The Turkish Perpective - Issue 42 by Performans

YOUR COMPLIMENTARY COPY

january 2016 ISSUE 42

TH YEAR

ECONOMY BUSINESS FOREIGN TRADE ANALYSIS

G N I C U D R O O E R F H P T RLD O W

The Turkish Perspective

25 CoVER STORY

Panorama of Solid Turkish Economy in 2016 A very strong side of the Turkish economic structure is its solid financial system and its export.

08 11 BRIEFING

57 BRANDS

11 | MARKA 2016

57 | Istanbul HOSTS Madame Tussauds museum

Turkey’s Greatest Information, Ideas And Motivation Platform

21st center of the world’s largest wax museum Madame Tussauds opened its doors at the Grand Pera building on Istiklal Street.

15 | WORLD HALAL SUMMIT World Halal Summit was held in Istanbul Lütfi Kırdar Convention Center between 15-17 December.

60 | Sportive cities are more fun

16 | A New Era in Flight Experience

50 | PRIVATE EQUITY FORUM HELD IN ISTANBUL

Turkish Airlines further improves its award-winning passenger experience with several new services including Denon headphones, Samsung tablets and an app with updated functionality.

ISPAT President Arda Ermut joined the event via video conference to talk about Turkey’s recent strategic business moves with the US, Europe, and Emerging Markets.

One of the problems that emerged in Turkey in recent years as a result of rapid urbanization is the increased need for sports and recreational areas and events on the part of people living in cities.

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

63 FIGURES THE BASIC INDICATORS OF TURKEY IN THE FIRST HALF OF 2016

2 Online

Online

theturkishperspective.com

MANAGEMENT

Publisher on Behalf of Turkish Exporters Assembly/ CHAIRMAN of The Turkish Exporters Assembly

MEHMET BÜYÜKEKŞİ

The Turkish Perspective Digital

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

Strategıc Partner Presıdent of Prıme Mınıstry Investment support and promotıon Agency

Arda Ermut Manager In Charge H. BADER ARSlan PhD

PUBLICATION BOARD M. İlker aycı BİLAL EKŞİ BÜLENT AYMEN MUSTAFA ÇIKRIKÇIOĞLU PhD SÜLEYMAN KOCASERT ZEKERİYA METE Furkan Karayaka

PUBLICATION MANAGEMENT President Mehmet Mücahİd Demİr

mdemir@theturkishperspective.com

Project COORDINATOR Ahmet Damgacıoğlu

adamgacioglu@theturkishperspective.com

Edıtorıal Editor mustafa yİğİt

myigit@theturkishperspective.com

USA MEDIA COORDINATOR ŞENAY ÖZDEMİR

Business Culture t Investmen cience S d n a Innovation e Day Video of th News keting B r a n d Ma r

european COORDINATOR İnanç atılgan GULF COORDINATOR FEYZA GÜMÜŞLÜOĞLU contrıbutıng reporters İBRAHİM AVCI KEMAL TUNÇSEL RAMAZAN GÜZYURDU SERPİL KASAP design CREATIVE DIRECTOR AHMET SAİD ÇELİK

acelik@theturkishperspective.com

DESIGNER UMUT DURUTUNA YOUR COMPLIMENTARY COPY YOUR COMPLIMENTARY COPY

SPECIAL REPORT

ECONOMIC SUSTAIN-ABILITY P22 FDI FLOW kEEPS ITS PACE P28

INDEPTH

centUries old Bridges to Be reBUilt:

BRIEFING

Keystones of export

YOUR COMPLIMENTARY COPY

TURkEY INSPIRES ThE REGION P40

BAlKAns And tUrKey

WhERE IS TURkEY hEADING TO? P46

BRANDS

UmBrellA of compAssion opened in istAnBUl JULY 2016 ISSUE 36

ECONOMY BUSINESS FOREIGN TRADE ANALYSIS

Democracy

TOP

Dawn of

AUGUST 2016 ISSUE 37

SEPTEMBER 2016 ISSUE 38

ECONOMY BUSINESS FOREIGN TRADE ANALYSIS

ECONOMY | BUSINESS | FOREIGN TRADE | ANALYSIS

715

Heading to a Brighter Future

The True Story Behind The Coup Attempt: Turkey starts off with a clean slate

EXPORTERS UlUpienis ArUm stdsgs litdAtiAspis perAtqUi ddolorem periorio MaxiMe PreM İs Di occUm etU Bore

YOUR COMPLIMENTARY COPY

7YEAR TH

A kEY FOR A

hEALThIER

YOUR COMPLIMENTARY COPY

TH YEAR

w RLD

OCTOBER 2016 ISSUE 39

ECONOMY BUSINESS FOREIGN TRADE ANALYSIS

DECEMBER 2016 ISSUE 41

MEGA pROjECTS

shınıng brıght as dıamonds TURkEY’S MEGA pROjECTS OF ThE GOvERNMENT ARE ShINING BRIGhT AS

kEYUSTTORYCATC 4.0 TURIND

ECONOMY BUSINESS FOREIGN TRADE ANALYSIS

whICh ARE BROUGhT INTO LIFE wITh ThE hUGE SUppORT DIAMONDS IN ThE REGION

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

FIRST New player: Turkey is joining the space race BRIEFING September has been a month for global dialogue Chemicals sector of the rapid growth Turkish brand of the New world BRANDS with Moofio pets have a social network of their own!

GAME OF TRANSFORMATION

wORLD IS GOING ThROUGh A pOLITIC TRANSFORMATION pROCESS wITh ThE ELECTIONS hELD IN 2016 AND wILL BE hELD IN 2017 RISING STARS OF ThESE ELECTIONS pROMISE NEw ECONOMIC ORDER IN ThE wORLD. whERE DO TURkEY STAY IN ThIS pORTRAIT? wILL TURkEY MOvE TOwARDS TD ShANGAI pACT? hOw wILL ThE FUTURE ShApE?

GET READY!

info@theturkishperspective.com

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contact T. +90 212 216 19 48 info@medyatr.com.tr www.medyatr.com.tr Neither text nor photographs from this publication may be reproduced in full or part without acknowledging the source and securing prior permission from the publisher.

JANUARY 2017 ISSUE 42

The Turkish Perspective

Editorial MEHMET BÜYÜKEKŞİ PRESIDENT (TIM)

2017 AS A LEAPING POINT

We are concluding 2016 with a slowing global trade and a turbulent world economy. Throughout the year, we faced an abundant number of economic, political and social events which laid all predictions to waste.

s a natural outcome, global

trade and world economy was affected by these events. With the rise of USD, fall of oil and commodity prices and weak performance of growing economies, global trade dropped by 4% in the first ten months of 2016. Despite all these, Turkey has done a good job by maintaining the export levels of 2015. This positive outcome was made possible by the reforms of the last years, which moved Turkey’s exports to the next level. Within this period, mediumlow tech products’ share in our exports dropped while medium-high tech products’ increased. Share of technology based sectors like machinery, electrical equipment and automotive increased from 20% to 29% while the share of textile, apparel and leather products dropped from 36% to 20%. During these 10 years, we not only increased the quality of Turkish products but also improved our market diversity. EU’s share in our exports dropped from 56% to 44% while Africa’s and Middle East’s shares increased. Apart from the economic developments, direct and indirect effects of the war in Syria are starting to show in Turkey. Just as the tension between Russia and Turkey started to drop, Russian Ambassador to Turkey, Andrei Karlov was assassinated in Ankara during an art exhibit. We condemn this attack,

which is clearly aiming to derail the developing Russia-Turkey cooperation. However, thanks to the levelheaded statements from both Russia and Turkey, we believe our relationship with Russia will not suffer again. It appears that, we will have a busy agenda in the coming year. The 20 years old Customs Union Agreement between the EU and Turkey will finally be modernized as the current agreement has become obsolete due to the developments in world trade and the exponential growth in Turkey-EU trade. With the modernization Turkey will be a part of EU’s free trade agreements with 3rd countries, which will greatly improve Turkey’s trade potential and Turkey-EU relations. We have no doubt that we will maintain our success in the following term. Despite all that happened in 2016, our government’s subsidies and incentives in investments, exports, production and employment make us remain hopeful towards the future. With the help of these structural reforms, we are aiming to benefit from the developments in the global economies, and to mark 2017 as a leaping point. As the umbrella organization of Turkish exporters, we kept working towards sustainable growth, increasing Turkey’s market share, and as a result, a much more prosperous Turkey. In this regard, Turkey

Innovation Week 2016 -which is one of the signature events of Turkish Exporters’ Assembly- was held on December 8-9-10, with the attendance of the President and Ministers. About 60 thousand people attended to Turkey Innovation Week, in the 5th year of the event. Innovators at heart, students and professionals shared their experiences and found a chance to display their ideas and designs. Similarly, in order to increase our share in services -which constitutes 23% of world trade- and to discover the true potential of this sector, we launched another research: “Turkey’s 500 Greatest Service Exporters”. With this research, we identified and rewarded the most successful companies in 11 sub-sectors. We hope to further encourage service exporters and reach our 2023 target, 150 billion USD service export, with the help of this research. In addition to our activities to increase Turkish exports and improve brand awareness of Turkey and Turkish products, we are also doing our best to lower our market dependence. In this respect, we have sent trade delegations to 30 countries, consisting of 900 businessmen from 700 companies and conducted over 5.000 B2B meetings. As Turkish Exporters’ Assembly, we will continue on this path with the same enthusiasm, to discover new possibilities in world trade. As the family of exporters, we are all aware that we are far from Turkey’s true potential and capabilities. We will advance on this path towards Turkey’s 2023 targets -1.5% share from world trade and becoming one of the top 10 economies of the world- through R&D, innovation, design and branding. In conclusion, I would like to wish you a happy New Year, and hope that 2017 would be a year of joy and peace for the world.

The Turkish Perspective Content: Hitachi Acquires Turkish Company P6 Local Currency For Turkey in Energy Trade P6 TurkStream Construction Work to Start in 2017 P7 Turkish Satellite Göktürk-1 Went into Orbit P8 ASELSAN Increases Sales by 10 Percent P8 ISTAC – TRAC Joint Conference P09 Editor: Serpil Kasap

First

INVESTMENT, FINANCE, ENVIRONMENT, INNOVATION, ENERGY, TELECOMMUNICATION, TECHNOLOGY, DEFENSE

The amount of vehicular emissions released will be reduced by approximately 82,000 tons per year thanks to the project.

ınvestment

Eurasia Tunnel:

crossing the Bosphorus undersea

The Eurasia Tunnel, connecting the Asian and European continents underneath the Marmara seabed, was inaugurated with the presence of Turkish leaders and many other foreign guests.

peaking at the opening ceremony, President Erdoğan said the Eurasia Tunnel has been built over the course of four years, stating that he is confident that this work, which received many awards at the project and construction stages,

will secure more interest. Pointing out the advantages of the tunnel, he said, “We are now leaving behind such news reporting the ferry trips are cancelled because of the weather. The Eurasia Tunnel allows people to transit between the European and Asian sides without

The Eurasia Tunnel allows people to transit between the European and Asian sides

the effect of weather conditions.” The Eurasia Tunnel, which cost $1.3 billion, will create a business volume of TL 1.5 million for the Turkish economy and save 52 million hours of time in traffic. The amount of vehicular emissions (carbon

monoxide, carbon dioxide, nitrogen oxides, particulate matter, etc.) released will be reduced by approximately 82,000 tons per year thanks to the project. As well, 60 subcontractors are working on the project which also employs 800 people a day.

First

INVESTMENT

FINANCE

ENVIRONMENT

Local Currency for Turkey in Energy Trade

Hitachi acquires Turkish company

Turkey is focusing on energy payments in local currencies

Hitachi has entered into an agreement with Turkey’s Kurt & Kurt. Hitachi has announced that it has entered into an agreement to acquire a 75 percent stake in Turkey’s Kurt & Kurt and aims to make it a consolidated subsidiary of Hitachi by April 1, 2017. Through the acquisition, Hitachi will gain the healthcare business platform that would help further expand its global business and strengthen operation services for hospital imaging centers, the company stated on Dec. 9. Kurt & Kurt, established in 1977, has been delivering a wide range of products including Hitachi’s diagnostic systems to customers in mainly Turkey and Central Asia

urkey will start a “new era” in its energy policy and will make payments to countries where large amounts of energy are concentrated in local currencies, Energy Minister Berat Albayrak has said. “Turkey will take a big step in the coming period in terms of the use of local currencies. Turkey will begin to make payments in local currencies with countries with which it has a large volume of energy trade,” Albayrak said in a speech during budget talks in parliament. He also stated that the government has recently introduced

two key factors in the mining sector. “First of all, we established a geological data and drilling core databank in order to collect and preserve data obtained during mining exploration and production. This system will be online next summer. Second, we are set to start a system to record Turkey’s mining resources and reserves, which will be dubbed UMREK. This system will likely be online in March 2017. We plan to complete a whole geophysical and geochemical map of Turkey from both air and land by 2018,” he added.

