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INDEX Publisher: TurkofAmerica, Inc.
14 THE ROLLING MILL SUPPLIER FOR STEEL MILLS: GERD WOLFF
Co-Founder & General Manager: Ömer Günefl – omer@turkofamerica.com Co-Founder & Editor- in- Chief:
Gerd Wolff works with many iron and steel factories,
Cemil Özyurt – cemil@turkofamerica.com
among which are the world giants. Bekir Sunman, a Turkish
Creative Director: Serdar fiahin
entrepreneur who joined up with Klaus Konrad to purchase
Page Design: Sinem Ertafl
Gerd Wolff in 1998.
Editor: Patricia Russo, Nancy Öztürk. Editor of Photography: Necdet Köseda¤
24 GERMANY PRODUCES AND EMS TRANSPORTS
News Center: Ayfle Önal Zambo¤lu, Ali Ç›nar, Ayhan Kay, Halim Özyurt, Demet Cabbar Advising Committee: Ali Günertem, Egemen Ba¤›fl, Ferhan Geylan,
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G. Lincoln McCurdy, Mahmut Topal, Mehmet Çelebi,
EMS, which handles most of the overland transportation
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between Germany and Iran, was founded by businessman fieref T›rafl in 1985. EMS employs approximately 200 people in the transportation sector.
Tolga Ürkmezgil.
26 THE TURKISH FOOD GIANT OF GERMANY
MAIN OFFICE
Baktat was established in 1986 by the brothers Mustafa,
TURKOFAMERICA, Inc.
Kadir, Ali, H. ‹brahim, and Muharrem Baklan. Mustafa
445 Park Avenue, Suite 936 New York, NY 10022
Baklan, the second son of Ad›güzel Baklan – a Turk who
Tel: +1 (212) 836 4723
came to Germany to work in a foundry – was only 16 in
Fax: +1 (917) 322 2105
1972 when he came to Germany.
info@ turkofamerica. com www.turkofamerica.com REPRESENTATIVES IN THE U.S. California (Los Angeles):
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Barbaros Tapan – btapan@ turkofamerica. com
46 BERLIN: THE CITY THAT INTRODUCED DONER TO THE WORLD Remzi Kaplan, President of Kaplan Doner, is one of the businessmen who discovered East Berlin after the fall of the wall.
Tel: +1 (213) 924 8027 Connecticut: Ali Ç›nar – acinar@turkofamerica.com Tel: +1 (203) 722 4339
48 GERMANY’S NEW JEWS: TURKS
Massachusetts:
It all began with an article penned by Prof. Faruk fien,
Mustafa Aykaç – maykac@turkofamerica.com
Director of the German Turkey Study Center Foundation,
Tel: +1 (857) 205 8318
entitled, “Europe’s New Jews.”
San Fransisco, CA: Ayfle Önal Zambo¤lu – aozamboglu@ turkofamerica. com
54 THE THIRD SIEGE OF VIENNA
Tel: +1 (650) 938 1764 Europe: Yasin Ya¤c› – yyagci@turkofamerica.com Tel: +31 (624) 66 92 23 Australia:
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Süheyl Yekenkurul – syekenkurul@turkofamerica.com
Turkish entrepreneurs in Vienna, the capital of Austria, focus mainly on the wholesale foods and gastronomy industries, just as their cousins in Germany do. Do & Co Restaurants and Catering, Etsan, Orient, and Hürpafl are some of the leading Austrian Turkish companies.
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TURKEY General Coordinator:
64 THE LARGEST TURKISH FOOD COMPANY IN AUSTRIA
Nuri Özyurt – nozyurt@turkofamerica.com
Macro Group, which was founded by Hüseyin Ünal, the Chairman of the Board of Directors of the Macro Group,
Marketing & Sales:
has 13 supermarkets in Vienna, varying between 600-1200
turkiye@ turkofamerica. com
square meters in size, as well as three furniture stores.
Subscription and Distribution: Nispetiye Caddesi Peker Sokak Aky›ld›z Apt. No:26/4
66 THE MAN WHO INTRODUCES CEYLON TEA TO EUROPEAN MARKETS
1.Levent Istanbul, Turkey Tel:+ 90 212 282 37 11 PRINT:
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Orient, under its own brand name, provides all European markets, Austria being first on the list, with every kind of
Promat Bas›m Yay›n San. ve Tic. A.fi.
dried food. In 1986 Bakan became the first businessman
Adile Naflit Bulvar› 122. Sokak No:8
to import Ceylon tea to Europe.
34513 Esenyurt - ‹stanbul - Turkey Telefon: + 90 (212) 622 63 63-pbx
68 AUSTRIA’S VEGETABLE & FRUIT KING
Fax: + 90 (212) 456 63 73
Presently, the Onur Group companies owned by Haydar
E-Mail: info@promat.com.tr
Güner are Austria’s number one vegetable-fruit import dealers.
All articles in the magazine are translated by Citlembik Ltd. Tel: +90 (212) 292 3032
70 WEDCO: THE INDUSTRIAL PRECISION CUTTING TOOL
www.citlembik.com.tr TURKOFAMERICA is a member of Independent Press Association. TURKOFAMERICA is a member of Turkish American Chamber of Commerce Industry.
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Wedco High Quality Tooling, established by Edip Bay›z›tl›o¤lu in 1991, controls 10% of the Austrian market in production of precision cutting tools and dies.
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FROM EDITOR Cemil Özyurt cemil@turkofamerica.com
THE FIRST TURKISH CONSULATE IN NEW YORK CITY
Hatchik (Christopher) Oscanyan. (Source: Oscanyan, C. “The Sultan and His People”. New York: Derby & Jackson, 1857.
t was in 1824 that the American government posted its first American Consul, David Offley, to the western Anatolian city of Izmir. It was only after thirty years of American efforts to establish formal relationships that the Ottomans agreed to open this consulate.
I
Well, did the Ottomans have an American consulate in the USA at that time? While glancing through the archives of the New York Times, a record starting from 1851 and stretching to the present, I chanced upon a story of some adventures of Turks living in New York City 146 years ago. An ad placed in a New York Times newspaper dated November 22, 1863 was eye-catching. The ad was an announcement that Hatchik (Christopher) Oscanyan, the author of a book entitled The Sultan and His People would be giving a lecture on the subject of “The Women of Turkey.” The announcement stressed the fact that the speech would be accompanied by a number of photographs detailing the lives, loves, marriages, dances and many other aspects of women living in the Ottoman Empire. Who was this Hatchik Oscanyan? And why did he, in the 1850s, feel the need to describe the Ottomans to the people of New York City? When I went deeper into my research, I learned that this Hatchik Oscanyan was a rather colorful character. Born on April 23, 1818 in Istan-
bul, Oscanyan was an Ottoman of Armenian descent. He was later to change his first name from Hatchik to Christopher. In addition to Armenian, he also knew Turkish, Greek, Italian, French, and English. He soon attracted the attention of Reverend Harrison G. O. Dwight, an American missionary working in the Ottoman lands. When Oscanyan’s mother died, the missionary persuaded him to travel to New York in order to continue his education. In 1835 Oscanyan traveled to New York City and enrolled in New York University (NYU), but he fell ill and had to postpone his studies. He earned his living during those years by working for the company that was building the Charleston and Cincinnati railroad lines. He spent six years in the US before returning to Istanbul, where he began to publish the first Armenian-language newspaper, the Astarar Ptizantian (Byzantine Advertiser). In 1843, when his enterprising efforts ran afoul of the administrators, he began working as the private secretary of Tophane Müfliri Fethi Pasha, the husband of Atiye Sultan and the son-in-law of Sultan Mahmut II, the 30th Sultan of the Ottoman Empire. (1808-1839) While he was employed as a private secretary, he was charged by the Palace with the responsibility of purchasing the dowry of Sultan Mahmut’s daughter, Adile Sultan, who was being betrothed to Mehmet Ali Pasha, the head of the Imperial Navy, or the Kaptan-› Derya. This appointment gave him an opportunity to have a first-hand look at the workings of the Ottoman Palace. Following this marriage, Oscanyan left his position as private secretary and began to serve as the Istanbul
representative for several American and European newspapers.
man took his place as Commanding General of the Army.
VOLUNTEER PUBLICIST In 1853 he opened an exhibit called the Oriental and Turkish Museum in London. While this effort did attract some attention from the English, it failed to meet with success, and in 1853 he decided to return to New York, the city he had left in 1841.
Oscanyan continued to act as Consul until 1874. After leaving this position, he continued in New York with his literary efforts and he wrote the words to an Armenian opera. There are no records as to when Oscanyan died.
In 1857 he published the 468-page book, The Sultan and His People, mentioned earlier. This book received wide attention in New York and 16 thousand copies were sold in just four months. The book was a wealth of information about the Ottoman Empire of the day, including information about the dervishes, the city’s mosques and the Grand Bazaar. In 1868, Oscanyan, an author with palace connections who had also served as a writer, a translator, journalist and politician, was appointed to head up the first New York City Consulate of the Ottoman Empire. Were there enough Turks in New York City at that time to require a consulate? According to research undertaken by Prof. Sedat ‹flçi, a total of 1.2 million persons migrated from Ottoman lands to the U.S. during the years spanning 1860 – 1921. Of these, 200 thousand were Muslims and ethnic Turks while the rest were non-Muslims. TOURING WITH THE GENERAL In 1872 General William T. Sherman visited the Ottoman Empire, and Oscanyan was given the responsibility by the Ottoman authorities of taking care of the general during his visit by acting as the “Representative of the Sultan.” When General Ulysses S. Grant served as US president during the years spanning 1869–1877, Sher-
He played a very significant role in changing the negative Ottoman stereotypes. As he labored to eradicate anti-Ottoman feelings, he also contributed to sparking English and American interest in the Ottoman regions. He acted as a kind of liaison in forming a bridge between western elites and the Ottomans. Oscanyan had his own place in elite New York society. He was a close friend of Ada Claire, a woman who was recognized as a leader among writers, artists and in the feminist movement. Very popular magazines of the day, such as Harper’s and Putnam, published reviews of his book The Sultan and His People. Putnam found Oscanyan’s book to be both “comical and interesting.” It is still possible even today to find Oscanyan’s books being offered by antique auction houses. In June 2008, Green Valley Auctions, Inc, a company operating out of Virginia, sold a work called Oscanyan’s Oriental Album, a book that contains 24 drawings of Ottoman daily life, for $4,520. Oscanyan introduced the West to the daily life of the Ottomans at the end of the empire, at a time when the land was being broken apart in nationalist uprisings. He not only was the Consul of the Ottoman Empire during those years, but also served as an ambassador for tourism, a writer, and a translator. He is a person who deserves to be remembered.œ TurkofAmerica • 07
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HOW WILL BUSINESSMEN SURVIVE DURING THE GLOBAL CRISIS?
Ekmel Anda, President of Unique Settings of New York.
Engin Ar›k, President & CEO of Luminit LLC
‹smail Hakk› Ercan, Businessman, Former Chairman of the Florida Turkish American Association
Ahmet Sand›kç›, Arcade Currency Palace, Inc.)
Alpaslan Bafldo¤an, President of Asia Minor Carpets
TURKOFAMERICA asked Turkish businessmen, who feel this crisis very closely, about their expectations for 2009, the effects of the election of Barack Obama as president, and the precautions taken in their companies. 14 • TurkofAmerica
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O
n February 7, 2007, the Reuters News Agency sent its subscribers a seven sentence news item. The news item said that the subprime and risky loans of British-based HSBC Holdings had reached 10.5 billion dollars in 2006, and that this was more than 20 percent over what the analysts had been expecting.
HSBC was the first bank to announce such a high loss. Subprime mortgage credits triggered the global crisis. Following this, New Century Financial, which was one of the biggest lenders of subprime mortgages in the USA, declared bankruptcy. As the crisis that had begun in February 2007 began to grow with a snow ball effect, financial institutions like Bear Stearns, Merrill Lynch, Lehman Brothers, Washington Mutual Bank, and Wachovia were wiped off the board. According to the latest data, the effects of the global crisis have spread throughout the world. According to data of the American Commerce Department, the foreign trade deficit of the USA was 56.5 billion dollars in September, and its exports decreased by 6 percent. In this way the US suffered its biggest monthly drop since September 11, 2001. According to a poll of 54 economists, the GDP of the US will drop by 3 percent during the last quarter of the year. According to an OECD report, the GDP of the 30 developed economies will shrink by 0.3 percent next year. In the USA this rate will be 0.9 percent, 0.5 percent in the European Union, and 0.1 percent in Japan. How has this crisis that has enveloped the world affected the businessmen living in the USA and in Europe? TURKOFAMERICA asked Turkish businessmen, who feel this crisis very closely, about their expectations for 2009, the effects of the election of Barack Obama as president, and the precautions taken in their companies.
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Ekmel Anda - (President of Unique Settings of New York) “THIS IS THE TIME TO INVEST. WE SHALL REAP THE FRUIT LATER” New York, NY - Ekmel Anda manufactures jewelry, aluminum and chairs in New York. He employs a total of 220 people. He says that in this crisis, rather than fire people, they have embarked on an aggressive marketing strategy. He says, “During a crisis there are not many companies that concentrate on marketing and that are active. While in normal conditions there would be, say, a hundred companies actively pursuing a strategy, this would fall to 4-5 during a crisis. We want to be one of the 3-5 active companies in our market.” Anda says that the jewelry sector in particular is not a basic necessity, and as such it is easier to postpone expenses concerning it, but underlines the fact that sales have increased by 15 percent during the last month. Anda expects the crisis to last a year and a half, after which things will get back to normal. “Within this context we are expecting the crisis to last for a total of 22-24 months. If we consider that six months have already passed, what we have left before a return to normality is 18 months.”. Anda says that once the markets are back to norma,l the benefits of the investments carried out during the crisis will become clear, and adds, “Thanks to the efforts we are making now, we shall be 3 years in advance in comparison to our competitors once things get back to normal.” Anda underlines the fact that they have used their own resources to carry out investments, without relying on loans, and says that even during a crisis there are many investors who want to invest their money in good investments. Anda says that he believes that the election of Barack Obama to the presidency has had a positive effect on the population, and adds, “He is a young and positive president. He is a unifier. The names
around him are also respectable people. I hope that he will do good for both the USA and the rest of the world.”. Anda says that Obama’s election is an important step in the motivation of Afro-Americans, and adds, “I always present myself as an example. I started my professional life in a gas station. ‘If I can do it, you can do better.’ Now having realized that one of their own has been elected president, the sense of ‘this means that I can do it also’ has been instilled among Afro-Americans, and they will be able to have a more positive outlook towards life.” Ahmet Sand›kç› (Arcade Currency Palace, Inc.) “THE FALL IN GAS PRICES WILL REVIVE THE ECONOMY” Palm Beach, FL - Ahmet Sand›kç›, the owner of Arcade Currency Palace, Inc., the first numismatic store in the USA, says that one of the elements that is preventing the economic crisis from deepening further is the fall in gas prices. Sand›kç› says, “If gas is cheap, people will go out and spend. The sale of cars will increase, car repair shops will do business. The price of a gallon of gas has fallen from around 4 dollars to 2 dollars. This will have an effect in reviving the various sectors of the economy.” Sand›kç› says that as one of the USA’s most respected numismatics, he has not been overly affected by the economic crisis and stresses the fact that while 2007 was not too good, 2008 was very good from his point of view, and that he was expecting even better things from 2009. Sand›kç› thinks that during a crisis, money collecting is a perfect investment, and adds, “You see the state that the stock exchange and the money markets are in. A million dollar invested in stocks a year ago has now fallen to 150 thousand dollars. In addition to this, you cannot manage your own money. It is the broker at the bank or your customer representative who chooses in your place.
You cannot control your own money. But in case of a collection, on the other hand, you have the chance of managing your own money. You can lose 5 or 10 percent as a money collector, but your losses will never be 100 percent.” He says that Barack Obama’s election as president is a ray of hope for Americans and the rest of the world, but he opposes Obama’s tax plans. Sand›kç› is against having people with a yearly income of more than 250 thousand dollars pay additional taxes, and adds, “This is like dipping your spoon in the soup prepared by businessmen, who for years have been working to employ people.” Ilgar Peker – (Gastronomy & Real Estate Investor) “THE MOST DIFFICULT THING TO CORRECT IN A CRISIS IS LOW MORALE” New York, NY - Ilgar Peker is the owner of Turkish Kitchen, which is one of the best Turkish restaurants in New York, and a businessman famous for his real estate investments. Peker, who is active in the gastronomy, gasoline and real estate sectors, underlines the fact that the most important factor in a crisis is a low morale. He says that he did not take any extra precautions for the crisis since he always manages his own companies as if there were a crisis. Peker believes that the food and gas businesses will be less affected by the crisis in comparison to other sectors. Peker says that the real estate market was forming a bubble before the crisis and that he expects markets to return to normal within 2-3 years. Peker thinks that the real estate sector provides people with many opportunities during a crisis, and that during a crisis there are always those with cash to invest. He thinks that between 9 months and a year will have to pass before good opportunities present themselves. Especially now that the stock-markets have crashed, people do not have TurkofAmerica • 15
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Harun Sevimli.
many investment alternatives apart from real estate, and he himself is waiting for good opportunities. The young businessman says that notwithstanding the crisis, constructive dialog between Republicans and Democrats was having a positive impact on markets. Peker, who did not vote on November 4th, says, “If I had voted I would have voted for Obama, but since I did not see much difference between the two I did not vote.” The businessman says that if he had voted, his first priority would have been the economy. Peker says also that it would not be right to expect Obama to solve the crisis immediately. Engin Ar›k (President & CEO of Luminit LLC) “THE STANDARDS OF LIFE WILL REVERT TO WHAT THEY WERE 50 YEARS AGO” Torrance, CA – Engin Ar›k, President & CEO of the Californiabased technology company Luminit LCC, (a global provider of innovative light management so16 • TurkofAmerica
lutions for the display, lighting, biomedical, and machine vision industries), thinks that in 2009 there will be a recession in the USA, Europe, and the Far East. Ar›k says, “They are talking of the probability of a depression, but I don’t think that’s very likely.” Ar›k says that Luminit had not yet been affected by the recession and that they were expecting growth to continue in 2009. He adds that the third quarter of 2008 had been the best quarter of the year for the year. Ar›k thinks that nobody can predict the time frame of the crisis, and adds, “The scariest thing is that nobody knows what to expect and nobody can make plans. Anyway, the best predictions up to now were of those who said the worst scenarios would happen.” Ar›k said that he was happy that Obama had won the election, and added, “Almost all other countries preferred Obama. One of the reasons why economic problems increased was a lack of faith in the team in power. Obama is a leader who is very intelligent, speaks very well and has the capacity to convince you. At the moment 70% of Americans believe that he will be able to solve these problems. Even though Obama says that these problems are so deep that they cannot be solved in a year or in a ‘term’ (and he is right), the fact that people trust him will make things a bit easier.” This is how Ar›k summarizes the way the crisis will change American society: “I think that the standards of living in American society will revert to their former more modest levels of half a century ago, and that this will contribute to the establishment of a more balanced society. In addition to this, a more participatory foreign policy that is based on dialog, which is Obama’s style, will restore America’s reputation in the world.”
‹smail Hakk› Ercan (Businessman, Former Chairman of the Florida Turkish American Association): “THE CRISIS CAN BE OVERCOME ONLY BY RENOVATING OLD INFRASTRUCTURE.” Coral Springs, FL – Businessman ‹smail Hakk› Ercan operates in Florida, which is one of the places where the real estate sector that triggered the economic crisis has hit bottom. Ercan says that the economy can be revived if the government renovates public infrastructure that is too old, such as roads, dams, and bridges. He says, “One of the policies of former American President Franklin Roosevelt was to revive the economy by accelerating the construction of dams and infrastructure. This administration also might try a similar method.” In addition to these new sources of employment, Ercan also stresses the importance of reducing dependence on foreign sources of energy, but does not think that Barack Obama will introduce radical changes, even though his message during the presidential race was “change”. Ercan says that he voted for the
Vocelli Pizza.
Democrats and that the main factor leading to this decision was the economy. He says, “The factor that most influenced people in this election was the economy. The other factor was the unjust way of governing of George Bush. In a way, being president of the USA means also being the president of the world. A president has to be just not only to his own people, but to all of the world. I hope that Obama will take this into consideration.” Ercan underlines the fact that in the USA, political campaigns based on fear are not effective, and says that for Turks to be effective in the political arena the first thing to do is to determine the cities and towns where there are more of them living. He also says, “In addition to this we have to unite in supporting a single candidate. We have to forget distinctions like right or left, secularist or Islamist, and support a single candidate so that we can be successful in the elections. Turks have a mission concerning the elections-- showing the Americans that Muslims are not bad.”
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Turan Kahraman.
Alpaslan Bafldo¤an (President of Asia Minor Carpets) “LEAVES ON A TREE CANNOT FLUTTER BY THEMSELVES” New York, NY - Asia Minor Carpets, which is one of New York’s oldest companies selling Turkish carpets and kilims, is known for its products for the upscale market. Alparslan Bafldo¤an says that just like all other sectors, the home furnishing industry will also contract and that one of the main problems is to get paid by customers. Bafldo¤an says that since they mostly sell to high-income customers, their sales have not fallen by much, and compares the present crisis with the crisis in 1989 in the following way: “The crisis in 1989 was a financial crisis and the stock exchange and money markets suffered greatly. Back then the real estate sector was not affected. But the present crisis includes both the financial sector and the real estate sector.” Bafldo¤an quotes a saying of his father to explain the crisis: “Leaves on a tree cannot flutter by themselves.” Bafldo¤an stresses the fact that the crisis will inevitably be felt in every sector, and says, “Considering our target segment, we cannot sacrifice for the sake of cost cutting. There is also no point in introducing new products during a crisis, because there would not be any demand for it. The USA is a dynamic market. Its nature will let it recover in a short time. And it is also important to recover morally
during the crisis.” Bafldo¤an stresses the fact that Obama’s election as president represents hope and says, “Americans had got into such a state that they were ashamed to show their passports. The new president will introduce a new period and a new enthusiasm.” Harun Sevimli (President of AmerTurk, Inc.) “THE CRISIS SHOWED US OUR WEAK POINTS” Santa Clara, CA – Harun Sevimli, President of the Amerturk, Inc. Company, which organizes the sale of the unsold products held by great chain stores, stresses the fact that every day they receive lists of new stores that have closed, but that there is no guarantee that these products will be sold. Sevimli says that they have never preferred to fire people during a crisis, and that
in fact they have just hired two new people, one of whom is a marketing person. Sevimli says that if the USA invents something that will affect humanity, this will favorably influence both its spirits and economy, and adds, “In the same way that man went to the moon, and there was the Internet revolution and computer technology providing jobs for millions of people together with all its branches, a similar great invention might change the history of the world.” Sevimli stresses the fact that the crisis led to the discovery of the weak points of the company, and adds, “If we had established representatives in foreign countries before the beginning of the crisis, at the moment we would have had great opportunities. We learn something new with each experience.” Sevimli reminds us also of the fact that before the crisis they had had great opportunities, but that they had not had the possibility of profiting fully from them, because they had preferred not to get loans from banks and adds, “It is fortunate that back then we preferred to invest with our own resources, because we now see the difficulties facing companies that took out bank loans.”
