May 2017
Issue: 108
Machinery Exporters Union Monthly Magazine
in english
THE TURKISH MACHINERY KEEPS THE TRADITION IN HANNOVER MESSE The Turkish Machinery participated in the Hannover Messe Fair, organized for the 70th time, for the eighth time, showing the production strength and quality of the machinery sector all over the world again. Turkey, which created the impression of partner country, became the third biggest participant of the fair after the hosts Germany and Italy in terms of square meters.
H
annover Messe, one of the world's leading industrial technology fairs, was held in Germany from April 24 to 28. Poland was the partner country of the fair that hosted 6.500 companies from
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70 countries.180 companies from Turkey took their place in the organization. Turkey became the third largest participant of the fair after the hosts Germany and Italy. With the advertising and promotional activities realized by the Turkish Machinery, the focus of the
fair was Turkey. The Turkish Machinery gave comprehensive information about the Turkish machinery sector at the two different stands. The Turkish machine sector has attracted attention with advertisements at various points in the airport and fairgrounds.
With the 'Turkish Machinery' logo, the advertisements prepared in German took place in the airports, in the advertisement areas of the exhibition zone, on buses, at taxi stops, on billboards, in fair maps and, in the fair magazine. 225.000 visitors were informed about the Turkish machinery sector through promotional activities realized by the Turkish Machinery. COMPREHENSIVE NEGOTIATIONS WITH PARTNERS Adnan Dalgakıran, Chairman of Machinery Exporters' Association (MAİB) and the Turkish Machinery, and members of the board Ali Eren and Sevda Kayhan Yıl-
maz took a place at the fair that organized with 'Integrated Industry-Creating Value', in behalf of someone MAİB and the Turkish Machinery. German Consultant of the Turkish Machinery Ahmey Yılmaz, runners of Fluid Power Association (AKDER), Industrial Automation Industrialist Association (ENOSAD), Association of Turkish Machine Manufacturers (MİB), and Turkish Pump and Valve Manufacturers’ Association (POMSAD) as a member of Turkish Machinery Federation (MAKFED) took a part at the fair in order to share information about their association and sector. Consul General in Hannover Banu Malaman, Hannover Commercial Attaché
Ruhi Deniz, board members of the Istanbul Chamber of Commerce (ITO) and the Istanbul Chamber of Industry (ISO) o visited the stand of the Turkish Machinery as well. Within the scope of the intercourse of Hannover Messe, a number of interviews were made with the German Engineering Federation (VDMA), The German Purchasing Association (BME), Saxony State Economic Agency, Turkish German Chamber of Commerce and Industry (TD-IHK), Dortmund Economic Development Agency, Robotation Academy (Technology Academy), Deutsche Messe OWL Maschinenbau and representatives of various broadcasting organizations. Ahmet Yılmaz participated in the Lower-Saxony Foreign Trade Day Program organized at the fair area and realized a presentation about the export of Turkey, especially the machinery and automotive sector. KEEP ON GOING FOR INFO AND EXPERIENCE TRANSFER IN THE FIELD OF INDUSTRY 4.0 Adnan Dalgakıran pointed out that Germany is the motherland of the Industry 4.0 as it is motherland of the world's largest machinery ex-
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ports. "Germany's approach to technology and innovation provides significant changes in industrial culture. If we want to be a strong part of this ecosystem, we must firstly establish this culture. Our sector made a serious leap with the importance it gives to R&D. The reputation of Turkish industry abroad is increasing with the in-
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vestments we make in machinery production. Hannover Messe is an arena where the world's giants race to showcase their latest technology. This year the fair was organized under the slogan 'Integrated Industry-Creating Value.' High technology applications of digitalization processes in the production and energy sectors were addres-
sed. The fair, where the production models of the future were exhibited, also provided new business opportunities for our companies with a high participating profession.” Mr. Dalgakıran said. Dalgakiran also noted that Poland, the partner country of Hannover Messe this year, is a market offering significant opportunities for our exports. " Poland is our important trading partner in Central Europe and Poland is in a very attractive position with respect to our firms with the opportunity to access regional markets. As it is the country that receives the most foreign direct investment among Eastern European countries, there is a serious continuity in infrastructure and domestic consumption expenditures. As MAİB we also continue the project 'Modern Approaches in Production Techniques in the Machinery Industry' in collaboration with Poland and Germany. We will continue to contribute to the transfer of knowledge and experience in the field of Industry 4.0 with like that actions." told Adnan Dalgakıran.