Greenpeace praises Bornova Municipality A photovoltaic facility has attracted plaudits from Greenpeace. A photovoltaic facility constructed by İzmir’s Bornova Municipality has attracted plaudits from environmentalist group Greenpeace, Doğan News Agency has reported. The facility, consisting of 250 solar panels, is part of a project that was launched to make better use of energy sources. Greenpeace shared some pictures of the project on Dec. 1, describing the endeavor as “good news.” The project, which was started with the motto “Pioneering Turkey for solar energy,” aims to increase the use of renewable energy sources and protect nature.

Turkish automotive exports reached highest since 2008 Turkish automotive exports increased in November, the highest monthly level since 2008, renewing its record after last month and marking a 50 percent increase in automotive exports as the determining factor in the sector’s successful performance.

16.9% Increasing Rate of Export In Nov. JANUARY 2017 ISSUE 42

$2.2

54%

$952

$23

export in Nov.

Increasing of Export Passenger Cars in Nov.

Export Passenger Cars in Nov.

2016 goal of

billion

Million

Billion export

The Turkish Perspective

INNOVATION

ENERGY

teleCOMMUNICATION

TurkStream Construction Work to Start in 2017 TurkStream gas pipeline project will begin in the second half of 2017.

Turkey’s first fully homegrown electric bus

Turkey’s first fully domestic made electric bus was unveiled. Avenue EV, Turkey’s first fully domestic made electric bus, was unveiled at a ceremony at the Sabancı Center yesterday. The program was attended by Turkey’s Science, Industry and Technology Minister Faruk Özlü, CEO of Sabancı Holding Zafer Kurtul, Turkish Armed Forces Foundation General Manager Orhan Akbaş and ASELSAN Deputy Chairman Murat Üçüncü. Jointly produced by Turkey’s leading bus manufacturer TEMSA and the country’s biggest defense electronic systems producer (ASELSAN), Avenue EV stands out because of its environmentallyfriendly and innovative features. It was developed using 100 percent locally sourced parts and machinery.

n Wednesday, Gazprom Chairman Alexey Miller announced that the construction of the sea section of the TurkStream gas pipeline project will begin in the second half of 2017 and both lines will be ready by the end of 2019, according to a written statement released by the Russian energy giant. Miller’s announcement came after Turkish Prime Minister Binali Yıldırım’s visit to Moscow on Tuesday. “Today we can confidently say that construction of the sea section of TurkStream will begin in the second half of 2017. Both pipelines will be ready by the end of 2019,”

Miller said in his statement. Russian President Vladimir Putin said in a meeting with Prime Minister Binali Yıldırım on Tuesday that Russia is grateful to President Recep Tayyip Erdoğan for the Turkish Stream agreement. “We are grateful to President Erdoğan for signing the Turkish Stream agreement,” he said. On October 10, Turkey and Russia signed an inter-governmental agreement on realizing the construction of the planned Turkish Stream gas pipeline to pump Russian gas under Turkish waters in the Black Sea towards Europe.

ZTE buys stake in Turkey’s Netaş Chinese telecom ZTE agreed to buy 48 percent of NETAŞ. Chinese telecom and mobile equipment group ZTE Corp. has agreed to buy 48.04 percent of Turkish systems integration provider Netaş Telekomunikasyon A.Ş. (NETAŞ) for 358 million Turkish Liras ($101.3 million) in order to expand in Turkey and the region, Netaş announced Dec. 6. The deal is subject to approval by the Turkish Competition Authority. When the transaction is finalized, the Chinese telecom giant will become the largest shareholder of Netaş. The Turkish Armed Forces Foundation holds a 15 percent share in Netaş, while the rest is publicly listed.

Turkish Airlines increases passenger numbers

Europe’s Best Airlines increased its total number of passengers in the January-November 2016 period compared to the same period last year, it announced on Dec. 8

58.3

4.3%

in Jan-Nov period Compared to last year

Total amount of passengers in Jan-Nov 2016

increased amount of passenger in domestic lines in Jan-Nov 2016

TOTAL

MILLION

2.1% increased amount of passenger in international lines in Jan-Nov 2016

First

TECHNOLOGY

Turkish Satellite Göktürk-1 Went into Orbit

ENERGY

TANAP’s

The Göktürk-1 satellite launched during a live event at the Turkish Aerospace Industries’ (TAI) Akıncı Air Base attended by President Recep Tayyip Erdoğan on Dec 5th.

construction

accelerates, costs decrease

TANAP’s construction is ahead of schedule and under budget by $3.2 billion. The construction of the Trans Anatolian Natural Gas Pipeline (TANAP) project which plans to carry Azeri gas to Europe, is ahead of schedule and under budget by $3.2 billion, TANAP General Manager has said. The TANAP project aims to bring natural gas, produced from Azerbaijan’s Shah Deniz-2 gas field and other areas of the Caspian Sea, primarily to Turkey, but also on to Europe via the Trans-Adriatic Pipeline (TAP). From June 2019, TANAP will deliver natural gas to Europe from the border of Turkey-Greece, Duzyol added.With a projected budget of $8.5 billion, TANAP’s total capacity is planned to increase to 23 bcm by 2023 and to 31 bcm by 2026. JANUARY 2017 ISSUE 42

he event marked the culmination of assembly

and integration efforts undertaken by the project’s main contractor Telespazio of Italy along with France’s Thales Alenia Space at their joint facility located in Cannes, where the satellite was designed to provide state-of-the-art satellite imagery to the Turkish Armed Forces (TSK) for the purpose of gathering target intelligence. The satellite, which circumvents the earth approximately every 90 minutes, is expected to take more than 60,000 images per year. Every time it passes over Turkey, the satellite will transfer the photographs and images taken while in orbit to the Air Force Command’s Satellite Ground Station. Designed to transmit images at a higher resolution compared to similar models in orbit, the Göktürk-1 satellite will also perform remote sensory tasks for public institutions and organizations in many fields including environment and construction monitors, agricultural cultivation, municipal applications, border control and cadastral activities.

DEFENSE

ASELSAN increases sales by 10 percent ASELSAN increases sales by 10 percent. Turkish arms companies’ sales rose by more than 10 percent in 2015, according to market analysis released Monday. The Stockholm International Peace Research Institute (SIPRI) analysis listed two Turkish companies ASELSAN and Turkish Aerospace Industries (TAI) among the world’s top 100 arms firms. Their sales climbed 10.2 percent over the year. ASELSAN’s sales stood at $1 billion for the year up from $979 million in 2014 while TAI recorded sales of $890 million, an increase on last year’s figure of $736 million.

The Turkish Perspective

real estate

trade

Arbıtratıon

ISTAC – TRAC Joint Conference The first session of the three-session conferences which will be held in Paris, Tehran and Istanbul took place in Paris on December 12.

Economy Minister Nihat Zeybekci said members of the Cooperation Council of Turkic-Speaking States (CCTS) should increase trade with each other further.

Turkish house sales rise in November Property sales in Turkey rose by 25.1 % on an annual basis. According to e Turkish Statistical Institute (TurkStat) reported, 132,655 houses changed hands in Turkey last month, marking around 2% increase compared to October. Of those sales, 1,773 were sold to foreigners, with approximately 3% (or 596 units) of them in Istanbul, the country’s largest city by population. Following Istanbul, the resort city of Antalya came in second with 409 properties, while the western province of Aydin ranked the third with 113. TurkStat data also revealed that Iraqis topped the list of buyers with 285 properties, followed by Saudis (236 units), Kuwaitis (212 units), Russians (107 units) and Afghans (91 units).

Turkey focuses on alternative trade routes

eventy people including lawyers and high level participants

attended the conference. Former Prime Minister of Jordan, UNESCO Ambassador of Turkey Altay Cengizer, Paris Attache of Ministry of Justice Abdullah Aydın, Representative of Ministry of Justice of Iran Professor Mohsen Mohebi, ISTAC High Board Chairman, ISTAC Deputy Chairman, Mustafa Çıkrıkçıoğlu, High Board Members Müjdat Keçeci and Rifat Bacanlı and Murat Alıcı from Ministry of Economy were some of these high level participants of the conference. In addition, important names such as Representatives from ICC Offices in Paris and Tunisia, Professor Pierre Mayer and TRAC President also attended the conference. It was emphasized at the conference that ISTAC will fill an important gap by becoming a bridge between the Middle East and Europe; and Turkey’s regional advantages as an arbitration centre were explained. Turkey’s economical potential and positive legislative changes on foreign investment and investment incentives were explained in detail. ISTAC, who has significantly increased its activities in the field of alternative commercial dispute resolution, was reviewed for it’s reliable and impartial position for investors. It was also pointed out that ISTAC’s reliability and impartiality is established with contributions from it’s International Board Members who are renowned world-wide.

Turkish house sales rise in November Property sales in Turkey rose by 25.1 percent on an annual basis in November, the Turkish Statistical Institute (TurkStat) reported on December 23.

132 1773 596 thousand

houses

houses changed hands in November 2016

sold to the foreıgners ın november 2016

sold to feoreıgners ın ıstanbul ın november 2016

Recalling that Turkey is the 16th largest economy in the world and the 6th largest economy in Europe, Zeybekci said the European Union (EU) took first place in the country’s exports. Pointing out that Turkey has achieved important relations with Azerbaijan, Iran, Macedonia, Kosovo and Russia, but regarding the Turkic Council countries, the average trade volume is not even in the top 10, Zeybekçi said, “Our population totals 110 million people. When we look at our total trade, it is not even $5 billion.” Noting that Turkey has a $430 billion foreign trade volume, Zeybekci stressed that the trade volume with the Turkic Council countries constitutes only 1 percent of this figure, which creates a very important gap.

The Turkish Perspective Content: Carry Your Idea to Future P13 Gel Production From The Fish Scale P14 World Halal Summit Took Place In Istanbul P15 A New Era in Flight Experience P16 Prıvate Equıty Forum Held In Istanbul P18 Editor: Mustafa Yiğit

Briefing

summıt, ınnovatıon, avıatıon, ınvestment

During the conference, 43 sessions were held 54 speakers who are leaders of their own fied took stage.

SUMMIT

Marka 2016

Turkey’s Greatest Information, Ideas And Motivation Platform

Specialists from different fields shared their exclusive contents on the MARKA 2016 stage in Turkey for the first time. By RAMAZAN GÜZYURDU

he MARKA Conference, which has been organized by the leading conference organization Yürekli for 17 years and sponsored by Yapı Kredi World for 15 years, ended with 21 presentations this year. MARKA 2016, which took place in Hilton Istanbul Bomonti on 14 - 15

December, has aroused a great interest with its subjects and guests. During the conference, 43 sessions were held for two days and 54 speakers who are leaders of their own fied took stage. Taking the pulse of the business world closely, the events led to an impact felt for a year.

MARKA Conference reorganized the MARKA Youth Event as a social responsibility project in its 17th year. With the event that has exclusively held for university students at Hilton Bomonti on December 16, the young had the opportunity to listen to world-renowned speakers such

as BJ Cunningham, Amber Atherton, and Kinvara Balfour on MARKA’s stage with free of charge. MARKA Conference, Turkey’s largest business platform, has been organized since 2000. Setting the trends for the marketing world and structuring

Briefing

the future of brands, the conference got ready to host the business community in the 17th year with yet another long-expected program. Ayşegül Yürekli Şengör, Chairwoman of Yürekli, informed the attenders of the conference with her opening speech. “The MARKA Conference is a very important motivational platform as well as a platform of ideas. We are leaving a difficult year behind. The world is going through a turbulent period. Turkey has suffered a great deal of social turbulence and we are still in the fight against terrorism as a country. There have been major changes in the world over the past six months. All these changes indicate that there is a general attitude towards to the system around the world. These signals will continue in the coming year. I am deeply convinced that in 2017 there will be many global opportunities ahead of the Turkish business world within the new world dynamics. We have to see these opportunities and make the best of them. For this, we must cling to our work and make a fresh start by refreshing our beliefs for our future. That’s why, we came together today, to make a new kick-off with you here. We aim to shake the desperate mood, and erase it completely. We are here for doing this in this organization” she said.

Social Responsibility Project in Istanbul: “One Heart, One Tree!” One of the most intriguing sessions of the conference was Naziha Mestaoui, who was on her way to reforest the world. The project of “One Heart, One Tree!” which carried out by Stepevi’s initiatives reached the Istanbul MARKA Conference as the fourth point after Paris, Brazil and India. In addition, the MARKA Conference has made the JANUARY 2017 ISSUE 42

audience happy to participate in the project on an interactive platform that is planting tree to the whole conference hall with the virtual trees. In her presentation, Mestaoui talked about how effective art is to solve world problems.

Changing Fashion Sector in the Footsteps of Changing Consumer In another exciting presentation, Caroline Rush, Chief

Executive of the British Fashion Council, talked with GQ UK’s legendary Editor-in-Chief Dylan Jones about “Changing Sectors in the Footsteps of Changing Consumer”. Rush gave some information about the trends of future in his presentation. Rush and Dylan Jones talked about wow fast and inevitable change will design the fashion industry in the near future.