Varol Ablak, (President & CEO of Vocelli Pizza) “PEOPLE SHOULD OVERCOME THEIR FEARS” Pittsburgh, PA- Operating 135 pizza stores in eight different states, Varol Ablak, President & CEO of Vocelli Pizza, says the current financial difficulties will be felt a year and a half from now. Ablak says that “To defeat the current crisis, first of all people should overcome their fears.” Vocelli Pizza, recognized by the industry's top trade magazines as a leader in the pizza sector, was ranked in the top 50 pizza companies for growth in Pizza Today’s national "Hot 100 Companies" annual listing. Over the past five years, Vocelli has doubled its annual systemwide sales. They were actively seeking new franchise partners to develop new Vocelli Pizza stores and Ablak’s projected growth rate was approximately 30% annually. Reaching the company’s target, Vocelli opened 10 stores in 2006 but added only four stores in 2008 and now the total store number is 135. Ablak says that before the current global crisis, they were planning to expand international franchises, but the current situation made them focus on local markets. “We still have same ambitions to open stores overseas, to go IPO, but right now we should focus on the current situation and markets.” Though he voted Republican in the last election, Ablak believes that Obama’s presidency promises to be a great opportunity for the U.S. and the world. Turan Kahraman, (President and CEO, Askew Industrial Corp.) “WE ARE PURSUING NEW CUSTOMERS AGGRESSIVELY” Los Angeles, CA - The current recession has touched just about every company in the US manufacturing sector. Askew Industrial Corporation, a 51 year-old supplier of production hardware
Haydar Güner
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THE CRISIS, OBAMA AND THE FUTURE
to OEMs, is affected by the recession primarily in two ways: 1Lesser volume: As our customers (OEMs) reduce their production due to the lack of demand for their parts, they purchase less. 2Lower margin dollars: The worldwide recession and the related reduced demand caused the material prices (for metals used in the manufacturing of our products) to plummet significantly. A drop in the cost of material would typically be welcome news. Unfortunately, the speed in which this happened left many companies with higher priced inventory. The other major effect of this sudden drop in prices is on the profitability of the companies. Most companies’ overhead structures are built to be supported by a certain amount of gross margin or contribution margin dollars. With the lower amount of contribution margin dollars, companies will have to lower their overhead. Askew has a two-prong response to the current situation: lowering its overhead and growing sales. We are continuing to lower our operating costs in order to manage our business with lower gross profit dollars. We are also pursuing new customers aggressively in order to grow our sales volume. The business models in which we have operated for the last several decades have proven themselves to be insufficient and inappropriate when faced with the challenges of the current economic crisis. Every company needs to be leaner, more determined and more diligent than ever before. While the current crisis is devastating, the companies that will survive will be much better prepared to weather future storms.” Ahmet Halaç (President of Halac Iron Works, Inc.) “THE SOLUTION DOES NOT LIE IN A BIGGER STATE” Sterling, VA - Ahmet Halaç, owner of the iron and steel manufacturer Halac Iron Works, Inc., 18 • TurkofAmerica
is one of the businessmen who have not been too affected by the crisis. Halaç, who builds schools in Virginia, Maryland, and Washington, D.C., says that their order book is full until mid-2010. Halaç stresses the fact that the crisis cannot be solved by means of state intervention in the economy, and says, “If the state had been able to manage the economy and improve it, Russia would now be the strongest country of the world. If you understand capitalism, you can find solutions.” Halaç preferred not to make predictions about how long the crisis would last, and underlined the fact that the American economy was based on consumption, and that this could not be changed. Haydar Güner – (President of Onur Group) “THE ELECTION OF OBAMA WAS A GREAT STEP FORWARD” Vienna, Austria - Haydar Güner, chairman of the board of Onur Group, which is Vienna’s biggest importer of vegetables and fruit, says that European markets, where the crisis was deeply felt, was closely monitoring the application of the decisions made in the USA, and that the solution of economic problems had to come from the USA as well. Güner says that just as in the rest of the world, the election of Obama to the presidency had been received with enthusiasm in Austria as well, and adds, “As a businessman who lives far from his own country, I also think that Obama’s election was a great step forward. The fact that the son of immigrants can also be elected president is an important step that supports globalization and the harmonious life for humans promised by America and all developed countries.” Güner says that the George Bush’s approach to humanity and human values had been aggressive, and that his greatest wish was for these errors not to be repeated.
Edip Bay›z›tl›o¤lu – (President of Wedco) “THE MAIN REASON FOR THE CRISIS IS INSECURITY” Vienna, Austria – In the Austrian capital of Vienna, Edip Bay›z›tl›o¤lu, founder of Wedco High Quality Tooling and president of the Austrian-Turkish Businessmen’s Association, says that the economic crisis has caused a stagnation in the market for cutting tools produced for heavy industry ranging from the car sector to the electronics sector. Emphasizing that the main reasons for the crisis in the marketplace are insecurity and hopelessness, Bay›z›tl›o¤lu says that, “While on the Autobahn, one vehicle stopped. Because the first one had stopped, the ones behind it slowed down in panic. I compare the current crisis to this.” Bay›z›tl›o¤lu, who points out that Lehman Brothers’ filing for bankruptcy created a major crisis of confidence among deposit holders, says that the American government should not have allowed the bankruptcy. Noting that they are continuing to maintain three factory shifts in their production centers and that they have not laid off any workers, Bay›z›tl›o¤lu states that they have pushed their investment plans to the back burner. Stating that the crisis in Austria will lead to a 5-15% contraction, he emphasizes that among the many countries with which they do business, in the crisis the greatest financial difficulties will be felt in Turkey. “Because in Turkey the business world is used to crises, they put on the brakes faster. They quickly go into their shells. There is not much loyalty towards the consumers, workers, and business partners. Big companies immediately extend the terms of their loans,” he said. Touching on the election of Barack Obama as president and how that will be a good opportunity for politics and the economy, Bay›z›tl›o¤lu says he believes that 20 years
from now the child of an immigrant family can be elected prime minister. “Today, French president Sarkozy is the son of a Hungarian family and London’s mayor Alexander Boris de Pfeffel Johnson’s great-grandfather was a Turk. Why couldn’t my child one day become prime minister of Austria? But the important question here is how Turkish would he still be?” Osman Nuri K›r (President of Pasha Whole Sales) “IT IS IMPOSSIBLE FOR SALES TO BE AS HIGH AS THEY WERE IN 2004-05” Long Island, NY – Osman Nuri K›r is the owner of Pasha Whole Sales, a wholesale company that markets products sold in the gas stations of Long Island and Queens in New York. He says that business has diminished by around 30 percent as a result of the shrinking of the market. He states, “A gas station, to which I previously sold 2500 dollars worth of goods, now buys the equivalent of 1700 dollars. Our biggest gain during this crisis has been the fall of gas prices. I consume around 150 dollars worth of gas a week. With the old gas prices, this amount was much higher.” K›r, who added a new route to his distribution web in Long Island, says that the route, that was sold for 149,000 dollars before the crisis, is now during the crisis worth only 70,000 dollars. He stresses the fact that a time of crisis provides you with ideal investment opportunities. As for K›r’s expectations for the year 2009, they are pessimistic. He says, “It is impossible for us to sell as much as we did during 2004-2005.” He summarizes the present crisis with the following example: “140 people working in a DHL building near a gas station to which we sold products were fired . 140 people, who every morning at breakfast time would get a coffee and cigarettes at the gas station, have suddenly disappeared. The sales of the gas station will fall and this will directly affect my business.”�
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EXPORT STRATEGY
TURKEY HAS AN EXPORT TARGET OF USD 200 BILLION IN 2010 2010-HOW WILL THE GLOBAL CRISIS AFFECT THE EXPORT TARGET?
State Minister Kürflad Tüzmen.
“We are planning on taking a major step towards exceeding our export objective of USD 125 billion in 2008 and achieving the target of USD 200 billion in 2010.”
W
hile the impact of the financial crisis affecting the whole world, starting with the USA, is increasingly being felt, the political and bureaucratic team steering Turkey’s foreign trade is seeking new ways of expansion. Plans call for Turkey’s exports to reach USD 125 billion by the end of 2008. The target established for 2010 is USD 200 billion. Will Turkey be able to reach that figure, and to what extent will the current crisis affect targets? How will the crisis in the USA, the greatest importer in the world, affect the purchasing power of the US and the exports of other countries? We asked Kürflad Tüzmen, State Minister responsible for Fo20 • TurkofAmerica
reign Trade, about Turkey’s foreign trade strategy in the near future and about its short and long term goals. What point have the activities aimed at the US reached? What is planned for the future? Within the framework of our strategy to develop trade and investment relations with the USA, we first carried out a series of technical activities in order to establish target states and sector groups. Now we have reached the stage when activities aimed at particular markets and in accordance with established targets will be carried out. In the meantime, we
have also focused on activities to launch a promotion campaign, which constitutes the most important leg of the strategy. These activities can be divided in two groups, long term and short term. The activities we can define as long term aim to a large extent to consolidate the image of Turkey and of Turkish products. Within this framework, for example, the Turquality project and other activities by groups promoting hazelnuts, leather and ceramics aims to consolidate the image of Turkish products and to emphasize the element of quality. The implementation of the strategy to develop trade with the USA will continue over the next
few years, but we need to keep in mind that we need to be patient for investments in the US market to produce results. Can you tell us about programs taking place in the near future? A trade delegation traveled to Miami at the end of April 2008 and another to the state of Georgia in October 2008. Meetings were held with delegations of 2025 people, especially on a sectoral basis. Other activities planned for the near future include active participation in important fairs, inviting Investors and Out-sourcing Delegations, the organization of reciprocal seminars, the intensification of sectoral promotional activities in the US market, and the
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development of collaboration among private sector organizations.
Which are the sectors that should be emphasized? In the light of these data, it is important that activities planned for the near future and in accordance with our strategy be distributed to targeted sectors and states, that there be some focus on other target markets, apart from traditional export sectors such as iron and steel and textiles, and that activities are increased. We can see that there has been an increase in exports in the sectors of machine industry, jewelry and ceramics and we will continue to support these sectors.
Activities conducted by promotion groups and the targeting of the US market are also continuing. The Turkish Leather Fair, begun by the Leather Promotion Group and first organized in January 2008, will become a traditional element and a brand. The project begun in 2007 in conjunction with the Turco-American Businessmen’s Association in the state of California with the aim of establishing a communication network between Turkish and American companies will be completed in 2008. In 2008 we are also planning to invite purchasing delegations from US chain stores, exclusively for Turkey and to show American importers all the production stages of Turkish products from all sectors. On the other hand, seminars held in Turkey for food and automotive products to promote the US market will continue to be held in other sectors too. What does Turkey need to do in the field of technology? One of the priority subjects in our activities concerning the USA was the removal of Turkey from the “Special 301 – Priority Foreign Countries,” category, a classification that is made in consideration especially of those companies that make technological investments in Turkey. Although it has no sanction power, this indicator is seen as a sign of the importance given by companies to intellectual property and it affects high level technology investments. It is for this reason that we continuously provide the USA with information on the developments taking place in Turkey with regard to the protection of intellectual property rights. Turkey has therefore been removed from the list of Priority
State Minister Kürflad Tüzmen with TURKOFAMERICA executives Cemil Ozyurt and Ömer Günefl.
Foreign Countries. In short, the objective of the activities held within the framework of our strategy is to consolidate the image of Turkey and of Turkish products, to increase our exports to the USA, to draw the attention of US investors, and to develop bilateral relations in general, taking advantage of the positive effect that trade relations will have on political and cultural relations. What can be done to increase sectoral variety? The products currently exported to the USA do not present a wide variety. Approximately 35% of our exports to the USA currently consist of textiles, ready made clothing, and iron and steel products. Because of the focus on these sectors, an export problem in these sectors can cause our total export performance to drop. We also need to calculate that the problems in the housing sector, which have triggered the crisis in the USA, can negatively influence the iron and steel sector that plays an important role in the US market. In this context, increasing sectoral variety and consolidating our presence in the US market are two of our main means to avoid being af-
fected by these periodical economic developments. However, we must also not forget that the USA is a market where there is a need for long term policies in sales and marketing.
We will continue organizing promotional activities that emphasize quality and providing incentives towards branding, in order to successfully compete in the export of textiles and ready-made garments
SHORT TERM ACTIVITIES AIMED TO DEVELOP ECONOMIC RELATIONS WITH THE USA
• The 3rd Term Meeting of the Economic Cooperation Committee (EOK) and the 5th Term Meeting of the Trade and Investment Council with the USA were held in 2007; the 4th Term Meeting of the EOK was held in 2008. • The 6th Term Meeting of the Trade and Investment Council was held in October in Ankara. • Meetings have been organized where information was presented on the US market, with the aim of facilitating Turkish companies’ entry into the market. Informative seminars have been held for exporters in Istanbul, Gaziantep, Bursa, Izmir and Ankara concerning the USA Generalized System of Preferences. • Conferences were held in 2007 in Ankara, Istanbul and Izmir and in March 2008 in Gaziantep, Mersin and Konya, on the “Kosher certificate.” • Seminars have been held in Bursa, Ankara, Konya, Izmir and Istanbul, with the participation of US purchasers, aiming to promote the automotive and food sectors of the US market. • These are mainly short term ventures that will introduce our companies directly to their distribution channels. • Apart from the existing trade representation offices in New York and Washington, new representation offices were opened in 2007 in Chicago and Los Angeles. The aim is to achieve an increase in the services provided to our companies in the USA. • Trade and boutique trade delegation programs have been organized since 2006 to target states. Many conferences, starting with conferences jointly organized by the Foreign Economic Relations Board (DEIK) and the American Turkish Council (ATC) have been attended. • The trade chambers of states, sectoral associations, and PR companies relevant to trade delegations and Turkish associations and chambers have been contacted, as well as other organizations and individuals considered useful.
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EXPORT STRATEGY
and to empower our exporters. In this context, we are continuing to offer incentives to companies that wish to open offices or set up representatives in the USA. The main objectives that we have established within the scope of our strategy for the near future include the diversification of our export products’ range with the addition of products of high added value that embody high technology and that are fashion and brand oriented, the increase of the share of states other than New York within our exports, and the resulting reasonable increase of our share in the USA’s total imports. On the other hand, in spite of all the recent unfavorable developments, the USA has occupied the 7th place in our exports for the year 2007. We have no doubt that if we consolidate our strategy on the basis of our experiences we will definitely achieve our objectives for the near future. How will the recession in the USA affect Turkey? In 2008, when there will be an increase in the influence of the
recession in the USA, fair organizations, purchasing and trade delegation programs will continue to be actively employed in order to develop our economic dialogue with foreign markets, starting with the target countries. Preferential trade and free trade meetings will be intensively pursued. Our current position in the international construction contract market will be further consolidated. Trade policies will continue to be implemented against the increase in imports, which damages local industries, and against low priced imports that result in unfair competition.
the first two steps. As for the third stage, which consists of increasing the export of products high in added value, we are working intensively on imagemaking projects and promotion and branding activities, such as TURQUALITY. These activities give our country the opportunity to compete in fields other than prices, too. Over the next few years our exporters are going to position themselves in accordance with economic developments.
Work is underway that aims to increase activities in the Chinese People’s Republic and markets in North and South America. We are planning on taking a major step towards exceeding our export objective of USD 125 billion in 2008 and achieving the target of USD 200 billion in 2010.
Significant projects are being realized in the field of construction contracting in oil rich countries. Because of the financial accumulation in these countries, this process will continue in the near future too. High level economic growth is expected to continue in China, India, and the Far East; some commentators even claim that these countries will be able to compensate for the recession in the USA.
How much success has been achieved in these stages? Thanks to the superior export performance shown in recent years, we can say that our country has achieved success in
What do you think about the production plants of some sectors moving outside Turkey? It is very important to present entrepreneurs with an appropriate and easy investment envi-
U.S. IMPORTS FROM TURKEY (2003 to 2007) (In thousands of dollars) / OVER $50 MILLION End-Use Code Fruits and preparations, including frozen juices Vegetables and preparations Fuel oil Other petroleum products Other (tobacco, waxes, nonfood oils) Synthetic cloth and fabrics, thread and cordage Finished textile industrial supplies Stone, sand, cement, and lime Iron and steel mill products-semifinished Finished metal shapes & advncd manuf, except steel Other (boxes, belting, glass, abrasives, etc.) Other industrial machinery Agricultural machinery and equipment Parts for civilian aircraft Engines for civilian aircraft Apparel and household goods-cotton Apparel and household goods-wool Apparel and household goods-other textiles Rugs and other textile floor coverings Jewelry (watches, rings, etc.) TOTAL (All imports) 22 • TurkofAmerica
Value 2003 47,857 31,274 39,017 88,476 154,203 92,690 48,610 218,292 212,776 38,767 37,683 43,503 58,203 15,114 55,263 1,218,827 45,187 253,075 41,489 248,872 3,788,189
Value 2004 54,339 41,506 50,899 67,996 154,357 102,154 95,783 285,694 887,697 75,351 47,784 51,667 69,190 29,834 60,399 1,116,483 74,346 270,197 59,273 369,871 4,933,808
Value 2005 46,822 51,706 123,365 354,598 189,027 122,308 98,645 394,782 458,677 74,872 56,026 64,515 80,938 49,523 71,328 931,808 85,418 250,070 75,221 405,893 5,182,052
ronment. Cost is the most important element in such an environment. The fact that some Turkish companies are moving their production plants abroad because of lower costs is a natural consequence of trade. And anyway such a process is happening all over the world. The same issues are being experienced in the USA and in Europe and companies are moving to the places where labor costs are lower. This situation no doubt has some negative consequences from the point of view of employment in Turkey; however, these companies bring their profits to Turkey and contribute to an investment accumulation. To change this situation it is necessary to lower costs for investors and entrepreneurs in Turkey. In this context, for example, factors such as energy prices and labor costs come into prominence in investment decisions. Last of all, an analysis is being conducted with the goal to increase competitive power in Turkey, with the participation of all relevant organizations. We expect this project to shed light on our work.�
Value 2006 79,887 64,595 83,846 150,787 161,489 130,318 53,171 453,483 918,807 124,251 77,811 61,509 66,413 71,112 79,155 698,523 52,316 290,115 80,892 359,828 5,359,038
Value 2007 108,047 69,727 73,000 252,376 183,550 149,414 54,099 452,680 269,422 146,334 80,880 64,338 57,026 85,449 107,893 589,534 58,529 211,547 96,792 358,030 4,600,537
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ISTANBUL MINERAL AND METALS EXPORTERS’ ASSOCIATION
Turkey’s Leading Exporters’ Association Istanbul Mineral and Metals Exporters’ Association (IMMIB) is a professional establishment which deals with all of export activities at the export density regions and affiliated to The Undersecretariat of The Prime Ministry for Foreign Trade. IMMIB consists of 6 Associations;
o o o o o o
‹stanbul Mineral Exporters’ Association ‹stanbul Ferrous & Non-Ferrous Metals Exporters’ Association ‹stanbul Chemicals and Chemical Products Exporters’ Association ‹stanbul Electrical-Electronics and Machinery Products Exporters’ Association ‹stanbul Precious Minerals and Jewellery Exporters' Association ‹stanbul Iron and Steel Exporters’ Association
IMMIB plays a significant role in the Turkish exportation as it represents more than 26,000 exporter members realizing about 32,3% of Turkey’s total exports in 2007 with the value of 34,2 billion dollars.
The basic aims of IMMIB are increasing the export potential and performance of Turkey and contributing to the development of bilateral and multilateral commercial relations of their members in their international activities. In that frame, the functions and objectives of our Association are as follows:
o Organizing international buyers mission programs in Turkey and arranging trade delegation programs to other countries for its members, o Participating in international fairs, o Monitoring and preparing sectoral datas, reports and market research studies, o Publishing documents in relevant fields of members, o Developing co-operations with international associations working on sectoral basis, o Solving problems and difficulties arising from the legal transactions that the member firms encounter, o Examining foreign trade regulations and laws of importer countries so as to keep the member firms informed about the international rules, o Enhancing export capabilities of our members by organizing Industrial Design Competitions, seminars, etc. Please ask for your reliable suppliers from IMMIB.
‹STANBUL MINERAL AND METALS EXPORTERS’ ASSOCIATION Address: D›s Ticaret Kompleksi - A Blok Çobançeflme Mevkii, Sanayi Cad. 34197 Yenibosna - Bahçelievler/ ‹stanbul TURKEY Tel: +90 212 454 00 00 Fax: +90 212 454 00 01 e-mail: immib@immib.org.tr www.immib.org.tr www.buyfromturkey.org www.taj.org.tr
www.turkishcosmetics.org www.turkishstones.org www.turkishkitchenware.org
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ADVERTORIAL
THE BROTHERS’
PASSION
Erdogan Akbulak was diagnosed with cancer in 1990. He came to the United States for treatment, and it was at this critical time that his brother Hakki realized how important it was to spend as much time with his brother as possible. akki and Erdogan Akbulak,
Hbrothers born in Ankara, es-
tablished AKDO/SILKAR after Erdogan was diagnosed with cancer in 1990. He came to the United States for treatment, and it was at this critical time that Hakki realized how important it was to spend as much time with his brother as possible. He pledged to start up a business with him if he survived. Fulfilling his promise, Hakki left his CPA job and researched what products he could import from Turkey to the United States. He settled on natural stone and within a short while granite, marble, limestone, travertine and slate became the brothers’ passion – imported not only from Turkey but from 25 other countries as well. Today, the two brothers split administrative duties for AKDO, the brand name given to retail products, and SILKAR, the name given to the operations where
both retail and commercial products are produced. Hakki is responsible for the North American market and Erdogan manages the rest of the international operation, including ownership of six quarries and two state-ofthe-art factories in Turkey. These stone production facilities occupy an impressive 1,356,250 square foot space. The cutting edge equipment housed at the factories allows for countless options for customized products, perfect for commercial projects. It also allows the research and development teams on both continents to produce original stone mosaic collections that are highly esteemed within the industry, and coveted by interior designers. With thousands of products supplied by Silkar’s manufacturing plants, coupled with numerous resources for slabs and tiles from around the world, the AKDO brand is able to offer customers the very best in both quality and se-
lection. The vast assortment of AKDO products is available through a dealer network of over 1,000 locations throughout Europe and the U.S.A. SUPERB QUALITY AND ORIGINAL DESING After the success of the stone slab, tile and mosaics, AKDO expanded its offering in the United States to include glass – not the regular low-end poured glass variety – but beautiful hand-made collections of superb quality and original design. An additional high quality product, through-body porcelain, has also been added to the company’s offerings. This is a business that thrives on quality and brilliance. The AKDO/Silkar showrooms, located in Turkey and in the United States, are acclaimed for their sophisticated presentation of product, which creates a gallery aesthetic unique to the industry. The spaces are a gathe-
ring place for designers and architects who come not only to educate themselves about natural stone, but also to find inspiration from the beautiful materials showcased. Designed by an award-winning architect, the AKDO Showroom in Connecticut is available for the trade and their customers, and showcases the company’s vast collection of natural stone slabs, tiles and mosaics. Also featured are tiles and mosaics in slate, glass and porcelain. Visitors can view stocked items first hand, as well as see the very newest in design trends, custom options and new product introductions. The showroom’s minimalist clean lines create an art gallery feel, perfect for the breath-taking array of mosaic panels, exotic slabs and stone tile displayed there. In-house product specialists are on-staff to make the selection process fun and easy. AKDO’s space also features a warehouse and distribution center to house its huge inventory of products, allowing the company to turn orders around quickly and conveniently. AKDO’s unique racking system and rail carriage allows designers, architects, retailers and their clients to easily view its vast selection of slabs from all over the world. COUNTLESS PRODUCTS There are two Silkar/AKDO showrooms in Turkey, one in Antalya, and one in Istanbul. The beautiful spaces display an overview of the countless products Silkar can produce madeto-order. Commercial contractors frequent the showrooms to
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browse products and meet with Silkar’s experienced Architectural Department. This department employs several architects who work to make every commercial project seamless. They do this by analyzing the job’s plans to provide the perfect product, and offering solutions to keep a project within budget. Customers can also take advantage of Silkar’s 3D software, which allows them to build a three-dimensional rendering of whatever space they need natural stone products for. The AKDO brand has come to represent innovation and commitment to quality. Their mosaic designers have mastered the art of creating original patterns that are instant classics, sure to stand the test of time. The key to the success of the products is that cutting-edge products are produced from classic stones to generate mosaics that have an appealing aesthetic, suitable for both contemporary and traditional environments. The proprietary mosaic designs are exhibited at several annual international trade shows in award-winning booths, always attracting the attention of the industry.
THE AKDO/SILKAR SHOWROOMS, LOCATED IN TURKEY AND IN THE UNITED STATES, ARE ACCLAIMED FOR THEIR SOPHISTICATED PRESENTATION OF PRODUCT, WHICH CREATES A GALLERY AESTHETIC UNIQUE TO THE INDUSTRY.
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AKDO/Silkar is equally as committed to providing superb customer service. The product is of the highest possible standard and it is vital to maintain this excellence in every facet of the company. To this end, on-going training is high on the list of fundamentals for each department. The caliber of the employees is an added value to all of the AKDO/Silkar customers. OVER 100 PEOPLE The growth of this company is legend – from its humble beginnings back in the 1990’s it has expanded greatly. The United States operation started out as a source for retail products and residential spaces. It now also employs a commercial and hospitality division. Apart from the Connecticut location, which supports a staff of over 100 people, there is a thriving Californian location, a manufacturing facility in China and imminent operation in Atlanta, Georgia. The European side of business provides over 400 people with jobs, and for over a decade has been a leader in fulfilling natural stone needs for commercial projects. A German showroom is slated for next year. Hakki and Erdogan Akbulak’s dream was born from a tragic situation and realized through hard work and passion for innovation. The brother’s collaboration fulfilled it’s mission of strengthening the bond between family, and across the world people benefit: through designing with AKDO products, working with helpful AKDO/Silkar representatives, and being employed at one of the many locations across the world.� TurkofAmerica • 25
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TURKISH STEEL INDUSTRY
TURKEY IS THE LARGEST BUYER OF UNITED STATES IRON AND STEEL SCRAP EXPORTS At the end of 2006, with 1.1 million tons of construction iron, Turkey was the largest supplier to the United States. Turkey transcended the setback in the iron bar market in America by directing itself to the Persian Gulf.
