business and investment opportunities in turkey for basque companies. internationalisation

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CHARLA DEBATE TURQUIA

25 DE FEBRERO / 9:30H

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BUSINESS AND INVESTMENT

OPPORTUNITIES IN TURKEY

“ Content ”

Ø  General Information on Turkey ... Ø  Summarized economic figures … Ø  Information on leading sectors … Ø  The possibilities of the market for the Basque industrial sector … Ø  Some Basque Companies already active in Turkey! Ø  How to proceed with SPRI Turkey?

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Ø  Turkey is at the center of a very special economic and political area, “Euroasia”,

where three regions of the world, Europe, the former Soviet Union and the Middle East intersect, overlapping Europe and Asia geographically and culturally. The proximity to the Balkans and the rest of Europe as well as to the growing emerging markets in Central Asia, the Middle East and North Africa creates unique business opportunities.

Istanbul

Ankara Bursa

Sinop

Trabzon

Erzurum


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Ø  Turkey is in the EU accession process to be a full member. Accession negotiations started in October 2005. Turkey has been a member to the European Customs Union since 1995 as the only non-member to the EU.

Ø  Turkey has Free Trade Agreements with EFTA and 17 countries, also is a member of Black Sea Economic Cooperation, Economic Cooperation Organization (ECO), Organization for Islamic Conference and Islamic Development Bank and World Trade Organization (WTO)

Ø  Turkey's population is approximately 75 million and is projected to continue to constitute one of the largest populations in Eurasia. The population is much younger than European countries, with over 60% of the population below the age of 35 and a median population age of 25.

Ø  The available workforce is highly motivated, disciplined and trainable. Ø  The improving consumption patterns and purchasing power, with a

growing middle class, are important features of the domestic market. Ø  The average annual GDP growth rate of 8 % over the past period, well

above many other countries, implies a continuing robust growth potential, where nowadays slowed down to 3-4 %.


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Ø  Turkey is the only secular democracy where its population is predominantly Muslim. That is; it acts as a bridge between the East and West. Due to good relations with other Muslim countries, Turkey is the entrance of other Eastern markets.

Ø  In addition, Turkey could be the most politically preferable Muslim country for investments due to secularism, physically closeness and sympathy for Europe and higher tolerance for different cultures in additon to its respect for human rights, protection of and respect for minorities, democratic order, and the rule of law.

Ø  The monetary policies, the banking systems, techniques, rules and regulations are uniform throughout the country.

Ø  Purchase of property in Turkey is simple and straight forward with the minimum of bureaucracy.

Ø  Net profits, dividends, sales, liquidation and compensation costs, principal and interest payments, etc. can be freely transferred outside the country through banks.


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Ø  Foreign investors can freely have title and obtain limited real rights on companies with a legal entity established or participated in, in regions open to investment by Turkish citizens.

Ø  Investors in Turkey enjoy lower labor and transportation costs. Turkey is surrounded by Agean, Mediterranean seas and the Black Sea also making maritime transport very convenient.

Ø  Also electricity, water and communication costs are lower than those in many countries

Ø  There are various government subsidies, R&D and technology development supports and tax incentives according to the business.

Ø  Foreign investors are treated the same as domestic investors. In general, there is no restriction on the ratio of foreign shareholding. Some restrictions exist for foreign investors in only a few fields such as radio and television broadcasting, civil aviation, maritime transport, marina operations, and fishing.


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Ø  Most of the industries are expected to grow mainly due to positive expectations on economic environment leading to increased demand in retail:

•  Raise in GDP

•  Raise in disposable income

•  Falling unemployement rates •  Falling interest rates

•  Increasing population / Young population

•  Increasing consumer confidence •  GDP growth; 2011=9, 2012=2.2, 2013E=3, 2014E=4

•  GDP Composition; Services %64, Industry %27, Agriculture %9

•  CPI–Inflation(period-end); 2011=10,5%,2012=6,2%, 2013E&2014E=6%

•  As of 2012 year-end, foreign direct investment (FDI) inflows to Turkey have reached $12.4 billion. In 2012,

•  Foreign Exchange Rate (TL/€) yearly average; 2012=2,31

Turkey – 2012 * GDP: 596 bn €

GDP per capita: 7,958 €

17th largest economy of the world **

* PPP adjusted

** estimated by IMF


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Ø Some of the the target sectors for the Basque Companies may be counted as;

§  Machinery and Tools - Mould and Die/Matrix §  White Goods §  Automotive §  Automation §  Packaging §  Aeronautics/Defense §  Railways §  Wind Power and Tools §  Steel & Foundry §  Subcontracting