Ayşegül Yürekli Şengör, Chairwoman of Yürekli, informed the attenders of the conference with her opening speech.

Caroline Rush and Dylan Jones talked on “Changing Sectors in the Footsteps of Changing Consumer”

Social Entrepreneurship In his presentation titled “A New Business Revolution: ‘Social Entrepreneurship’ , Boyner Group Board Member Ümit Boyner said that a new understanding called ‘social entrepreneurship provides profitability and sustainability based on the right business model. At the same time, he added that it includes the ideal of creating a solution to a social problem and the transformation of individual dreams into collective utility. Boyner also shared his belief in the philosophy of social entrepreneurship.

Some Outstanding Presentations In The Conference -Tülin Karabük, Assistant General Manager responsible for Arçelik Marketing told the story of Arçelik brand in his speech titled “New Dynamics: Becoming a Winner in Markets by Considering Social Benefit”. -Zeynep Yalım Uzun, Unilever’s Vice President, stated that her presentation was about the existence of the consumer in her life. -One of the speakers of interest at the conference was Mehmet Kutman, who is Chairman of the Board of Global Investment Holding. In his presentation titled “How Dare You! Daring as a Way of Life and Governance”, Kutman responded to the questions of BJ Cunningham and described his approach to demolishing borders in business life.

MARKA Conference, Turkey’s largest business platform, has been organized since 2000.

The Turkish Perspective

Within the context of the event, 3 student projects have been awarded a total of $12,500.

INNOVATION

Carry Your Idea Into the Future

5th International Food R&D Brokerage Event, with the slogan of “Carry Your Idea Into the Future” will take place on 25 May 2017 in İzmir By fikri türkel

he event will be held with coordination of the Turkish Exporters Assembly (TIM) and the organization of the Aegean Exporters Association (EİB). It aims to increase added value of food products exports and to bring new technologies and methods to production processes. Rıza Seyyar, Chairman of the International Food R&D Brokerage Event and Chairman of the Aegean Fresh Fruit and Vegetable Exporters Association, said that they aim to bring new technologies and methods

to production processes and strengthening universityindustry collaboration through Food R&D Brokerage Event. “We bring industrialists, professionals and investors together innovative products related to food, prepared by researchers and students and projects that will increase value-added production. In the next period, we will carry out the 5th International Food R&D Brokerage Event on 25 May 2017 in Izmir” he added. Within the context of this event, 3 student projects have been awarded a total of $ 12,500. A total of $40.000

will be awarded to students, researchers and special categories this year. Ahmet Güldal, Izmir Provincial Director of Ministry of Food, Agriculture and Livestock, made a speech about the project in the launch. “We are closely following the food and agriculture business. The Food R&D Brokerage Event is an affair that we care about and we are interested in. Our objective is to export agricultural products worth $ 40 billion will be possible with the cooperation of everyone from the new

project producers, buyers, industrialists, exporters and universities in this period” he stated. Dr. Uygun Aksoy, Advisory Board Member of 5th International Food R&D Brokerage Event, talked about the project in his speech. “Project application topics were identified as Primary Production {Vegetable Products, Animal Products, Aquaculture, Natural Products (cereals, pulses, oilseeds, nuts, fresh fruits, vegetables, olives, spices, medicinal aromatic plants, aquatic products etc.)}, Food Processing and Technology Packaging and Packaging, Marketing and Value Chain Management, and Special Category (Green Production Practices in Foods and Future Product Future Design) within the scope of 5th International Food R&D Brokerage Event. We intend to raise our young people’s awareness and create sustainable work. President Seyyar said that the applicants started at www.gidaargeprojepazari. org. He also said that specialists, inventors, academicians and students, who are original projects in the field of food production and technology based on herbal, animal and aquatic products, can participate it. “We continue to work with European and American universities to establish cooperation within the scope of 5th International Food R&D Brokerage Event. For the project market, we signed the “Scientific Cooperation Protocol” with the Valladolid University in Spain as a beginning” he added.

Briefing

“Gel Production From The Fish Scale” We talked about the project of “Carry Your Idea Into the Future” and innovation with Rıza Seyyar.

Like most exporters, you travel a lot. Is there anything about innovation that you see when you travel around the world but we are not? Actually, we are not very back in innovation. On agricultural products, we are not behind the world in packaging. Moreover, we are ahead of many other countries. We used to sell only cotton. Now we are trying to increase the export figure of per kilogram unit by producing yarn from cotton, fabric from yarn and fabric products. This is what we try to do. What I see behind the Food R&D Brokerage Event is the introduction of a system for innovation. What is our position compared to the world? The world is working, so we want to work. They have pack. We can buy it and sell it with that package, but we intend to put it on that package and sell it more value added. Turkey is now in the middle of a bridge. We have to jump. Universities, industrialists and farmers need to contribute to do this. The exporters association announced a mobilization on innovation. the Food R&D Brokerage Event is one of them and the exporters have got it. For example; innovation studies that began 30 years ago in Finland began JANUARY 2017 ISSUE 42

On agricultural products, we are not behind the world in packaging said Rıza Seyyar.

to get in return for it. We can be patient for 10 years or 20 years. However we want to achieve this. We are continuing to work. We are taking positive steps. Innovation should not just be on the product. Innovation has to be realized in every service that reaches the final consumer as well as in service and logistics. In addition, new product categories such as wild products and new foods, such as vegetarian and vegan classification, are being created abroad. Turkey should have a significant potential in this area. Yes, this is an important issue for exporters. In addition, the public should take ownership of it and prepare its legislation.

Now we are trying to increase the export figure of per kilogram unit by producing yarn from cotton, fabric from yarn and fabric products.

What are exporters or producers’ requests? They demand the evaluation of the residues from olive oil production and the evaluation of the seeds from the fruit shells. What I really want is to get a lot of products from the output. We look at how we can use it in cosmetics or health care in the arms industry as well as the fruit oil. The French dominate the wine market of 78 billion but our geography has more potential in that respect. This is also the case with molasses or sugar products. We can sell everything now. And we can reach all countries of the world and we can export. There is absolutely a Turk at every hotel in the world and we are there to sell them our products. We have to find an answer to how we should sell our products more value-added. That’s the way to go with branding. Is there a budget or an estimated budget for this project? Turkey is not a country where surplus values are created. We make use of organized industrial zones, exporters’ associations and promotional groups. Manisa gave approval immediately. So are Aydın and Turgutlu. I believe that I will receive support from the TIM or the Ministry if there is a budget around 800 thousand Turkish Liras or a little bit more. Big business can be done with a small budget. Which was the most popular project? Gel production from the fish scale was vey loud. I think that it is going to be more popular in a few years.

The Turkish Perspective

Sheikh Thafier Najjaar, president of the World Halal Council, said that Muslims should consume halal food according to the orders of Allah.

Technology Minister Faruk Özlü, Governor of Istanbul Vasip Şahin and Discover Events Chairman Emre Ete made their speeches to the participants.

Developed countries apply standards in their favor

SUMMIT

WORLD HALAL SUMMIT TOOK PLACE IN ISTANBUL

World Halal Summit was held in Istanbul Lütfi Kırdar Convention Center between 15-17 December 2016. By ramazan Güzyurdu

he Summit took place in cooperation with the Turkish Standards Institute (TSE) and the Standards and Metrology Institute for Islamic Countries (SMIIC). The summit brought together prominent people in the halal sector and producers from around the world along with high-level speakers from Turkey and 26 countries. The Halal Expo 2016, a pioneering event that guides the sector by combining the World Summit with the Halal Fair, united the leading figures in the sector. Considering the number of Muslims, an important part of the world tourism industry with an economic volume of more than $1 trillion consists of buyers of halal tourism. On the first day of summit, Sheikh Thafier Najjaar,

president of the World Halal Council, said that Muslims should consume halal food according to the orders of Allah. He also said the sector should prioritize producing halal food rather than grabbing profit. The second day of the summit started with the Quran recitation in Lütfi Kırdar Anatolian Auditorium Hall. After the program, Science, Industry and

$15 BILLION

expected Halal food exports ın 2017

$337 BILLION

volume of halal food ın turkey ın 2023.

World Halal Summit took place together with Halal Expo 2016, Halal Food and Gastronomy Conference.

$192 BILLION

Halal tourism volume over the next four years

Science, Industry and Technology Minister Faruk Özlü indicated that Turkey is striving to produce solutions for a fundamental problem of Muslims around the world. Minister Özlü said many countries and organizations are now working to prepare, harmonize and document standards on halal certification. “The Standards and Metrology Institute for Islamic Countries (SMIIC) aims to develop trade between its member countries through its work in the field of halal documentation. It will serve the interests of all Islamic countries and Muslims that SMIIC standards will be the only standard in the world. Today, it is not acceptable for Muslim countries, which are close to 25 percent in terms of population, to receive only 10 percent of world trade. Changing this table is our job,” he said. World Halal Summit took place together with Halal Expo 2016, Halal Food and Gastronomy Conference, Islamic Finance Conference, Halal Tourism Hajj and Umrah Conference under the roof of Istanbul this year. Besides, World Halal Summit took place under the auspices of President Recep Tayyip Erdogan.

Briefing

AVIATION

A New Era in Flight Experience

Turkish Airlines further improves its award-winning passenger experience with several new services including Denon headphones, Samsung tablets and an app with updated functionality.

urkish Airlines, the

“Best Airline Company in Europe” for the last six years, has unveiled new services to further improve its standing as a premium airline aiming for the global lead . The national flag carrier airline of Turkey, which regards passenger satisfaction as the first priority, continues to deploy latest technological innovations, taking into consideration post-flight evaluations and requests of its passengers.

Enjoy Best-in-Class Acoustics The collaboration that Turkish Airlines has done with Denon, the manufacturer of the highest quality audio and visual systems, is just one of the innovations that global carriers have had in this context. Within the scope of this colloboration Turkish Airlines’ Business class travellers on long-distance flights to North America and the Far East will experience superb sound quality of Denon headphones with an advanced noise cancelling design. Phenomenally comfortable even for long periods of usage, JANUARY 2017 ISSUE 42

the headphones can also be purchased on Shop&Miles, an alternative way of using miles accumulated in the airline’s popular mileage reward program. Thanks to the headphones with 99% disposal of the external sound, the passengers are virtually unaffected by the current voices during their long journeys.

On-Board Tablets

Another innovation is the Samsung Galaxy S2 tablets, which will be introduced to business class passengers on all flights over 2.5 hours. Turkish Airlines adds a new dimension to the in-flight entertainment experience with its up-to-date and rich media options to different passenger profiles. Turkish Airlines is on top of expectations and offers business class passengers a different entertainment service with the latest technology tablets. Turkish Airlines, carrying the title of ‘Turkey’s Most Valuable Brand’ (Brand Finance Turkey 100 - 2016), serves blockbusters, television series, children’s programs and game options over 2.5 hours of flights via the distributed tablets on airplanes without

backrest digital entertainment system. The introduction of the portable IFE service, which will be available on select services, will be especially useful on aircraft lacking embedded IFE screens. Always equipped with

The Turkish Perspective

Turkish Airlines offers business class passengers a different entertainment service with the latest technology tablets.

application that has an innovative design, travellers can easily access flight booking, checkin and Miles&Smiles services on the move.

Easy Check-In with Turkcell BIP

the latest technologies, Turkish Airlines’ highest priority is maximizing its passengers’ satisfaction.

An Update for the Mobile App Another update that draws great attention in terms of passenger experience is; the mobile app revision that Turkish Airlines has recently released. With the updated mobile version of application, passengers will be able to add flights, cancel reservations, add passengers, upgrade from economy class to business class in addition to booking and doing check-ins. The app’s new features will offer tips and ideas for

travellers, including maps of the world’s major airport terminals, a tool especially useful for first-time visitors. Driving directions will be added to the app, while the featured airports will be Istanbul’s Atatürk, Hong Kong International, London Heathrow, and Miami International Airport. It is now easier to access all Turkish Airlines services via mobile devices with iOS, Android or Windows operating system. Using Turkish Airlines mobile

Turkish Airlines domestic flights have an easy check-in option, thanks to Turkcell BIP application. Accessible to subscribers of all operators, the BIP application enables passengers to check-in and to book their seats via BIP messaging system.

Exclusive Service for Young Passengers Heroes now meet its members at Istanbul Atatürk Airport. The re-designed Heroes counter offers travelers’ kids a different flight experience from the first step and opens the door to a unique world.

Always equipped with the latest technologies, Turkish Airlines’ highest priority is maximizing its passengers’ satisfaction.

Briefing

INVESTMENT

PRIVATE EQUITY FORUM HELD IN ISTANBUL ISPAT President Arda Ermut joined the event via video conference to talk about Turkey’s recent strategic business moves with the US, Europe, and Emerging Markets.