T
he United States imports iron and steel products from 27 countries around the world, including Turkey. As Turkey’s exports to the United States reached 642.7 million dollars in the first 10 months of 2008, and even though there were certain setbacks recently, Turkey is still assertive in the American market when it comes to construction iron (Bars-Reinforcing). At the end of 2006, with 1.1 million tons of construction iron, Turkey was the largest supplier to the United States. Turkey transcended the setback in the iron bar market in America by directing itself to the Persian Gulf.
tons and our HRP steel export reached 116 thousand tons. There were serious increases in the exports of these three products. Due to the problems faced in the American market when it came to iron bars, Turkey changed its course to the Persian Gulf and with the increase in the price of oil and the increase in the investments in this area there was a larger share of the market to be had.
Istanbul Iron and Steel Export e r s’ Association President Serdar Koçtürk spoke to TURKOFAMERICA about the structuring of the iron-steel sector and the demands of the American market during this economic crisis. Could you speak especially about how the iron steel sector, which at the end of 2006 had reached 1 billion dollars in exports to the United States, fell to 300 million dollars in 2007 and 491 million dollars in the first nine months of 2008? What kind of expansion did the Turkish iron steel sector make during this time in the export market? To evaluate Turkey’s iron steel exports to the United States on a value base would not be healthy due to the extreme fluctuations of the unit price. It would 26 • TurkofAmerica
Serdar Koçtürk, President of Istanbul Iron and Steel Exporters Association
be healthier to evaluate it on a quantity base. If you look at it from a value base, then Turkey’s exports to the United States reached 642.7 million dollars in the first 10 months of 2008. Last year it had reached 264.4 million dollars in the first ten months. When looked at on a value base that is an increase of 143% but at a quantity base there is only a 40% increase. When the export product base is
examined in the iron bar exports in question there was an export of 359 thousand tons last year and this export has deteriorated in the past ten months to 224 thousand tons. However there has been an increase on other items. Turkey also exports pipes, HRP steel and wire rod to the United States. Our pipe export has reached 116.4 thousand tons in the first ten months, our wire rod export reached 111 thousand
Is there a possibility that the United States will not import Turkish iron bars, therefore jeopardizing its own sector in the meantime? (As far as I know Turkey imports the raw materials for the iron bars from the United States) Turkey is the largest buyer when it comes to American iron and steel scrap exports. Turkey’s yearly iron and steel scrap imports in 2007 reached 17.1 million tons. 3.9 million tons of this was from the United States market. In the first 6 months of 2008 2.3 million tons of iron and steel scrap was imported from the American market. The monetary value of this is over a billion dollars in six months. In other words, the volume of our iron and steel scrap imports is higher in value then our steel exports. It is a fact that the companies within the iron steel sector in Turkey have proven experience, knowledge and capital accumulation in this area. Besides new export ventures, is it possible to follow a strategy of “investing specifically within the United
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States in order to be close to the customer and to make a place for oneself as a direct manufacturer in the market”? It is very logical for Turkish manufacturers to invest in the United States. The United States is the largest iron and steel scrap supplier in the world. It also imports long steels. It can be foreseen that in the event that Turkey does not fill this void, others will fill it. We see that there are steps in this direction already. However, due to this period of economic crisis, it looks like the Turkish investor is not in a place currently to undertake such a venture. In the month of August 2008 alone, the import of iron steel and products from the United States reached over 400 million dollars. As of the end of September 2008 the requests for iron steel imports were at 2.684 million tons. When we look at iron steel, which is our largest import to the United States of all of our imports, doesn’t it take a large piece of the pie when compared to the United States Market? Your observation is correct. The United States is the largest importer in the world. Even though our share in this market is small, in the context of all the goods that are sold in this market the United States takes a huge share of our exports. For example in the first ten months the United States was the largest customer when it came to our export of HRP steel. For wire rod and pipes it was the third largest market.
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dollar these last few days is said to make those in the export business happy, but isn’t it a disadvantage for those producers who buy their raw materials based on the dollar? There is no problem for the manufacturer who buys raw materials on the dollar and then sells them on the dollar. The increase in the dollar value can be an advantage for those who buy raw materials with the New Turkish Lira, and for those in fields where it is labor based. These are sectors such as foods and textiles. However, since devaluation is present in many countries, the competitive field has not created an advantage. Will a new strategy be decided for the American market going on the prediction that by 2010 it will have recovered its past strength? The role of the United States in Turkey’s complete export picture may be small, but when the Unites States limits its consumption, then the manufacturer in Turkey also gets affected. Is there a date you foresee for the effects of the economic crisis to end and for normalcy to return to Turkey? The American market is important for Turkey and Undersecretariat of the Prime Ministry For Foreign Trade values this market and is working on developing
strategies for increasing the export numbers. Due to the fact that the United States is the world’s largest net steel importer, it is important to Turkish steel manufacturers and exporters. This mutually beneficial business
trade will continue to grow after this crisis is over and new opportunities will abound. We foresee that the effects of this economic crisis will start to abate towards the second half of 2009 and that the trend of growth will restart.�
US Import of All Steel Mill Products From TURKEY
This current economic crisis has deeply affected the construction sector in the United States; to what degree will it have an effect on the Turkish exporter? The effects of this crisis will be serious and there will be a setback in our export numbers. However, due to the decrease in oil prices and freight costs our competition level in the market has only gotten stronger. The increase in the value of the TurkofAmerica • 27
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COCA-COLA
SINAN ALTUN, GLOBAL MARKETING MANAGER OF GLACEAU:
“THE CRISIS WILL BEGIN TO BE WEATHERED IN 2009”
Chosen from among 600 candidates worldwide, Sinan Altun was appointed Global Marketing Manager responsible for Glaceau, fruit juices, and centered in the company headquarters in Atlanta. sic carbonated beverages to vitamin drinks cost the giant company USD 4.1 billion. Chosen from among 600 candidates worldwide, Sinan Altun was appointed Global Marketing Manager responsible for fruit juices, and centered in the company headquarters in Atlanta; he was a member of the team responsible for the purchase of Glaceau. After the transfer of Glaceau, which was previously sold only within the US, to Coca-Cola, Altun was named Global Commercial Manager of the team established to launch Glaceau in markets outside the US. Altun spoke to TURKOFAMERICA about his career, the effects of the crisis, and the beverage sector:
Sinan Altun, Global Marketing Manager of Glaceau.
I
n 1996, J. Darius Bikoff was checking into the purity of bottled water and didn't like that some had contaminants. He decided to create his own distilled water with added electrolytes. The resulting Smartwater, in a sleek bottle designed by Doug Lloyd, became a hit in natural and specialty food stores when it was released in 1998. Bikoff’s company, Glacéau, also 28 • TurkofAmerica
known as Energy Brands, Inc., is a beverage company based in the Whitestone section of New York City. The success of the Glacéau brand launched a new marketing category in the beverage industry: enhanced water. Glacéau's slogan is “hydrate responsibly.” In October 2004, noted rap artist 50 Cent obtained a stake in Energy Brands, stating that he wanted to make his mark in he-
althful beverages. Having understood early on the importance of the energy and vitamin beverage market in the world, Coca-Cola made the strategic decision to enter into this new market by purchasing a company with an established reputation. The company it purchased, Glaceau, accords in all respects with Coca-Cola’s strategy, even though this move from clas-
How and when did your career at Coca-Cola begin? Your name was mentioned as the architect of the Glaceau deal, worth USD 4.1 billion, which took place this past year. What does it feel like to be part of an enterprise that can be considered a radical change in the strategy of a century-old company? My career with Coke started in 1997 as Fanta and Bonaqua Brand Manager, responsible for the Caucasus and the Central Asian Republics, located in Istanbul. Later, I took on different responsibilities, ranging from Brand Manager to Marketing Director in the Belgium-Luxembourg region, Turkey region and Southern Eurasia region. In November 2005, I was selected as one of the top 5 marketing talents out of 600+ candidates across the globe to attend The Coca-Cola Company's Global Benchstrength
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Program based in its Atlanta headquarters, and became the Global Marketing Manager in the company's Non-Carbonated and New Beverages Department. Last year, after the acquisition of Glaceau, I was appointed the Global Commercial Director to export the magic of Glaceau business to the world. I am definitely not the architect behind this acquisition but it is a fantastic feeling to take such a crucial role in its expansion around the globe. This acquisition was one of the biggest and most important of all in our company’s history. I am very excited and happy to be a part of this and to know that I am a key player in this change and growth opportunity for the company. Can you tell us about the developments that have taken place in the vitamin water and energy drinks sector since 2007? In line with the global health and wellness trend, consumer habits and attitudes are changing. The enhanced water and energy drinks segments have been two of those fastest growing segments within this change. With our marketing intelligence and strategies, we are keeping tabs of the pulse of the consumers and responding faster to their emerging needs. Today, the Coca-Cola Company has 12 billion dollar brands in addition to the ‘Coca-Cola’ brand. We are replicating the innovation and leadership model that we have used with our flagship brands with the enhanced water and energy drinks segments. How do you expect the current crisis to affect the soft drink sector? Does the position of energy and vitamin drinks in the market show any difference in comparison to other drinks (negative or positive)? I am a firm believer and may be a positive thinker that the world will start getting out of this crisis next year. During crisis situations, people’s consumption behavior
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changes in terms of when, how and how much they consume. It is more important to focus on what matters for the business and continue communicating with the consumers. Within this context, I believe the energy drinks and enhanced water segments will be important forces driving growth in the beverage industry. You are one of the Turkish senior managers in Coca-Cola. CocaCola is the only company among the Fortune 500 to have a Turkish CEO. How does the presence of Turkish managers in top management motivate you in your work? In the past 30 years, the Turkish economy has been through much turbulence. In these times a lot of valuable experience was gained. Turkish managers have been leveraging these experiences and capabilities around crises management, calculating risk taking, acting fast upon needs and collaborating in the companies they were managing. We are seeing more and more Turkish managers in middle and upper level positions in international companies. I am confident this will continue to increase and we will have our fair share in international organizations. Of course for me and my colleagues, seeing Turkish managers at upper management levels in the Coca Cola Company is both a source of inspiration and motivation. When I examined your CV I noticed that a large part of your professional life was spent at Coca-Cola. What kind of advantages has it given you to work at Coca-Cola, a world giant and the best known brand in the world? Ever since I joined the Coca Cola Company I have had the opportunity to work in a multi cultural and multi national organization. Working at Coke helped me become a global citizen. It helped me to understand and respect different cultures in the world, to accomplish work in different geographies, to have a wider and deeper world
Sinan Altun with his daughter, Alara.
view, to be a visionary, to develop a more flexible, result oriented and entrepreneurial management style and to build strong relationships all around the world. If the history of Coca-Cola were to be written one day, what would you like it to say about Sinan Altun? I would like to be remembered as one of the global influential leaders who put his heart and mind into the Coca-Cola company and with his infectious energy grew and expended many brands, most recently Glaceau, around the globe to put a smile on the faces of the world’s consumers. How many days in the year do you travel? I know that you have a daughter. Are you able to spend enough time with her? I travel half of the year. My wife Serfi, who works for Procter & Gamble, also travels a lot due to her job. The other half of the year, I try to spend with my wife and with my daughter Alara. With Alara we have our ‘fatherdaughter days’. Especially when
Serfi is traveling, we play basketball together, swim together, watch movies and play her favorite games. I try to take all my vacation days every year. We always have 1 week winter vacation and 2 weeks summer vacation and make sure to spend quality time together in these times. Are you able to follow what happens in Turkey? If you were to set up your own business in Turkey, would this be in the drinks sector? I follow the agenda in Turkey as much as I possibly can. We have an amazing country and we try to quench our thirst for it by visiting often for our family holidays. I’ve been working for the Coca Cola Company for the past 11 years and I believe that success lies in focusing on the work you do and nothing else and I am continuing on this path. Is there anything you would like to add? I would hope that the Turks in the US combine their forces and support each other in more effective platforms. Thank you. �
THE TURKS AT COCA-COLA
Coca-Cola is the only company in the Fortune 500 to have a Turkish CEO; Muhtar Kent has been the CEO of Coca-Cola since 1 July 2008. Coca-Cola has 5 important regional management headquarters in the world and one of these is in Istanbul. There are at least 20 Turkish senior managers at Coca-Cola. In Istanbul, Ahmet Bozer manages the Eurasia region, which covers 93 countries. The other Turks working at Coca-Cola and their job titles are as follows: Umut Özayd›n l› (The Coca-Cola Company, Global Music Marketing Manager), Ali Nejat ‹pekçi (Glaceau Global, Field Development Manager), Alev Gökçe (New Product Development Manager), P›nar Zaimo¤lu (Global Marketing, Financial Analyst), Tebessüm Welch (Financial Research Manager), Güran Yet (Global Planning, Financial Director), Berna Kaçan (Ethics and Compliance Manager), Arzu Küpçüo¤lu (Project Manager), Rana Kardefltuncer (Glaceau Global, Brand Activation & Cooperation Manager) TurkofAmerica • 29
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TURKISH TEXTILE INDUSTRY
HALIT NARIN:
“TURKEY IS ONE OF THE COUNTRIES THAT WILL EXPERIENCE THE LEAST LOSS DURING THE CRISIS.” Of Turkey’s 500 largest manufacturing establishments, 20% of them are active in the textile and ready-made clothing sector.
Halit Narin, President of the International Textile Manufacturer’s Association and chairman of the board of the Turkish Textile Employers Association,
T
he textile and ready-made clothing sector is one of Turkey’s locomotive industries. Of the approximately 43,000 companies that are operating in the sector, 25% of them are active exporters. Of Turkey’s 500 largest manufacturing establishments, 20% of them are active in the textile and ready-made clothing sector. It is estimated that total investments made in Turkey’s textile and ready-made clothing sector have surpassed $150 billion. 32 • TurkofAmerica
We asked Halit Narin, President of the International Textile Manufacturer’s Association and chairman of the board of the Turkish Textile Employers Association, about the effects of the global economic crisis and the strategies that the Turkish textile sector is following. After a long time as chairman of the board of the Turkish Textile Employers Association, you were chosen to also serve as president
of the world textile sector’s top organization, the ITMF (International Textile Manufacturer’s Federation) for a two-year period starting in October. Can you give us some information about the ITMF and your projects? The International Textile Manufacturers Federation (ITMF) is the top organization in the international textile sector. With the research it carries out, its studies, publications, and the conferences it organizes, it is constantly provi-
ding its members with a stream of information about developments in the textile sector, and as a result, it plays a leading role in defining the macro strategies of the sector. Of course my first goal as president of the ITMF is to be present for every type of undertaking on all platforms directed towards developments in the world textile sector, and in this context to carry ITMF’s activities even further. Since the first day of my presidency, my colleagues have been working very intensely, and in the upcoming period, though visits and reciprocal meetings that we will carry out, we will give shape to our strategies in this field. When we examine trends from the past until now, in the textile and ready-made clothing sector as in many other areas, it appears that production is gradually shifting from developed countries to less developed and developing countries. As president of the ITMF, how do you evaluate this trend in this context? Of course now in this globalizing world economy, as production criteria like costs, logistics, raw materials, and qualified manpower are evaluated, production has shifted to the most suitable regions in its own particular progression. But I find it useful to underline that the contribution of developed countries to the textile and ready-made clothing market should still not be underestimated. When one looks at existing technologies and investments in R&D, there should be no doubt that in the future, as today, innovative technology-focused products and developed countries will continue to be authoritative in this sector. Today the textiles and ready-made clothing sector, by following every type of scientific development, first and foremost nanotechnology, is working on adapting these advances to the sector. To think the opposite, that textiles are going to completely shift to less developed coun-
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tries, would be naïve, since hightech textile products today are intensively used in many areas, including space technology. As for our largest concern here, it is the issue of fair trade. Today the markets of many developed and developing countries are forced to compete with textile products and ready-made clothing that have been supported with incentives contrary to the rules of the World Trade Organization and not produced according to appropriate standards, or not following any standards. One of the most important points is that whether it be on the part of the consumer or the producer, we need to take a stronger role against this type of wrongdoing. How will the world textile sector be affected by the latest global crisis? In this context, what is the biggest difficulty that the Turkish textile sector is expected to face domestically and abroad? The dimensions of the global crisis currently underway have not yet been clearly established. I believe the biggest danger seems to be its indefiniteness. But I believe that after measures taken by many of the world’s countries and with the monetary support given to the markets, after a certain period everything will get back on track. Of course in the short term, as a result of consumption slowing down and world markets shrinking, many producers will fall on hard times and this will cause some consolidations and liquidations in the sector. At this point it’s natural that the Turkish textile and ready-made clothing sector will experience its share of the crisis, but by completing sectoral transformations and moving from producing basic products to higher value products, Turkey will be one of the countries that will experience the least loss during this crisis. My recommendation to my own friends is that we concentrate on the flexible production model Turkey has had from the past
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until now and make products focused on the customer, whether it be through the market or product diversity. The U.S. has NGOs that closely follow working conditions in textile factories to monitor whether they are in accordance with human rights. As a Turkish textile employer, what would you like to say to American consumers and to NGOs following these types of businesses about working conditions and opportunities in Turkey? Of course this situation is a topic that Turkey takes very seriously. The Turkish textile and readymade clothing industry has brought workers and employers side by side to the present situation. The types of practices that are in violation of human rights are almost nonexistent in Turkey, unlike many places around the world. I’d like to say that through the framework of years of experience as a union, we ensure that all of our businesses give their workers every type of social security and more. Any kinds of practices that are in violation of the mandated human rights regulations must be fought against in the strongest possible way. In this context, NGOs should carry out more effective studies related to the raising of awareness during the procurement process of all types of products and those companies buying products for their own needs must be more sensitive regarding issues of human rights and child labor when choosing companies with which to work. In the recent American election, one of the topics most frequently mentioned by both presidential candidates was that efforts should be made to bring back to the U.S. the textile and ready-made clothing production that has moved abroad. In this sense, how much of Turkey’s production has shifted abroad? As an association of employers, do you see investment abroad by businesspeople in the Turkish textile sector as a
loss? This is a very interesting topic. Of course every country would like its national companies to be authoritative on all points, and with that aim, to evaluate every type of enterprise opportunity without having restrictions as to place. But here an important point, also expressed by American presidents, is to not forget one’s own people and workers. Although Turkey has a young, dynamic, and educated population, around 10% of it has to struggle with unemployment. From the perspective of our country, one of the most important issues is to provide work opportunities for our own people. Turkey has a need for work provided by the textile and ready-made clothing sector. For now we can’t ignore the fact that nearly 3 million people are employed by this sector. Without providing jobs for our own people, it will be impossible for the country to develop as a whole. In this light, I don’t look at all warmly on factories that close down so that investments can be made in other regions. Every day we see more Turkish textile companies in the U.S. These are mostly in the position of representing companies that are producers in Turkey. But we don’t often see enterprises on the investor level. It’s not possible to see Turkish textile-makers as investors in the U.S. given the current economic conditions, but how about in the future? Whether this is impossible or a difficult possibility, would the biggest obstacle here be the cost factor? In its own land, Turkey is one of America’s most important allies. On a number of issues, strategic alliances on common points are under consideration. But up to now, the subject of bringing partnerships in the military field into the economic field has not been advanced far enough. For now, besides cost factors, the reason that Turkish textile companies are not taking enough of a share
in the American market is American leaders’ insufficient interest in, and support for, Turkish investors. For example, an agreement like the U.S.’s favored trade agreements (QIZ) with countries like Egypt, Lebanon, and Israel, from our perspective offers great importance. American leaders should never forget that the Turkey founded by Atatürk, with its history of more than 80 years as a republic and nearly 600 years of experience as a state, is in the position of being America’s only real ally in the region. In the eyes of the world the two societies share strong similarities and as the world takes shape in the future the importance of this will become much more apparent. What are your thoughts on EUTurkey relations? This is the wrong time for this incident to be considered. Certainly both sides are in the wrong on some points. But we are moreover a country that is making an effort to be a member. By persuading those against us of our efforts, we must work towards propelling them onto a better path. Our duty is to meet Western civilization face to face and take our place in Western civilization, on the path given to us by Atatürk. In this way, if the EU steps back a bit we need to persuade it to come forward. It’s the wish of our whole nation to join the EU. While government politics continue like this, if as the government and as the National Assembly we have decided to join the EU, and if as a nation we are behind this decision, we should act according to our own manner of conduct rather than according to that of those against us. But it has to be a union that is wanted on both sides. With it now being desired on only one side, we are in the position of considering whether we should abandon the EU as an alternative. Because in respect to the final outcome, it’s like love, and can’t be one-sided.� TurkofAmerica • 33
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RAVINI
RAVINI DISCOVERED SHADOW R
avini, which has been operating since 1996 in Turkey’s most important natural stone center of productions, Bal›kesir has captured a new trend with the gray marble (Shadow) that it has presented to the American, European and Middle East market. For the past years, Ravini has been supplying beige marble and travertine from its own quarries to big projects all around the world. In 2008, they entered their most important venture by selling the gray marble they found in the second stone quarry that they had purchased to the American market. Ravini USA General Manager Cengiz Ermifller says, “We have been looking for different color to offer to our customers. As soon as we found our new product, the gray marble, we immediately started production. Gray marble is very fashionable at the moment.” Gray marble is used mostly both in interiors and exterior, in living areas, bathrooms, kitchen, pools, patios and driveways. Ravini's new products have been attracting a lot of interest at the trade shows the company has been attending and Ravini has developed a corresponding sales strategy. Their new products have contributed greatly to Ravini’s sales during this time of economic crisis. Ravini Turkey exports 60 percent of their manufactured goods to the American market, and via their Miami office they are able to reach their customers directly. In addition to their sales to the American market, Ravini sells to Europe, middle east, Asia, South America, mpre then 30 countries around the world. As Ravini changed its sales strategy by focusing more on new products, it also took many precautionary measures when preparing for the economic crisis. One of these measures was to decrease the production of mosaics. When Ermifller traveled to China to see mosaic production in its place, he says “When 36 • TurkofAmerica
I saw how little it cost to produce mosaics during my trips to China, I saw that it was not possible to sell in this market unless we have better quality and service. After supplying mosaics to Home Depot for three years, we decreased the mosaic production and focusing for the special design for our special clients.” THE MARKET WILL PULL ITSELF TOGETHER IN THE SECOND HALF OF 2009 Ravini, which had 400 workers in their facilities in Bal›kesir and Bilecik, had to drop that number down to 250 due to the current economic crisis. However, Ermifller is hopeful for the upcoming year. He says that he believes the American market will pull it together in the second half of 2009. “The construction sector will not always stay this way; it will pull itself together. We believe that America will revive faster than Europe. This is why the American
market is so important to us, and in this new period we will continue with a new strategy. At this time we are continuing to work with the companies in the market that we trust,“ he says. Ermifller says that lately they have been concentrating on special projects in America and
Ravini's new products have been attracting a lot of interest at the trade shows the company has been attending and Ravini has developed a corresponding sales strategy.
Cengiz Ermifller, Ravini USA General Manager.
adds that they will continue to focus on this strategy in the upcoming months. Among the projects in which Ravini products are being used this year a 400,000 sq ft multiple story building in Europe, all of the bathroom furnishings of a 41-story, 489-unit project called the Wind Miami Project, the luxury residential project Marina Tower Of Turnberry in the city of Aventura in Florida, an apartment building in Fisher Island, one of the world’s most famous residential spaces, and the Parc Place South Beach project in Miami Beach. Ermifller says, “We are participating in important projects in Miami. We have also made important contributions to our sales with the important projects that we have taken on in the Far East. We will also enter the other states in in addition to New York, Illinois, Florida, Texas and California, with different products.” For Ravini, Latin America tops the list of targeted markets outside of the United States.�
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ADVERTORIAL
TAV AIRPORTS HOLDING TO OPERATE AIRPORTS IN MACEDONIA tructuring will take place that also includes the modernization of the technical infrastructure. TAV Airport Holding will operate Alexander the Great and St Paul the Apostle International Airport for 20 years. The Shtip Cargo Airport construction is expected to be finished in the second half of 2011.
Sani fiener, President & CEO of TAV Airports Holding.