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Ø Machinery and Tools Industry in Turkey

12th largest manufacturer among 28 countries §  The production value is US$ 555 million §  26% of the total is from metal cutting type machining centers §  74% from metal forming type machine tools. §  partially meets domestic demand, §  72% of the production (US$ 555 million) was exported to nearly 134 countries §  The Turkish mahine tools industry and sub-industries are composed of about 480 companies, whereas about 10 companies are large-scale manufacturers of machine tools and parts/components/auxiliares §  The sector employs about 3200 workers. §  Manufacturing sites are mainly located in the Marmara, Central Anatolian and Aegean Regions of Turkey, where Istanbul, Bursa, Konya, Izmir, Ankara and Kayseri are the major cities in machine tools and parts/components production.


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Ø  Turkish White Goods Industry

Overview: §  Total sales turnover of the main industry firms corresponds to 4 billion € §  Those OEM firms supply most of their materials from the local Turkish part

manufacturers §  Primary Products manufactured by the Industry are;

Refrigerators, Dishwashers, Washing Machines, Ovens, Tumble Dryers, Air-conditioners, Commercial Refrigerators, Household Appliances

§  Within the scope of BEYSAD, White Goods Suppliers Association members, there exists 185 Turkish part manufacturers and contractors, most of which are small and medium sized enterprises.

§  Locational distribution of the sector; §  47% Istanbul, 14% Eskişehir, 12% Manisa, 8% Kocaeli, 5% Bolu, 5% Tekirdağ,

3% Bursa, 3% Izmir, 3% Ankara


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Ø  Turkish White Goods Industry

Export Skills: §  Exports are made to more than 100 countries §  Current market share of the Turkish products in Europe;

TV market 55%, White Goods market 15% §  The Position of the Turkish White Goods Sector in Europe;

32% Italy, 22% Turkey, 14% Germany, 32% Other §  Export Turnover of BEYSAD Members;

Direct Export amounting to US$460 million Indirect Export through main industry firms amounting to US$1,5 billion In total, approximately US$2 billion


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Ø  The Automotive Industry in Turkey

Development of MVI in Turkey: 1960/2010


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Ø Motor Vehicle Manufacturers in Turkey (2008)

TOFAŞ JV FIAT 400.000O.RENAULT JV RENAULT 360.000TOYOTA FDI TOYOTA 150.000HYUNDAI ASSAN JV HYUNDAI 100.000HONDA FDI HONDA 50.000

1.060.000FORD OTOSAN JV FORD 295.000HYUNDAI ASSAN JV HYUNDAI 25.000KARSAN Local PEUGEOT 25.000B.M.C. Local Local 22.000OTOYOL JV IVECO 18.000M.BENZ TÜRK JV M.BENZ 13.000ANADOLU ISUZU JV ISUZU 13.000TEMSA Local Local 11.000ASKAM Local Local 9.000OTOKAR Local LAND ROVER 8.000M.A.N. FDI MAN 4.000

443.0001.503.000

Capacity Vehicle/Year

CV

Ownership

TotalCV Total

P.Cars

Companies Partner

P.Cars Total

Product


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Ø MV Manufacturers in Turkey


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Ø Automotive Component Industry In Turkey


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Ø Prospects of the Turkish Automotive Industry


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Ø  Industrial Automation Sector in Turkey §  The activity of bringing different complementary dyciplines under one umbrella body is managed by ENOSAD, the association for industrial automation sector in Turkey. §  The engineering systems and services provided to the following sectors are subjects of Industial Automation; chemical & petrochemical, food, cement, textile, ceramics, paper, fuel & gas, defense, iron & steel, medecine, automotive, glass, energy, water & waste treatment, machinery production, ... §  Regarding the world market of industrial automation, Turkey ranks really low. §  Currently number of active companies are about 100-120 §  Total size of the market is assumed to be about US$1 billion, whereas US$600 million is based on imports. §  Assuming a transition level of 20-30% for automation, the market is expected to grow up to US$4 billion. This may be valid through the right investments. §  Rest of the market is made up of mainly the engineering services and local production. §  The strength of the local market lies at the process automation, but not at the machine automation.


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Ø  Turkish Packaging Industry

§  There are about 3000 companies manufacturing various packaging materials in Turkey, whereas 11 of them are among the largest 500 companies in Turkey §  The annual consumption of packaging is about 4,5 million tons. §  In the last five years, the average growth rate of the Turkish packaging industry has been 8% per year, and it is estimated to remain the same in the coming years. §  The breakdown of packaging products consumption in Turkey is; 37% for flexible packaging, paper, cartoon, and corrugated board packaging, 22% for metal packaging, 20% for plastic packaging, 13% for wood packaging and 8% for glass packaging.