Arda Ermut joined Private Equity Forum via video conference and informed attenders about Turkey’s strategic moves.

rmut said that

ISPAT attaches great significance to private equity investments that are a major source of funding for FDI across the globe. He explained that the macro and micro economic conditions of Turkey have been major reasons for private equity interest in Turkey. Ermut went on to emphasize that at the micro level, the make-up of the Turkish business community, with its high proportion of local players, makes it ripe for private equity deals. The ISPAT President added that entrepreneurs who have established a good business but who need equity financing to reach the true potential of their business provide profitable opportunities for private equity investors. At the macro JANUARY 2017 ISSUE 42

Turkey is one of the most attractive investment destinations in the world, and this has been proven by the tremendous amount of FDI attracted in recent years.

level, Ermut underlined that the stabilization of macroeconomic conditions in Turkey and continued robust economic growth have encouraged private equity investment in Turkey. “Such developments clearly highlight the importance of emerging economies in the world.

In this regard, Turkey offers a safe haven for global investors. Its strong economic performance, growing domestic market, young population, skilled labor force, and strategic location make Turkey one of the most attractive investment destinations in the world, and this has been

The Turkish Perspective

proven by the tremendous amount of FDI attracted in recent years. All these positive developments are not ignored by private equity investors; therefore, foreign direct investment either by private equity funds or by other means is increasing in Turkey,” said Ermut. The executive briefing featured two panels. The first panel focused on the current investment appetite and local fund raising alternatives in Turkey and emerging markets, while the second panel explored views on investing in Turkey in the wake of recent domestic and international political events and also covered local fund raising opportunities. In the closing session of the forum, Deputy Prime Minister Mehmet Şimşek spoke on Turkey’s growth prospects going forward and on the formation of the Sovereign Wealth Fund. Şimşek underlined the significance of reforms for economic growth and invited foreign investors to Turkey. “It is the best time to invest in Turkey. We left the worst behind and our potential is great,” said Şimşek. He added that private equity funds should evaluate Turkey with a long-term perspective. He made it clear that stability will be ensured by the fact that pending structural reforms in Turkey are set to pass. “A strong stance in public finance is in fact a factor that increases Turkey’s resistance against internal and external shocks,” Şimşek concluded.

SAMSUNG LAUNCHES INNOVATION CENTER IN TURKEY

Samsung, one of the ten most valuable brands in the world, inaugurated an innovation center in Istanbul.

outh Korean

electronics giant Samsung recently inaugurated an innovation center in Istanbul, continuing the company’s commitment to conducting R&D in Turkey following its February 2015 investment in Istanbul Teknopark. The Samsung Innovation Center will provide seamless B2B enterprise solutions. Speaking at the opening ceremony on December 13, 2016, ISPAT President Arda Ermut said that fifty years after the beginning of the information age, the world is undergoing a substantial transformation fueled by automation, R&D, and productivity. “This period, called the fourth industrial revolution and which drives economies, is also having an influence on Turkey. In this sense, investments that will give rise to R&D activities and enable the transfer of technology are prioritized. As the Agency, we attach great significance to sectors that will support the development of this process in Turkey, which is defined as Industry 4.0,” said Ermut. Focusing on the importance of the Samsung Innovation Center, Ermut further added that many developing countries are reevaluating their positions in the global value chain. These countries are targeting more strategic, high-tech sectors and are developing policies accordingly. “Similarly, within the value chain, Turkey is developing

Arda Ermut: “Turkey is developing technology-intensive policies”

technology-intensive policies,” continued Ermut. “As the Agency, we take this and other initiatives very seriously and try to support them as much as we can. Taking part in innovation, identifying crucial points for improvement, and conveying them to related public bodies are strategic priorities in our agenda. We consider the ICT sector in particular to be one of the strategic priority sectors. We will adopt a top-down approach as we strive to raise awareness of qualified-staff,

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market research, financial support, and incentives in this area.” Samsung is one of the ten most valuable brands in the world and it is the global market leader in 17 of the areas in which it operates. In addition to its centers in Turkey, the company’s global R&D network includes the likes of the US, the UK, Russia, Israel, India, China, and Japan. The company stands as one of the largest R&D spenders in the world, surpassing USD 14 billion in 2015.

Briefing

UK-TURKEY CROSS BORDER BUSINESS MODELS DISCUSSED IN ISTANBUL

The UK-Turkey Business Forum, held in association with ISPAT, brought business professionals together with government officials from both countries on December 2 in Istanbul.

his year’s forum

focused on manufacturing, the UK-Turkey cross border legal agenda, technology, and business models in the two countries. Attending the forum were company representatives, professionals, academics, and individuals engaged in or intending to do business in the UK and Turkey. ISPAT Department Head A. Burak Dağlıoğlu, during his keynote speech at the forum, said it is not a coincidence that the UK is one of the leading foreign investors in Turkey. An indicator of the strong business ties between the two countries is the fact that the UK took top honors as Turkey’s main partner country for exports in the recent months of 2016. With regard to capital inflows from the UK, the share of long-term capital investments in total has been on an upward trend in recent years. According to Dağlıoğlu, from Vodafone to Rolls Royce and from BP to HSBC, there are around 3,000 UK companies with investments in Turkey. The stock value of companies’ combined investments is more than USD 21 billion, making the UK the second largest investing country in Turkey. Meanwhile, ISPAT Coordinator Necmettin Kaymaz was a panelist at the manufacturing session of the forum where he provided an insight into joint manufacturing opportunities between the UK and Turkey. Undersecretary for EU Affairs Ahmet Yücel, Acting JANUARY 2017 ISSUE 42

Turkey was set to become the U.K.’s third largest export market following the Brexit referendum.

An indicator of the strong business ties between the two countries is the fact that the UK took top honors as Turkey’s main partner country for exports in the recent months of 2016

Deputy Undersecretary for Ministry of Economy Tarık Sönmez, Ambassador of Turkey to London Abdurrahman Bilgiç, TBCCI Chairwoman Emma Edhem, and Ambassador of the UK to Turkey Richard Moore also delivered keynote speeches at the forum.

The Turkish Perspective

2nd ANNUAL SPANISH-TURKISH CHAMBER OF COMMERCE AND INDUSTRY AWARDS

The 2nd Annual Spanish-Turkish Chamber of Commerce and Industry Awards ceremony was held on December 15, 2016 in Madrid.

he Spanish-Turkish

Chamber of Commerce and Industry annually recognizes people, institutions, and companies that through their activities and dedication make a significant contribution to the rapprochement of Spain and Turkey and the strengthening of bilateral ties between the two countries. The 2nd Annual SpanishTurkish Chamber of Commerce and Industry Awards ceremony took place on December 15, 2016 in Madrid. Spanish automotive company Ficosa, which has operated in Turkey since 2000 and where it currently has two production plants and employs 1,100 workers, took first place in the Spanish company category. In the Turkish company category,

Turkish conglomerate Doğuş Group, the second-largest shareholder in Turkey’s Garanti Bank after Spain’s BBVA, took top honors. Doğuş Group also has significant investments in Spain’s tourism and services sectors. Meanwhile, FC Barcelona’s Turkish midfielder and captain of the Turkish national football team Arda Turan was the winner in the professional merit category. The awards were handed out at an exclusive ceremony where ISPAT, as a member of the chamber’s board, was among the sponsors of the event. Around 240 participants, including Spain’s Energy, Tourism and Digital Agenda Minister Álvaro Nadal, Turkish Ambassador to Spain Ömer Önhon, BBVA CEO

Carlos Torres Vila, Chairman of the Spanish-Turkish Chamber of Commerce Ramón Gascón, Ficosa Chairman Jose María Pujol, Doğuş Group Chairman Ferit Şahenk, and top executives of prominent Spanish companies such as Amadeus, Maxam, Essentium, Befesa and Mapfre attended the awards ceremony. During his speech, Doğuş Group Chairman Ferit Şahenk said that Spain and Turkey have a lot in common as they share a great Mediterranean culture. He added that it is the friendly and constructive approach of their Spanish partners that has played an important role in moving forward their business cooperation. The Ficosa Chairman in his speech recalled his very

Doğus Chairman Ferit Şahenk: “Sharing the great Mediterranean culture, Spain and Turkey have a lot in common”

first visit to Turkey and the extremely positive impression that the country made on him. He also said that after 16 years of business, they are quite content and proud to be in Turkey and invited other Spanish companies to invest in Turkey. Over the past decade Spanish companies have invested more than EUR 10 billion in Turkey. The volume of commercial relations between Turkey and Spain reached EUR 9.8 billion in 2015, and more than 600 Spanish companies currently operate in Turkey.

Panorama

By EMRAH AKIN

Which Investments Will Benefit from

“Super Incentives System”? Turkey has started implementing a new model that could be called the “Super Incentive System”, to attract investors, and as such the Cabinet of Ministers hasbeen granted the authority to extend comprehensive incentives to investments to be decided on a project basis.

n the month of August, a very important step regarding

our investment incentive system was taken by means of “Law No. 6745, Supporting of Investments on a Project Basis and Administering Changes in some Laws and Decree Laws.” However, since August, the investments that would be evaluated and supported within this scope have not yet been determined. Therefore, we are yet to witness an investment project that has benefitted from this new incentive system, which was initiated in August. By means of the Decree No. 2016/9495 “Regarding the State Assistance to be Extended to Investments on the Basis of Projects (BKK)” published in the Official Gazette dated November 26, the type of investments to benefit from this important incentive system and the procedure to be used have been clarified. Now we will first have a look at the important issues regarding the incentives that have been left to the authority of the Cabinet by means of Law No. 6745 and then the

JANUARY 2017 ISSUE 42

system that has been established by means of published Cabinet Decree No. 2016/9495.

What Are the Super Incentives? We must state that a flexible incentive system has been initiated by means of Law No. 6745. The new model is a very important milestone where the development of our investment incentive system is concerned. Thanks to this model, we’re able to say that a special incentive system unique to each investment project put forward for support can now be developed. According to the stipulations of the respective Law, the Cabinet will be able to grant the right to benefit from all or some of the incentives - that are described in the Law - to the investments that are supported on a project basis by the Ministry of Economy. In other words, the Cabinet would be able to design a flexible and special incentive mechanism

The Turkish Perspective

for each investment project designated to receive support by the Ministry of Economy. In determining the projects to be supported within this scope, attention will also be paid to whether these investments meet the current or future requirements of Turkey in line with the targets set in the development plans and annual programs and/or whether they could ensure continued supply, reduce dependence on foreign sources, achieve technologic transition, be innovative, and add value as well as being R&D focused. It could be said that the authority granted to the Cabinet by means of the Law has been quite comprehensive. As stipulated in the Law, the Cabinet will be able to: • Have the corporate tax rate applied at a discount of up to 100% and determine the rate of contribution in the investment up to a rate of 200%. • Grant exemption from corporate tax, limited to the earnings obtained from the investment, for a period that extends up to 10 fiscal periods starting from the commissioning of the investment, • Grant the right to benefit from the “income tax withholding” incentive applicable to the recruited personnel in the cities restricted presently to only the 6th region, • Grant Customs Duty exemption, • Grant free of charge easement or utilization rights for a period of 49 years in relation to the immovable property belonging to the Treasury and have the immovable property of Treasury transferred free of charge if requested with the condition that the investment is completed and the predicted employment rate is achieved for a period of 5 years, • Meet the employer’s share of the investor in the insurance premium for a period up to 10 years, • Meet up to 50% of the energy consumption expenditures in the operating period pertaining to the investment for a period up to 10 years, • Provide interest or profit share support or extending a grant for a period up to 10 years for the investment credit used in the financing of the fixed investment amount, • Provide salary assistance up to 20 times the minimum gross wage for a period of up to 5 years for a designated number of qualified personnel that are essential for the realization of the investment, • Participate in the investment, provided that 49% of the investment amount is not exceeded and that the shares acquired are offered to the public or sold to the investors within a period of 10 years, One or more of the incentives listed above could be extended to the designated investors.

Opportunities provided to the investors are not restricted to the ones listed above. The purchase guarantee and easing of some bureaucratic procedures are among the alternatives. We should elaborate on this subject: • The Cabinet could possibly extend a “purchase guarantee” to the product subject to the project-based investment for a period and amount to be determined by the Cabinet. Furthermore, where the project requires, it will also be possible to make any substructure investment based on the decision of the Cabinet. • In the new model, the Cabinet could also provide exemptions regarding the permits, allocations, licenses, registrations and other restrictive requirements stipulated in other laws on investments included within the scope of the scheme or make arrangements in the legal and administrative processes for purposes of speeding up or streamlining investments. This would lighten the legal and administrative burden of the investors to a great extent. • How Will the Projects Be Submitted to the Cabinet? According to Law No. 6745, the Cabinet could use its above indicated authorities for the investments chosen for support by the Ministry of Economy on a project basis; however the investments to which these significant incentives will be applicable have not been clarified since August. By means of Cabinet Decree No. 2016/9495 published on November 26th, the type of investments to benefit from this important incentive system and the procedure to be used have been somewhat clarified. Briefly, the project-based incentive model will become operational when the Ministry of Economy determines the investment subject and suggests a relevant investor or investors to the Cabinet.

Turkey has started implementing a new model that could be called the “Super Incentive System”, to attract investors.