T
AV Airports Holding has won the bid to operate the Alexander the Great Airport in Skopje, the capital of Macedonia and the most important center of the Balkans, St Paul the Apostle International Airport in Ohrid, and the new cargo airport in Shtip. TAV Airports Holding’s offer to operate Alexander the Great airport and St Paul the Apostle International Airport for the next twenty years as well as to build and operate Shtip’s New Cargo Airlines was announced as the winning bid by the Macedonian government. The operations contracts were finalized on September 24th in Macedonia. The President & CEO of TAV Airports Holding, M. Sani fiener, the Macedonian Minister of Transportation and Communications Mile Janakieski, and various other Macedonian government officials were present. M. Sani fiener, the CEO of TAV Airports Holding, which in addition to becoming a regional brand in airport management has also become a global company due to its business character, said, “We are very happy to be operating an airport in Europe and that we have been successful in
this project that we have been working towards for a very long time. The Macedonian contract also carries the mission to open the door to Europe for TAV Airports Holding, a company that already operates airports in the Middle East, the Caucasus, and North Africa. Another important point for us is that along with the airport operations in Macedonia we have reached our aim of ‘10 Airports in 10 Years’ in only eight years. We are proud to have reached our goals ahead of schedule.” fiener stated that the operation of airports in Macedonia will serve to further open TAV Airports operations into Europe. fiener said, “With our projects in Macedonia, which holds a very strategic place in both the world and politics and with which we have shared a 500 year common past, we have said, “Hello, Rumelia*” We have been very successful in
this project, which we have worked towards for a very long time. With this project TAV Airports has clinched its place in the international arena, both in the financial and the aviation field.” TAV Airports Holding was the only company, among such global giants as Hochtief (Germany), Egis – Kaupthing Vienna (Austria), and Singer & Friedlander (French – British partnership), which had all passed the first phase of the bidding, to have made it to the final phase and to have been able to meet all of the criteria. In 2007, 680 thousand passengers used Alexander the Great airport in the capital city of Skopje and St Paul the Apostle International Airport in Ohrid. TAV Airports aims to increase both the passenger and the airline numbers at both of these airports after taking over operations. At the same time it is foreseen that a res-
TAV Airports, an international player in the field of airports management in the Middle East, North Africa and the Caucus, operates Istanbul Ataturk, Ankara Esenboga Domestic and International Terminals and Izmir Adnan Menderes Airport in Turkey; its overseas operations include Georgia Tbilisi Airport and Batumi Airport and Monastir Habib Bourguiba Airport in Tunisia. TAV Airports also holds the rights to operate Antalya Gazipafla Airport and Enfidha Zine Abidine Ben Ali International Airport in Tunisia. CAIRO AIRPORT OPENS Cairo Airport’s new third terminal, constructed by Turkish TAV Airports Holding, was opened by Egyptian President Hüsnü Mübarek and Egyptian Prime Minister Ahmet Nazif in last December. Cairo International Airport is one of the major airports in Egypt and the primary hub for the national carrier Egypt Air. Cairo International is known as the second busiest in Africa after Johannesburg International in South Africa. Cairo handled nearly 10.8 million passengers in 2006 and ten million passengers in 2007 and it is becoming busier and busier. The airport has the potential to be a major hub with its positioning between Africa, the Middle East and Europe. (* Ru melia is the part of the Ottoman Empire which was in Europe.)�
TurkofAmerica • 37
Designing concept rooms and products to enrich imagination of world’s children by considering their needs, emotions and life styles, Çilek is the first and the most important specialist brand of Turkey, specialized in baby, child and young rooms.
SENSE OF GENUINE DESIGN Çilek Mobilya follows up life styles, choices, needs and current trends of children and youth, thorough its Turkish designers within the structure. Designing well-defined concept rooms, Çilek gathers all the products to meet all the requirements of a person in a room, from bed to blanket, carpet to curtain, lamp to night table, closet to pillow, in room atmosphere. Being admired all across the world, Çilek products have GS (TUV) Certificate of Quality, which is granted to high safety and quality standards.
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FIRST SAMPLE STORE AND WAREHOUSE APPLICATION IN GERMANY Providing an example for the entrepreneurs with sample store and warehouse application in strategically-important countries, Çilek realized the first application in Köln, Germany. With
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GERMAN MODEL IN USA MARKET Çilek implemented the sample store and warehouse application in USA, which had been applied in Germany first, and established the first sample store and warehouse in Miami City, Florida State. Opening 2nd store in Nashville City of Tennessee State, Çilek’s goal is to establish 8 stores in Florida and then to expand in USA, starting from California State.
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U.S. FURNITURE INDUSTRY
FURNITURE INDUSTRY WILL NOT REBOUND UNTIL 2010 The heart of the U.S. furniture industry, North Carolina, has lost more than 22,500 jobs in furniture and related industries since 2000.
I
n recent years, the American furniture industry has been hurt on a number of levels. The weak dollar has made imports expensive and the industry is facing increased competition from Asia -- from China and Vietnam to relatively new suppliers like India and Bangladesh. The furniture industry is experiencing a tough year because the housing market is slowing down and the credit crunch is hurting furniture consumers. The industry lost a lot of retailers and it will probably lose more. Furniture and home furnishings continued its decline, dropping 13.2% versus last October. Industry analysts said that this is the worst period for the industry since World War II. Jerry Epperson, a furniture industry analyst with Richmond, Va.-based investment banker Mann, Armistead and Epperson, and a Furniture/Today columnist, has ratcheted back his forecast for the furniture and bedding business, calling for a 7.2% decline in shipments this year and a mild rebound of 1.7% in 2009. According to Furniture Today column, Epperson is projecting shipments of $37.3 billion this year — a 7.2% decline from 2007. And the $40.17 billion recorded in 2007 was a drop of 2.1% from 2006. Epperson doesn't see a significant rebound until 2010, when he's forecasting shipments of $40.7 billion. For 2011, the projection is $42.64 billion. The forecast is based on an economic model developed by University of Michigan economist Saul Hymans. The heart of the U.S. furniture industry, North Carolina, has 40 • TurkofAmerica
lost more than 22,500 jobs in furniture and related industries since 2000, according to the state’s Employment Security Commission. The number of wooden furniture jobs dropped by 62 percent between 2002 and 2007; the number of upholstery jobs declined 16 percent. BACKGROUND AND DEVELOPMENT According to a report by research company Gale, in the late 1990s the economy was still go-
ing strong, unemployment was low, and the stock market and consumer confidence levels were high. Housing starts were still strong, and low interest rates spurred home refinancing, resulting in more money to spend on household furniture. The "Wood Household Furniture, Upholstered" Encyclopedia of American Industries report indicated that people in the United States had more disposable income than ever, resul-
ting in strong furniture sales. However, by the early 2000s growth rates for the furniture industry began to lose ground. Nevertheless, the upholstered furniture sector suffered fewer company closures and employee layoffs than the furniture industry as a whole, which experienced several company closings and employee layoffs. In 2004 the industry stabilized and began to grow at a more predictable pace. The U.S. Census Bureau reported that the total value of upholstered household furniture reached $10.5 billion in 2005, a modest increase from $10.1 billion the previous year. The number of establishments engaged in that industry reached 1,593 in 2005, employing more than 82,500 workers. With 289 manufacturers, California ranked first among the states, followed by North Carolina's 259 and Mississippi's 109. INDUSTRY LEADERS La-Z-Boy Inc. is the largest producer of upholstered furniture in the United States, and its recliners are the world's leaders. Based in Michigan, its brands include La-Z-Boy, Bauhaus USA, Hammary, and Kincaid. The company also manufactures chairs, sofas, and tables, all of which contributed to its 2007 revenue of $1.6 billion. As of April 26, 2008, the company had 70 company-owned La-ZBoy Furniture Galleries stores. Furniture Brands International ranks as one of the leading manufacturers of residential furniture in the United States. Revenue for 2006 topped $2.4 billion, portions of which were derived from its non-upholstered lines. Based in St. Louis, Missouri, this company produced such brands as Broyhill, Lane, and Thomasville. As of December 31, 2007, it operated 28 stores. With over 50 years of innovation and experience in the furniture industry, The Ashley Com-
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panies (Ashley Furniture Industries, Inc.) makes upholstered, leather, and hardwood furniture, and distributes them through some 275 Ashley Furniture HomeStores throughout the United States, Canada, and Japan. HARDWOOD PLYWOOD AND FLOORING MARKETS In the U.S., domestic hardwood plywood and flooring manufacturers face increasingly unfair competition from abroad in their home market. According to a report released by the U.S. International Trade Commission, imports of wood flooring and hardwood flooring increased from $1.2 billion in 2002 to $2.7 billion in 2006 before dropping to $2.4 billion in 2007 due to the housing downturn. In comparison, U.S. consumption of these products grew from $3.5 billion in 2002 to $5.6 billion in 2006 before falling to $5.2 billion in 2007. In other words, the market share of imported wood flooring and hardwood plywood increased from 34% to 46% over the five-year span. Imports of Chinese wood flooring and hardwood plywood increased at an annual rate of 37% between 2002 and 2007 and accounted for most of the growth of U.S. imports. (Source: Rich Christianson, Wood & Wo od Products, 1 October 2008)
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TOP U.S. FURNITURE COMPANIES
Company Ashley Furniture Industries Steelcase Inc. Masco Corp. Jeld-Wen Inc. Furniture Brands Int. Andersen Corp. HNI Corp. MasterBrand Cabinets Inc. Herman Miller Inc. La-Z-Boy Incorporated Haworth Inc. Pella Corp. Knoll Inc. Ethan Allen Interiors Inc. Global Group American Woodmark Corp. Klaussner Home Furnishings Leggett & Platt Inc. Teknion Corp. Kimball International Inc.
HQ Arcadia, WI Grand Rapids, MI Taylor, MI Klamath Falls, OR St. Louis, MO Bayport, MN Muscatine, IA Jasper, IN Zeeland, MI Monroe, MI Holland, MI Pella, IA New York, NY Danbury, CT Marlton, NJ Winchester, VA Asheboro, NC Carthage, MO Toronto, ON Jasper, IN
Revenue 2007 $3.21 billion $3.1 billion $2.9 billion $2.2 billion $2.17 billion $2.1 billion $2.08 billion $2 billion $1.92 billion $1.62 billion $1.48 billion $1.2 billion $1.05 billion $1.005 billion $930 million $760.9 million $715 million $690 million $631 million $615 million
Web ashleyfurniture.com steelcase.com masco.com jeld-wen.com furniturebrands.com andersenwindows.com honi.com masterbrandcabinets.com hermanmiller.com lazboy.com haworth.com pella.com knoll.com ethanallen.com globaltotaloffice.com americanwoodmark.com klaussner.com leggett.com teknion.com kimball.com
Source: fdmonline.com
U.S INTERNATIONAL TRADE STATISTICS FOR FURNITURE AND FIXTURES (In Thousands of Dollars) NAICS Description 337110 Wood Kitchen Cabinets and Countertops 337121 Upholstered Household Furniture 337124 Metal Household Furniture 337127 Institutional Furniture 337129 Wood Sewing Machine Cabinets 337211 Wood Office Furniture 337214 Office Furniture (except Wood) 337215 Showcases, Partitions, Shelvings, and Lo 337910 Mattresses 337920 Blinds and Shades Total
September 2008 Export Import
Cumulative YTD thru September 2008 Export Import
15,419 45,319 8,225 173,816 734 14,011 24,374 100,417 15,696 5,647 403,658
118,316 382,883 87,273 1,439,299 4,797 114,510 190,309 902,236 102,330 45,179 3,387,131
56,639 221,081 177,927 1,057,268 168 70,983 38,217 399,804 22,138 86,335 2,130,551
512,074 1,937,351 2,274,399 9,966,519 3,312 686,513 355,262 3,501,736 170,243 743,940 20,151,351
Source: U.S. Census Bureau
INDUSTRY NEWS
Top 100 Companies’ Revenue Slipped Sofa-sleeper specialist Jennifer Convertibles continued to struggle in its fiscal fourth quarter, reporting a net loss of $867,000, compared to a $1.7 million gain for the same period a year ago. Revenue for the Top 100 company slipped 16.3% to $30.8 million for the period ending Aug. 30, while same-store sales decreased 19.5%. (Source: Furniture Today) Englander Adds Malaysian Licensee Top 15 bedding producer Englander is continuing its international expansion with the addition of a licensee for Malaysia. Mattressworld Inds. of Selangor, Malaysia, has won the right to produce Englander-brand bedding in Malaysia, Singapore and Thailand. Mattressworld, in business for more than 30 years, produces natural latex bedding as well as polyurethane foam and spring models. The company exports its mattress lines to Japan, Australia, Europe and Canada. (Source: Furniture Today) The Heart of the U.S. Furniture Industry: The High Point Market The High Point Market is the largest furnishings industry trade show in the world, bringing more than 85,000 people to High Point every six months. Serious retail home furnishings buyers can be found in High Point twice a year. Current Demographics: 188 Buildings, 12 Million Square Feet of Show Space, 85,000 Attendees Each Market, More Than 2000 Exhibitors, 110 Countries Represented, Tens of Thousands of New Product Introductions. Approximately 10% of Attendees Are International. Upcoming Spring and Fall High Point Market Dates: April 25-30, 2009 / October 17-22, 2009.
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ON PALM BEACH
THE FIRST MONEY SHOWROOM ON THE STREET OF THE WORLD JET SET Sand›kç›, who opened his first antique paper currency store in 2005 in Tarpon Springs, pointed out that the Palm Beach store was designed to present the world jet set with a different kind of service.
T
he Arcade Currency Palace, known for its American paper money collection, has opened its second store in Palm Beach, a favorite location for the world jet set. The opening of the store, owned by Turkish businessman Ahmet Sand›kç›, a famous numismatist living in the U.S.A., and his business partner Dennis Detrie, and situated at the corner of Worth Avenue, where many world brands are located, and S. County Road, was attended by famous personalities from Palm Beach high society and by Turkish businessmen. Among the items of American paper money exhibited at the Arcade Currency Palace, which is assiduously followed by numismatists, the piece that attracted the most attention on the opening night was a USD 1,000 paper bill issued in 1928 and valued at USD 50 million. The total value of the money in Sand›kç›’s collection is estimated to be around USD 500 million. Florida Congressman Alcee L. Hastings sent a proclamation to the opening and thanked Sand›kç› and Detrie. The col-
46 • TurkofAmerica
lection contains paper money with interesting stories dating from 1862 to our day. Sand›kç›, who opened his first antique paper currency store in 2005 in Tarpon Springs, pointed out that the Palm Beach store was designed to present the world jet set with a different kind of service. “The stores on Worth Avenue, Palm Beach’s world famous avenue, are generally built around the same concept. This new investment targets a different group of people and that will draw a new customer group to Pal Beach.” The celebrities living in Palm Beach arrived in private limousines to attend the opening. Guests were met at the entrance with red roses. The guests supported education projects by the Raymond F. Kravis Center by attending a silent auction for products and services of world famous brands. In order to give support to this education project, Ahmet Sand›kç› and Dennis Detrie, partners in the Arcade Currency Palace, donated to the campaign a symbolic check worth USD 10,000. Protection for the money and other valuable
goods exhibited at the opening was provided by two officers from the Palm Beach Police Department. The famous pop star Vanilla Ice visited the Arcade Currency Palace the day before the opening and began to form his first numismatic collection. The opening was attended by guests coming from a variety of states in the USA as well as Turkey, among whom were Ferhan Geylan, owner of the Gilan jewellery, Mahmut Topal and Ömer Günefl, Board Members of the Turkish-American Chamber of Commerce, the businessmen Ismail Hakk› Ercan and Cengiz Ermifller from Florida, George H. Pearlman, Vice President of the American Turkish Council and his wife Elaine, Lincoln McCurdy, Chairman of the Turkish Coalition of America, and local TV channels from Palm Beach and celebrities from Palm Beach high society. WHAT EXPERT SAY ABOUT AHMET SANDIKCI Randy Campbell (Educational Director of Florida United Numismatist): “The first time I
met Ahmet was at the Clearwater Coin show 2005 after I was informed by fellow collectors of his impressive accumulation of United States paper money. Having been so intrigued by it, I flew down to Florida from Ohio that year to meet him in person and view his collection. When a fellow collector and I walked up to Ahmet Sandikci’s table at the Clearwater Coin show, we were simply amazed at the rare perfect quality of Paper Money that he owned. By far it is the most impressive and awe-inspiring Paper Money collection that I have ever seen in my 46+ years of being paid travel around the U.S. After speaking with Ahmet and was just shocked at his knowledge of each and every note that I had to invite him to the Annual Florida United Numismatist Convention to give the first Paper Money Educational speech ever. Ahmet has truly added so much to our community with his amazing and I mean amazing accumulation of Paper Money, that he is World Wide known especially amongst our 150+ million collectors in the U.S. as having only the best of the best.” �
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THE TURKISH EXPORTERS’ ASSEMBLY
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espite the fact that Turkish exports have been rising uninterruptedly since the 1980s, the recent global crisis means that Turkish exporters must now direct their activities towards new outlets. While Turkey exports 55 percent of its total exports-- quite a conspicuous share--to the countries of the European Union, the USA has remained below its potential as a trade partner. Turkey’s exports to the USA for the period January-September 2008 were around 1.5 billion dollars. US imports during the same nine months, on the other hand, were as high as 1.6 trillion dollars. The top 15 exporters sold goods amounting to 1.2 trillion to the USA. The remaining 500 billion dollars worth of goods were sold by the remaining countries, including Turkey. As for the USA, its exports during the same nine-month period were 1.01 trillion dollars. The most important of the reasons why trade relationships between these two countries are so weak, even though the USA is the biggest importer in the world and Turkey is one of the countries with the fastest growing export volume, is the geographical distance between them. Another element is that the USA does not grant Turkey the trade privileges it grants to countries like Israel, Jordan, and Lebanon. During the first nine months of the year, even though it did not export as much as it wanted to the US market, Turkey increased its exports to the United Arab Emirates by 209 percent, to Qatar by 203 percent, to Kuwait by 177 percent, to Lebanon by 121 percent, to South Africa by 112.5 percent, to India by 85 percent, and to China by 57.5 percent. Mehmet Büyükekfli, who was elected Chairman of the Turkish Exporters’ Assembly last September, answered TURKOFAMERICA’s questions. 26 • TurkofAmerica
TURKISH EXPORTERS SHOULD REDISCOVER THE USA
Mehmet Büyükekfli, Chairman of the Turkish Exporters’ Assembly
The top 15 exporters sold goods amounting to 1.2 trillion to the USA. The remaining 500 billion dollars worth of goods were sold by the remaining countries, including Turkey. For the first time in a long period, Turkey's exports declined during October, even if only by a little. Taking the global crisis also into consideration, what are your expectations concerning exports in 2009? We have to face the fact that the global crisis will not end very quickly and that for a time world markets will stagnate. The economies of the EU were already slowing down even before this latest
crisis, which originated in the USA. With the crisis, this slowdown will increase. Remembering that Turkey exports 55 percent of its total to the EU, it becomes obvious that the crisis in the EU will obviously have a negative effect on Turkey’s exports to this area. If Turkey is to stay ahead of the game during this crisis, Turkish companies will have to develop
innovative manufacturing and marketing techniques and, what is more important, Turkey will have to be successful in finding alternative world markets. Why do you think it is that the share of Turkish exports to the biggest market of the world is small even though exporters have been greatly successful and have taken giant strides forwards during the last 10 years? Will this period of crisis make it even more difficult to penetrate the US market? Or might it create new opportunities? Turkey is an important ally of the USA. We are talking about two countries that have cooperated in important political matters. However, the USA and Turkey are not so close geographically and for this reason these two countries are not part of the same integrated regional economic union. Turkey is geographically adjacent to other European countries such as itself and this has led Turkey to joining the EU Customs Union Agreement. At the same time, Turkey’s aim of being part of the EU has also made Turkey turn its attention politically to EU countries in particular. Today Turkey sends more than half of its exports to the EU. However, in the new world order, focusing on a single area may not always provide positive results. This is why, as you yourself have said, Turkish exporters should rediscover the USA, which is the world’s biggest market. There are important opportunities awaiting Turkey in this gigantic country. I think that in the next few years trade between Turkey and the USA will get better. For the first time since September 2001, US imports fell in September 2008 by 12.1 billion dollars, to 211 billion dollars. This was a record. Imports of car components, which is an area of potential interest as far as Turkey’s exports to the USA are concerned, fell to their lowest level. (In Feb-
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ruary 2004 it had been 18.5 billion dollars, and this last September 18.6 billion dollars.) Could it be that the reduction in the consumption of the products of important sectors like textiles and automotives in the USA will lead to sectoral changes in Turkey's export strategy to the USA? Even though Turkey’s exports of textiles and automotive products are high, Turkish industry does not consist solely of these two sectors. We manufacture according to world standards all kinds of industrial products and we export them to world markets. Turkey’s present needs are to develop new marketing strategies for the global world, and to expand into new markets. This is why the reduction in the US imports of textiles and automotive products does not reduce the US market’s importance for Turkey. Quite the opposite, by reminding one of the question of how to export the products of other sectors to the USA, it will encourage Turkey. The prestige of the USA as a country, which had sunk during the last 8 years to its lowest level in almost all countries, has slightly recovered with the election of Obama as president. How did Turkish business circles react to the fact that the son of an immigrant has in these days of global crisis been elected president of the USA? As far as you can see, how will this political change affect the economy during the next years? The election of Obama has been perceived as a victory for the oppressed throughout the world. The same goes for the way it was perceived in Turkey. However, Obama is not a member of the oppressed classes. The portrait we have is that of a Harvard graduate, with a successful past, fully accepted and a member of the upper classes. This is why I do not think that we should be expecting great changes in America's political and economic policies during the Obama presidency.