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Ø Aeronautics and Defense Industry in Turkey

§  Leading aircraft manufacturers rank Turkey 3rd among the fastest growing civil aviation markets in the world, after China and India. §  Total number of Turkish airliners, charter and cargo operators reached 22, whereas the number of aircraft owned by these companies reached 286. §  286 aircraft represents a growth rate of 89% over the span of 6 years for the same period, the seat capacity has grown with a rate of 83% and reached 44,543 seats in 2009 compared to 25,114 in 2002. §  Regional market projections of both Boeing and Airbus conclude that this growth will continue in the upcoming 10 years. §  Revising their projections accordingly, both manufacturers expect 150 to 180 aircraft to be added to the fleet in the next 10 years representing a monetary value of US$12 to 16 billion. §  An enormous domestic market has actually emerged, with a shocking 269% growth rate over a period of 5 years.


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Ø  Turkish Rail Sector

§  95% of transport in Turkey is realized through motorways, whereas only 5% is through railways.

§  The Republic of Turkey General Directorate of State Railways Administration (TCDD) operates rail services in Turkey. TCDD is a State Economic Enterprise (SEE) affiliated to Min.of Transport with monopoly powers to provide rail services (suburban and inter-city passenger and freight) in Turkey.

§  TCDD is responsible for both infrastructure construction and maintenance and train operations. TCDD also owns and operates three affiliated companies responsible for the manufacture of locomotives, passenger coaches and freight wagons.

§  TCDD owns and operates a total of 7 ports that have railway access: Haydarpasa, Mersin, Iskenderun, Derince, Izmir, Samsun and Bandirma. The ports are currently the only part of TCDD that are operating profitably and are cross-subsiding railway operations.

§  TCDD’s current staff figure in total is about 43,500. §  Total lines of 11.005 km, whereas 8.699 km is for the main lines is open to service.


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Ø  Turkish Energy Market and Renewable Energy

§  Turkish Energy sector offers one of the top growth opportunities for an array of business segments within the next decade. Growing Energy Demand

§  Turkey’s forward looking energy sector needs an investment amount of approximately US$130 billion by 2020. On the basis of demand series of 8.5%, which is in line with the State Planning Organisation’s new long term development plan projections, a total of 51 thousand MW new capacity investments have to be added to the system. This is apart from the 7,385 MW projects under construction.

§  Driven by strong population growth, urbanization and economic expansion, the energy consumption more than tripled in the 1980s and 1990s, and recent surveys suggest that until 2020, the oil consumption is expected to increase two fold, and gas consumption four fold. A liberalization of the energy sector coupled with the energy demand foreseen to grow at an average over 8% annually through 2020 offer great opportunities for energy generation and equipment providers. In the planning work conducted, a total of 4,500 MW nuclear power plants need to be put into operation as of 2012.


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ADDITIONAL CAPACITY REQUIREMENT IN ELECTRICITY, 2005-2020 (MW)

Source 2005-10 2011-15 2016-20 Lignite 0 4,520 5,520 Hard coal 0 0 1,200 Import coal 0 0 4,500 Natural gas 2,800 6,000 5,450 Hydro 542 6,811 7,782 Wind 500 625 625 Nuclear 0 4,500 0 Total 3,842 22,456 25,077

Source: The Ministry of Energy and Natural Resources, November 2004


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Renewable Energy Potential (MW) Wind economic potential 10,000 Hydro economically usable 35,000 Geothermal 35,000 Solar 35 Mton year

Source: The Ministry of Energy and Natural Resources

Renewable Energy Opportunities §  Turkey’s total electric energy demand is expected to increase, the country has a major demand for small hydro power plants, wind power, solar energy, geothermal power generation and waste to energy type of technologies. §  It is expected that €1.2 billion will be invested in wind energy only. §  Turkey is encouraging the use of renewable energy to reduce the energy imports and carbon dioxide and other emissions. §  The hydropower potential of Turkey is about 128 billion kWh per year. About 35% of the hydropower potential is utilized and generating electricity. §  Hydropower plants with an installed capacity of 11 billion kWh/year are under construction. §  Many private companies are developing small and midsize hydropower projects.