Investors Who Are Not Invited or Do Not Possess the Qualifications AnnouncedWill Not Be Able to Benefit From the System! We must state that the system established by means of Decree No. 2016/9495 has no precedent in the past. That is to say; as per the Decree the Ministry of Economy could invite one or more firms to invest in the subject designated for investment or invite relevant firms to apply for investment by making an announcement. In other words, all investors meeting the terms of the related incentive scheme as stated in the respective legislation would not be able to apply to the Ministry, as was the case with the previous incentive models. They have to wait either for the invitation to be issued or the announcement to be made by the Ministry to be able to make an application.

Panorama

The investors that respond to the invitation they receive or the announcement made will be required to make their application to the Ministry of Economy with the information and documents indicated in the Decree No 2016/9495. We must also state that the Ministry could also request information and documents from the investors that are not included in the decree.

The “Minimum Fixed Investment Amount” of the Project to Be Supported Must Be At Least USD 100 Million! According to the Decree, it is not possible for investments with minimum fixed investment amounts of less than USD 100 million to benefit from this incentive system. The Ministry of Economy will evaluate the project applications received on the basis of the following criteria. • Being able to meet any critically important current or future requirements of our country, • To develop our technologic capacity in the fields we technologically fall behind in. • To reduce dependence on imports in the areas where a foreign trade deficit exists. We must emphasize at this point that, exceeding a specific amount of imports as prescribed in the “incentives for strategic investments” or having a higher volume of exports in comparison to imports are not the conditions set out in this Decree. However, last year’s import and domestic production numbers regarding the investment product and projections of the production and import numbers to be achieved upon conclusion of the project will be requested from investors who submit an application. • To improve our country’s competitive power, • To be an innovative R&D focused investment, • To be an investment oriented towards the production of processed products of high added value in the sectors that affect the current account balance negatively and also experience raw material shortages. The projects that are deemed to be suitable on the basis of the criteria above shall be presented to the Cabinet by the Ministry of Economy and an “incentive decree” will be published for the projects chosen for support by the Cabinet. In other words, the incentives that the chosen project will receive, will be assured in the decree of the Cabinet. Following this decree, the Ministry of Economy will issue an “Investment Incentive Certificate” for the respective investment project.

The InvestmentWill Be Followed Up Bi-annually Through Sworn-In CPA Reports! The investment is required to be completed between the commencement and completion dates indicated in the incentive decree; however, an extension of time could also be granted if there is a reasonable justification. We must also underline the fact that the investments that benefit from the incentives provided within the scope of this Decree would not be able to use other incentives and assistance provided under other incentive systems. Different from other incentive schemes, a tracking and control system specific to the investments supported by means of this system is being established. Accordingly, the investor will be required to submit to the Ministry, accompanied by a sworn-in CPA’s (sworn tax advisor) report, the information on the realization of its undertakings pertaining to the investment in the investment and operating periods, and the amount of incentive used in the months of January and July throughout the period designated in the incentive decree.

What Consequences Will an Investor Failing to Meet its Obligations Face?

Ministry of Economy will issue an “Investment Incentive Certificate” for the respective investment project.

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If the investor fails to meet its obligations indicated in the Incentive decision, it will be required to pay back any corporate tax that has not been accrued due to the discount or the exemption applied and the income tax withholding incentive applied and any applicable default charges - excluding tax loss fines. Other incentives will be recovered within the framework of the provisions of Law No. 6183 on the Collection Procedure for Public Receivables.

From the Point of Our “Responsible Tax” Approach

According to the data issued by the Ministry of Economy, the inflow of “Foreign Direct Investments” to Turkey in the 2016 JanuaryJuly period amounts to USD 4.8 Billion. This shows a decrease of 54.2% in direct investments compared to the same period of 2015. In consideration of the difficulties we experience in terms of “savings”, the vital importance of foreign direct investments for Turkey becomes quite clear. We must underline the fact that this new incentive system is a significant step taken in this direction. However, this doesn’t fully resolve the issue. It is necessary to explain the super incentive system to all domestic and international investors to have the investments start flowing into the country as soon as possible. Within this context, we should start promoting the new system in the most effective way possible, emphasizing the opportunities the new system as well as our country can provide to investors.

photograph byLOREM IPSUM

SectorAL EXPORTS REPORT

2016

Export fıgures of tHE Sector’s councıl

Panorama of Solid Turkish Economy in 2016

A very strong side of the Turkish economic structure is its solid financial system and its export.

SectorAL EXPORTS REPORT 2016 Content

JANUARY 2017 ISSUE 42

The Turkish Perspective

Mehmet Büyükekşi President of Turkish Exporters’ Assembly

Spreading the Succes We’ve left 2016 with recession in global trade and a number of interesting economic, political and social developments.

If we were to make a general evaluation; quantity based world trade has seen its slowest growth rate of last 15 years, excluding 2009. 3 main factors are lying behind this situation: The first one is the rise of US dollar. The second one, underperforming petroleum and commodity prices despite the positive activity in the last 2 months. And the last one is the weak economic performance of the developing countries. In terms of US dollars, global trade has contracted by nearly 4% during the first 10 months of the year while US exports dropped by 4.6% and China by 8.3%. Despite all the internal and international negative developments, Turkey’s exports remained close to 2015 levels. In the light of these developments, we could say that Turkey’s exports were below her potential, but above the expectations. However, sectors shouldering the Turkish national exports displayed an outstanding performance during the year. From this point of view, we decided to share these sectors’ outlook in this issue of The Turkish Perspective. In this study, we analyzed export performances of our sectors in order to understand their development during the year. We tried to reveal the steps and the actions to be taken in 2017. At the same time, we uncovered the success stories behind these sectors. It is important to understand how the strong sectors has adopted themselves to local and global economic developments and changing technological world. We tracked how these sectors has differentiated positively among their peers. We expect these findings to guide us, Turkish Exporters’ Assembly, in our activities and pave way for our requests and suggestions from the Government and the Ministry of Economy. As the representative of 65,000 exporters who provide jobs for 3 million people, we are aiming to analyze and spread the success. If we want our products to be favored throughout the world, all our sectors and exporters have to continue this high paced race. We are well aware of this fact; we can only spread success by warding failure off. Only then, we can maximize our long term gains. With these in mind, we are trying to visualize how our successful sectors stood strong in this highly competitive environment and managed to get ahead of their competitors.

Million PEOPLE

Turkısh exporters provıde Job

THOUSAND Exporters

Turkish Exporters’ Assembly REPRESENTS

A Brief Story of Trade Finance and Turkish Banking Sector

Trade Finance has been one of the focal points of all players of trading realm throughout history.

ften, the focus on Trade Finance itself has been even stronger than the one on trade. That is because, the fragile trivet of trade which is consisted of goods/services, buyers and, sellers is not easy to form and sustain without a catalyst, namely Trade Finance, which holds the trivet intact as a means of security. Being a term created by Banks and Financial Institutions, the term Trade Finance might carry a few different meanings. First, as the word â&#x20AC;&#x153;financeâ&#x20AC;? implies, it might simply mean provision of funds needed for a trade transaction. Secondly, as hinted above the term could also mean the formation of a secure means of trade and, thus enabling the exchange of goods/services for money in a risk free environment. Indeed, it has been this second meaning of Trade Finance that researchers have come across in history on some Babylonian clay tablets. Those tablets, dated around 3000 BC constitute first examples of promissory notes and letters of credit. Having its roots in Mesopotamia, the story of Trade Finance nourished primarily as a regional activity around active trade routes of the time during almost three millennia. However, with the fall of Roman Empire in third century AD it somewhat went into a long hibernation until fifteenth century. Around that time, it started its second phase led mainly by some European banks and financial institutions. This second phase however has been so fast and, widespread that some of the banks has opened their first branches in some junction points of international JANUARY 2017 ISSUE 42

Turkish banking sector including both banks and financial institutions has brought dynamism to entire banking industry.

Murat Argun Senior Expert at OMV Corporate Treasury

trading rather than having done that in their homelands. Interestingly, one of those junction points happened to be Istanbul. As mentioned above, the trivet of trade is extremely fragile. Especially when the buyer and seller are in two different locations without trusting one another, the trivet is almost impossible to build let alone sustaining it. It has then been the role of banks and financial institutions to become the bridge between the parties of trade and thus, to strengthen the structure of trivet. To enable the trade what the banks have done was actually quite simple. They first started to intermediate exchange of promissory notes (plain IOUs) between trading parties. In time, with growing volumes and, complexity of trade led the banks to become more involved and, they started to issue bank letters of credit which guarantee payment of funds if & when terms of trade are met by both parties. Introduction of letters of credits also led expansion of trade volumes since they enabled the buyers to leverage using banksâ&#x20AC;&#x2122; funds. As a result, funding became widely utilized in trade finance. Until this point, what is summarized above constitutes roughly eighty five percent of trade finance story in money value. Let us call it traditional trade finance. The rest of world trade is still being done on open account basis based on simple trust between the parties. That being said and, after another half millennium has expired, we might call an end to the second phase and, commence telling about the current, third, phase.

The Turkish Perspective

This phase has come because of a few set of events. Those were such events that have increased the pressure on banksâ&#x20AC;&#x2122; profitability yet, still kept them very much eager to remain integrated in trade. Most important set of events applying pressure on banks were the global financial crises marking the last two decades. Eventually, risk appetites of banks decreased significantly due to increased capital costs and, stressed adequacy levels. Secondly, the markets got more and more competitive squeezing margins down. However, banks did not throw the towel into the ring. Due to survival instinct or, thirst for profits or, both they just got creative and, began to eye the untouched fifteen percent of the big trade finance cake. In doing so and to their lucks, banks did not have to reinvent the wheel. Actually, they simply reverted to the roots of being enablers rather than being risk takers. In the meantime, another very important market development somewhat helped the banks. Controversially, that was the alltime low level of interest rates prevailing in the markets Thus came into focus was the term structured trade finance which already existed yet, somewhat abandoned Adopting the back-to-roots approach fast, banks resumed promoting already known concepts of factoring, securitization and, reverse-factoring bundling them under one single term; Supply Chain Finance. Above-mentioned low level of interest rates made it easier for the banks to find investors willing to take the risk in which they have had only limited interest left. On the other hand, those new investors were able to take the risk since their capital and profitability requirements were different and, since the structures were secured by the intermediation of banks and, legal documentation. Turkish banks were plugged in to this big picture somewhere around the last decade of twentieth century and, became important players not only because of the geographical attraction as exemplified by Ä°stanbul being target of international banks focused on trade finance but, also due to the fact that while international banks were still focused on the bigger part of the cake, namely traditional trade finance, they had to become involved in structured trade finance almost immediately.

Turkish banks have the advantages of being creative, dynamic, agile and, technologically advanced. Yet, they also have always suffered one big disadvantage, which also has become the push behind their involvement in structured trade finance. That is and has been the scarcity of funding due to low risk appetite of investors in Turkish market or, in other words, relatively high risk profile of Turkish assets in the eyes of international investors. Therefore, Turkish banks being in need of access to funds and, international investors that are consisted of banks, financial institutions and, institutional investors being in need of mitigated risks and, relatively higher returns have naturally

Turkish banks have the advantages of being creative, dynamic, agile and, technologically advanced.

found a common ground of cooperation in the area of structured trade finance. Turkish banks used trade finance backed loan syndications and, to a certain extent, international trade flow securitizations heavily to raise funds. However, adding their creativity, they also introduced local Supply Chain Finance structures much earlier and, technologically more advanced than international banks. Especially in consumer-banking segment, the structures developed by Turkish banks have been pioneering examples of the entire banking industry. Another flavor added by Turkish banks and financial institutions was the use of Islamic banking in structured trade finance area. In conclusion, Turkish banking sector including both banks and financial institutions has brought dynamism to entire banking industry regardless of its mainly local nature. Many of its young and very agile, open-minded professionals have spread into international banks getting important positions in trade finance area. Thus, one can easily claim that the story of trade finance, which has come back to its roots in practice, has also come back to its homeland where it started to flourish almost five millennia ago.

Electrical-Electronics And Services Industry

Bright Future of the Industry

Turkish Electrical and Electronics and Services Industry is renewing itself.

BILLION

Export In 2016

BILLION

2023 Export Goal

Sector’s share ın total export

2016

estımated ıncreasıng rate of export ın 2017

JANUARY 2017 ISSUE 42

onsidering the value added Turkey’s industry, the Electricity-Electronics and Services sector has increased its export volume by continuing its production-focused and successful performance. Electricity-Electronics and Services are an important and key sectoral production area that has a close impact on other industries due to their economical and technological characteristics. This sector is one of the largest and leading industries because of the number of workers it employs in the world production volume, the effect on the whole area of the industry and more than 10% of world industrial production. The Electricity-Electronics and Services industry, which started to be established as an assembly industry in Turkey in the 1950s, has developed rapidly in recent years, has gained a competitive edge and has been one of the fastest growing sectors. Activities such as Turkey Innovation Week events hosted by Turkish Exporter’s Assembly increases the awareness for innovation and companies of all scales begin to embrace innovation as a fundamental part of their business. Today, the industry has reached a point where it can develop its own design and technology. The fact that the Turkish Electrical and Electronics and Services Industry is constantly developing and renewing itself, adapting to world technologies and showing new technologies in its adoption, indicates the bright future of the industry. Electricity-Electronics and Services sector are carrying out an intense workload with our industrial sectors as well as the Ministry of Economy and the Service Sectors, which will continue throughout 2017 and 2017.