METALLOOBRABOTKA HOSTS THE TURKISH MACHINERY The Turkish Machinery participated in the metalworking fair METALLOOBRABOTKA twice in Moscow, Russia this year. The Turkish Machinery has made an important effort to strengthen the image of the Turkish machinery sector.
T
he Turkish Machinery, which continued their promotional activities towards the Russian market, participated in the metal processing fair Metalloobrabotka 2017 held in Moscow between 15-19 May. 30.000 visitors came by event, which took 5 days and host machine manufacturers from 30 countries. Association of Turkish Machine Manufacturers (MİB) as a Turkish Machinery Federation (MAKFED) member informed the visitors about their members and activities at their booth. Cutting, shaping, casting and welding metal machines, cutting tools, coating and heat treatment and testing equipment and equipment are exhibited in the fair. Within the scope of the Metalloobrabotka Fair, the Turkish Machinery has been in contact with representatives of various associations, institutions and firms. Moscow Trade Consultant Halit Oral Akbay also visited the stand of the Turkish Machinery during the 5 days event. BIG BUSINESS OPPORTUNITIES IN RUSSIA Adnan Dalgakıran, Chairman of Machinery Exporters' Association (MAİB) and the Turkish Machinery, said that the economic cooperation with Russia is beneficial to both countries and that there
are important business opportunities in Moscow. Mr. Dalgakıran emphasized that the activities carried out by the Turkish Machinery in the framework of the exhibition, which brings the international metal industry in Moscow, contribute to Turkey's activity in foreign markets. "Russia is an important trading partner in our export strategy. There are significant opportunities between the two countries. We were welcomed in Russia where our relations is getting bet-
ter and better, very well by this exhibition. We are a competitive sector that has proven itself to the world with the quality, technology and service understanding of the machines produced. We have a potential to make Russia one of the top five countries that we export most. I think that our industry which successfully represents Turkish industry in Moscow will contribute to our exports with the new cooperation that it has developed." said Adnan Dalgakıran.
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in english
GLOBAL AGRICULTURAL MACHINERY MANUFACTURERS IN SAO PAULO The last meeting of the Agrievolution Alliance that is the global co-operation organization of agricultural machinery manufacturing associations was held in São Paulo, Brazil, on 3-4 May. The meeting was the last event in the Agrievolution The Turkish Association of Agricultural Machinery & Equipment Manufacturers (TARMAKBİR) presidency.
T
urkish Association of Agricultural Machinery & Equipment Manufacturers (TARMAKBIR) had taken over the term presidency of Agrievolution Global Alliance for Agriculture Equipment Manufacturing Associations from India last year. The organization held its final preparatory meeting in Sao Paulo, Brazil before the 6th Agrievolution Summit to be held in China in October. Agrievolution was set up in 2012 to be a global representative of the agricultural machinery industry, to address industry issues on a global scale and to create various collaborative opportunities among member associations. The organization owns agricultu-
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sic activities of Agrievolution are to create statistical reports on sectorial global coverage by exchanging data between members, Regularly organizing summit events for agricultural and agricultural machinery companies hosted by its members, and promoting activities on behalf of the sector in the presence of public institutions and international organizations such as FAO, World Bank. Agrievolution has organized 5 global summits to date. ral machinery industry association members from 14 countries and represents more than 6.000 companies worldwide through its members. 6TH SUMMIT IS IN CHINA Summit event is organized for once in an average of 18 months and members of the association host each event. The event brings together international organizations, private sector representatives, academics and other sector stakeholders for the agricultural and agricultural machinery industry. Up to today Italy, USA, France, India and finally Turkey -TARMAKBIR- have hosted the event and China is going to host the event next October. The ba-
LAST EVENT OF TARMAKBİR AS AN AGRIEVOLUTION'S TERM PRESIDENT The main theme of the summit organized in Turkey was the opportunity for the development of agriculture and the use of agricultural machinery in Africa, the Middle East and the Turkic Republics. The main theme of the summit organized in China will be the mechanism of efficient farming practices in Asia. Agrievolution members met in São Paulo, Brazil between 3-4 May last events of TARMAKBIR as the Agrievolution Presidency. The members both assessed the current results of the conducted statistical data studies and discussed the details of the summit to be held in China.
TURKEY-UK BUSINESS CONNECTION GATHER SPEED BY BREXIT The British Chamber of Commerce in Turkey has celebrated its 130th anniversary via working on increase business relations between two countries in different sectors. The chamber foresees the relationship between Turkey and United Kingdom after Brexit can increase higher than Turkey-EU relationship.