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Ø Renewable Energy Law

Ø  Investment Opportunities GENERATION HEPP WEPP GEOTHERMAL NATURAL GAS COMBINED CYCLE PRIVATIZATIONS DISTRIBUTION IMPORT- EXPORT


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Ø  Turkish Iron and Steel Sector

§  entirely operated by the private sector §  has 19 electric arc furnaces and §  three integrated works (KARDEMIR, ERDEMIR, ISDEMIR) §  total raw steel production capacity of nearly 42,7 million tons per year §  In 2010, out of this capacity, 35,4 million tons, or 72.6% was for long-steel products where mostly used in the construction sector. The rest is directed to flat products. §  Crude steel production of Turkey has been 29,143 thousand tons in 2010, out of which; 21,827 ingot

7,316 slab. •  Turkey became 10th largest steel producing country in the world by the end of 2010, where; raw steel production rose to 29.1 million tons. •  In terms of production processes;

72% was electric arc furnace steel, 28% was oxygen (BOF) steel were produced.


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Ø  Turkish Iron and Steel Sector

•  Sector has 30 facilities producing crude steel and about 200 rolling mills...

Providing direct and indirect employment for 200.000 people.


İzmir Region 11.3 mt

İskenderun Region 16.4 mt

Marmara Region 14.5 mt

Black Sea Region 7.9 mt

27 Source: Turkish Iron and Steel Producers’ Associa6on

§  entirely operated by the private sector §  has mainly electric arc furnaces and §  three integrated works (KARDEMIR, ERDEMIR, ISDEMIR) §  total raw steel production capacity of nearly 47,2 million tons per year, as of 2011

Ø Steel Map of Turkey, 2012


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Ø  GLOBAL IRON & STEEL PRODUCERS Crude Steel Production of Top 15 Countries, 2012

2000 2002 2004 2005 2009 2012

1 China 127 236 1 China 182 249 1 China 272 456 1 China 355.790 1. China 567.842 1. China 716.540

2 Japan 106 444 2 Japan 107 745 2 Japan 112 675 2 Japan 112.471 2. Japan 87.534 2. Japan 107.460

3 USA 101 803 3 USA 91 587 3 USA 98 545 3 USA 93.285 3. Russia 59.940 3. USA 88.598 4 Russia 59 136 4 Russia 59 777 4 Russia 64 289 4 Russia 66.146 4. USA 58.142 4. India 76.720

5 Germany 46 376 5 S.

Korea 45 390 5 S. Korea 47 521 5 S.

Korea 47.820 5. India 56.608 5. Russia 70.608

6 S. Korea 43 107 6 Germany 45 015 6 German

y 46 408 6 Germany 44.524 6. S.Korea 48.598 6. S.

Korea 69.345

7 Ukraine 31 767 7 Ukraine 34 050 7 Ukraine 38 738 7 India 40.862 7. Germany 32.671 7. Germany 42.661

8 Brazil 27 865 8 Brazil 29 604 8 Brazil 32 918 8 Ukraine 38.610 8. Ukraine 29.757 8. Turkey 35.885 9 India 26 924 9 India 28 814 9 India 32 626 9 Brazil 31.610 9. Brazil 26.507 9. Brazil 34.682

10 Italy 26 759 10 Italy 26 066 10 Italy 28 334 10 Italy 29.350 10. Turkey 25.304 10. Ukraine 32.911 11 France 20 954 11 France 20 258 11 France 20 773 11 Turkey 20.965 11. Italy 19.737 11. Italy 27.310 12 Taiwan 16 896 12 Taiwan 18 230 12 Turkey 20 478 12 France 19.481 12. Taiwan 15.747 12. Taiwan 20.660 13 Canada 16 594 13 Turkey 16 467 13 Taiwan 19 570 13 Taiwan 18.942 13. Spain 14.300 13. Mexico 18.180 14 Spain 15 874 14 Spain 16 408 14 Spain 17 665 14 Spain 17.904 14. Mexico 14.172 14. France 15.607 15 Mexico 15 586 15 Canada 16 002 15 Mexico 16 701 15 Mexico 16.195 15. France 12.836 15. Iran 14.463 16 UK 15 155 16 Mexico 14 010 16 Canada 16 428 16 Canada 15.327 16. Iran 10.873 16. Canada 13.730 17 Turkey 14 325 17 UK 11 667 17 UK 13 772 17 UK 13.248 17. UK 10.080 17. Spain 13.628 18 Belgium 11 636 18 Belgium 11 343 18 Belgium 11 733 18 Belgium 10.421 18. Canada 8.968 18. Ukraine 9.756 19 Poland 10 498 19 S. Africa 9 095 19 Poland 10 648 19 Poland 8.444 19. S. Africa 7.484 19. Poland 8.366 20 S. Africa 8 481 20 Poland 8 368 20 S. Africa 9 504 20 Iran 9.404 20. Poland 7.208 20. Austria 7.421