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Exports make Turkey function. Does the devaluation of the Turkish Lira against the dollar in this period of crisis make exporters the hope of Turkey? The fall in the value of the Turkish Lira is good news for Turkish exports. The fact that the NTL had been overvalued for a long time had led Turkish manufacturers to produce with expensive NTL and to sell with cheap foreign exchange. Naturally enough, this kind of a situation minimizes profitability. A more realistic valuation of the prices of foreign exchange will motivate our exporters. Also because an appreciation of foreign exchange will reduce Turkey’s imports, thus contributing favorably to local manufacture. Recently, the low value of foreign exchange had led manufacturers to get their raw materials and semi-finished products from countries other than Turkey, and this created problems for local providers. With the present level of foreign exchange values, this disadvantage will be partially compensated for. However, there is another point besides the revaluation of foreign exchange. And that is that for exporters it is the stability of foreign exchange prices that counts rather than their absolute values. Just as in all other financial markets, speculative movements also exist in foreign exchange markets, and they will always exist. However, excessive fluctuations in foreign exchange markets make planning more difficult for the real sector. Steps taken to alleviate this problem will eliminate the unpredictability facing exporters, and will let them be more optimistic about the future. In 2009, will Turkey's small and medium scale enterprises, which operate thanks to bank credits, face the danger of the banks refu-
sing to provide loans or raising interest rates? What kind of a financial environment will exporting companies face next year? The probability of experiencing problems obtaining loans is rather high in the case of the real sector. It is even being said that these problems have already begun. The minimization of the effects of the crisis requires the strengthening of credit resources for our real sector, not their reduction. It is said by many that Turkey’s banking sector is strong, and this makes us think that the banking sector will understand our problems. It is very important for our exporters that extra resources be transferred to Eximbank to strengthen its capital structure, and that the limits concerning the credits that companies can get from Eximbank be raised. In addition to this, it would be good if resources equivalent to 1% of total yearly exports were transferred to the Price Support and Stability Fund. The deferral of social security premiums and of other similar contributions for companies that do not fire employees in the near future, the freezing of energy prices until the economy is back to normal, and the introduction of advantages for the payment of energy bills to industrialists would all be welcome as palliatives. Is it possible that the fact that the economy of the European Union, which is Turkey's greatest export partner, is stagnant, that Japan is facing the same situation, and that the same goes for the USA, will make it impossible for us to find alternative markets? Can you say anything about when we will get back to normal? Every crisis certainly includes opportunities. For example, the cri-
sis will mean that European companies will order in smaller quantities. It is at this point that our geographical proximity to Europe and our logistical advantages will become important. What I mean is that European countries will prefer to order from Turkey, when the quantities are smaller, rather than from the countries of the Middle and Far East, so as to be able to get better quality products in a shorter time. This is why in 2009 there will be advantageous situations for some of our sectors, and especially for the textile and garment making sectors. In addition to this, we have also got to increase our efforts to find alternative markets. Recently we have seen that Turkish exporters have become increasingly interested in neighboring countries and regions. The African market has become a center of this interest. For example, during the first 9 months of the year, Turkey increased its exports to the United Arab Emirates by 209 percent, to Qatar by 203 percent, to Kuwait by 177 percent, to Lebanon by 121 percent, to South Africa by 112.5 percent, to India by 85 percent, and to China by 57.5 percent. Consequently, we can say that in these days of crisis we have to expect that our main markets will shrink, and focus more on these rising markets. If instead of worrying about the crisis we can take pro-active steps and turn our energies towards new markets, I am confident that nothing will happen to us in this crisis. However, it is not easy to fix an exact date, because this crisis in not centered in Turkey. Consequently, as developed economies continue to try to find solutions for this crisis that they caused, we shall have to act fast and to try to find solutions as quickly as possible.� TurkofAmerica • 27
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ADVERTORIAL
USING TURKISH HAZELNUTS ADDS VALUE TO PRODUCTS Americans eat an average of less than 1 ounce of hazelnuts each year. In comparison, the Swiss consume more than 4.4 pounds per person and Germans consume more than 2 pounds. ccording to historical re-
Acords, hazelnuts were being
produced along the southern shores of the Black Sea in today’s Turkey as far back as 2300 years ago and Turkey has been exporting these nuts to other countries for the past 600 years. Turkey is one of the handful of countries in the world that has all of the climatic conditions amenable to the raising of hazelnuts. It also produces and exports approximately 75% of world hazelnut consumption. It is thanks to the high quality of Turkish hazelnuts that this product is so popular and so sought after. Turkey has an annual 250,000 ton export of shelled hazelnuts with 80-85% of these products going directly to the EU. Europe has a broad use for 50 • TurkofAmerica
these hazelnuts, adding them to chocolate products, confectionaries, pastries and ice-cream. In addition to this, thanks to the efforts of the Hazelnut Promotion Group in markets that it has been targeting, the use of hazelnuts is also growing in other markets outside of Europe. Currently, Turkey exports about 7000 tons of hazelnuts annually to the US, but it is also noted that, even though North America also produces hazelnuts, the consumption of hazelnuts has not yet reached targeted levels in America. This is also despite the fact that consumer surveys carried out in the US have demonstrated that US consumers are interested in hazelnuts. A total of 70% of the consumers surveyed said that they believed that hazelnuts were beneficial to health, 40% reported that they snacked on hazelnuts once
a week, 33% said they consumed hazelnuts weekly as additives to other foods, and 86% reported that they liked the taste of hazelnuts. Spurred on by the positive results of the consumer surveys, advertising and promotional campaigns were launched in the USA and these activities continued throughout 2007 and 2008. These activities were carried out with a three-pronged strategy approach: marketing strategies directed towards the food industry and marketing and nutritional marketing strategies directed towards consumers. THE FOOD INDUSTRY MARKETING STRATEGY The Hazelnut Promotion Group, with its “Consumer Research Program” is showing the marketing people that the hazelnut is
suited to the tastes of the American consumer. They are working on breaking down the misconception that the hazelnut is not widely accepted in the American food sector. The Hazelnut Promotion Group tries to encourage the American food companies to create new products with hazelnuts by providing special information regarding the hazelnut. The Promotion Group has signed off on a wide-ranging market research project, aiming to gain a database that would prove that American consumers like hazelnuts. A research project was set up in order to create an industry profile and to increase hazelnut consumption. The data collected from the two research projects were printed in a brochure. Within the framework of food company meeting tactics, to give messages of hazelnut use to companies that produce chocolate and bakery products, and in order to raise the awareness of the hazelnut in the American
Turk Of America 50-51-52-53
market, as well as the success of hazelnut products, the group has held meetings with leading firms in the food sector. In partnership with leading companies that use hazelnuts, ads were made and printed in the leading magazines of the sector. Within the framework of Commercial Media, commercial work was executed with the largest firms in the food sector, along with various advertisements about the hazelnut, recipes and articles were published in the following commercial magazines, which have very high circulations, reaching over 2 million readers: New Products Magazine, Baking Buyer, Food Management, Snack Food Wholesale Bakery, Candy Industry, and Manufacturing Confectioner. Within the framework of such important Commercial Trade Shows in the food sector as the Philadelphia Candy Show, Fancy Food Show, Retail Confectioners International 84th Annual Convention, All Candy Expo, Institute Of Food Technologies, International Baking Industry Exposition, International Foodservice Editorial Council, Food & Culinary Professionals, International Association Of Culinary Professionals, Research Chef Association Annual Conference, Pennsylvania Manufacturing Confectioners Association and Copia Chef, the interest in the hazelnut was stirred through conferences and various activities. The Hazelnut Council, which was created in 1997, has been serving ever since in order to provide resources to food sector professionals, with their formal website that provides up to date statistics regarding worldwide hazelnut production, hazelnut production in Turkey and Oregon, supply and demand data, technique brochures, supply database and recipes using hazel-
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nuts, and additionally an online sample order form for industry purposes. The Hazelnut Council publishes an e-newspaper called Nuttrends as part of a food products e-newspaper framework, which publishes information on matters such as new trends in the food industry, hazelnut research, new hazelnut product news, consumer statistics and news on hazelnut use. Within the framework of partnership, working with important and leading companies in the food sector, and getting consumers to try hazelnuts or products containing hazelnuts, two presentations were held in the winter and the summer with the Au Bon Pain company, which holds 230 businesses in the United States and Asia. In the winter presentation, the “Hazelnut Fudge Cookie” and “Hazelnut Cream Pastry” products, and in the summer presentation the “Hazelnut Monkey Bread”, “Hazelnut Salad Dressing” and a new product Au Bon Pain product, hazelnut iced coffee, were introduced in 43 cafes in the New York City, Chicago, Boston, and Washington D.C. markets. Throughout the presentations positive feedback was received from consumers through the use of comment cards. CONSUMER MARKETING STRATEGY Within this strategy, in order to raise the awareness that already exists in Europe that the hazelnut is a perfect complement to chocolate, articles and hazelnut recipes were published in newspapers. Additionally, a series of recipe cards were printed in order to reach the consumer population. As long as companies continued to use hazelnuts, they were supported in creating new products and their demands for hazelnut samples from the Council were met through trade shows, firm meetings,
The Hazelnut Promotion Group started its activities in the untied States in 1997. Since 2002 the Hazelnut Promotion Group has been working with public relations and promotion firms to identify the place and the importance of the hazelnut in the American market through various sets of research and surveys. The Hazelnut Promotion Group carried out a consumer survey among the food sector regulators in order to “show that the hazelnut is suited to the tastes of the American consumer” and worked with focus groups in order to identify consumer trends. Special presentation kits were prepared for meetings held with firms. A media tour was done regarding the benefits of using the hazelnut. Advertisements were placed in food sector magazines and fairs were attended. In the Hazelnut Council website; there are news items regarding the hazelnut in the e-newspaper “Nuttrend”, and recipe cards were prepared, aimed at the consumer. The Hazelnut Promotion Group won the “Perfection” award in the United States from the International Association of Business Communicators. The Hazelnut Council, which executes advertisement and presentations for the Hazelnut Promotion Group, won an award with its project "Hazelnuts: Creating a Compelling Food Trend”. and through correspondence and the website. Eight hazelnut recipes were emailed to editors in order to suggest new ideas for use of the hazelnut. Partnerships were formed with 25 important bloggers who write personal blogs and through the use of the media over 275 million consumers were reached with new ideas and messages regarding hazelnuts, nuts, health/fitness, chocolate/candy and general nutritional information. The recipes were based on 4 different subjects; hazelnuts (story of, sector, properties), healthy lifestyles, superfoods and general knowledge. Within the framework of Spokesperson Promotions, in order to introduce the hazelnut with a famous face, a media blitz was realized with chef Curtis Stone in New York, in which he talked about the benefits of cooking with hazelnuts. A clip was broadcast on Health Home Report and Direct TV about cooking with hazelnuts. The conversations with various editors regarding the hazelnut was published in Good Housekeeping, Family
Circle, Elle, Fitness, Women’s Health, Quick and Simple and Prevention magazines, publications with a combined circulation of 16 million, reaching more than 40 million readers. Additionally, the editors of the best consumer magazines did 14 radio spots regarding the use of hazelnuts in home cooking and reached 9 million listeners. Recipes and research news were sent to Women’s Health and Elle magazines. NUTRITIONAL MARKETING STRATEGY Within this particular strategy a database was created on the benefits of the hazelnut on health. Scientific research is being done on the health benefits of the hazelnut and of the phenolic content within the membrane of the hazelnut in order to increase the interest of consumers in the use of the hazelnut and to increase the interest of the industries, which could use the hazelnut in their products. Participation in the American Dietetic Association Show (ADA) in order to reach nutrition and health experts to help spread the word of the health benefits of the hazelnut was executed.� TurkofAmerica • 51
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TURKISH JEWELERS INDUSTRY
“TURKISH JEWELERS’ TARGET: TO CAPTURE ITALY’S MOST IMPORTANT ADVANTAGE THROUGH BRANDING” “If “If we we can can succeed succeed in in this this as as aa sector, sector, we we aim aim to to capture capture Italy’s Italy’s most most important important advantage. advantage. When When we we succeed succeed in in this, this, our our production production and and export export totals totals will will increase increase much much faster faster than than our our exports.” exports.”
T
he jewelry sector, which is one of the sectors most ambitious to make its landing as Turkey’s global brand, realized exports of $2.6 billion in 2007. Representatives of the sector have declared their goal of becoming the global leader by reaching exports of $10 billion in 10 years. According to ‹mam Alt›nbafl, president of the Istanbul Precious Minerals and Jewelry Exporters’ Association (‹DMM‹B), which aims for 25% growth in the next year, “My biggest expectation is for 2010 and after. I believe that growth will be at its lowest in 2009 and that between 2010-2012 there will be an explosion.” In 2007, the American jewelry and precious stones industry (6digit NAICS code 339914) made $1.7 billion worth of imports from 104 countries. The American market reached a sum of $2.3 billion in 2007. It is expected that Turkey’s jewelry exports to the American market will reach a total of $200 million worth of exports. What are the sector’s targets for its 10-year projections? 54 • TurkofAmerica
In the past 15 years, by showing itself to be high level, our jewelry sector has made an important place for itself in the world. In the production of gold jewelry in particular, we are in the position of being the country with the largest share in the marketplace after Italy. There is also a rapid growth in the production of jewelry containing diamonds and precious stones, which is tied to increasing demand. Looking at the period ahead of us, it’s clear that we are not fortunate enough to have competition based on cheap inputs. This is because our in our sector more than 80% of the factors determining the cost are based on import inputs. As for labor costs, which are as important as technology in production, we have almost caught up with European standards. For now, the main criteria in our exports is the amount of labor that
goes into the product. As long as we do not change this, because of rising labor costs there’s no doubt that we will feel increasing pressure to sell more merchandise that requires less labor to produce. For this reason, the future of our sector is closely connected to its ability to rapidly transform itself in order to continue accelerating. Put another way, the sector is facing a need to move into a higher class by adding to its accumulated past and advantages. What needs to be done in order to achieve this?
It is of vital importance to reach the necessary maturity in the areas of design, product development, logistics, marketing, and customer service in order to achieve a sustainable competitive power. The process of branding plays an important role in our ability to succeed in these areas. This is the new goal for our country in the field of jewelry. Branding, by making ourselves different from our competitors in terms of design, production, service and communication, is a very important step in gaining customer preference. In the period ahead, the force propelling our exports is going to be our branding. What benefits will branding bring to the sector? If we can succeed in this as a sector, we aim to capture Italy’s most important advantage. When we succeed in this, our production and export totals will increase much faster than our exports. As a sector, we have a goal of becoming the global leader by reaching exports of $10 billion in 10 years. In the period ahead, the increase of retail stores abroad, tourism sales, and the suitcase trade, which still accounts for a significant portion, will all have an important share in this. While this is a very ambitious target, it will become reachable with sectoral transformations and with the development projects we are going to begin. We know that nothing can be obtained without certain costs. The latest crisis will cause consumers to spend less. How will products in the luxury-consumption category, like jewelry, be affected by this crisis? Among luxury consumer goods, we can say that jewelry is the only thing that doesn’t lose value after it’s bought. For example, readymade clothing, accessories, and electronic products, which become worn out and go out of style,
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quickly lose their value and there is almost no gain to be had in reselling them. For that reason, during economic crises the demand for that type of product decreases, for people have less of what is called “disposable money” that can be spent wastefully. But jewelry, because it’s made of precious metals and stones, has a special value as a form of investment, along with its esthetic qualities. For this reason, in the face of the psychological and social depression that comes during times of crisis, there is a strong probability that people will be inclined towards rewarding themselves and that rather than buying other products, they will buy jewelry as gifts that are lasting and do not lose their value. Buying a present of jewelry for family members is more appealing because it will remain as something with value that can be later put towards the family budget if money is needed. Therefore, I am not of the opinion that our sector will be affected as negatively as other luxury and consumer sectors. There are many Turkish companies now active in the American market. Because of problems stemming from competition and differences in the markets, some of them have had to close their offices and return to Turkey. Do you have a general briefing given by your association, or any advice that you would give companies that are starting to do business in or export products to the U.S.? Has an association of the strongest Turkish exporters considered opening a similar sort of information or advertising office in the U.S.? As you know, on its side the U.S. applies its own Generalized System of Preferences (GSP) towards developing and underdeveloped countries. The gold production sector in our country benefits from this system as it allows the possibility of importing goods into the U.S. without customs fees. However, at certain points the
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U.S. removes from this system countries that have passed the criteria that it has set. For example, during a reexamination period in 2007, it was decided that gold products in the 71131950 GT‹P category would be removed from this system as of July 2008. As a association, we organized educational seminars for our exporters so that they could make better use of this vital system, and those seminars will be continued. Moreover, in 2008 our association, as a national organization of exporters, took part in some of the most prestigious jewelry fairs, including the JCK Show in Las Vegas, the Hong Kong Jewelry and Watch Fair, and the Macau Jewelry and Watch Fair. Firms in the sector were educated in design with the goal of strengthening their competitive edge. The question of our association opening an office in the U.S. is one that will be evaluated in terms of the demand in this area. Certainly our association will use all the possibilities that it has to help our sector. Does the high competition between firms doing business abroad weaken the prestige of Turkish products in the market? What should be done to prevent this? The main reason for this competition is that we used to compete in a very narrow field. And, after all, competition among like firms is the natural outcome of trying to use cheap labor to get a foothold in the market. As I said earlier, by creating advantages for continued activities and high yields, our goal is to develop ways for Turkish companies to coexist and to complete each other as partners, rather than as competitors. As an association it is not possible for us to apply commands by force. What needs to be done and what we are focusing on is to equip firms with the weapons to protect themselves from debilitating price competition.
Will the U.S. first of all change place in your list of markets due to the crisis? Will imports go into a different expansion because of the crisis? Even in the worst scenario, the U.S. is the world’s largest market for gold and diamonds. The shortterm stagnation and shrinking will not be enough to change this fact. However, Middle Eastern companies do have an edge in times like this when the market turns towards lower caret and lighter products. For that reason we can send what are called “price point” cheap products to the upper-middle segment and make up for our losses in the lower market. In the end the U.S. market is not one that is entered with a short-term approach. Whatever the conditions are, it’s a market that we will remain in longterm by adapting. Are any of your member companies thinking of production in America, getting rid of exports all together and deciding to be part of domestic market? In our sector, there are many companies wanting to bring the production experience that they have gained in our country to other countries and there are entrepreneurs that have already started this. The same thing is true for the U.S. You should not doubt that there will be Turkish firms that will carry out production under the necessary and appropriate conditions there. Furthermore, the owners of many small and mediumsized businesses that are in production in the U.S. have Anatolian roots. Gülaylar, Atasay, and Alt›nbafl are among the first Turkish jewelry companies that come to mind in the U.S. While there’s a ruthless race to open stores in Turkey, in the U.S. in particular companies act more carefully on the issue of opening stores. What are the reasons for this? The reason for this is that most Turkish companies are not yet
strong enough to provide merchandise to big distributors in the U.S. on a large scale, and there is not enough American appreciation of Turkish jewelry. In a meeting we had, the WGC president said that it was thought by American consumers that all of the gold jewelry in the country had come from Italy. In such a big market as the U.S., rather than being dreamers and adventurers, it’s more correct to take action by considering the consumers’ brand sensitivity. For this reason, not counting individual enterprises, an option that could be considered by Turkish jewelry stores is to buy existing chains of stores in the U.S., particularly in the crisis environment in which we find ourselves. What are your expectations for exports in terms of numbers to the U.S. market for the end of 2008 and the year 2009? For 2008, it appears that the U.S. has given its place to the UAE. By the end of the year we will have succeeded in reaching exports of $200 million. In the next year, if we consider the existing financial crisis, we can aim for an increase of 25%. My biggest expectation is for 2010 and after. I believe that growth will be at its lowest in 2009 and that between 20102012 there will be an explosion. Our main preparations should be for that period. The crisis period presents us with a test environment in which we can determine our shortcomings. � TurkofAmerica • 55
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TURKISH TEXTILE EMPLOYERS' ASSOCIATION – ADVERTORIAL
THE WORLD’S SECOND LARGEST TEXTILE INVESTOR:
THE TURKISH TEXTILE SECTOR
Halit Narin, President of Turkish Textile Employers' Association.
Of its approximately $25 billion worth of exports of textile and ready-made clothing products, Turkey, in its position as the U.S.’s second largest supplier, sends approximately 70% of its exports to this region. ith the export figures it
W has reached and its qu-
alified employment capacity, the Turkish textile sector is one of most important players in the world textile sector. After China, Turkey is the largest textile investor oriented towards textile machines in the world. It is estimated that investments in the textile and ready-made clothing sectors have reached a total of $150 billion. 52 • TurkofAmerica
In Turkey, which has the world’s 17th largest economy and the 6th largest economy in Europe, the textile and ready-made clothing sector holds a very important share of overall industry and is one of the country’s locomotive sectors. Of its approximately $25 billion worth of exports of textile and ready-made clothing products, Turkey, in its position as the U.S.’s second
largest supplier, sends approximately 70% of its exports to this region. After pressure from lower costs in the Far East, the Turkish textile and ready-made clothing sector underwent a serious period of transformation and rather than basic products it now concentrates its energy on the manufacture of high-tech, innovative products.
There are approximately 43,000 companies operating in the sector, of which 25% are active exporters. Of Turkey’s 500 largest manufacturing establishments, 20% of them are operating in the textile and ready-made clothing sector. Approximately 20% of the companies that are operating with foreign capital in Turkey’s manufacturing industry
R:
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are in the textile and readymade clothing sector. The Turkish textile and readymade clothing sector, with its integrated structure that extends from cotton to thread, thread to fabric, and fabric to ready-to-wear clothing; experienced manpower on every level; a structure that is innovative and open to change; a large domestic market and a strategic geographic position, will continue to be one of the world’s most important production and trade centers in the future as it is today. SINCE 1962 Turkish Textile Employers' Association (TTSIS) has been established in 1962 to legally and professionally protect the social and financial rights of its members. The main objectives of the Association are to create unity in the industry by facilitating collaborations among members, to financially support their professional activities and to invest in business ventures to raise the level of productivity and efficiency in the industry. In addition the Association provides legal representation for its members and negotiates labor agreements, providing various domestic and international services for textile employers to maintain the best performance at their workplace. TTSIS prides in being the first employers' association in Turkey to have negotiated labor agreements with trade unions. This experience has helped the association keep a pulse on the sensitivities of the labor force and the association has been able to consider their issues at every new period and phase in the industry. Believing in creating sustainability through social dialogue, Turkish Textile Employers' Association has bu-
ilt a solid reputation among all involved parties in the sector. THE MEMBER OF INTERNATIONAL ORGANIZATIONS TTSIS works to find solutions to common problems in the industry, to protect the legal and social rights of its members and improve the industry standards to be able to better respond to the legal and technical demands of the modern business life. In order to present the significance of the Turkish textile sector and to be able to protect it against unfair competition, the Association is registered with various international platforms. TTSIS has seen the importance of international callaboration
and therefore represents the industry not only at national level but also at international level as well. We are members of the International Textile Manufacturers’ Federation-ITMF, International Wool Textile Organisation-IWTO, the European Textile and Clothing Organization-EURATEX and the European Committee of the Cotton and Allied Textile Industries of the E.U.-EUROCOTON. TTSIS believes in the importance of building a generation of well-trained individuals and participates in many education and research programs that support the intellectual and professional development in Turkey. In light of this mission, the association organizes seminars, conducts various research projects and publishes
reports to build collaboration between the academia and the industry. The Association announces its activities and services by way of its own publications and receives regular coverage at numerous media outlets in the country. Additionally the Association is subscribed to various national and international media and keeps a tab at all kinds of regional and global developments in the industry. TTSIS gives utmost importance to the promotion of Turkey and the Turkish textile industry. The Association is also open to developing more international collaborations, meeting potential customers and building new strategic partnerships. �
Turkish Textile Employers' Association board members are together.
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A GLANCE AT THE U.S. JEWELRY INDUSTRY
IS A PIECE OF THE GOOD LIFE HURTING? In 2006, there were nearly 1,700 manufacturers of precious metal jewelry in an industry with over 32,000 employees. The U.S. had 15 percent of the worldwide sales in this category. the industry in 2007 was $23.3 billion USD. According to the U.S. Census Bureau, jewelry, watch, precious stone, and precious metal wholesalers represented approximately 12,936 establishments in the mid-2000s. Combined, they employed some 61,411 people with an annual payroll of $2 billion, most of whom worked in New York, California, and Texas.
Located in prestigious Monmouth County New Jersey's largest jewelry showroom, Marlboro Diamond Plaza, in Marlboro, NJ.
S
ales of luxury goods in the U.S. are expected to total $72.5 billion in 2008, according to Bain & Co., a Bostonbased retail consulting firm. Worldwide, sales of luxury goods are expected to grow 3 percent this year to $230.7 billion, Bain predicted last October. That is down from growth of 6.5 percent last year and 9 percent in 2006. The jewelry industry is one of the indispensable parts of luxury goods. The US jewelry manufacturing industry includes about 1,900 companies and the 50 largest firms account for 60 percent of industry revenue. However, nearly two-thirds of companies have fewer than five employees. Consumer confidence in the luxury market dropped in the third quarter to its lowest level 56 â&#x20AC;˘ TurkofAmerica
since Unity Marketing began tracking it in December 2003, but according to the Elite Traveler - Prince & Associates, about three-quarters of families with a net worth of $1 million to $10 million said in a survey that they would spend less in the final three months of this year than last year on luxury items. Less than 1 percent said they would spend more. 58 percent of survey participants said they planned to spend an average of $2,400 for jewelry and watches. INDUSTRY OUTLOOK In 2006, there were nearly 1,700 manufacturers of precious metal jewelry in an industry with over 32,000 employees. The U.S. had 15 percent of the worldwide sales in this category. Manufacturers face stea-
dily rising costs in precious metals and jewels, especially diamonds. The value of shipments grew from $5.26 billion in 1998 to $8.62 billion in 2003. Industry revenue for 2005 was approximately $7.18 billion, with a gross profit of 33.16 percent, or $2.38 billion. According to the report prepared by Global Markets Direct, the industry's revenue for the year 2007 was approximately $9.7 billion USD, with an estimated gross profit of 27.45%. Import was valued at $32.6 billion USD, from 160 countries. The industry also exported $19.0 billion USD worth of merchandise to 166 countries. Adding import value to and subtracting export value from the industry's shipment value, the total domestic demand for
The total number of employees reached 61,411. The average sales per establishment were $1.1 million. The majority of the establishments were small, employing fewer than five people. Jewelry, the largest sector of the industry, dominated more than 37 percent of the market. The jewelry and precious stones category numbered 3,435 establishments and controlled more than 26 percent of the market. Diamonds represented 1,327 establishments and controlled about 10 percent of the market. The main markets for U.S. exports of precious metal jewelry were Switzerland, Japan, and Thailand. In the late 1990s, the United States was Japan's fourth-largest overseas supplier of jewelry, with 15.3 percent of its import market, following Hong Kong (23.1 percent), Italy (18.8 percent), and Thailand (17.1 percent), and leading France (8.6 percent). Asia is projected to be the biggest consumer of U.S.-manufactured jewelry from 2007 through 2015. JEWELRY DEMAND According to the World Gold
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Council, the third quarter of 2008 saw a record $18 billion in consumer demand for gold jewelry, with buyers returning to the market on lower price points, around and below $800. The biggest contributor to the positive trend was Indi-
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a, which witnessed a rise of 65 percent in value, or 40 tons, relative to the prior year’s levels, with the Middle East, Indonesia, and China all enjoying rises of more than 40 percent in value or 10 percent in tonnage.
There were however, strong declines in Western markets with the U.S. down 9 percent in value and 29 percent in tons, and the U.K. down 5 percent in value and 26 percent in tons due to the overall decline in the retail market.
Source Citation: "Jewelry, Precious Me tal." Encyclopedia of American Industri es. Gale, 2008. Reproduced in Business and Company Resource Center. Far mington
Hills,
Mich.:Gale
Group.
2008., jckonline.com.�
COMPANY NEWS
The current global crisis is affecting luxury department stores, with Saks, Nordstrom and Neiman posting disappointing results. The high-end department store chain Saks lost $42.8 million, or 31 cents a share, for the three months that ended Nov. 1, compared with a profit of $21.6 million, or 14 cents a share, for the period a year ago. Sales at Neiman Marcus, the luxury department store, dropped nearly 28 percent in October compared with the same month last year. Sales fell 20 percent at Abercrombie & Fitch, nearly 17 percent at Saks, 16 percent at The Gap and nearly that much at Nordstrom.