B
ritish Chamber of Commerce in Turkey (BCCT) that is one of the deeprooted chambers of industrial or commerce in Turkey, is our guest for this issue. The British Chamber of Commerce in Turkey that is founded in 1887, is one of the oldest foreign commerce and industrial chambers in our country. We asked Emrah Ă–z, General Secretary of the British Chamber of Commerce in Turkey about the interaction with the Turkish business community, the support provided and how the trade between Turkey and the United Kingdom could be improved. Since how long has the British Chamber of Commerce (BCCT) in Turkey operated? The chambers of commerce of the countries act as a kind of commercial and cultural bridge, dominating the trade and social dynamics of the countries. BCCT has been also strengthening the link between Turkey and the United Kingdom for 130 years. We have developed projects with the aim of increasing trade relations and creating new cooperation between the two countries. BCCT plays a key role in the development of commercial relations between Turkey and the United Kingdom and mediates efficient co-operation.
What can you say about the current situation of Turkey-United Kingdom trade? In recent years, the Turkish investors to strengthen its presence in the UK market also increase our hope for the future. Meanwhile, British investors have not kept Turkey's dynamic market out of sight as well. The British Chamber of Commerce (BCCT) in Turkey foresees the relationship between Turkey and United Kingdom after BREXIT can increase higher than Turkey-EU relationship. The business and the service sectors in the United Kingdom and Turkey are gaining a positive and constructive experience resulting from mutual interaction. But the experts say that it is time for economies of both countries to start thinking more about projects with a complementary understanding. What kind of services does BCCT provide to Turkish producers who want to open up to the UK market? BCCT informs Turkish companies who want to do business with Turkish companies about Turkish economy and Turkish companies. BCCT has also developed associations with commerce and industry chambers and Minister of State for Trade and Investment in the UK on behalf of its members. BCCT visits Turkey in the context of business consultancy services offered
Emrah Ă–Z The British chamber of commeret in Turkey CEO
by companies in both countries. During the visit, BCCT talks with companies in the sectors such as heavy machinery industry, automotive, energy, fast consumer goods, environment technology, health, construction, and communication technology. Here we have looked at business opportunities and partnership in Turkey. BCCT offers services to its members. Members are of top priority for getting BCCT services. The chamber provides its members with a wide network of opportunities both in Turkey and in the UK. Organizations that are not affiliated but want to take advantage of BCCT's services can contact the BCCT Business Development Department.
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SECTOR'S COURSE OF ACTION IS READY 'Market Analysis of the Machine sector, Current Situation Evaluation and Strategic Proposal Report' has been issued under the guidance of Turkish Machinery Federation (MAKFED) and The Turkish Machinery, and the cooperation of Deloitte in April.
M
arket Analysis of the Machine sector, Current Situation Evaluation and Strategic Proposal Report' aims to conscientiously accumulate the entire knowledge of the Turkish machinery industry and to interpret the current knowledge in the light of global economic and political developments and to present it to its
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members and stakeholders. The report includes recommendations to determine the strategies that will shape the future structure of the industry and what needs to be done so that the sector can gain a global competitive position. The report brings detailed and comparative overview of the current status of the machine industry. The report examines the US, Germany, China, South Korea, Italy, Mexico
and Taiwan in terms of their position in the world machinery sector, as the relative position of Turkey has to be revealed in terms of competition. In the first part of the three-part report, Turkey and selected countries are analysed at the macro level. Macroeconomic indicators, demographics, criteria such as the level of doing business in the country are reviewed in this section. In the second part,
Michael Porter's 'Diamond Model', considered as the pioneer of competitiveness, compares the countries determined with Turkey. As a result of 'the Diamond Model', the Turkish machinery sector is stronger and more developed than the developed countries. As a result of the analyses, strategic suggestions were prepared about the issues that need to be developed in order to increase competitiveness in the Turkish machinery sector and prioritized by analysing them according to the added value and the risk to be created. SUBVENTION IS VITAL Senior Manager of Deloitte Strategy and Operations, Aysun Özen Tacer informed us about the report. “204.000 people were employed in the Turkish machinery sector in 2014. In the sector where about 16 people are employed per enterprise, 5.5 per cent of the total employment created by the manufacturing industry. Due to export potential, the machinery sector is one of the critical sectors for Turkey's economy. Exports of $ 13.14 billion in 2016 were realized in the sector. Considering Turkey's exports target corresponding to 1.5 per cent of the total exports in the world in 2023, the role of the
machinery sector in achieving this goal is very important. Here are critical points in 'the Diamond Model', macro analysis and surveying: The Turkish machinery sector recorded an annual compound growth of approximately 7-8 per cent between 2005-2015. Considering the purchasing motivations of customers, it is seen that there is a sector with a low price index rather than advanced performance and advanced features in Turkey. In view of the state supply effects of high-tech products; public procurement is likely to develop in the domestic market. Agree-
ments prepared for public procurement usually include features of imported products. While many big companies have operated on the market, many small companies also offer services with special products. However, an increase in the number of companies adversely affects product quality. In order to offer low-cost products to the market, companies have focused on informal employment, production and import of low-quality products. There are also shortcomings in the market supervision structure, which will support the increase in product quality in the country. It is necessary to tighten production control with informal employment and to minimize the factors that constitute such unfair competition. It is also seen that the international certification firms are experiencing difficulties in certifying domestic products in international markets because of the inadequacy of their domestic offices. Therefore, we can say that Turkey has not reached the sufficient number of domestic suppliers and qualities, and that this situation has come forward as a factor increasing the external dependency,” said Aysun Özen Tacer.