World 847 622 World 903 785 World 1054

679 World 1141892 World 1 199 162 World 1.518.28

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Ø CRUDE STEEL PRODUCTION

CRUDE STEEL PRODUCTION(1000MT)

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

LONG 11.937 12.019 13.579 15.211 17.447 17.869 20.302 22.028 22.650 20.524 21.827 24.400 FLAT 2.388 2.962 2.888 3.088 3.031 3.095 3.135 3.726 4.156 4.779 7.316 9.707 TOTAL 14.325 14.981 16.467 18.299 20.478 20.964 23.437 25.754 26.806 25.303 29.143 34.107 35.885 World Rank 17 15 13 13 12 11 11 11 11 10 10. 10. 8 Europe Rank 6 5 4 4 4 4 4 3 3 2 2 2 Capacity 19.832 20.808 21.929 22.906 23.584 25.144 27.716 32.008 34.091 38.466 43.434 47.235 49.000 Capacity Utilization Rate(%) 72 72 75 80 87 83 85 80 79 66 67 72 75 3 YEAR PROJECTION(1000MT)

2013 2014 2015

LONG 26.500 28.000 28.500

FLAT 14.500 15.500 17.000

TOTAL 41.000 43.500 45.500

Capacity 50.300 53.000 55.200 Cap. Utilizat. (%) 81,5 82,1 82,4

§  In 2012, out of this capacity, about 74% was for long-steel products where mostly used in the construction sector. The rest is directed to flat products. §  Crude steel production of Turkey has been 35885 thousand tons in 2012, out of which; main part was ingot, and the rest was slab. § Turkey became 8th largest steel producing country in the world by the end of 2012. §  In terms of production processes;

72% was electric arc furnace steel, 28% was oxygen (BOF) steel were

produced.


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Crude Steel Production Turkey’s crude steel production grew by 5.2% to 35.89 Mt in 2012. Turkey moved up to the 8th position in the largest steel producing countries list from the 10th position in 2011 overtaking Brazil and Ukraine. Despite sharp drop in crude steel production growth from 17 % in 2011 to 5.2 % in 2012, Turkey kept its position as the country with the highest production increase in the top 10 steel producers. Although crude steel production increase slowed down, Turkey’s growth rate was 4.5 times higher than the world average of 1.2%. Quarterly production figures for 2012 clearly reflects the slowdown in production growth. Growth rate of the Turkey’s crude steel production was 13.7 % yoy in the first quarter. Increase in the production slowed down to 5.2 % in the second quarter, 6.7 % in the third quarter, growth tendency turned to negative during the last quarter and production dropped by -3.6 %. Recent figures show that Turkey increased its production compared to the pre-crisis period by 39 % and in this respect was among the 5 countries to carry its production to 2007 level. Billet played a significant role in Turkey’s crude steel production growth. Turkey’s billet production rose by 10.9 % to 27.05 million tons. Slab production, which grew by 53 % in 2010 and 33 % in 2011 due to the new capacities established, dropped down by 9 % to 8.8 million tons due to the unfavorable conditions in flat steel markets, increasing competition, unfair trade from some of the Far East countries and low quality steel import from some of the neighboring countries. In this respect, share of slab in Turkey’s total crude steel production dropped from 28.5 % in 2011 to 24.6 % in 2012, which means a large part of the capacity kept underutilized in 2012. While crude steel production of the EAF mills increased by 5.1 % to 25.56 million tons, production growth in the BOF route stayed around 5.6 % reaching 9.33 million tons.


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5.2

4,2

3.1

2.5

2.5

1.2

1.2

-0.1

-1.5

-3.7

-6.9

-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

Turk

ey

Indi

a

Chi

na

Rus

sia

USA

S. K

orea

WO

RLD

Japa

n

Bra

zil

Ger

man

y

Ukr

aine

Source: World Steel Associa6on

Ø Production Growth of Top 10 Countries (%) – 2012


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19.8

25.1

27.7

32.0

34.1

38.3

42.7

47.1

49.0

50.4

36

.5

72.2

83.4 84.6 80.5 78.6

68.0 71.0

76.0 75.0 73.0

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

0.0

10.0

20.0

30.0

40.0

50.0

60.0

2000 2005 2006 2007 2008 2009 2010 2011 2012 2013*

Capacity Production CU %

* estimate (MMT) (%) Source: Turkish Iron and Steel Producers’ Associa6on

Ø  Crude Steel Production Capacity (MMT) and Capacity Utilizaton (%)


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Ø  IRON AND STEEL EXPORTING COUNTRIES – Top10