COST OF DOING BUSINESS SURVEY
Jewelers of America, the national association of retail jewelers, has released the JA 2008 Cost of Doing Business Survey, which analyzes member stores’ financial data from 2007. For Jewelers of America members, 2007 produced mixed results. There was growth among designer/custom, independent high-end, and chain retailers, while mid-range independents saw real declines. Overall growth was essentially flat for the first time since 2001 and 2002, coming in at -0.3% on average (down from 4.1% in 2006). Designer/custom retailers fared best with a 6.1% sales increase over 2006. Independent high-end retailers saw a growth of 3.5%, but that was down from 2006, when the category was up 7.4%. Chain stores experienced a 2.5% sales growth, while mid-range retailers were down 1.7% compared to 2006 sales. Profitability was down in 2007, with specialty retailers experiencing a median 4.6% net profit as a percent of net sales compared to last year’s 5.3%. Gross margins were 48.7%, down from an increase of 49.1% in 2006.
NEW TREND: CYBER MONDAY
Cyber Monday, the ceremonial kickoff to the online holiday shopping season, debuts thousands of promotions to show what Web sites have to offer this holiday season, according to Shop.org. The online shopping day was held on the Monday after Thanksgiving (Dec. 1 this year). Nearly 84 percent of retailers had a special promotion for Cyber Monday, up from 72.2 percent last year, according to the eHoliday Survey, conducted for Shop.org this fall by Shopzilla. About 85 million Americans were expected to do some online shopping on Monday. That figure is up 18% from this day last year, from 72.0 million in 2007 and 60.7 million in 2006, according to a Shop.org survey.
ONLINE HOLIDAY SPENDING
Approximately $8.2 billion (excluding travel) has been spent online so far for the November – December holiday season, marking a 4-percent decline versus the corresponding days last year, according to comScore. ComScore is forecasting that holiday online retail spending will be flat versus a year ago and significantly lower than last year’s growth rate of 19 percent and below the retail e-commerce growth rate of 9 percent ($102 billion) that has been observed for 2008 through October.
AN ASSOCIATION
The New York State Jewelers Association was established in 1909 and is based in New York City. With over 700 members from Montauk to Buffalo, the NYSJA represents the top retailers, designers, suppliers and manufacturers in New York City—the jewelry capital of the world. (newyorkjewelers.org)
BLACK FRIDAY
According to the National Retail Federation's 2008 Black Friday Weekend survey, conducted by BIGresearch, more than 172 million shoppers visited stores and websites over Black Friday weekend, up from 147 million shoppers last year. Shoppers spent an average of $372.57 on Black Friday weekend, up 7.2 percent over last year’s $347.55. Total spending reached an estimated $41.0 billion. NRF represents an industry with more than 1.6 million U.S. retail establishments, more than 24 million employees - about one in five American workers - and 2007 sales of $4.5 trillion. As the industry umbrella group, NRF also represents more than 100 state, national, and international retail associations. www.nrf.com
LEADERS IN TOTAL REVENUE OF JEWELRY RETAILERS / (ttm)
Signet Jewelers Ltd Tiffany & Co. Zale Corp. Blue Nile, Inc. DGSE Companies, Inc
$3.6 B $3.1 B $2.1 B $321.4 M $107.0 M
Source: yahoo finance TurkofAmerica • 57
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PORT ISBI – ADVERTORIAL
A NEW FAVORITE FOR INVESTORS: PORTISBI AND GAZIMAGUSA PORT ZONE sa Free Port and Zone, which is currently active, is approximately 478,000 mÇ. The aim is for 80 companies to be added as of 2010 to the currently existing 45 companies and intensive promotional activities are being conducted with this objective. Taking into consideration the geopolitical advantages of TRNC, the zone is expected to become a center from which it will be possible to conduct direct trade with all countries located within an area of 600 km. The sectors and countries targeted initially are as follows:
Metin Yalç›n PortISBI, Director
ith the passing of Law No.
W14/77, in 1978 a 480,000
square meter Free Port and Zone was established as part of the Gazimagusa Port in Cyprus. The enterprise was financed completely by the state and it has been operated since then by the state, mainly as a port.
PortISBI – Cyprus Free Zone & Marine Logistics Services, Ltd – was authorized in 2008 by the government of the Turkish Republic of North Cyprus to develop the Gazimagusa free port and zone and integrate it with the economy, on the basis of a build-operate-transfer model. PortISBI is a private company that carries out its investments with its own enterprise capital. Although there are currently no
60 • TurkofAmerica
plans for an additional partnership within the project, due to foreign investors’ increasing interest in the project, it seems highly probable that a foreign partnership will take place in the future.
THE OBJECTIVE OF PORTISBI The Gazimagusa Free Port and Zone is an active free zone open to investment, with an existing infrastructure. The first phase of the process, that is to say the investment phase for the 130,000 mÇ area to be developed, will begin at the end of October 2008. Even in its present state, the free port zone offers facilities that can be immediately put into operation by investors. The utilizable area of the Magu-
Target Sectors 1. Construction and subsidiary industries 2. Hotel and tourism logistics 3. Yacht construction, maintenance, repairs and logistics 4. Commercial and individual land vehicles, spare part logistics 5. Software and technology development companies
needed by companies wishing to operate within the Gazimagusa Free Port and Zone. All services required by a company wishing to operate within the free zone, including during a company’s founding phase, the planning of its operation model, the follow-up of its founding processes and mediation and logistic services related to trade, will therefore be provided centrally. Speedy and efficient logistical services (transportation services within and outside ships, forklift handling, packaging and stock management services) are also among the most important and efficient services offered by PortISBI.
Target countries 1. Turkey 2. Israel 3. Great Britain 4. UAE and countries of the Arabian peninsula
THE ADVANTAGES OF THE GAZIMAGUSA FREE PORT AND ZONE Free zones are established in developing countries all over the world with the aim of developing the country’s economy via financial and commercial incentives. The free zone incentives accorded to Turkey at the time of the initial development of free zones, and which have recently partly ended because of the EU harmonization process, are still valid for TRNC.
As distinct from most known free zone models, PortISBI is a company that centrally coordinates all services that may be
Significant tax incentives are available at PortISBI Gazimagusa Free Port and Zone, with the aim of drawing investors to
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Northern Cyprus. All local and foreign companies within this zone can benefit from the following incentives, in accordance with the Law on Free Ports and Zones in the TRNC: 1. The income obtained from operations and activities by producers within the Free Port and Zone is 100% exempt from Corporate and Income Taxes. 2. All of the income obtained from operations and activities by investors other than producers is 100% exempt from Corporate and Income Taxes, on condition that commercial products and services are not sold to the TRNC. 3. Activities within the zone are exempt from Customs Taxes, VAT and indirect taxes. 4. The employment of foreign experts, engineers and technical personnel is permitted. 5. Free income and capital can be transferred freely, without being subject to foreign exchange legislation. 6. All operations and all payments, such as salaries, fees and concessions, can be carried out with internationally valid foreign currencies.
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THE IMPORTANCE OF TRNC FROM A LOGISTICAL PERSPECTIVE Owing to its perfect geographical position at the crossroads of the East Mediterranean commercial sea traffic and to its proximity to the countries of the Mediterranean and of the Arabian peninsula, Northern Cyprus is an area that many countries wish to make use of in their commercial logistics. This aspect of the country frequently comes up in many regional collaboration meetings. Although TRNC is very important from the point of view of the areas appropriate for transit trade, unfortunately, because of the political situation that has in question until recently there is very little awareness regarding it. PortISBI will act as a catalyst in the integration of TRNC into world trade in the near future. The main problem encountered by both North Cypriot and Turkish companies can be said to be the “trade embargo and limitations” lying behind the economic conjuncture of TRNC. The expectations that this state of uncertainty, which has lasted for many years, will be resolved, at least from an economic point of view, have increased as a result of recent developments. In this sense, there are expecta-
tions that the incentives and advantages provided by the free zone, complemented by high quality services, will make a big difference for companies competing in the international conjuncture. The companies to benefit the most from the development of the economy of TRNC will be Turkish companies and their partners. When we look at Cyprus’s historical development, we see that the Gazimagusa settlement in particular constituted an important logistical transition point and that it was one of the most important stops on the Silk Road. Following the planned developments, we will witness the island of Cyprus, along with the Gazimagusa Free Port and Zone project in TRNC, regaining its important historical role. Following the positive contributions made by the Turkish side in Cyprus to the UN solution plan, their having said “yes” in the referendum held in April 2004 and the fact that the EU Commission approved TRNC’s trade legislation directly, Northern Cyprus has become a favorite venue for international investors. In October 2007 the EU
Commission also stated that there were no international bans on the ports of Northern Cyprus, thereby declaring that the limitations that have been implemented unilaterally until the present were not valid. All these developments will positively affect TRNC’s integration with global trade. The incentives and advantages offered by the Free Zone, on the other hand, will draw foreign investment to the economy of Northern Cyprus, thus enabling the development of an economy based on trade and on small sized production.�
Cyprus Free Zone & Marine Logistics Services Ltd. Headquarters: Gazi Magusa Free Port and Zone - TRNC Liaison Office: Osman Pafla Cad. Server Somuncuo¤lu Sk. Ya¤c›o¤lu ‹fl Han› K.2 D.2, Lefkofla Turkish Republic of Northern Cyprus Tel Fax
: +90 392 228 61 26 : +90 392 228 62 39
Web : www.portisbi.com E-mail: info@portisbi.com
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WASHINGTON BACKSTAGE Ali Günertem agunertem@turkofamerica.com
I
n August 2000, United States President Bill Clinton was the keynote speaker at a charity event held in order to get Congress member Richard Gephardt reelected for another term. Bill Clinton came to this event, held in Washington DC at the Mayflower Hotel, fresh from the Israeli and Palestinian Peace Talks with Yasser Arafat and Ehud Barak. In fact, he was a little late because of that. I was among those there who was waiting impatiently for President Clinton. In his speech President Clinton spoke about the differences in thinking between Al Gore and George Bush; he reiterated that there would be a big change in the United States and in the whole world if the Republicans won the elections. I made some predictions as to what these changes might be and I put down my thoughts in an article I wrote in 2002 for TURKOFAMERICA. I evaluated the post 9/11 United States and the world. Now when we look back at the past 8 years we can see what these changes were. In this time period the risks are great and the world is divided, there is a divided structuring of “you are either one of us or one of them,” hardly any semblance of trust and an economic crisis, which we are unsure of how deeply it goes. When Barack Obama announced his candidacy for President on a cold day in February 2007, Hillary Clinton was seen as a sure thing even before the Democratic Party had its primaries. I was one of those who thought, “How can Obama be elected in times like these?” I was wrong! The people of the United States were sick and tired of the Republican rule for the past eight years and they had first given this signal by voting for Democrats in the 2006 House and Senate races. I was expecting a strong De62 • TurkofAmerica
CHALLENGING TIMES mocratic candidate to be chosen but I was not expecting a result like this. Newly elected president Obama understood during this whole voting process what the people of the United States were unhappy about and he built bridges with voters who all had different views but had met in the center. Furthermore, he had even gained support from voters more to the right on ending the war in Iraq. The people of the United States, whether Democratic or Republican, had become fed up with the war and they were all on the same page when it came to the billions of dollars being spent in Iraq while there were financial problems to be solved back home. These problems were education, fair income distribution, healthcare problems, retirement, an aging infrastructure and the two most important subjects: independence when it came to energy politics and the slowing down of the economy. However, what was on every person’s mind, thought it was rarely spoken about, was a black man becoming President of a white America. This subject was paramount till the very last day and though the polls showed Barack Obama with a major lead, political experts were not voicing any guesses on the election’s outcome. Speculations were made and polls were discussed but no one really expected the people of the United States to punish the Republican Party in such a way, even tho-
ugh the polls were showing just that. Or maybe everyone was waiting for this but no one was saying it. In the end everyone witnessed a historic election and were all tired. We are witnessing the change that Obama spoke about and promised during his campaign. This change is coming from Obama himself. His cabinet members seem to be old faces but Obama is bringing together all experienced names under his presidency. Those choices show us how Obama believes in himself. With Hillary Clinton, who knows very much about Turkey and its problems, as Secretary of State; and Rahm Israel Emanuel, who was instrumental in blocking congressional efforts to pass an Armenian genocide resolution being selected by President-elect Obama to be his Chief of Staff, and with retired general James Jones as National Security Advisor, the promises made to the Armenian diaspora during the election may not be so easy to fulfill. The new president's world politics is based on compromise; he had stressed this point during his entire campaign. He will try to rebuild the reputation of the United States, which has been eroded for the past eight years. While he is doing this he will also be communicating with world leaders that have not been allies in the past. While these liaisons are on diplomatic terms in the beginning, if there is the potential, then they may also be executed on a presidential level later on. How
will these changes might effect Turkey is a question on everybody’s mind. It is only natural that there is such a curiosity since President-elect Obama has made promises to the Armenian diaspora during the election campaign that have never been made before. In the very beginning he may have been influenced by his closest advisors, who had biased opinions. It could be; up till now many presidential nominees in the United States have made such promises but then after seeing important information on national security every day, they have walked away from such positions. Let me repeat, newly elect president Obama may have said these things knowing all of this. During the campaign he said numerous times that he would withdraw from Iraq, that he would make a strong presence in the Israeli-Palestinian talks, that he would solve the problem with Iran diplomatically and that he would shift the war from Iraq to Afghanistan. Now when we look at this foreign policy, even though it has not been so declared, we see that these things cannot be done easily without Turkey. For this reason I believe that the Obama government will create problems for Turkey, more on the Kurdish issue rather then the Armenian issue. When it comes to withdrawing from Iraq, the issues of “Motion 2”, (Motion 1, allowing US troops to use Turkish soil to invade Iraq, was rejected on March 2003 in Turkish parliament) and “What will happen to the Kurds” will be issues that will cause Turkey some headaches. Turkey should not get locked into the genocide issue and leave the solutions to the other problems to time; instead we must take an active role and also take precautions. �
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TACCI & MMC
SUPPORT FOR THE TURKISH BUSINESS WORLD FROM THE MANHATTAN new window is opening for which companies set up connectiCHAMBER OF COMMERCE ATurkish exporters and invesons with which, and whether the-
tors through the Manhattan Chamber of Commerce (MCC). The Turkish American Chamber of Commerce and Industry (TACCI), whose headquarters are in New York, has reached an agreement with the Manhattan Chamber of Commerce to carry out a series of activities, including conferences and meetings, aimed toward bringing together the U.S. and Turkish business worlds, and evaluating and encouraging trade and investment opportunities between the two countries. NANCY PLOEGER: A GREAT OPPORTUNITY FOR INVESTORS Nancy Ploeger, President of the Manhattan Chamber of Commerce, told TURKOFAMERICA about the details of the program and said that they are very happy to enter into a partnership with a country with such a large economy as Turkey. Pointing out that they will be enabling Turkish businessmen to make use of their connections, Ploeger said, “Maybe we won’t have a member in each and every field that Turkish businessmen need to do business in. However, we may have members who have connections with other firms. We will help to set up those connections.” Ploeger emphasized that the Manhattan Chamber of Commerce has connections with 85 chambers of commerce in Brooklyn, the Bronx, Queens and Staten Island and that this means great opportunities for companies wishing to invest in New York. Mentioning that companies generally find the opportunity to get together at fairs, investment meeting and road-shows, but that there is no clear information on the continuity of such events, Ploeger said that within the framework of the program initiated with TACCI, they will be able to examine how the process works,
The MCC is known as one of the biggest business organizations in the USA. Member companies provide job opportunities for 1.6 million people in the USA and nearly 4.5 million people around the world.
Sevil Öz›fl›k, President of Turkish American Chamber of Commerce Industry (TACCI)
Nancy Ploeger, President of Manhattan Chamber of Commerce.
Nancy Ploeger with Turkish mission.
se connections are pursued. Organic foods, clean energy and construction have been chosen as target sectors by the two countries. The aim is to encourage not only Turkish firms to work in the United States, but also for American firms to invest in Turkey. Ally Gunduz also played an important role in the realization of this program. Gunduz, who started to work as First Global Business Director at the Manhattan Chamber of Commerce, played an important role in the choice of Turkey as a partner. Before her post at MCC, Gunduz worked as Trade Commissioner at the Swiss Federal Ministry. DTZ, the London-based international consultants, stated that $58 billion worth of foreign direct investment flowed into New York in 2006.
SEV‹L ÖZIfiIK: “IT IS VERY IMPORTANT THAT THE PROGRAM SUCCEEDS” Sevil Öz›fl›k, Chairman of TACCI, stated that it is a wonderful opportunity that MCC has chosen Turkey as a partner, and that it will set an example for other countries. Öz›fl›k said, “Since we had been aiming to work together with MCC in many organizations in the USA, it was important for us that they chose a Turkish business organization. This shows that American firms want to work with Turkey and with Turkish businessmen.” In 2009 TACCI and MCC will collaborate on activities in sectors that they believe Turkey is strong in, and that would offer new opportunities for the USA. Öz›fl›k said, “We expect our businessmen to set up direct joint ventures or partnerships in these sectors. In Turkey there are serious companies operating, especially in the field of green energy and organic foods. We believe that these companies will find a big market and many opportunities in the USA.”� TurkofAmerica • 79
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CHEMICALS INDUSTRY
P
arallel to the effects of the current economic crisis, Turkey has now experienced a decline in its exports for the first time in 32 months. The export figures for October 2008 decreased by 1.87% in comparison to the same month last year and by 21.8% in comparison to last year’s figures. Despite this, there has been increase in exports in the chemicals sector, a trend that has been continuing consistently since last year. During the first 10 months of 2008, an increase of 46.7% over the prior year was recorded. The rate of increase in October was 10.2% in comparison to the same month last year. By 2023, exports in the chemicals sector are expected to reach USD 100 billion. In 2007, the Turkish chemicals sector realized exports to the USA valued at USD 425 million. In the first ten months of 2008, the chemicals sector’s exports to the USA have already reached USD 520 million. Murat Akyüz, Chairman of the Istanbul Chemicals and Chemical Products Exporters' Association (IKMIB), spoke with TURKOFAMERICA about the current state of the sector and its future. Turkey occupies the 45th place among 228 countries selling goods to the USA. Total exports for the first nine months have reached USD 1.3 trillion. The total value of chemical companies on the stock exchange in the USA is approximately USD 91 billion and they have an average profit margin of 6.6%. In a country where the market and the figures are so big, what does the Turkish chemicals sector need to do? Our aim as the Turkish chemical sector is to increase our exports to all countries and to become a global player. The USA is a large market and the most basic way to realize exports to this market is to build a standardized production and export structure. Turkish companies need to be aware, however, that due to matters of se66 • TurkofAmerica
THE CHEMICALS SECTOR HAS GROWN IN SPITE OF THE CRISIS
will be included among the most important topics for negotiation. Last year the total US investment in Turkey reached USD 4.2 billion and the total trade volume exceeded USD 12.3 million. However, looking at it from the other side, the situation is still inadequate; the number of Turkish companies investing in the USA is very low. The main reason for this is Turkish investors’ biased approach to costs in the US market. What is the importance of the US market for the sector of chemicals and chemical products? What part of the total exports goes to the US market? In 2007, the Turkish chemicals sector realized exports worth USD 425 million to the USA. In the first ten months of 2008, the chemicals sector’s exports to the USA have already reached USD 520 million. The main products exported to the USA include mineral fuels, organic chemicals and inorganic chemicals.
The increase in exports in the chemicals sector, which has been continuing consistently since last year, has continued in spite of the global crisis. curity, the USA insists that the exported products be monitored from the production to the packaging stages. The most important factor in the US market is a suitable price, however, and for this reason I recommend that our exporters take this into consideration when quoting prices. Moreover, another characteristic of the market lies in the fact that US consumers are fully aware of their rights and are ready to protect them. The strategy to develop trade and economic relations with the USA and the other North American countries was launched in 2006 and our companies were advised to choose markets on the basis of states. The Generalized System of Preferences (GTS), which enables customs-free ex-
port of some products established by the USA, can also be defined as an advantage. The fact that plastic products exported to the USA are sold with 0% customs taxes constitutes an advantage for Turkish exporters. Besides exports to the USA, can production activities also be carried out? Are there any member countries that have such a plan or that will conduct market research on this subject? In order to talk about intensively carrying out a project of this kind, it is necessary for relations between Turkey and the USA to cease being so focused on security and for trade and economic relations to gain prominence. When this happens, direct capital investments between the two countries
What are the major problems that your member companies encounter when doing business in the USA? The main problems encountered by Turkish companies doing business in the USA: - The continuous inspection of containers by X-Ray, because of security reasons. - The Generalized System of Preferences which is brought up every year and which prevents the establishment of long term marketing strategies. - The long duration of shipping and the high prices charged by companies carrying out direct shipping. - The inability of distributing companies in the USA to serve all states. How is the chemical and chemical product sector in Turkey expected to be affected by the crisis? What are your forecasts regarding production and export in this sector for the next five years? It is out of the question that a cri-
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sis of these dimensions should not affect our country and our sector. However, I hope that its effect on our sector will be at a minimum level. Our export figures support my expectations, but we foresee that the sharp drops in raw materials and petrochemicals in the exports of the last two months will result in a standstill in exports as well. Turkey’s October 2008 export figures were recently made public. Our total exports have dropped by 1.87% in comparison to October 2007, to USD 9,530,000,000. This is to say that Turkey’s exports dropped for the first time in 32 months. The automotive sector, which occupies the first place in exports, declined significantly in October. The sector’s exports have dropped by 21.8% in comparison to October 2007. The sector of ready-made garments has experienced a similar situation, with a drop of 17.15%. However, the increase in exports in the chemicals sector, which has been continuing consistently since last year, has continued in spite of the global crisis. In the first 10 months of 2008, an increase of 46.7% has been recorded in comparison to last year. The rate of increase in October was 10.2% in comparison to the same month last year. As of the end of October, our export figures have reached USD 12,133,000,000. In 2023, exports in the chemicals sector are expected to reach USD 100 billion. In the USA there are many medium sized companies that may wish to become partners or cooperate with Turkish companies. Keeping in mind the power of consumption in the USA, are there plans for collaborations with small and medium sized companies? Although existing collaborations within the sector are generally Germany-based, I hope that ongoing regular relations with the USA can form the basis of long term collaborations. I think that the increase in companies with Turkish capital in the region and in the Turkic Re-
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publics will result in the speedy increase of small and medium sized companies of this kind. When you take into consideration the development of the chemicals sector in Turkey, what are the major problems that await the sector in the near future? The REACH legislation, which came into force within the framework of EU harmonization laws, is the main problem affecting the chemicals sector, as well as many other sectors, such as iron and steel, mining, metal alloys, automotive, stationery and textiles. The REACH legislation, which aims to offer high level protection for human health and the environment and protection for the competitive and effective structure of the market, ascribes the industry responsibility, and therefore high costs, concerning the management of risks resulting from chemicals and the provision of accurate information on chemicals produced. As Turkey is not yet a member country of the EU, in the short term, the REACH legislation does not directly affect our chemicals production and our export to countries outside the EU. However, if our country becomes a full member of the EU, it will be mandatory for the regulations brought by REACH to be implemented in all the production activities of the chemicals sector. The REACH system will directly affect our chemicals export to the EU. In the export of chemicals from Turkey to the EU, products to be exported need to be recorded at the European Chemicals Agency (ECHA), in accordance with the REACH legislation. As our country is not a member of the EU, it is not possible for our companies to apply directly to the European Chemicals Agency (ECHA), within the framework of the REACH legislation. At this point we are confronted with the obligation to form a Single Representation Office, which would fulfill all requirements within the
scope of REACH. As IKMIB is aware that the issue of Single Representation will bring financial and administrative responsibilities to Turkish exporters, it has developed a solution and has established RGS, or REACH Global Services company. Another issue that Turkey may have to confront lies in the probability that, together with an in-
Murat Akyüz, Chairman of the Istanbul Chemicals and Chemical Products Exporters' Association.
crease in production in neighboring countries, Turkey will remain at the level of spot markets. �
TOP 50 THE U.S. CHEMICAL DISTRIBUTORS
1. Univar N.V. 2. Ashland Distribution Co. 3. Brenntag North America, Inc. 4. Helm America Corp. 5. ICC Chemical Corp. 6. Itochu Chemicals America Inc. (ICAI) 7. Harcros Chemicals Inc. 8. JLM Industries, Inc. 9. Hydrite Chemical Co. 10. Canada Colors & Chemicals Ltd. 11. KODA Distribution Group 12. Interstate Chemical Co., Inc. 13. Premium Ingredients International 14. L.V. Lomas Ltd. 15. Quadra Chemicals Ltd. 16. EMCO Chemical Distributors, Inc. 17. K.A. Steel Chemicals Inc. 18. Superior Solvents & Chemicals 19. Hawkins, Inc. 20. Mays Chemical Co. Inc. 21. Grupo Pochteca S.A.B. de C.V. 22. PVS Chemicals, Inc 23. Barton Solvents, Inc 24. E.T. Horn Co. 25. Wego Chemical & Mineral Corp. 26. The M.F. Cachat Co. 27. Startex/CSD 28. Pride Solvents & Chemical Co. 29. The Plaza Group, Ltd. 30. Callahan Chemical Co. 31. Chemicals Inc. (Chemgroup) 32. Allchem Industries 33. Archway Sales Inc. 34. Whitaker Oil Co. 35. H.M. Royal, Inc. 36. Tanner Industries, Inc 37. Solvents and Chemicals, Inc. 38. GS Robins and Co. 39. Rowell Chemical Corp. 40. Durr Marketing Associates, Inc. 41. Tilley Chemical Co. Inc. 42. Cole Chemical & Distributing, Inc. 43. Westco Chemicals, Inc. 44. George S. Coyne Chemical Co., Inc. 45. Industrial Chemicals Inc. 46. Tarr, LLC 47. D.H. Litter Co., Inc. 48. TCR Industries 49. Conchemco, Ltd. 50. Charkit Chemical Corp.