Güven Uçkan Electrical-Electronics and Services Industry Councilman

2017 will be a more favorable year We expect that our sector exports will increase by 2% in total with a total value of 10-11 billion dollars in white goods, consumer electronics, electricity production distribution equipment and cables products group. The coup attempt we experienced on July 15th caused a wavy procession in the markets. It affected not only in the Electricity Electronics sector but in all the exporting sectors. This can be seen clearly when the July data is analyzed. In the Electricity and Electronics sector and in Turkey’s general sectors, our exports were down by 20% compared to the same month of the previous year. However, when exports are evaluated on a cumulative basis, this situation is not long-term and the effect on exports of the sector is at minimum level. Compared to 2015 and 2016, we think that 2017 will be a more favorable year in terms of sector exports. As of December, international organizations have revised up the growth rates of the world economy and there is a recovery of the growth in developing country economies. These developments are confirming our expectation. However it is also known that the world is experiencing a significant slowdown in commodity trading which constitutes an obstacle to our industry and of course, to the 2023 export targets. We do not expect the realization of our value target due to the contraction in world trade, but we think that we will achieve our goal of increasing our share of the world trade from 8 % to 16 %, as we aimed.

1.5

Defense and Aerospace Industry

BILLION

Fruit and Vegetable

Products Industry

0.9%

BILLION

Latif Aral Aliş Defense and Aerospace Industry Councilman

2023 Export Goal

BILLION

Export In 2016

EXPORT IN 2016

1.2

Rıza Seyyar Fruit and Vegetable Products Industry Councilman

Sector’s share ın total export

BILLION

2023 Export Goal

The rising star and the future of Turkish export

urkey has seen a transformation in its defense industry in recent years, with a remarkable shift from arms procurement to arms manufacture and sales. Over the last 21 years since its establishment, and as a result of dedicated efforts, the Undersecretariat for Defence Industries has made real achievements in the creation of a modern national defence infrastructure in Turkey, with highly successful results in certain vital areas. Turkish UAV Anka, main battle tank ALTAY, satellite GÖKTÜRK, corvette ship MILGEM are the pride of Turkish defense industry, all giant projects that contribute to both the nation’s defenses and exports. Due to these, Turkey has reduced by half its external dependence in defense industry over the past 14 years . The crisis in Middle East and the other regions of the world and international terrorism affect the export of defense industry but on the other hand, increase the demand for defensive structures and devices. This political environment give birth to the opportunities for defensive industry companies in the globe, but Turkish Defense Industry at most: Turkey’s proximity to such regions and stable, trustworthy economic and diplomatic ties makes the country the first target for purchases. In 2016, exports from Turkey for defense industry included aircrafts and helicopter parts, engines, armored land vehicles, speed boats, missiles, rockets, launching platforms, command and control systems, light weapons and electronic systems including transmitters, simulators, sensors, and military software. The overall aim of the Turkish defense and aerospace industry is to boost exports to $25bn by 2023, from around $1.46bn in the period of January- December 2016. The 2023 vision of the government is to be ranked in first ten countries in defense industry and to manufacture all ground vehicles, marine vessels and unmanned aerial vehicles domestically.

Always Aiming the Top The industry’s future appears to be bright it is not so far from its export goal.

he agricultural sector is not only important for the foreign currency inflow it supplies to our country. It is also an important sector as it holds a strategic place in the economy of our country by contribution to the employment in the related sectors as production, packing and logistics, beginning from the stage of production with farming workers to the stage of packing and transportation with the workers in the packinghouses. And if we consider the sector of fresh fruit and vegetables, we can say that it is one of the main subsectors of our agriculture. Turkey is one of the rare countries where the prosperous, fertile and large agricultural areas with different regional ecological conditions allow the production of fruit and vegetables of quality in optimum conditions. The main market of Turkish Fresh Fruit and Vegetable Sector, which prioritizes the quality factor, is Russian Federation. In this regard, the political and economic recovery between Turkey and Russia will affect positively export figures of fruit and vegetable products industry in 2017 and next years. In order to reach 2023 goals, industry’s future appears to be bright and it is not so far from its export goal, which is $4 billion worth export. Nowadays considering the final situation, where an excessive international competition in the sector of fresh fruit and vegetable must be taken into account, the Management Board of Turkey Fresh Fruit and Vegetable Sector is currently formed by 4 Unions of Fresh Fruit and Vegetables throughout Turkey: Mediterranean, West Mediterranean, Eastern Black sea and Uludağ Unions. Their objective is to work so that to give benefit to the economy of the country by protecting Turkey’s share in markets already found and by finding out new markets.

Automotive Industry The Shining Star of Turkey’s Export

Today’s Turkish automotive industry is highly efficient and competitive thanks to value-added production.

$25 BILLION

Export GOAL IN

2017

1.10 million

Quantity of pieces exported in 2016

1.45 million

Quantity of pieces manufactured in 2016

$Billion

2023 export goal

JANUARY 2017 ISSUE 42

utomotive Industry is leading to Turkish economy and exports for many years. The industry has been the export champion for nine in a row and it is no surprise how advantageous Turkey is for the automotive industry. The foundations of Turkey’s automotive industry date back to the early 1960s, when the first efforts to develop and produce a Turkish-made passenger car were undertaken. During a period of rapid industrialization and progress, this key sector transformed itself from assembly-based partnerships to a full-fledged industry with design capability and massive production capacity. Between 2000 and 2014, Original Equipment Manufacturers (OEM) invested more than 12 billion $ in their operations in Turkey. These investments significantly developed their manufacturing capabilities, which in turn led to Turkey becoming an important part of the global value chain of international OEMs. Meeting and exceeding international quality and safety standards, today’s Turkish automotive industry is highly efficient and competitive thanks to valueadded production. Toyota, Opel, Fiat and Renault are among the most renowned automotive companies that manufacture or assemble in Turkey. Already a powerful industry, Turkish Automotive sector will grow further beyond and achieve its 2023 goals.

Ömer Burhanoğlu Automotive Industry Councilman

New records are waiting for us in exports

The Automotive Industry, which is the export champion of Turkey’s exports for the last 10 years, is preparing to celebrate its 11th export championship while entering the last days of 2016. At the beginning of the year, as the Association of Automotive Industry Exporters, we set an export target of approximately with an increase of about 10%. Our export target was 23 billion dollars but we close the year with an export figure above our targets. The positive effect of the new models produced and expanding in the European Union market reflect the positive effect of exports in 2016. As the Automotive Industry, we reached an average of $ 2 billion worth of exports especially during the February-June period of 5 months. In August, which is considered as holiday season for automotive, automotive industry has reached its highest export date of August. Automotive Industry reached 2.19 billion dollars in October, the highest monthly export figure since 2008. On a monthly basis, export record was once again improved by 2.24 billion dollars in November. In summary, the year 2016 of our automotive exports will be over the targets set at the beginning of the New Year. And it will be closed with the best export performance after 2008 in terms of the automotive industry this year. On the other hand, the figures for the first eleven months of 2016 indicate that new records are waiting for us in exports on production and unit basis. As the Board of Directors of Automotive Industry Exporters’ Association (OIB), we set our 2017 target as 25 billion dollars. This means that we can’t pass the export record of 24.7 billion dollars belonging to 2008. We are aiming to reach the highest export figure in the automotive industry today by passing this record in 2017. Issues we talk today ages fast. It is not possible to meet 2023 targets with this investment capacity.

5.7

Cereals

$ BILLION

Pulses, Oil Seeds and Products Industry

Ferrous

and Non-Ferrous Metals Industry

5.45 BILLION

EXPORT IN 2016

Export ın 2016

Zekeriya Mete Cereals, Pulses, Oil Seeds and Products Industry Councilman

4.2% sectors share ın total export

Using the Potential to Reach Our Target The sector has become one of the most important subsectors of the food industry.

urkish cereals, pulses, oil seeds and products sector, which has great potential and is among the leading growers of cereals and cereal-based products, has a 30% share in total exports of agricultural products. The sector mostly exports wheat flour, vegetable oils, confectionery containing sugar and chocolate, pasta and biscuits. With the rising graphic, the sector has become one of the dynamics of the country’s economy, both in terms of production and export. The sector exports to more than 190 countries and has a wide market range. The sector has become one of the most important subsectors of the food industry using modern technology. It has the most advanced technology in the Middle East, Balkans, North Africa, Baltics and Central Asia. Products are more widely diversified and of a higher quality. Wheat has great importance because it is grown in almost all parts of Turkey by a large number of farmers and constitutes

BILLION

2023 Export Goal

the main nutrient for the majority of the population. Cereals are grown on 12 million hectares (50%) of 24 million hectares of arable land in Turkey. The Turkish wheat flour sector has a major position in the world wheat flour export with its high production capacity. Approximately 1.200 wheat flour factories, which are operating in almost every province in Turkey, have the total production capacity around 30 million tons. The sector exports 1 billion 846 million 702 thousand dollars of cereals, pulses, oil seeds and products in the January-November period of this year. Wheat flour took place in the first place with 482 million 847 thousand dollars of export and vegetable oils followed it with 345 million 666 thousand dollars. The third most exported product was pasta with 247 million 313 thousand dollars. The aim of the cereals, pulses, oil seeds and products sector is to achieve the 2023 export target of USD 13.7 billion.

BILLION

Tahsin Öztiryaki Ferrous and Non-Ferrous Metals Industry Councilman

2023 Export Goal

Research and Developement for a Sustainable Growth The industry aims to spread the innovative understanding and create a culture of innovation.

errous and non-ferrous metals industry includes aluminum, copper, casting, goods made of iron and steel, hand tools, locks, scraps materials and kitchenware made of metal. In this regard, ferrous and non-ferrous metals industry have represented their works and Turkey in international organizations, executed technical seminars, buy trade committee actions and supported R&D activities to enable sustainable-growth of ferrous and non-ferrous metals industry. In the period of January- November 2016, Ferrous and non-ferrous metals’ total export worth of Turkey was $5.4 billion. In this period, the most successful sector was the aluminum industry with $2.03 billion and 36% share. Turkey’s Ferrous and non-ferrous metals were mostly exported to Germany with $750 million. Secondly, exports to Italy were $354 million. As the third country, exports to the UK increased %11. Among the top ten countries in terms of exports, the highest increase compared to the previous period of the last year was Poland with %30.1. On the other hand, improved relations between Russia and Turkey as two countries are important trade partners for each other can affect positively the export rates in ferrous and nonferrous metals industry in 2017. As for the 2023 goals, the industry aims to reach 25 billion USD ferrous and non-ferrous metals export. To reach this goal, ferrous and non-ferrous metals industry need to focus high value added products with highest priority and thanks to innovation and R&D. Therefore, the people who lead the industry aims to spread the innovative understanding and create a culture of innovation.

Leather and Leather Products Industry

Progressing to Develop with The Same Enthusiasm One of the oldest industries of Turkey plays a crucial role in the country’s export rate.

1.3 T

BILLION

EXPORT IN 2016

12%

Increase Rate in Export

25%

Increase Export to Iraq

$Billion

2023 export goal

JANUARY 2017 ISSUE 42

he Leather and Leather Products sector covers many disciplines as sub-sectors and with its internal harmony, plays a crucial role in the country’s exports for many years. Leather and Leather Products industry has taken on a new significance especially after dissolution of Soviet Union, as former Soviet countries became the main buyers of Turkish leather products. In the last two years, low oil prices and the Russian jet plane crisis had negatively affected the Turkish leather sector. But, after the second period of 2016, Turkey’s leather and leather products export with Russia recovered again. Also, Turkish leather industry gained different markets during the Russian crisis and will continue increasing its shares in these markets with promotion campaigns, trade committees, and attending foreign fairs. In order to reach 2023 export goals, the industry set markets with high priority; Italy, China, US, Canada, Japan, South Korea and EU, respectively.

Mustafa Şenocak Leather and Leather Products

Peaceful environment will be reflected positively. 2016 was not an easy year for our sector. Particularly, the events that happened in Russia which is our traditional market and in the Middle East affected the exports of our sector negatively. However, despite everything, our sector exported approximately $1.3 billion worth of exports in the January-November period of 2016, down by 5.7% compared to the same period of the previous year. Moreover, when we look at the figures on the basis of quantity, there has been an increase of about 10% in our exports. I think we will reach an export value of 1.4 billion dollars at the end of the year with December figures. Unfortunately, the coup attempt of FETO terror organization that happened on July 15 made 2016 a little more challenging for our sector. However, the success of our nation in the examination of this democracy and the prevention of this treacherous coup has strengthened our industry as well as

strengthening our nation and our state in the long run. As of today, when we look at the period from July 15 to December 13, the value of our exports has not decreased but it has increased on a very small scale. The increase rate in our export this year is 12%. The 2023 export strategy was created in coordination with Ministry of Economy and Turkish Exporters’ Assembly. Our short, medium and long-term targets, which are measured continuously under the 500 billion dollar target, have been identified. However, unconventional and unpredictable regional crises, extreme reductions in oil and natural gas prices, internal disturbances in the immediate surroundings and neighboring countries, and reductions in raw material and semi-finished prices may make it difficult to achieve such targets. In 2017, partial relief and a partial peace environment that can be reached in the problems we talked about will reflect our export performance very positively. Especially I think that the relations developing between the Russian Federation and our country will have positive effects on our exports.