# 2010 2011 2012* (2010/11) (2011/12) 2011 Million Tons

Million Tons

Million Tons % Change % Change % Share

1 CHINA 53,9 61,6 68,6 14,4% 11,4% 13,0% 2 JAPAN 43,3 41,2 42,4 -‐4,9% 2,8% 8,7% 3 RUSSIA 35,3 31,4 35,7 -‐11,0% 13,5% 6,6% 4 S. KOREA 25,6 30,2 32,1 18,2% 6,3% 6,4% 5 GERMANY 28,6 30,4 29,2 6,5% -‐4,1% 6,4% 6 UKRAINE 26,8 27,9 26,4 4,0% -‐5,5% 5,9% 7 TURKEY 17,3 18,1 19,9 4,6% 9,7% 3,8% 8 ITALY 16,7 18,6 19,7 11,3% 6,1% 3,9% 9 BELGIUM 16,7 18,1 15,8 8,1% -‐12,7% 3,8% 10 FRANCE 14,8 15,2 15,2 2,7% -‐0,2% 3,2% OTHERS 169,1 182,6 8,0% 38,4%

TOTAL 448,1 475,4 6,1% 100%

*Due to lack of data for various countries, year 2012 data is incomplete. Source: United Na6ons Comtrade Database


QUANTITY 9,6 % INCREASED VALUE 1,8 % INCREASED

THO

USA

ND

TO

NS

MILLION USD

MIL

LIO

N

USD

15.292

15,564

0

5,000

10,000

15,000

20,000

2011 2012

18.118

19.860

0

5,000

10,000

15,000

20,000

2011 2012

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Ø  Turkish Steel Export (2011-2012)


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Ø  2023 EXPORT TARGET: 55 BILLION USD

TURKISH IRON & STEEL EXPORTS 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

TonS (1.000MT) 6.445 10.779 11.364 11.920 14.396 13.331 15.352 16.695 19.955 18.740 17.347 18.140 Mio $

(1.000.000) 1,666 2,547 2,872 3,789 6,983 6,698 8,646 11,351 19,367

11,011 12,297 15,352

2008 2013 2018 2023

Global Iron & Steel Trade (Billion $) 686 699 972 1.350

Turkish Iron & Steel Trade (Billion $) 19,3 25 38 55 Turkey’s Share(%) 2,8 3,6 3,9 4,1


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Ø KEY FACTS AND FIGURES

ü  8th most important steel-producing country globally

ü  3rd fastest growing steel producer globally between 2001 and 2012

ü  World’s leading exporter of reinforced bars

ü  72% of Turkish crude steel production belong to scrap consuming EAF mills

ü  World’s largest importer of scrap metal


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Ø About TURKISH STEEL •  Despite sharp slowdown, with its production growth of 5.2 %, Turkey achieved the highest growth rate in 2012 among the top 10 steel producers and this rate is well above the world average.

•  With the recent investments to the production of flat and structural steel products, Turkish steel industry is trying to establish new balance in its production structure and its status the world markets accordingly.

•  Slowdown in export markets and continued import have negatively affected the production of Turkish steel industry.

•  Although 6.9 mmt of flat steel capacity has not been utilized, Turkey imported 6.4 mmt of flat steel in 2012, which is an indication of functioning free market conditions in the Turkish market.

•  Because of the high import tonnage and weak export markets, capacity utilization in flat steel stayed at 56 % in 2012.

• In 2013, Turkey’s economic growth is expected to accelerate and thus steel consumption is expected to grow further.


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Ø About TURKISH STEEL •  Despite strong performance in 2011 and 2012, Turkey’s crude steel production is on downward trend in the first months of 2013.

•  Although domestic steel consumption and steel export are showing moderate growth, production drop is a result of the sharp increase in total steel import which is up by 35 % in 4 months of2013, yoy.

• The demand conditions in the main export markets such as EU, Middle East & Gulf and North Africa has not totally improved. Turkish steel industry is expected grow with the help of strong domestic demand, which is expected to accelerate in the second half.

•  Infrastructure investments before the general elections next year and low interest rates are expected to boost the local demand for steel beginning from the second half of this year.

• Huge government projects like 3rd Airport in Istanbul, 3rd bridge on the Bosphorus, highways, channel project in İstanbul, high speed train lines and urban transformation projects is expected trigger Turkey’s steel consumption.

•  In addition to the internal dynamics, the performance of the Turkish steel industry in 2013 depends on the international market conditions in EU, Middle East and Asian markets.


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Ø Why TURKISH STEEL?