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"INNOVATION, DESIGN AND ENGINEERING CAPABILITIES SHOULD BE INCREASED" According to analysts, Tacer said that in order to increase the competitiveness of the Turkish machinery sector, market inspections and supervision structures and training infrastructure should be developed. "An advantage is the fact that energy costs have fallen compared to the energy index, which is made up of electricity, oil, natural gas and coal costs. Turkey has an advantage over other countries besides China in terms of labour cost. There are weaknesses in salary and productivity when you look at the quality of workforce. The structure of the family business is rather widespread, especially in management, instead of corporate firms. Brain migration is a serious problem as companies are having difficulty-keeping employees in their own right. There is also a weakness in talented labour from abroad. It can be said that the education system in Turkey is not at the level that can meet the needs of the industry. It turns out that the level of mathematics and science education as the pioneer
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of elements that play a key role in the development of the industry is also inadequate. The prevalence of research and education services in Turkey lags behind the world average. Companies have little investment in training and employee development. Depending on the increasing technological competitiveness, the number of qualified engineers with high technical knowledge and experience is not enough. As a result of this lack, the industry's innovation, design and engineering capabilities are low. Turkey's another weakness is R&D. Firms' capacity to
develop new technologies is weak. Turkey is behind the world average in terms of the quality of scientific research institutes. Also, companies in Turkey are at a disadvantage because of the lack of sufficient research assistants and engineers. Co-operative organizations in Turkey lead the members by offering similar services to the co-operative organizations in other countries to help develop the sector. The fact that the machine sector data is not at a sufficient level creates problems when determining the current state of the subsectors. While the prevalence of occupational clusters that increase productivity and innovation in production is low, firm clusters occur in a number of regions.” told Aysun Özen Tacer. GERMANY HAS THE EAR OF EXPORTERS Within the scope of the report, the opinions of MAİB and MAKFED member companies were consulted in order to understand the current problems of the Turkish machinery sector and the expectations of the companies in the sector. In the survey these subjects were evaluated: Problems in the sector, the countries where the players perform most export/ import, points open for improvement, qualified labour force, fac-
tors affecting financing, Turkey's competitiveness, Competing leading countries, current status of R&D activities and expectations from public institutions and organizations. 39 per cent of the companies participating in the survey have employees between 50-299. And 39 per cent of the firm's giros are over 20 million Turkish Lira. The main customer group of 46 per cent of companies is corporate companies. Germany ranks first among the countries preferred by exports in the survey. The vast majority of companies in question are marketing their own resources and carrying out export activities. All of the companies have stated that they export and they also represent Turkey in 60 countries. Middle Eastern and European countries are among the most preferred ones among the companies in the survey because of their close geography, Germany and Iran are the most preferred countries by sector players. 79 per cent of companies maintain their marketing activities using their own resources. Other companies indicate that they have exported by working with intermediaries or wholesalers.