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A SUCCESS STORY
I
n May 2006, Sefa Stone began serving American consumers with its 16,000 sq.ft. depot in Miami. The reason the company chose the city of Miami, the heart of the East Coast, is the high demand for natural stone in that area. It’s possible to see natural stone from Turkey not only in Miami but also in all of America’s growing cities. Between 2000 and 2005, Turkey’s market share of the natural stone industry in the U.S. rose from 10.9% to 38%. During the same period, Italy’s share decreased from 32.4% to 9.4%.
WHY HAVEN’T WE BEEN AFFECTED BY THE CRISIS?
Turkey’s market share of the natural stone industry in the U.S. rose from 10.9% to 38%. During the same period, Italy’s share decreased from 32.4% to 9.4%.
During the first nine months of 2008, exports from Turkey to the U.S. of unprocessed marble, semi-processed marble, granite, and travertine reached $386 million. Turkey, which has a third of the world’s marble reserves, is attracting attention with the unequaled products that it offers the market.
SALES 40 PERCENT UP Beginning in 2008, besides continuing its leadership in the travertine market, Sefa Stone has also entered the marble market. With the diversity of its products increasing by the day, its sales figu46 • TurkofAmerica
The economic crisis, which became a reality in 2008 and has caused some of the world’s largest companies to go bankrupt, is affecting real estate and consequently the natural stone sector. It is expected that the sector can be revived when the excess stock of houses, which is reducing demand for new construction, is depleted and there is a renewed need for houses. Çevik emphasizes that in this crisis, which is directly affecting the natural stone sector, they are managing the crisis by buying the right merchandise at the right time and at the right prices.
With more than 50 different products in gold, noce, and ivory colors in stock at Sefa Stone, the city’s only expert is on location at the company. Selçuk Çevik, Sefa Stone’s General Director, says that, “Having our own quarry and factories in Turkey is the most important source of our confidence in ourselves.” In the American market, Sefa Stone offers customers its main products of gold-, noce-, and ivory-colored travertine in different dimensions and thicknesses. Çevik says, “Our leadership in the travertine market in particular was proved in 2007 by our high performance in exports.”
even if Sefa Stone’s sales rates drop significantly because of dependence on other businesses, in this difficult period the company does not anticipate that its end point for the year will be below target.
Selçuk Çevik, Sefa Stone General Director.
res compared to last year’s figures have gone up by 40%--despite the global economic crisis. General Director Çevik summarizes the strategy they have been following during the crisis: “We hear that business in the sector is going badly, that many firms have closed their offices, that some of them have reduced their staff. However, we as a company have not felt the need to make any major changes during this diffi-
cult period. For us, the crisis has not brought any serious loss. The reason for this is that our customers’ satisfaction, the diversity of our products, our products’ quality and consistency, and the trust and harmony we have created in our company. These have been the main keys to our success.” During the economic crisis that has become especially apparent during the last quarter of 2008,
The young director adds: “From our point of view, the stagnation in the American market that has affected competition in the natural stone market has become a real opportunity. The reasons for this is that small and medium-sized companies are unable to weather the crisis and are closing down. Let me also mention again our customers’ trust in our company and our products. At this point, I see it as a point of pride that a question mark doesn’t come to anyone’s mind when Sefa Stone is mentioned. We are sure that we are going to handle this tough time which affects all world and we will continue serving our customer as good as possible. We will keep improving our services for our customers and we will keep doing this kindly and more effectively, our main goal is always to meet our customer needs have them all satisfied on the other hand of course increasing our sales. I want to finish this nice interview by saying "Keep watching us we have not done anything so far.” �
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NATURAL STONE Hasan Kürflad Devecio¤lu*
ABOUT THE NATURAL STONE SECTOR IN THE UNITED STATES T
he construction and natural stone sector ranks as one of the sectors that has been hit the hardest by the financial crisis that we are living through in the United States. All natural stone suppliers and producers are feeling the stagnancy within the natural stone sector. This stagnancy is causing the natural stone market in the United States, which was already shrinking in the past few years, to get even smaller. With these two factors coming together, an increase in competition and a drop in the profit margin are coming into effect. In the past few months the increasing value of the dollar may have created an advantage for the producers, but the stagnancy in the market has brought down this advantage to the lowest possible level. CAN THIS CRISIS BE CHANGED INTO OPPORTUNITY? The most frequently asked question in this economic crisis, as in all other ones before this, is the same: “How can we change this current crisis into an opportunity?” Whether you are a natural stone factory in Turkey supplying to the market in the U.S. or whether you are a natural stone importer and supplier based in the U.S., what you present your clients is more than just marble tiles or marble slabs. You do not merely provide a product; you also provide a service. For example, your job does not end when you deliver the marble slabs you promised to a construction company in the U.S. This is a point that is often overlooked, but in fact the quality of the service you provide your clients is just as important as your product. In the natural stone market, American clients choose suppliers first based on their quality of service and then on their quality of product. Listening carefully to the client, showing interest with periodic visits, keeping the 78 • TurkofAmerica
promises that were made, your attitude when dealing with the client and professionalism in service are important parts, if not the entire concept of service. Periods of economic crisis all end some day. The important thing is not just to get through an economic crisis period with no harm or with the least harm done; it is also important to prepare in order to operate properly within the market after the economic crisis is over. How can this preparation be executed? During a period of economic crisis, in the period of compensating for the crisis, and in the period of a boom, the key point for natural stone companies is always to have a command over your customers or your customer portfolios. Working with existing clients is always less costly and more profitable then finding new clients in the marketplace. Additionally, existing clients will also recommend you to other potential clients in the market. This means that, especially during an economic crisis, concentrating on existing clients rather than on finding new clients will help natural stone companies not only in weathering the crisis with the least amount of loss but will also help natural stone companies gain an advantage against their competitors in the period following the crisis. IMPORTANCE OF CRM A natural stone company can only stay in business and grow as long as it can supply product to customer groups such as contractors, architects and construction companies. Companies should try and keep in hand those customers that they work with most profitably and efficiently. This activity can be executed with CRM, which a marketing implementation that is very popular these days. The CRM application first starts with the analy-
sis of existing clients. Just as one can use different criteria for this analysis, there are also the criteria which are widely accepted in the marketplace: how recently was the customer acquired, how frequently does the customer use the service, what is the average monetary amount of customer’s order? According to these criteria, who your--meaning the natural stone supplier--most recent customer is, how recently they have bought natural stones from you, how frequently they buy natural stones from you and on an average how much they spend each time they order from you are criteria which are widely accepted. Of course a natural stone company can widen this list of criteria. There are two different benefits of coming to this point for a natural stones company. Firstly, with such a grouping you will get to know your existing customers much better and you can clearly see which customers you need to be making your priority. Secondly, by identifying your ideal customer, whenever you venture out into the market to find new customers in an appropriate market, it will make it easier for you to find that new ideal customer. In short, within the American natural stones market you know what you want and whom you want. You will know what kind of contracting company or what kind of construction company you want to work with and you will conduct a market search accordingly. In this way you can use your limited resources in the most efficient way by clearly defining your target. Another important point is the need to constantly analyze the financial risks of your customers. This analysis becomes even more important during an economic crisis. Keeping your existing customers may be your number one goal, but in order to take make wise decisions, keeping constant track of the
financial risk situations of customers within the natural stone sector carries a paramount importance for the financial well-being of your natural stones company. You need to keep in mind that even your best customer may have to hand off their business tomorrow due to any number of reasons. Just as you can get information about the reputation of any company, which is your client, from any other company in the marketplace, you may also use financial databases. The U.S. is rich with database companies which keep records of not only individuals’ finances, but also the finances and reputations of companies. You, as a natural stone supplying company, can, from your own office, learn about the financial risk situation of your customer or a company in any state of the U.S. From existing corporate database companies in the U.S. you can learn the following about the company which is your customer: the names of the owners, the financial risk situation of the company, whether or not they owe money to other suppliers, how many times they have been taken to court for outstanding debts, and the results of those lawsuits. In the natural stone sector, as in the business world, continuity is relevant and the financial risks of your customers may increase or decrease. With a constant watch you can be aware of the financially risky situations of your customers and you can take precautions accordingly. � * Hasan Kürflad Devecio¤lu has been applying his knowledge and experience of direct marketing management for many years to the natural stone sector in the US. He is the author of “Marketing Imported Natural Stone Products” and “Strategic Natural Stone Marketing”. In addition, he had two books in Turkish, The Direct Mar keting Method Which Is The Most Suited And The Most Profitable For The Turkish Market and The American Business World. You may reach the author at kur sadd@yahoo.com. (For further informati on visit www.kursaddevecioglu.com or www.marketingmarble.com.)
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TECHNOLOGY Mesut Darendeli info@rhxo.com
THE NEW INTERNET TIMES B
ack when the Internet bubble was deflating disastrously, no one has ever thought that the interaction between geniuses and dummies has created any important conflict. The way we see the internet’s luminous view was that, it would never be its like again. The whole internet-land has gone into meltdown and thank goodness we tried every possible money making way on it. It’s been a decade now it is gone and left a sour taste. Angel investors who slapped a dot-com name in the fashionable internet times are stone-broke nowadays to feed geeks’ lovely web applications. Hell, How are we gonna make money on the internet? I think it is the time to re-think about it. Exuberance has definitely returned, but with a bit of disparity. There’s been a growing trend of high-profile Internet and technology investors shifting focus to green tech. That was one of the major reasons why internet has got lonely for years. The opportunities for investing in green technology innovations are massive and only just being seriously looked at. So that’s why most of the Internet entrepreneurs are staying away from www life and focu76 • TurkofAmerica
sing on growing innovations to fight climate changes. Being a philanthropist and making good money beside is good. When we look at the completeness of the solutions to re-discover the internet, I’m sure we will be able to see that there are still many areas and ideas to put into a form and to shape them useful for human life in terms of making the communication easier and richer to control in a mobile environment for instance, developing creativity, increasing the social competences of a personality, promoting communication bonds and social cohesion. Internet plays a decisive contribution role in the formation of socio - cultural potential between places and people. If there are people out there who think that internet has come to an end then I would say it still is a tremendous source of economical profit. Here is the tricky question, HOW? Your new website has to be about something. It could be anything. What’s most important is that, the idea you come up with should be unique. Practically any subject you can think of has millions of potential 'visitors'
that would be interested in visiting your website. Some of the most simple ideas have turned into very successful websites for example: a specific tropical fish, antique cars, exotic flowers or even pet grooming. If your idea is unique, for example if you are an expert on raising exotic orchids and you want to make a website about how to raise or take care of them, you have a unique 'niche' which although there may be less potential visitors, you will probably get a larger percentage of those visitors because there will be fewer websites about exotic orchids raise to compete with. Once you started to get visitors to your website you can sell your website spaces to people or to companies who want to advertise their products/services etc. to your very targeted visitors. This is how not to make money on the internet. Brace yourself because it's the time to say “hi” to the new digital era. The Internet, as you well know, did not perish along with those which were very famous dot-com once upon a time. While investors are getting awarded for investing in greentech and are coming back with their very- philanthropic badge, folks are still day-dreaming new ways to use the goluptious technology that made a big fuss in the first place. I don’t need to tell you that nowadays the internet is fulfilling many of the visions and magnitudes. All these crazy applications that seemed beyond the grasp of understanding just a few years ago; online invoicing tools, event calendars, stock management applications - are “a taken for granted feature” of daily life. This extraordinary data circulation supercharges itself with high speed internet and finally this will
be called web 3.0. Since we have long way to go for Web 3.0 which Eric Schmidt hypothetically explains that it will be "applications that are pieced together" - with the characteristics that the apps are relatively small, the data is in the cloud, the apps can run on any device (PC or mobile), the apps are very fast and very customizable, and are distributed virally.” we can start to find a way around solutions that will enable us to discover this abortive land. On the other hand the term "Web 2.0" describes the changing trends in the use of World Wide Web technology and web design that aim to enhance creativity, communications, secure information sharing, collaboration and functionality of the web. Web 2.0 concepts have led to the development and evolution of web culture communities and hosted services, such as socialnetworking sites, video sharing sites, wikis, blogs, and folksonomies. The term became notable after the first O'Reilly Media Web 2.0 conference in 2004. Although the term suggests a new version of the World Wide Web, it does not refer to an update to any technical specifications, but rather to changes in the ways software developers and endusers utilize the web according to Tim O'Reilly. It seems that mobile technologies will lead the digital life of the near- future. The-not-so-staggering result is that the Internet is not just back. It is much better and more flexible than it was before. Early stage investors (called “angels”) and venture capitalists are looking for new hits to get the lion's share. The new run, however, will definitely be different. If you are the one of those guys who just doesn’t want to invest in something touchable, try doing business o n l i n e .�
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TURKS & QUALITY
THE WORLD'S FIRST AND ONLY STATE SUPPORTED TRADEMARK PROGRAM By November 2008 the TURQUALITY project, which had set out with the slogan, `10 World Brand Names in 10 Years` reached a total of 61 companies.
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record 39,945 international trademark applications were received in 2007 by the World Intellectual Property Organization (WIPO) under the Madrid system for the international registration of trademarks, representing a 9.5% increase on figures for 2006. For the 15th consecutive year, applicants from Germany have led the list of top filers, followed by users in France, the United States of America (USA) and the European Community (EC). China remains the most designated country in international trademark applications, reflecting increasing levels of trading activity by foreign companies in China. Turkey, however, remains the only country that is involved in the trademark program on a state level. By November 2008 the TURQUALITY project, which had set out with the slogan, `10 World Brand Names in 10 Years` reached a total of 61 companies. The TURQUALITY project includes a number of Turkish trademarks/brand-names, in a list of sectors that stretches from ready-to-wear and cosmetics to food and electronic name brands. TURQUALITY has explained its mission to TURKOFAMERICA.
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What is the annual growth factor of companies which are working under the auspices of the Turquality project? Is the primary aim of the project to increase the number of such companies, or is it to instill the TURQUALITY philosophy into companies? As you know, the TURQUALITY® project started off with the target of creating ten Turkish name brands that would have world-wide recognition in a time period of ten years. The aim is to identify those brand names that have this kind of potential and to provide the support necessary to accelerate the branding process. Thus, it has never been the aim to increase the number of companies receiving support per se, but there is also no upper limit to the number of projects eligible to receive such support. As a result of this, while there were 46 brand names included in the project by the end of 2007, by November of 2008 that number had risen to 61. Each Turkish brand name that meets the minimum requirements and which has determined its vision to becoming a world recognized name is eligible to benefit from the TURQUALITY® support program. Turquality set off with the slogan of `10 world name brands
in 10 years.` By doing so has it become a model for other countries? Are there other countries, besides Turkey, that have set up strategic planning aimed at creating brand names? The TURQUALITY® program remains the world's first and only state-sponsored branding project. No other country has yet set up a similar project. Do you have any statistics on hand about the number of stores owned abroad by companies that are Turquality project participants? We maintain on-going statistics related to the companies involved in the program. While it is not the sole denominator of the project's activities at this point in time, companies involved in the TURQUALITY® project have approximately 300 overseas operations that are either currently open or at the opening stage. Among the firms you have supported, are there any that have very quickly achieved notable successes? Can you give us the names of such companies? The TURQUALITY® program currently includes 61 trademarks operating in 7 different sectors. Because of the very large differences among the sectors, the differences relative to
the time they entered the program, and the varying market conditions of the sectors in which they operate, it would not be right at this point to draw any comparisons. On the other hand, a variety of measuring tools are used to monitor the performance and the actions of the companies in the program. Is it correct to say that the Turquality project represents governmental policy? Will the Turquality project continue if there is a change of government or of governing officials? The TURQUALITY® Project was started under the leadership of Minister of State Kürflad Tüzmen and in a very short period of time this project has gained the attention and approval of both the public and private sectors. The efforts of the TURQUALITY® Project will continue to be directed both to the vision and the mission of the program. �
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ADVICE TO BUSINESSMEN
“TIMES OF ECONOMIC CRISIS ARE ALWAYS A GOOD OPPORTUNITY FOR INVESTMENTS” “Do not act on the belief that “I am selling to a large corporation in the U.S., I am sure to get my money.”
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s the effects of the economic crisis spreads across the United States, companies that are closing, those who cannot get their outstanding receivables, those who are freezing their investments and those who are shrinking their markets are all lining up. According to the data from the Administrative Office of the U.S. Courts, as of June 2008 967,831 companies have declared bankruptcy. With a 28.9 percent increase from the year before in bankruptcies, it is expected that in the following months as the crisis deepens this number will increase. One of the career groups who see an increase in their workload during an economic crisis is business litigation lawyers. They are the first address when companies have lawsuits against each other. Barbaros Karaahmeto¤lu, the founder of the Kara Law Firm, is a name that is very well known among the Turkish community in New York when it comes to business law, and he states that the economic crisis will only increase their business. Karaahmeto¤lu, who has been concentrating on corporate and international law, created a partnership in the beginning of 2007 with litigation court lawyer Thomas Luz, who is experienced in labor law, expanding his field of practice even more. Luz, who is licensed as a lawyer in New York, Connecticut and the D.C., worked as Vice President and consultant at NatWest Bank N.A. for the past six years. Karaahmeto¤lu underlines the fact that with his partnership with Luz the areas in which they can now serve their clients’ legal needs have expanded.
Thomas Luz. and Barbaros Karaahmeto¤lu
In addition to Thomas Luz and Barbaros Karaahmeto¤lu, there are five lawyers working at the Kara Law Firm. Karaahmeto¤lu would like to also hire a lawyer with a specialization in bankruptcy matters in parallel with the need created in the following months by the economic crisis, but the firm is still serving their clients’ needs when it comes to business, corporate law, accounts receivable law, the creation of corporations, restructuring, labor law, inheritance and branding. In addition to their office in New York, Kara Law Firm also has liaison offices in Los Angeles and Istanbul. “FIRST TAKE YOUR PRECAUTIONS AND THEN DO BUSINESS” With what they have learned from their experiences in the courtroom, Karaahmeto¤lu and Luz give some advice to businessmen who execute sales to the U.S. They underline the two primary causes for cases of personal action, the first one being that there is no legal foundation created before the purchase and sale. Do not act on the belief that “I am selling to a large corporation in the U.S., I am sure to get my
money.” The second cause is the expectation that the lawyer on the other side will create a just and fair agreement. Those firms that do not get legal advice before getting into a business agreement pay a lot more in legal fees once things come to a deadlock. Karaahmeto¤lu and Luz point out that if their clients seek their advice before they get into trouble then their profits will be much larger. During an economic crisis, in addition to firms that see their businesses dwindling, there are also those people who would like to invest their cash. Thomaz Luz says that the first piece of advice to those that would like to invest is, “Invest in relation to what you know.” He says, “If you know textiles then invest in textiles, if you know food stuffs then invest in the food sector. If you have cash and you are experienced in the real estate market, then this is a good time to invest in real estate.” Karaahmeto¤lu also points out that during an economic crisis branding is also a good investment. ADVICE FOR THE TURKISH BUSINESSMAN Karaahmeto¤lu and Luz have
the following advice for businessmen who would like to do business in the United States: - Find an experienced lawyer. Instead of picking a legal firm that has some experience and knowledge here and there, pick one that specializes in a certain field. - Let go of the way that business is done in your country; try to learn and understand the system in the United States. Know that the two systems work differently. - Do not forget that cultural differences are also reflected in the world of business. - In the American business world accountants and lawyers are integral, even if this is not the case in your own country. - Know that the United States is comprised of 50 different states and that if needed you may have to consult a different lawyer for each state you do business with. Choose a legal firm with a good network. BEFORE YOU START DOING BUSINESS - Research well the company to whom you are selling. Is it a good company? Are they consistent in paying their debts? Research whether they have a bad reputation in their field. - Meet one on one with your clients. See with whom you are doing business. - Research whether or not the company with whom you are doing business has been sued for outstanding debt. - There may be companies who try to take advantage of the fact that you are inexperienced in the market, so do market research to prevent this. - Be patient. There is no reason for a good businessman not to do well in the United States. � TurkofAmerica • 83
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FINDING A JOB
HOW CAN ONE FIND WORK DURING AN ECONOMIC CRISIS? According to the Bureau of Labor Statistics for November 2008, in that month there was a 6.7% unemployment rate with 10.3 million people out of work.
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his global economic crisis, which is said to be one of the biggest ones in the 21st century, is an important factor in the increase in unemployment in the United States. According to the Bureau of Labor Statistics for November 2008, in that month there was a 6.7% unemployment rate with 10.3 million people out of work. There has been an increase in unemployment in the past 12 months, 2.8 million people added to the jobless rolls. From December 2006 up till today the number of people in the finance sector who have lost their jobs has reached 200,000. Just in October of this year, 24,000 people have lost their jobs in the finance sector. As universities graduate more and more people, many welleducated brains from overseas also move to the United States for work. In these difficult times, those who are looking for work must follow an appropriate strategy from beginning to end in order to get firms interested in them. Esra Öziskender, an expert in the field of human resources, states that the first condition in looking for work in the United States is to know exactly what you want and to make a wise career plan. If you do not want to waste any time, then another must is to know what state and what city you want to work in.
Esra Öziskender with her business partner Ira E. Shapiro.