Proven Production Capacity to meet growth in future levels of demand – Turkey is the 2nd largest producer in Europe by volume

Proximity to markets – Turkey’s position on the Aegean & Mediterrenean Sea and

proximity to major European industrial markets means it can respond to demand quickly and on time

Modern infrastructure – consolidated investments have provided Turkey with a world-

class infrastructure meaning it can get its steel products faster to market Quality products – all members of the Turkish Iron and Steel Producers Association

enjoy International Standards Organization certification ISO9001 and Turkish steel products enjoy certification from individual EU states and US authorities

Competitive pricing – Investments in technology provide state-of-the-art production

facilities and new production technologies mean that Turkey can offer quality products at consistently competitive prices


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Ø Why TURKISH STEEL?

Experienced & skilled workforce – excellent standards of training and education ensure an expert workforce for highest production standards

Latest technologies – Production techniques integrate world-standard technological

practices, such as the world’s most productive electric arc furnace for scrap. Continued Investments – Turkey continues to invest in upgrading, enhancing and

improving production methods and in innovative products. Greener steel – Turkey produces 72% of its total crude steel production using the EAF

method, which is based on recycling scrap metal. The industry has committed to meeting all EU and United States environmental standards and without recourse to state subsidies. All integrated plants enjoy ISO 14001 environmental standards certification. Turkey’s proximity to key European markets helps reduce the carbon footprint of EU countries’ steel imports.


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Ø  Forecasts for TURKISH STEEL?

Turkish economy is forecasted to grow by 4 % in 2013. With the help of the increasing market demand, Turkey’s crude steel production is expected to rise by 6 % to 38 million tons level.

In 2013 finished steel production is forecasted to pass 37 million tons level and consumption to reach around 30.5 million tons.

Expected recovery in the construction industry which accounts for around half of Turkey’s total steel consumption, growth oriented government policies, drop in loan interest rates and production growth of the manufacturing industries which consume steel products for their production will be the main drivers of the Turkey’s steel consumption in 2013.

.


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Ø  Turkish Foundry Sector

§  Turkish Foundry sector has vital importance for both Europe and the world, as Turkey ranks within the top 4 countries in Europe and 13 in the world. §  Annual production capacity of Turkish foundry industry is about 1.4 million tons in 2011. Recent capacity utilization rate is 72%. §  Currently, as of 2011, there are 1040 casting foundries operating in the sector, active with a total turnover of 2,58 billion euro in 2010. Out of these, 1022 are private and 18 are public companies. §  Casting products for the automotive industry is the largest product group in sector exports, whereas casting for the machinery industry is the second product group. §  Around 300 factories producing castings are intermediate and large scaled companies which sell their products to the outside in addition to the producing components to Automotive, White Goods and Machinery industries.

SPRI Turkey - Internationalization Support from the SPRI Foreign Network CHARLA DEBATE TURQUIA

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Ø Subcontracting Industry in Turkey

§  Turkey’s subcontracting industry succesfully integrates all types of basic and complex production processes required for Turkish industry and international customers with more than 25.000 companies most of which are small and medium sized.

§  Key Sectros are; §  Automotive §  Auto parts §  Machinery §  Household Appliances §  Metal and Metal Products §  Shipbuilding §  Plastics


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As of 2012;

Ø Basque Exports : 20.302 Million €

Ø Basque Exports to Turkiye : 407 Million € (+4.4% yoy)

Ø Within Basque Exports; “TURKEY ranks number 12 as Destination Country”

Ø  Aproximately 136 Basque Companies export to Turkiye Source: Eustat and CIVEX, 2013


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Ø  Main Products Exported to Turkiye (Thousands €) Total 407.246 84 Máquinas, aparatos mecanicos (Mechanical machinery and equipment) 92.448 86 Vehículos, material ferroviario (Railway Vehicles) 65.474 87 Vehículos automóviles, tractor (Automobile vehicles, tractors) 61.442 72 Fundición hierro y acero (Iron and steel foundry) 55.907 85 Aparatos y material Electricos (Electrical Machinery and material) 35.007 39 Materias plásticas (Plastic materials) 19.519 40 Caucho y sus manufacturas (Rubber and articles thereof) 15.269 73 Manufacturas de fundición (Articles of iron) 13.735 82 Herramientas y útiles (Tools and kits) 8.210 94 Muebles, sillasi lamparas (Furniture) 6.358 48 Papel y cartón (Paper and cardboard) 3.687 03 Pescados, Crustaceos, Moluscos (Fish and various sea products) 3.605 83 Manufacturas metálicas (Metal manufacturing) 3.441 33 Aceites Esenciales, Perfumer (Esential Olives, perfumes) 3.133 90 Aparatos ópticos (Optical Instruments) 2.281 99 No clasificados-conjunct de otros productos (Non classified) 2.048 93 Armas y municiones (Arms and ammunition) 1.650 38 Otros Productos químicos (Chemical Products) 1.517 52 Algodón (Cotton) 1.317 74 Vidrio y sus manufacturas (Vidrio and articles thereof) 1.215