Apparel Industry A Competitive Power in the World

Turkey is using its geographical advantage of providing shorter delivery times in steadily.

15.6 A

BILLION

EXPORT IN 2016

$Billion

2023 export goal

12,1% Sector’s share ın total export

pparel is among the most important sectors of the Turkish economy and foreign trade. In the first six months of 2016, Turkey’s apparel export increased 7% and became 8,7 billion $ compared to the same period of 2015. And it shares within the general export of Turkey has gone up from 11,1% to 12,4%. With the help of the new reforms initiated by government, existing and new supports about R&D, designing, branding and innovation, growth numbers will increase. Since Istanbul is the clothing production and fashion center, the majority of textile and clothing supply manufacturers are located in Istanbul. The rest are in Izmir, Bursa, Denizli, Gaziantep and Kayseri. The competitor countries of Turkey in foreign trade in the apparel and clothing sector are generally from the Far East, but due to channels of marketing and distribution, Turkey is using its geographical advantage of providing shorter delivery times in steadily increasing its competitive power in the world clothing sector. Germany, United Kingdom, Spain, France, Poland, Holland, Italy, Iraq, USA and Denmark are the leading countries in Turkey’s apparel export. Except two countries, Holland and Iraq, export rates to these countries has increased between the rates of 1,2% and 89,5% compared to the same period of 2015. The highest increase rate was recorded in export to Poland with the increase rate of 89,5. In 2017, the world trade is estimated to grow by 2.8%. Similarly, growth in the merchandise trade is forecasted to be about 3% contrary to 2016. Turkey’s export target is to reach 153.3 billion USD by 7.1% increase in MediumTerm Programme.

Süleyman Kocasert Apparel Industry Councilman

Turkey continues to grow, produce and export. 2016 was a tough year not only for Turkey but also for the global economy. In 2016, economic growth of the global economy was below the expectations with 2.4%. At the same time, merchandise trade decreased by 3-4% approximately and declined to 16 trillion USD. In spite of all the negations such as Turkey’s geopolitical risks, problems in the neighbor countries and the declines in the petroleum and commodity prices, Turkey’s economy grew 3.9% on average in the first 2 quarters in 2016. In the last quarter, the economic growth was realized as -1.8% and there was a shrinkage after 27 quarters. After the coup attempt, we contacted with our business partners to tell that there was not any disruption in Turkish Economy and business world. Just for a month later after the coup attempt, the total export of Turkey increased by 6.9% in value and reached to the highest export number increase in the last 28 months. We can obviously say that the coup attempt could not reach to its goals both economically and politically. Considering a 3% growth in the merchandise trade, this export figure is an achievable target. As known, Turkey’s 2023 target is to get %1.5 share from the world trade and becoming one of the 10 strongest economies. In 2016, the share of our country is 0.89% in the world trade. We can reach to our 2023 goals by giving more importance and focusing on innovation, R&D, designing and branding.

Carpet Industry Making Art While Producing

The industry is growing steadily with endless investments.

1.75 C

BILLION

eXPORT IN 2016

15%

Market share in world Carpet trade

160 Number of countries exported

5.5

Billion

2023 export goal

JANUARY 2017 ISSUE 42

arpet-making is an art form that Turks brought to prominence and introduced to the world. Over time, it has grown into an industry that creates many jobs, enjoys great export potential, and contributes to various fields. One of the world’s most prominent carpet manufacturers, Turkey is continuously expanding its global market share with ever increasing export potential each year. The Turkish carpet industry is well-known around the world thanks to the superior quality products it creates by applying advanced technology in production. Turkey holds a 15 per cent market share in the world carpet trade, ranking number two behind the industry leader China as of 2015. The industry’s exports make an immense contribution to the Turkish economy. Over the past five years, Turkish carpet exports reached a value of nearly $10 billion, while the industry’s imports were only one-tenth of this figure. Belgium, India and the Netherlands are the other countries at the top of the list of the world’s machine-made carpet exporters. Turkey has a considerable competitive advantage the carpet industry increased its export capacity by 100 per cent in the 2007-2015 period, and has set high targets for the future. The Turkish carpet industry posted total exports of $1.7 Billion in the period of January-November 2016, to more than 160 countries with those in the Middle East accounting for most of the exports. The Turkish carpet industry plans on expanding the export market into Africa and the Far East in the coming period. The industry is growing steadily with endless investments. It sets its investments and development based on the 2023 targets, and in 2017 the initiatives with regard to the target countries will be intensified. The objective is to expand the carpet export market across the globe.

Selahattin Kaplan Carpet Industry Councilman

The carpet industry will begin the New Year with greater hopes. When we look at the carpet industry by the end of 2016, we have seen a 7% decline in kilogram basis. These figures generally show that 2016 is not too bad. The wars in the Middle East and the political crises we have experienced in some countries, especially Russia, Egypt and Libya, affected our exports negatively. Although, our export rate with many EU countries, USA and United Kingdom increased during the year. Now, we are focusing on increasing our export with these countries. The carpet industry will begin the New Year with greater hopes than last year. Resolving the political crises with Russia will enhance our export with this country. The crises in the Middle East continue but we have a lot of expectation from the US and European countries market that we have done well. We also place great importance on international fairs. In 2016, we participated Germany Domotex, China Domotex,, Canada Carpet Fair and UK Carpet Fair with our committee. As for 2017, We will be at Germany Carpet Fair with more than 20 firm and then we will represent our industry at China Carpet fair.

Wood and Forestry Products Industry New acceleration in 2017

The export graphics of the sector will reach top level in the coming years.

3.7 F BILLION

EXPORT IN 2016

$Billion

2023 export goal

0.6% Increase ın exports

urniture, Paper and Forest Products are among the sectors with the highest added value to our country. The sector also has an important place in Turkey’s total exports. The main market of the sector is Iran with 44.3 million dollars and United Arab Emirates with 15.5 million dollars. While wood and wood products stand out as the product group that has the highest exports in the industry, furniture also plays an important role in the sector’s exports. Paper and cardboard exports in the sector have reached the point where they will not be underestimated. If this growth chart is maintained, it is predicted that the export graphics of the sector will reach 200 million dollars in the coming years. In 2023, the export target of the sector will be 16 billion dollars. It is estimated to be 7 billion dollars for Paper Cardboard sector, 6 billion dollars for furniture, and 3 billion dollars for woodenware and paper-mache. The Wood And Forestry industry’s export are increasing to the USA. Additionally the industry have African markets such Congo, Somalia, Guinea on hand. Azerbaijan, Syria, Iraq, Iran, Russia, France, Germany, Greece, England, USA, , Israel, and Bulgaria are determined as target countries.

Ahmet Güleç Wood and Forestry Products Industry Councilman

Increasing the production is the best answer.

The years 2015 and 2016 didn’t leave a good memory regarding the World trade economy and foreign trade. Because of political crises, conflicts and so forth in 2015 the World export experienced a declination of 11%, but the furniture sector experienced a declination of 3%. It safed it’s spot with an export of $2,315 million. The years 2015 and 2016 are seen as lost years and I can state that we succeeded in keeping up. In 2016 Turkey was confronted with a lot of risks in economy and political stability. I don’t think that the rate will stay under the numbers of 2015. The crises experienced at the end of 2015 affected our furniture trade with Russia negatively. But, we succeeded in the mobilization and diversification of Saudi Arabia and UAE markets. The most positive development in 2016 was research-development and design law. By this means our companies will be able to take advantage of the incentives in order to open design centers with 10 technical- design staff. The next days of the coup attempt on 15th July we experienced a regression especially in the domestic market. Also, after September the sectors turnover and production index experienced a decrease. But, after a short time we were able to dust ourselves off. A couple of weeks after the treacherous coup attempt the furniture sellers met and discussed the strategy for the 13th CNR IMOB. This and similar attempts such as the increase of production and to spread the Word of Turkish furniture are the best way to give an answer. Uncertainty will continue in 2017. But we strongly believe that the furniture sector will experience a new acceleration in 2017. Our 2023 goal was defined as an export amount on $ 10 billion. Yet we are at $ 2.3 billion but I believe that we will catch up the margin fast with the experience we have gained so far, the abilities and especially “design quality” and meet our 2023 goals. In this sense the CNR IMOB’s that will be organized from now on will have a big contribution on that.

Chemicals And Chemical Products Industry The Industry Strenghtening Its Competitive Skills Turkish chemical industries and companies enhance the industry’s export.

12.7 I

BILLION EXPORT IN 2016

15.5

BILLION EXPORT GOAL IN 2017

9.8%

Sector’s share ın total export

BILLION

2023 Export Goal

JANUARY 2017 ISSUE 42

raq, Egypt, Germany, UAE, Italy, Spain, Iran, Saudi Arabia, Greece, Azerbaijan, United Kingdom are the countries that Turkish Chemical and Chemical Products industry exports most, respectively. World trade is always dependent on international politics and conflicts, and recent events in Middle East and other regions of the world affected all industries, not only the chemical sector. In such circumstances, industries and companies are tested: The external stress factor forces the companies to strengthen their competitive skills. Turkish companies are, with support of Ministry of Economy, following projects by Turkish Exporters’ Assembly to increase their competitive skills and promote their products and brands. Turkish chemical industries and companies enhance the industry’s exports, from USA to Hong Kong, from Colombia to UAE. Networking, bilateral agreements, seizing the instant opportunities on occasions are crucial to keep the trade going and increase the exports during such difficult times. They also try to reach the markets such as Sub-Saharan Africa, Far East and Asia, as alternatives for Middle East and North Africa. As the industry managed to increase its quantitative export though was unable to increase its profit, especially due to declining commodity prices, innovation and R&D becomes even more important. The industry’s export goal for 2023 is 50 billion dollars. Chemicals and Chemical Products Exporters Association continues its already effective support efforts in organizing various activities to support and build cooperation among its members and support their member companies to be leaders in global markets.

Murat Akyüz Chemicals and Chemical Products Industry Councilman

We need to take a faster path in order to reach our targets. We had a tough year of intense economic and political uncertainty throughout the world. The ongoing slowdown in global trade, hot developments in our close geography, and the continuing losses in our major export markets negatively affected our exports. Despite all the negativity, we continued to be one of the top three sectors, which exported the most in the year. We anticipate that the chemical industry will close 2016 with an export of approximately $ 15 billion. The negative impact of oil prices on our exports has begun to decrease and we hope that it will continue in the coming months. Our export target for 2017 is 15.5 billion dollars. It is not hard to imagine that 2017 will not be a challenging year. Despite this, we are not desperate because we have seen much more difficulties. Exporters do not give up working with their all strengths since Turkey is a promising market despite everything. Those who lived on 15 July showed how important the stability and security of our country is. As exporters and industrialists, we have to explain and introduce our country very well in every country where we go. That’s why we are acting with this responsibility. We need to increase our export unit prices with high added value technological products. Our goal for the chemical sector is to achieve added value over the Turkish average in all our sub-sectors.

1.2

Dried Fruits and Products Industry

BILLION EXPORT IN 2016

Ornamental Plants Industry

75 MILLION

2016 Export

5,6%

BILLION

2023 Export Goal

Osman Bağdatlıoğlu Ornamental Plants Industry Councilman

Increasıng rate ın 2016

500 mıllıon

Abdülkadir Çıkmaz Dried Fruit and Products Industry Councilman

2023 Export Goal

We plan to increase the share of existing markets in 2017 as well as to continue the quest in target markets and put on top of our existing exports in 2017 to bring higher levels.