INSUFFICIENT INTERNAL MARKET 70 per cent of companies surveyed said they imported inputs such as components, raw materials or semi-finished products they used during their manufacturing processes. Germany, Italy and China stand out as the top three countries in terms of import. 80 per cent of the companies prefer imports because they can not find the related products in the country and 48 per cent said that they import products because the inland produce are inadequate in terms of quality. Other companies are importing inputs because domestic products are expensive or aftersales support is incomplete. INCENTIVES FOR NEW PRODUCT DEVELOPMENT 86 per cent of companies said that they have R&D activities, and 56 per cent have benefited from R&D incentives. Incentives are mostly evaluated for new product development. According to the survey results, R&D incentives are seen to be inadequate at 64 per cent, although 73 per cent of the companies benefiting from state subsidies are satisfied with
incentives. Firstly, survey participants indicated that the contribution of most universities needed to increase R&D activities. Secondly, there are those who think that the incentives do not meet the needs of the industry and that they do not fit the industry structure. The shortcomings in introducing incentives or informing companies are also in third place. TRIO COMPETITORS: ITALY, GERMANY, AND CHINA Germany, Italy and China rank as the top three countries that can be considered as leaders in the machinery sector. The companies with 95 per cent said that Germany is the leader in the machinery sector. The surveyed respondents cited Italy, Germany and China as the three strongest countries that they competed in the markets they exported. A large majority of respondents said that training in vocational schools needs to be developed to increase qualified workforce. On the other hand, firms consider high capital requirements for equipment and high financing costs as the most important factors affecting financing.
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in english EXPORT FIGURES IN RESPECT TO THE ACTIVITY FIELD OF THE MACHINERY AND ACCESSORIES
Source: All Exporter Unions Database JANUARY 1-APRIL 30, 2016
PRODUCT GROUP
VALUE (Mil $)
JANUARY 1-APRIL 30, 2017
$/kg
QUANTITY (1000 Tonnes)
VALUE (Mil $)
(%) CHANGE
$/kg
QUANTITY
VALUE
ENGINES, ACCESSORIES AND SPARE PARTS
43
689
16,0
48,3
711,7
14,7
12,2
3,3
INDUSTRIAL AIR CONDITIONERS AND COOLING MACHINES
151
626,6
4,1
146,4
585,5
4,0
-3,0
-6,6
OTHER INDUSTRIAL WASHING AND DRYING MACHINES
146,8
408,7
2,8
147,6
392,6
2,7
0,5
-3,9
OTHER MACHINES
51,5
356
6,9
60,5
376,9
6,2
17,6
5,9
CONSTRUCTION AND MINING MACHINES
77,4
301,4
3,9
85,6
278,1
3,2
10,6
-7,7
PUMPS AND COMPRESSORS
30,6
231,6
7,6
34,1
241,2
7,1
11,2
4,1
MACHINE TOOLS
32,2
226,4
7,0
32,1
211,6
6,6
-0,3
-6,5
AGRICULTURE AND FORESTRY MACHINES
44,4
214,3
4,8
47,6
211,1
4,4
7,2
-1,5
TURBIN, TURBOJETS, TURBO PROPELLERS
4,6
113,8
24,3
5,5
176,6
31,9
18,1
55,2
TEXTILE AND CLOTHING MACHINES AND ACCESSORIES
27,9
153,7
5,5
29,5
158,9
5,4
5,8
3,4
VALVES
16,9
141,3
8,3
17,3
155,8
9,0
2,0
10,3
REACTORS AND BOILERS
16,1
124,8
7,7
19,2
140,1
7,3
19,0
12,3
FOOD INDUSTRY MACHINES, ACCESSORIES AND SPARE PARTS
21,7
126,2
5,8
28
139,6
5,0
29,2
10,6
WEAPONS AND AMMUNITION FOR THE DEFENSE INDUSTRY
18,2
245,4
13,4
8,3
113,2
13,6
-54,4
-53,9
ROLLER AND FOUNDRY MACHINES, MOULDS
12,4
91,8
7,3
14
105,8
7,5
12,3
15,3
INDUSTRIAL HEATERS AND COOKERS
12,1
86,3
7,1
14,5
99,3
6,8
20,3
15,0
LOAD LIFTING, CARRYING AND STOWING MACHINES
17,2
76,5
4,4
21,6
85,2
3,9
25,4
11,3
PACKAGING MACHINES, ACCESSORIES AND SPARE PARTS
2,5
46,7
18,2
2,8
56,7
20,2
9,7
21,4
1
45,4
42,1
1,2
53,8
42,3
17,7
18,4
GUM, PLASTIC, RUBBER PROCESSING MACHINES
4,9
46,7
9,5
4,5
46,8
10,4
-8,6
0,1
BEARINGS
3,9
41,8
10,7
3,8
41,3
10,8
-2,4
-1,2
PAPER MANUFACTURING AND TYPOGRAPHY MACHINES
3,2
24,1
7,3
4,2
28,5
6,7
30,2
18,6
LEATHER PROCESSING AND MANUFACTURING MACHINES AND ACCESSORIES
0,6
3,6
5,6
1
4,6
4,4
61,0
26,7
741,4
4.423
6,0
778,6
4.416
5,7
5,0
-0,2
OFFICE MACHINES
TOTAL
128
QUANTITY (1000 Tonnes)