Source: Listed as total of last year, 2012


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Ø SPRI Basic Data & History in this Country

-  OFFERING SERVICES since 2004

-  WORKED with 153 PROJECTS, where most of the projects were about

the “commercial introduction”


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Ø Basque and Spanish Investment in Turkey, thousand €

As of 2013 – first 9 months: we know that Spanish investment increased about 50% (379.403)

2008 2009 2010 2011 2012 Basque Investment in Turkey 61.802 4.566 5.203 4.161.440 2,26

Spanish Investment in Turkey 1.102.057 230.090 233.944 4.560.063 252.810 Euskadi/Spain (%) 6 2 2 91 0

Source: Datainvex, 2013


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Ø  Main Basque Companies established in Turkey: with production facilities; “COPRECI” “FAGOR INDUSTRIAL” “TECASA” “IMEGUISA” “GESTAMP” “CAF” “ELIOP-CAF” “BEFESA”

with commercial facilities; “LANTEK” “ORMAZABAL” “IDOM” “IKUSI” “BBVA” “INDAR” “IBERDROLA” “GAMESA” “ATUSA”

Others; “GKN Driveline” “MAIER” “SENER”


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Ø  Some SPRI Projects in Turkiye - Market Report for investment decision on production of:

METAL SHEET PRODUCTS - New Investment for producing: ELECTRICAL HOUSEHOLDS COMPONENTS - Finding Investment Partners for two companies producing:

AUTOMOTIVE COMPONENTS for production - Finding a Local Partner for: CONSTRUCTION EQUIPMENTS - Finding Distributors for companies of: SECURITY SYSTEMS

MACHINE TOOLING ELECTRICAL CONSUMER GOODS METALIC TOOLS PLASTIC RECIPIENTS CLOTHING AND FASHION

- Help in Investment for Commercial Office: INDUSTRIAL SOFTWARE


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Ø Some of Our Services

ü  Updated COUNTRY REPORT

ü  MARKET Research / SECTOR Analysis

ü  SEARCH and PRE-SELECTION of MARKETING CHANNELS: SUPPLIERS/DISTRIBUTORS, REPRESENTATIVES, AGENTS, etc.

ü  SEARCH and PRE-SELECTION of INDUSTRIAL, COMMERCIAL and/or TECHNOLOGICAL PARTNERS

ü  SEARCH for INFORMATION about SPECIFIC COMPANIES (Sites, Facilities, Commercialised Products, Main Clients,

Commercial Structure, References, etc.)

ü  ASSISTANCE to PROMOTE TECHNOLOGICAL COOPERATION PROJECTS with COMPANIES AND LOCAL ENTERPRISES


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Ø Some of Our Services (Continued)

ü  CONSULTING at; - the HOMOLOGATION PROCESS and PRODUCT REGISTRATION

in the LOCAL ADMINISTRATION, - the IMPLEMENTATION PROCESS;

COMMERCIAL AND MANUFACTURING (contacts with Institutions, Lawyers, Incentives, Local Customs, etc.)

ü  Preparation of AGENDAS & Providing LOGISTIC SUPPORT ü  INFRASTRUCTURE RESOURCES and INITIAL CONSULTING

in the IMPLEMENTATION PROCESS in the Country ü  CONTACTS with; - ORGANIZATIONS,

- BUSINESS ASSOCIATIONS, and - LOCAL INSTITUTIONS

ü  ATTENDANCE to SECTORIAL FAIRS ü  COORDINATION of;

- WORKING MEETINGS with BASQUE COMPANIES already established in the Country


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Thank You for your attention “ESKERRIK ASKO”

SPRI Turkey, Istanbul

Basque Country Business Office

Ø  Representative in Turkey Mrs. Çiğdem KOÇAK e-mail: [email protected]

Ø  Representative for the area in Euskadi Mrs. Leire INTXAUSTI e-mail: [email protected]

________________________________________________________

CHARLA DEBATE TURQUIA CHARLA DEBATE TURQUIA

business and investment opportunities in turkey for basque companies. internationalisation

Business

spri turkey

charla debate turquia

imf charla debate turquia

foreign investors

population young population

muslim countries

gdp raise

european countries