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When we talk about the American market, first we need to summarize what kind of environment we are talking about. Öziskender exlplains, “With a land mass of 9.83 million square kilometers, a
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population of more than 300 million, 50 states and several territories, the United States is a very large work space.” She says that besides the national labor laws and regulations, each state also has its own labor laws, regulations, traditions and customs. Öziskender also underlines the fact that those who are looking for work in the United States are very conscious, from the highest level manager, the newly graduated personnel and the construction worker on the lowest rung of the ladder; they all know what they want, they look for work with a clear plan for the future, and they do not leave things up to chance. For this reason the first rule to looking for work is to work with a welldesigned career plan. POWER OF THE RESUME Öziskender says that the second important step for those who are making a career plan is to prepare a good resume, and adds: “Your resume is your marketing tool. The resume will usually not get you the job. The purpose of the resume is to generate enough interest in order for you to get called in for an interview. Whether or not you get the job depends on how successful you are in your interview.” The next step after your career plan and a good resume is to send out your resume to as many firms as possible or to all of your target firms. Job search sites and headhunter sites on the Internet are also resources that must be used. Öziskender embarked on her human resources career in Boston by aiding people around her with their resumes, and now she has over 15 years of experience in her field. At her last position, Öziskender was the director of human resources at AstraZeneca pharmaceuticals in Turkey before coming to the United States, and with her participation on human resource task for-
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ces with experiences in Europe, Asia and the United States, she has a wide range of experience in every field of human resources. Öziskender has organized workshops on the establishment and protection of company cultures and values during mergers and acquisitions in Europe and the United States, and establishing her own company HRLink Consulting, Inc. in March of 2005, she signed a partnership with Ira E. Shapiro, an expert in human resources, management, organization, strategic planning and leadership with many years of experience in New York. Öziskender and Shapiro now serve their customers with a wide range of services, including the establishment of a company from the ground up, legal and financial consulting, and finding and hiring temporary or permanent staff. Shapiro, as the president of Hire USA, Inc., has been working in human resources management since 2006. Shapiro underlines the fact that mistakes made in hiring practices cause long-term damage for a company. He emphasizes the fact that his company can be of service to companies wanting to invest in the United States at every stage. Öziskender claims that the resumes that they aid in writing have a 98 percent rate of leading to the applicant being hired and adds: “Writing a good resume does not guarantee a job for the person searching for one. It aids in getting called in for an interview. What makes the decision of whether or not that person gets hired is the impression that they leave on the employer and whether or not their past experiences meet the needs of the position to which they are applying.” PROBLEMS FOR TURKISH PEOPLE LOOKING FOR WORK Öziskender, based on her past experiences, touches on the problems that Turkish people looking for work frequently run
into. She lists them under the following headings: - Legal Status: If the person looking for work does not have a Green Card or citizenship, then ‘legal status’ heads the list of problems. The H1B work visa that gave employers the opportunity to hire foreigners became much harder to get after 9/11. Some firms do not want to sponsor workers due to the extra expense that it brings them. In times where the economy is good and the need for workers is high the chance given to foreigners increases accordingly, but in times when the economy is bad and Americans are also out there looking for work then it gets harder for a foreigner to get hired. - The Transfer Of Experience: For those candidates with work experience especially in Turkey and Europe, when they get to the United States they have to start from zero in about 90% of the cases. This is extremely demoralizing for them. The candidates must get used to the fact that this is just a temporary phase; they need to believe that after a few years of gaining experience in the American market, they then can move onto positions which are more suitable to them. - Job Search Techniques: Looking for work in the United States, in the same way as they did back in Turkey, without knowing the appropriate techniques, can lead to disappointment. Generally the candidates bring together all the experiences and knowledge that they have, but when you look at the resume, it does not have a completeness to it. There are two factors for this; the first one is that in Turkey workers who have experience in every phase of management are much more valuable than those with specific specializations, and the second one is that a resume in Turkey is written in order to bring together all past education and experiences rather than written with a specific aim. The lack of a career plan made while they
are still in school causes the candidates to lose track later on. - The Language Problem: Even though these candidates graduate from language schools, because they do not use English in their everyday lives there is a certain lack of flow in their English. “For this reason, if they have the opportunity, the candidates should first take care of their language problems, and they should start looking for work when they believe that their English is fluent enough,” says Öziskender, but if they can find the opportunity to work and also solve their language problems, especially by finding a low level job, then that will also produce good results. “Generally what we see is that if a candidate finds a job with the state of their English at that time, then they do not work on advancing their language skills after that,” she says. - Lack Of Networking: Networking in Turkey is usually done among friends and acquaintances. In the United States it is not unusual to network with people that you do not know as long as you create a common denominator. WRITING A RESUME - If there is no interest in the resume that you have sent within one to three months then you should suspect that there is something wrong with the resume. - A good resume shortens the job search period by 50%. - Just as there is no room on a resume for too much information, a too short resume is also not appropriate. - A resume that is 1-3 pages is considered a normal length. - As you write your resume, see if any sentence you write raises any questions. - A recruiter usually spends 3 seconds per resume and they look for key words that are looked for in the job requirements. If they do not see these words then they usually give up on that resume. Clearly write out your experiences with key words. � TurkofAmerica • 73
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POLITICS
PRESIDENT OBAMA – A NEW BEGINNING FOR AMERICA
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ith the election of Barack Obama as the next President of the United States, one could almost hear a collective sigh of relief emanating from around the world. It was as if the darkness that had come over the world for the past eight years was finally about to be lifted. The election of a new American president always brings with it a sense of hope and possibility of better days to come. And we certainly need that. With the world economy in turmoil and seemingly intractable foreign policy challenges, seldom has an election carried such importance to the U.S. and the world. Barack Obama is not well known to the Turks, so they rightly want to know what kind of President he will be and what impact his presidency will have on U.S.-Turkish relations. Predictions in politics are more often wrong than they are right. A year ago, before the first presi84 • TurkofAmerica
his campaign rallies, and the unprecedented amount of funds he raised. His campaign organization was highly disciplined and focused. He correctly assessed the mood of the American people who were yearning for a change from past eight dismal years. He showed great political acumen by mastering the intricacies of an inscrutable primary nomination process to defeat the much better known Hillary Clinton, and showed calm resolve in a tough general election campaign. Obama’s inspiring yet sober and thoughtful election night speech was a tour de force. Rather than showing jubilation that would have been understandable given his astounding accomplishment, the newly elected president showed a humble appreciation for the enormous challenges that he faces. dential primary in January, the nomination of Hillary Clinton by the Democrats was almost a foregone conclusion, while on the Republican side, John McCain’s candidacy was on life support. At this early stage, all we can do is speculate on what an Obama administration will do. Expectations for an Obama administration are sky high, perhaps unrealistically so given the problems he faces. But there are encouraging signs that President Obama will justify the faith that Americans and the world have placed in him. Obama hasn’t taken office yet, but his campaign revealed the president elect’s even temperament and keen intellect. These provide important clues as what kind of President Barack Obama will be. During the campaign, Obama inspired millions of voters with his oratory, many of them young people who were voting for the first time. He demonstrated his broad appeal in the massive crowds he drew to
Governing, however, requires different skills than campaigning. Choices have to be made; unlike during the campaign, Obama won’t be able to assuage everyone with his soothing rhetoric. The road ahead is difficult and there will be many unexpected turns. The economy is on a downward spiral and foreign policy decisions on Iraq, Iran and Afghanistan cannot wait. In assembling his team, Obama is showing signs of being cautious and measured in his approach to his transition to power. He is demonstrating a pragmatic side in staffing his White House administration with political veterans. As of this writing, press reports indicate that Obama will nominate Hillary Clinton to be Secretary of State, and New York Federal Reserve President Timothy Geithner to be Secretary of the Treasury. Word of the appointment of Geithner calmed skittish world markets for a time but the expectations are
that this recession will be deep and painful. Hillary Clinton as Secretary of State would bring to the Obama team someone with whom Turkey and foreign governments are familiar. Some concern has been expressed as to the hawkish views she expressed on Iran during the presidential campaign... Too much should not be read into what she said on the campaign trail, where as a potential president, she had to appear tough enough to handle the job, or political compromises she had to make as a Senator. Clinton has a strong pragmatic side to her that indicates she can adjust to the situation at hand. The economic crisis is job one for Obama. The news is dire: consumer spending is down and unemployment is rising; bankruptcies are increasing, and the housing market is virtually dead. Businesses are re-trenching in the expectation of a prolonged downturn. Credit is tight and the lack of capital is making life difficult for both small and large businesses. Any recovery looks a long way off. To help avoid a prolonged recession or worse, a depression, Obama proposes a massive public spending program to get the economy on track. Spending for transportation and other public works infrastructure will help provide work to the construction industry and will also funnel money to state and local governments which must operate with balanced budgets and are having to cut back spending at all levels because of reduced tax revenues. These actions will restore some confidence even as it will take time for his programs to get implemented. Much to the consternation of
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Osman Bengur Baltimore, Maryland
many Democrats, some costly projects, like reforming health care, may have to been accomplished on a piecemeal basis. In light of the dour economic news, it will be President Obama’s main task to show the nation and the world that he is taking the necessary steps to improve the economy. There will no doubt be missteps along the way, but given the tough situation he is inheriting, the public will probably give him the benefit of the doubt for a while. Any progress, however slight, should begin to restore confidence, which will be a pre-requisite for an economic recovery. Obama is not likely to have a similar grace period when it comes to foreign policy. Vice President Biden may have been inappropriate when he stated that the new president was likely to be tested by foreign leaders in the first six months of his presidency, but he was probably right. Obama will push the Pentagon for a plan to start withdrawing troops from Iraq, while at the same time wanting to increase pressure on the Taliban and Al Qaeda in Afghanistan without alienating Pakistan. Iran is continuing to develop its nuclear program. The Russians have threatened to put missiles along their borders if NATO goes ahead with plans for a missile defense shield. The Obama administration is likely to take a much more active role in trying to resolve the festering Palestinian-Israel problem, a fair resolution to which is at the heart of many problems in the Middle East. The President-elect has stated that he wants to use diplomacy to address many of these issues, but he will have to do so without appearing weak to Iran’s wily
Ahmedinejad and dyspeptic Putin.
Russia’s
Where does Turkey fit into the Obama administration’s plans? It remains to be seen, but given the high-profile problems of Iraq, Iran, Afghanistan and Russia, common sense would dictate that the U.S. would want Turkey to play an important role. Turkey has shown that it is already willing to be active diplomatically in the region. For example, Turkey is mediating talks between Syria and Israel, and can provide a counter balance to Iran and Russia’s ambitions in the region. A peaceful Iraq is as important to Turkey as it is to the U.S., if not more so, and Turkey can play a key role in helping to stabilize Iraq, particularly the Kurdish area. In the past, much has been asked of Turkey but from Turkey’s standpoint, not enough has been given. While of late there has been cooperation on the PKK issue, residual bad feelings and a certain level of mistrust have characterized the relationship with the US during the Bush administration. Turkey has its own legitimate issues that it needs the new Obama administration to help it with, not just in regard to the PKK, where Turkey will continue to need the cooperation of the U.S. to eliminate PKK sanctuaries across the Iraqi border. Since the election of the Greek Cypriot leader in February 2008, there has been renewed hope for a settlement on the Cyprus issue. Talks have been ongoing since September 2008 between the two sides. While the United States supports the resumption of talks, it has not been actively involved. U.S. intervention could provide the necessary impetus to reach a final agreement. If the U.S. decides to get involved, it will be a telling test for the Obama administrati-
on to see whether it will succumb to the powerful Greek lobby in the US, which will strenuously oppose any perceived concession to Turkey or the Turkish Cypriots, or whether it will take a more even handed approach. The 800 pound gorilla in U.S.Turkish relations is the question of the so-called “Armenian genocide.” Prime Minister Erdogan, in his recent visit to Washington for the G20 Economic Summit, made clear in an address at the Brookings Institution in Washington that any recognition by the US of the events of 1915 as genocide would irreparably damage relations between Turkey and the US. There is no reason to believe that he isn’t deadly serious. It is an unknown whether Obama and Vice President-elect Biden, who in the past have expressed support for the Armenian position, will risk a rupture with such a key ally as Turkey at a time when Obama will need Turkey’s cooperation on a number of key regional issues vital to U.S. interests. Turks will hope that Hillary Clinton and Rahm Emmanuel, Obama’s new chief of staff, who opposed the congressional genocide resolution, will oppose any actions that would alienate Turkey. There is a way out of this conundrum. The Turkish government’s proposal for an independent commission of historians to study the issue would take the genocide question off the political table. Such a historical commission makes eminent sense, but for this to happen, the Obama administration is going to have to take the lead and be the “honest broker” to insure that all sides will cooperate. In doing so, Obama will have to be willing to withstand intense lobbying from Armenian interests and powerful congressional Democrats like House Speaker Nancy Pelosi.
If, indeed, President Obama wants to change business as usual in Washington, as far as Turkey is concerned there would be no better way for him to demonstrate this than by removing politics from the genocide debate that has from time to time paralyzed previous administrations and congresses and threatened to derail relations between the two countries. It would be a bold move by the new President. It would demonstrate that he is willing to stand up to parochial interests. And it would win him tremendous good will with the Turkish nation. With threats of terrorism still high and tremendous instability in the Middle East, the world is far different from the previous century where Turkey was always there for the U.S. A more confident Turkey appears determined to play a leadership role in the Middle East and the Caucasus. In fact, it may just be that the U.S. needs Turkey more than Turkey needs the U.S. Nevertheless, after eight feckless years under President Bush during which the international reputation and credibility of the U.S has been seriously damaged, and as we face unprecedented threats to our economy, U.S. leadership is needed more than ever. The extraordinary election of Barack Obama as the next President is bringing much optimism that the United States can once again provide that leadership. As Americans and Turks, we wish Barack Obama Godspeed, for his sake, and ours.*� *A native of Maryland, Osman Bengur is a graduate of public schools in Montgomery County, Maryland and Washington, DC. He received his A.B. in 1971 from Princeton University, where he rowed on the heavy weight crew team, and received an advanced degree from Cambridge University, England. He was a first Turkish American candidate for the U.S. Congress in 2006 election.
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DOING BUSINESS PROJECT By Demet Cabbar
PRIVATE SECTOR IS THE LOCOMOTIVE OF AN ECONOMY According to the World Bank’s “Doing Business Project”, Turkey is ranked 59 out of 181 economies in 2008. Turkey jumped from a ranking of 91 in 2006 to 59 in 2008.
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t is now widely accepted that small and medium-sized enterprises are key drivers of competition, growth and job creation, particularly in developing countries. According to the World Bank’s Financial and Private Sector Development’s Vice Presidency: • Productive jobs tend to be created in private markets and competition tends to drive upgrading of skills and productivity growth • Rules-based markets that allow entry of new firms promote success on the basis of rules, not on the basis of personal connections; this stimulates movement from the informal to the formal sector including access to finance for underserved small firms and households • Better regulation and governance reduces opportunities for corruption • Wealth creation and entry of new parties into the market tend to create demand for better governance Yet, until recently there were no globally available indicator sets to measure and compare the ease of doing business across countries. For instance, the macroeconomic indicators in national accounts are standard in every country. However, for governments that are committed to improving daily economic activities of their country and job opportunities for its citizens, and for international investors who are looking into investment opportunities in other countries, there were no standard indicators. The Doing Business project, launched 7 years ago, looks at domestic small and medium-sized companies and measures the regulations applying to them through their life cycle. Although there have been earlier attempts to measure economic and policy 22 • TurkofAmerica
conditions for the private sector, the Doing Business project is the first that has come close to creating a global standard in this field. The first Doing Business report, published in 2003, covered 5 indicator sets in 133 economies. The 2009 report covers 10 indicator sets in 181 economies. The project has benefited from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business. Doing Business provides a quantitative measure of regulations for starting a business, dealing with construction permits, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business-as they apply to domestic small and medium-sized enterprises. A fundamental premise of Doing Business is that economic activity requires good rules. These include rules that establish and clarify property rights and reduce the costs of resolving disputes, rules that increase the predictability of economic interactions and rules that provide contractual partners with core protections against abuse. 239 reforms in 113 economies were introduced between April 2007 and June 2008. Reformers simplified business regulations, strengthened property rights, eased tax burdens, increased access to credit, and reduced the cost of exporting and importing. The pace of reform varied across regions, with Eastern Europe and Central Asia reforming the most. According to the report, during this period only one business reform took place in Turkey. A
new law requiring that an independent auditor assess transactions between interested parties before the transactions are approved was introduced in order to strengthen investor protections. According to the report, Turkey is ranked 59 out of 181 economies in 2008. Singapore is the top ranked economy in the Ease of Doing Business category, followed by New Zealand, the United States, Hong Kong – China, and the Western European countries, something which does not come as surprise. Although Turkey jumped from a ranking of 91 in 2006 to 60 in 2007, in 2008 it only moved up by 1, reaching 59 in the overall ease of doing business ranking. STARTING A BUSINESS In terms of the sub-components of doing business, in 2008, for instance, in starting a business, Turkey is ranked 43 overall. It requires 6 procedures, takes 6 days, and costs 14.91 % GNI per capita to start a business in Turkey. Turkey is ranked 68 overall for Paying Taxes. CONSTRUCTION PERMITS Turkey is ranked 131 overall for Dealing with Construction Permits. Where the regulatory burden is large, entrepreneurs move their activity into the informal economy. There they operate with less concern for safety, leaving everyone worse off. Another striking finding is that Turkey is ranked 138 overall for Employing Workers. Employment regulations are needed to allow efficient contracting between employers and workers and to protect workers from discriminatory or unfair treatment by employers. In its indicators on employing workers, Doing Business measures flexibility in the regulation of hi-
ring, working hours and dismissal in a manner consistent with the conventions of the International Labor Organization (ILO). Governments all over the world face the challenge of finding the right balance between worker protection and labor market flexibility. But in developing countries especially, regulations often lean to one extreme, pushing employers and workers into the informal sector. Analysis across economies shows that while employment regulation generally increases the tenure and wages of incumbent workers, overly rigid regulations may have undesirable side effects. These include less job creation, smaller company size, less investment in research and development, and longer spells of unemployment and thus the obsolescence of skills, all of which may reduce productivity growth. As the entire world watches the global financial system being transformed, inefficient production systems forced to reform, and economic power being reshuffled towards a more evenly distributed paradigm, this may be the right time for Turkey to reform its business regulations to catch up with its competitors in Asia, Europe and Latin America and to get ahead in the new economic era by removing the constraints that prevent the private sector from flourishing. With Turkey’s comparative advantages in location and educated work force, there is no reason why Turkey should not be a heaven of entrepreneurship and investments. The time is ripe to put the private sector in the driver’s seat. For more information on Doing Business Country Report for Turkey, visit: http://www.doingbusiness.org/ Documents/CountryProfiles/ TUR.pdf �
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U.S. STEEL INDUSTRY
THE STEEL INDUSTRY’S MAJOR CONCERNS:
THE CHINA FACTOR AND ENVIRONMENTAL STANDARDS Total and finished steel imports on an annualized basis this year are each down 2 percent, respectively, vs. 2007. as the voice of the North American steel industry in the public policy arena and advances the case for steel in the marketplace as the material of choice. AISI's member companies represent over 75 percent of both U.S. and North American steel capacity.
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ccording to RNCOS, an industry research firm, in a new market research report titled "US Steel Industry Outlook,” the US produces and consumes about 3% of the world's iron ore output. In 2007, mines in Michigan and Minnesota - the two largest iron ore producers in the country - shipped 95% of the iron ore produced. The weak dollar remains a major challenge for the US steel industry as steel imports are expected to slip down to around 27 million metric tons this year from 30.4 million metric tons in 2007. The RNCOS report indicates that the energy-related construction market is a potential growth area for the US steel industry. At the global level, overall crude steel production remained high in 2007, but a slowdown was observed in the growth rate of crude steel production from last year. Getting loans and expanding bu34 • TurkofAmerica
sinesses and the housing market has become difficult due to uncertainty in financial markets. This resulted in a decline in apparent steel consumption in 2008. Although the U.S. imported $2.9 billion in steel mill products, as of October, 2008, a national survey of over 1,000 U.S. voters found that 80 percent of those polled believe that cheap steel from countries where environmental standards and manufacturing requirements are low is a bad thing. The reasons given were increases in global pollution, greenhouse gas emissions, and the fact that it creates an unfair advantage for foreign steel producers that domestic steel companies do not have. The question related to steel, sponsored by the American Iron and Steel Institute (AISI), was part of the FirstView 2008 National Post Election survey conducted by Strat@comm. AISI serves
The U.S. imported a total of 2,964,000 net tons of steel in October 2008, including 2,344,000 net tons of finished steel, up 1 percent and down 5 percent, respectively, vs. September’s final data. While total and finished steel imports through the first ten months of 2008 are each down 6 percent vs. the same period in 2007, the monthly average for finished steel imports in the most recent 3-month period (AugustOctober 2008) is up 7 percent vs. the monthly average in the previous 3 months (May-July 2008).
bally, the unprecedented tonnage of finished steel imports from China in October (713,000 NT) is of extreme concern.” In October, the largest volume of finished imports from offshore was from China (713,000 NT, up 26% from September). This was 30% of all finished imports. While steel imports from China in the first ten months of 2008 are down 9 percent compared to the same period last year, Chinese imports set a new all time record in October. Much of this tonnage is in high-value products still receiving government export tax rebates. Other major offshore suppliers in September include Korea (167,000 NT, down 32% from Sept.), Japan (132,000, up 5%), Germany (81,000 NT, down 11%), Turkey (72,000 NT, down 33%) and India (65,000 NT, down 59%).
Total and finished steel imports on an annualized basis this year are each down 2 percent, respectively, vs. 2007. On an annualized basis, total imports of steel in 2008 would be 32.8 million NT. Thomas J. Gibson, AISI President and CEO said, “Against the backdrop of a severe economic downturn in the U.S. and glo-
While the import of steel is increasing in the U.S., AISI reported that for the month of September 2008, U.S. steel mills shipped 7,920,000 net tons, a 6.8 percent decrease from the 8,492,000 net tons shipped in September 2007, and a 10.7 percent decrease from the 8,860,000 net tons shipped in the previous month, August 2008. �
LEADERS IN MARKET CAPITALIZATION IN THE U.S. STEEL INDUSTRY
Precision Castparts Corp. United States Steel Corp. Reliance Steel & Aluminum Co. Valmont Industries, Inc. Matthews International Corporat Mueller Industries, Inc. Mobile Mini, Inc. Chart Industries, Inc. Ladish Co., Inc. Graham Corp Source: Yahoo Finance
$8.7 B $3.5 B $1.5 B $1.4 B $1.3 B $865.3 M $452.9 M $271.5 M $263.8 M $92.2 M
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HAPPENINGS
“BEYOND BABYLON” EXHIBIT AT THE MET
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globalizing world, developing trade routes, and communication networks connecting these to the world... Every type of product and merchandise that you can think of can be marketed to the four corners of the globe. Today these things are normal and common... But 4000 years ago, what kind of goods were used in trade between civilizations, and how were they transported? Some 350 objects including necklaces, earrings, bracelets, and figurines that traveled from Syria to Anatolia and from Anatolia to Greece, comprise an exhibit called “Beyond Babylon: Art, Trade and Diplomacy in the Second Millennium B.C.,” which opened to the public with a ceremony on November 15 at the Metropolitan Museum of Art. The artifacts, which come from various museums in Turkey, Armenia, Georgia, Greece, and Lebanon, can be viewed until
March 15, 2009. Although the Met also wanted to include ancient artifacts from Syria in the exhibit, these plans were abandoned because of the “Foreign Sovereign Immunities Act,” which was passed by the American government in January 2008. A total of 140 items are from Turkey, of which 98 items, belonging to the Uluburun shipwreck, come from the Bodrum Underwater Archeology Museum, with the remaining items coming from other museums. These important works from Tur-
key were retrieved in 1984 from a merchant ship that sank in the Late Bronze Age. Considered the oldest known seagoing ship, it is estimated to have sunk in 1300 B.C., and contained goods that were used for trade from different cultures from Nubia to the Balkans. Present at the opening of this exhibit, which sheds light on the history of the Near East and Eastern Mediterranean and on Turkey’s history as a center of trade, were Halis Komili, Semahat Arsel, Suzan Sabanc› Dinçer, TA‹K Baflkan› Haluk Dinçer, Jeff Hak-
ko, Semahat Arsel, Ömer Dinçkök, Halis Komili, Melih Sipahio¤lu and other well-known names from the Turkish business community. The exhibition is made possible by Dorothy and Lewis B. Cullman and The Hagop Kevorkian Fund. Corporate sponsors are the DEIK Turkish-American Business Council, Do¤an Holding, Do¤ufl Holding, Koç Holding, and Sabanc› Holding. Additional support is provided by the Oceanic Heritage Foundation and the National Endowment for the Arts. � Place: Metropolitan Museum of Art, Iris and B. Gerald Cantor Exhibition Hall, 2nd floor Price: $20 suggested contribution, $15 seniors, $10 students. Reservations: No Recommendation Nearby Subway Stops: 4, 5, 6 at 86th St. Official Website: metmuseum.org Schedule: Thru 3/15/09 Tue-Thu, Sun, 9:30am-5:30pm; Fri-Sat, 9:30am-9pm
HUMA GRUAZ NAMED BRAND MARKETER OF THE YEAR FINALIST
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hicago, IL – Huma Gruaz, founder and president of Alpaytac Inc., has been named one of the nation’s top three “Brand Marketers of the Year” by PR News. Gruaz was honored at the 2008 PR People Awards in Washington D.C. on November 6, 2008. Hosted by PR News, these
annual awards showcase top industry professionals who have demonstrated outstanding achievements in public relations and marketing. Gruaz’s work with leading housewares company Shark Euro-Pro, the founding client of the agency, in addition to the rapid growth of the
agency, helped Gruaz stand out amongst an impressive list of finalists. Gruaz founded Alpaytac in 2004, and has since built the company into one of the premiere public relations agencies in the nation. To learn more about Alpaytac, visit www.Alpaytac.com.�
CONGRESSIONAL TURKISH CAUCUS HOLDS UP STRONG IN ELECTION
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he Turkish Caucus in the US House of Representatives will begin the new legislative year (January 2009) with 71 members, down from its record number of 80. However, only five of those Members lost in the November 4
elections, while four members did not seek re-election. Members of the Caucus who lost the election are: Rep. Steve Chabot (R-Ohio/1st), Rep. Thelma D. Drake (RVirginia/2nd ) Rep. Phil English (R-Pennsylvania/3rd) Rep. Randy
Kuhl (New York/29th ), Rep. Chris Shays (R-Connecticut/4th ). Members of the Caucus who did not seek re-election are: Rep. Bud Cramer (D-Alabama/5th), Rep. Jim Ramstad (R-Minnesota/3rd), Rep. Tom Tancredo (R-Colora-
TURKISH CULTURAL FOUNDATION 2009 FELLOWSHIPS
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urkish Cultural Foundation (TCF) announces the 2009 Fellowship Program. The 2009 TCF Fellowship Program will
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award 10 Fellowships at USD 10,000 for dissertation research at the Ph.D. level; and 5 Fellowships at USD 15,000 at the Post-
doctoral level. The deadline for application is February 1, 2009. In 2007, 10 fellowships were awarded under this program.
do/6th), Rep. Heather Wilson (RNew Mexico/1st). “We are very pleased that the co-chairs of the Turkish Caucus and the majority of its members have been re-elected and congratulate them on their election victories,” said Lincoln McCurdy, President of the Turkish Coalition of America. �
For detailed information on eligibility criteria, applications forms and to learn more about the program, visit the Turkish Cultural Foundation website. �