export volume rapidly and continue to contribute Turkey’s export and reach 2023 targets.

CITY (Thousand $)

İSTANBUL

BURSA

KOCAELİ

İZMİR

ANKARA

GAZİANTEP

SAKARYA

MANİSA

DENİZLİ

HATAY

2017 1 - 31

5.698.680

1.321.248

1.109.245

871.482

602.453

586.722

451.672

428.714

300.408

215.711

October


64 Figures

GERMANY

1,35

BELGIUM

share of tOP 20 COuNTRIES ın total export (bıllıon $)

0,28

NETHERLANDS

0,42

FRANCE

0,59

UK

0,86 USA

0,72

Turkish exports shares to most prominent 20 markets in November 2017.

SPAIN

0,54

poland

0,31

ROMANIA

0,33

RUSsıa

0,33

ITALY

0,82 BULGARIA

0,24

china

0,26

IRAN

ıraq

0,63 Algerıa

0,12

Data: TİM

JANUARY 2018 ISSUE 54

saudı arabıa

0,22

ISRAEL

0,31

0,28

EGYPT

0,26

UAE

0,22


KAYAK 20x26cm ING.indd 1

17.11.2017 16:29

TTP 54  
TTP 54