Turkish exporters are taking good advantage of the geographical location of Turkey.

he export of Dried Fruits and Products Sector in 2016 was 1 billion and 340 million dollars. This figure corresponds to approximately 1% of total Turkish exports. Although we initially felt negative effects from the free market economy that has managed to stand up against global crises, the strong image of our country disposed these negativities both in the domestic market and in foreign markets. Likewise, our industry has reached a normal course rapidly. As the Dry Fruit Sector, we exported to approximately 139 different countries in the world with 1074 active exporting companies in 2016. When looking at the countries where sector exports are the most intense in 2016, it is seen that Germany is taking the first place with the exports of 159 million dollars. Germany is followed by the United Kingdom with 143 million dollars and Italy with 98 million dollars. The United States, the Netherlands, France, Australia and Iraq are the other countries where our dry fruit exports are concentrated. Our country ranks first in the export of dried apricots, dried figs and seedless raisins. As it was in the previous years, these products are the most important export products in the sector in 2016. In addition, another important traditional export product of our country is pistachio. The export target of our industry in 2023 is 4 billion dollars. For this purpose, the aim of dry fruit sector is to create projects for education, innovation, R&D aiming at the solution of structural problems and increasing global competitiveness, and aiming to keep university-industry cooperation at the highest level. We plan to increase the share of existing markets in 2017 as well as to continue the quest in target markets and put on top of our existing exports in 2017 to bring higher levels.

urkey is a country that is optimally situated for ornamental plant production. It has many advantages for a prospering horticultural sector, like having a favorable climate for production of cut flowers, geographical proximity to the main markets, production in modern greenhouses and cheap and skilled labor. Also, Turkey takes the lead in rare endemic species, and many species of economically important trees, pleasant smelling plants used in medicine, and industrial and ornamental plants grow there. The Anatolia region is the source of many ornamental plants obtained as a result of rehabilitation efforts. Thus, Turkey boasts key advantages in the ornamental plants and products industry, thanks to its ecology and natural assets, suitable climatic and geographical conditions. Flower exports from Turkey began 25 years ago, and the sector has grown steadily since then. Ornamental plant total export between January and November 2016 increased to $74 million. Turkish exporters are taking good advantage of the geographical location of Turkey and of the proximity to the large consumption markets in Europe and elsewhere. Turkish flowers are exported to nearly 65 countries. The most important export markets are the Turkmenistan, Netherlands, United Kingdom, Germany and Iraq. Turkey has logistical advantages in the sector. Air and road transport is commonly used in exports. According to the Turkish Exporters’ Assembly November 2016 data, exports from the Turkish ornamental plants and products industry rose by 5.6 percent compared to the last year. The rise in exports is proof that Turkey is working to reach the $500 million ex¬port objective by 2023 with increased support for the industry.

Mining and Minerals Industry Increasing the Competitiveness in Global Market Turkish Mining Industry’s aim is to increase the competitiveness of Turkish minerals exporters’ in global market.

3.4 T BILLION

EXPORT IN 2016

2,7%

Sector’s share ın total export

Bıllıon

2023 Export Goal

JANUARY 2017 ISSUE 42

urkey, an important segment of the Alpine-Himalayan tectonic belt, hosts notably diverse mineral deposits. In Turkey, especially in Anatolia, mineral exploration and mining facilities of these deposits for metals and raw materials dates back to ancient times. Therefore, Anatolia has pioneered many civilizations up till now. Turkey has the largest prospective land area in Europe. However, the complex geologic structure of Turkey makes it more difficult for mine exploration and mining facilities. Despite this, Turkey is one of the few countries which can provide most of their raw materials. In Turkey nearly 60 types of minerals have been produced. Turkey is in the 10th place throughout the world according to mineral variety and 28th for its production of underground resources of 132 countries. Only 13 of all the 90 minerals traded all over the world do not exist in Turkey. These minerals do not have enough quality and quantity to be exploited. 50 types of minerals are found adequately but 27 types of minerals lack the desired quality and reserves for exploration. Moreover, Turkey has 2.5% of the industrial raw material, 1% of the coal and 0.8% of the geothermal and 0.4% of the metallic mineral reserves of the world. It also has a significant potential for natural stone. Turkey’s exportation of natural stone is in 3rd rank in the world, but 1st of the world in marble and travertine exportation. In 2016, mining export of Turkey by the end of the 11 months is worth $ 3.4 billion. Mining industry’s 2023 export goal is to reach $15 billion worth export. Turkish Mining Industry’s aim is to increase the competitiveness of Turkish minerals exporters’ in global market, to provide export advice and assistance to our members to penetrate all markets worldwide, to promote minerals sector through trade exhibitions, buying and trade missions, projects and publications, to provide export related information by our studies and researches, to find solutions to export related problems, to establish and develop relations with international organizations to keep warm the interests of our members.

Ali Kahyaoğlu Mining and Minerals Industry Councilman

It is hoped that the mining sector will grow parallel with Turkish economy in 2017. The mining sector exports continued declining in 2016, which started to in the last quarter of 2015. Total exports for the January-November period decreased by 4.26 percent from the same period of 2015 and dropped to 3 billion 433 million dollars from 3 billion 586 million dollars. In the same period, natural stone exports decreased by 5.22 percent, from 1 billion 749 million dollars to 1 billion 657 million dollars. The main reason for this exaggerated retrenchment is the fact that the effects of the mortgage crisis still remain in the US, which is the first place in exports of processed natural stone. Also the government of China fight against black money and that slows down the construction sector which is the leading market for block marble exports. In addition to this, the ongoing aircraft crisis with Russia, where the Turkish construction sector has been intensively active, has been a major factor in the decline in exports of the sector, especially in Libya, Iraq and Syria. It is hoped that the mining sector will grow parallel with Turkish economy in 2017. China, which is an important export partner for the mining industry, has started to recover in 2017. With the results we obtained from domestic and international fairs we have emphasized as İMİB and the returns we have made from the Ur-Ge projects increased our hopes for 2017. In addition to this, in our current and target market activities, the growth target of our industry is predicted as 5 percent in 2017. Next year we don’t except a contraction in the sector, but we foresee that our major export partners may be inert during the year due to their general conditions, and we plan our goals and activities according to their situation. We declared in December, as IMİB; the year 2017 as “World Turkish Natural Stones Year”. Within the scope of this project, we will increase our exports by producing high value added products and there won’t be a country to which we have not set foot in the World. With the support of our President, we took a considerable distance in use of Turkish natural Stones at the 3rd Airport which is constructing in Istanbul. The company, which undertook the construction of the airport, announced that 80 percent of the stone they use will be a Turkish stones. We’ll follow up this. We also want to use domestic products in public projects. This will increase the dynamics of the industry, expainsion in the domestic market will suppert our industry if narrowing in foreign markets.

Ship and Yacht

Industry

0.935

Tobacco

Industry

BILLION 2023 Export Goal

816

13,5%

mILLION

Increase rate compared to 2015

2016 Export

Başaran Bayrak Ship and Yacht Industry Councilman

Turkish ship building industry is a traditional industry with hundreds of year background. Our export performance as Ship and Yacht industry fell short of the mark for 2016. Especially political and economic crises in our region, shrinking demand of countries that import ship and yacht, recession in off shore markets affected negatively our ship and yacht exports. In 2016, ship and yacht export by the end of the 11 months is worth $ 790 million and estimated export value is $ 830-840 million. It shows us a decrease by 18% compared to last year. Nevertheless, these results should motivate us to go further. Turkish ship building industry is not new and it is a traditional industry with hundreds of year background. Our government can improve support programs in order to overcome contraction in the ship building industry. Moreover, we need to explain our foreign customers that our country is a safe, democratic state of law. In this context, our government gave financial support and provided conveniences in some cases. We believe that the implementation of new maritime conventions in 2017 will lead to a demand growth in the sector, especially for applications related to rehabilitation of ballast water and low emission requirements.

BILLION

EXPORT IN 2016

1.2

BILLION

2023 Export Goal

urkey, surrounded by the sea on three sides, is a natural bridge between Asia and Europe. It has borders to the Black Sea from north, the Mediterranean from south, the Aegean from west and the Marmara as an inland sea. As a result of Turkey’s geographical location and global developments, Turkey’s shipbuilding and yacht building industry have been boosted. Traditional ship and yacht building skills combined with modern techniques and education has enabled Turkish ship and yacht industry to develop into an international trademark since early 1990s. In 2016, the export rate of industry has decreased because of political and economic crises in our region. Ship and yacht industry’s 2023 export goal is to have $1 billion worth export, which will be hard to achieve. However, with the help of its historical and traditional background, industry will recover again in next years.

Noyan Kazım Gürel Tobacco Industry Councilman

We have to be agile in order to adopt to that change. Quality wise 2016 produced a good quality Leaf Tobacco crop. On the agriculture side it was a difficult year for the producers of other crops due to the developments in the international arena. Interruptions in supply chains disrupted pricing of those crops and in this respect Leaf Tobacco producers were happier as there was not an interruption in the supply chain and we had a healthy demand. We have seen a healthy increase in total exports of both Tobacco Products and Leaf Tobacco. Total exports at the time this report was written were at USD 975,000.00 and we anticipate that we will surpass the USD 1 billion mark. The ratio has increased in favor of Tobacco Products so now % 65 USD 631 million are Tobacco Products and % 35 USD 345 million of the exports are Leaf Tobacco. Our Government recently promised to us that they would address a long term request of the industry to allow the Leaf sector to import tobacco with the purpose of processing and reexporting if this is fulfilled and implemented it could increase the value and volume of our exports. The importance of Turkey as a Tobacco Products manufacturing center are increasing. The events of the year 2016 did cause some temporary concerns about continuity and security of supply but we reassured our customers and buyers that supplies would continue undisturbed and we demonstrably proved that as the year progressed. There were some travel restrictions placed on some of our customers so they were unable to visit us this season. We are expecting a better year in front of us as far as the 2017 year is concerned. We see a steady demand for our products and we foresee that we will be able to meet our projected targets. There is a change in progress as far as the whole World trade is concerned and in this light we will have to review and reposition ourselves. As the wave of change takes place we have to be agile in order to adopt to that change.

Steel Industry An Industry with New Technologies Steel industry will decrease the costs as well as increasing the variety of steel products to be manufactured.

8.2 S

BILLION EXPORT IN 2016

$Billion

2023 export goal

%6.3

Sector’s share ın total exports JANUARY 2017 ISSUE 42

teel industry is a strategic industry that is closely related with other industries and it is a significant component of Turkish economy. That is because steel products are the key input for other industries’ manufactured goods. Far eastern countries such as China, Japan and South Korea are the main producers of steel in terms of volume and it seems that they control the industry on a global scale. In the Western hemisphere, United States, Brazil and Germany is taking the lead. However, all countries cannot earn the same profits from the same amount of steel. The selling price and profits of steel products are determined according to production costs, steel quality and other factors. Chair of Steel Industry Exporters Union Mustafa Çıkrıkçıoğlu stated that the industry needed to improve its production techniques and facilities to increase the competition especially against the Chinese producers. The production capacity will increase with the new technology. It will decrease the costs as well as increasing the variety of steel products to be manufactured. The support of Ministry of Economy is also very important. In this regard, two trade missions that visited Iran, Kuwait and UAE were additions of the ministry to the quest of the industry to find different and new markets to increase its export volume and profitability, which is the key to reach the huge 2023 export goal, $55 billion worth total export.

Mustafa Çıkrıkçıoğlu Steel Industry Councilman

Our industry continues to work intensively 2016 was a challenging year for our exporters. While economic and political uncertainties on a global scale put our Turkish steel sector in a difficult position; the recent fluctuations in foreign exchange rates have also added to this process and our costs have increased above our expectation. In addition to political and economic problems, Turkish steel industry also faced with some industrial problems throughout the year. These problems made our business activities more difficult and pressured our exports. One of the leading reasons of decrease in our exports is the fact that China has been directing its surplus production to exports. Another reason for this decline is that mainly China and some other countries grabbed our market share through dumped, subsidized and even fraudulent export by changing the harmonized system codes. We can list, among other reasons, the political unrest in the MENA region, which is our largest market; some developing countries, which are our export markets, that establish their industry for import substitution imports; and unfair trade cases filed against us. In addition, economic shrinkage in the world and declining commodity prices are playing an effective role in this decrease. Our industry continues to work intensively and focuses on minimizing negativities and even increasing exports. We were also pleased with the success of our work in November. According to the January-November 2016 export figures released by Steel Exporters’ Association, the exports of the sector increased by 1.5 percent compared to the same period of last year, reaching 14.9 million tons. In the same period, value-based exports decreased by 10.5 percent to 8.2 billion dollars. On the other hand, our exports amounted to 1.3 million tons with an 11 percent increase in quantity in November while it increased by 12.1 percent to 742 million dollars. The decline we have experienced over the last few years, both on quantity and value, has made us especially hopeful for the year 2017. In the upcoming period, we anticipate an increase in our exports as a result of the global steel market recovery. We have a little time left to our 2023 goal. We are going through difficult times in terms of both Turkey’s overall exports and steel exports. However, we believe that this process can be met with the determination and hard work of our companies together with the new strategies that our government has determined to increase exports. We need to identify our necessities and deficiencies and make a good planning without sinking into pessimism. As Steel Exporters Association, we are working for the progress and development of the industry and are trying to support and guide our members in every issue.

2.1

Precious Mine

and Jewelry Industry

1.7

Fresh Fruit And Vegetables Industry

$ BILLION

BILLION EXPORT IN 2016

Export in 2016

BILLION

Increase in quantitative export

2023 Export Goal

BILLION

2023 Export Goal Ayhan Güner Precious Mine and Jewelry Industry Councilman

Mustafa Satıcı Fresh Fruits And Vegetables Industry Councilman

We believe that all the economic and democratic institutions will work in harmony in 2017.

We look forward with a great hope.

s you know, 2016 is a challenging year for both our country and our region. Our jewelry exports have been adversely affected by these developments. Despite all of this, we don’t have experienced a huge decline and we are closing 2016 with a decline of 10%. We closed last year with $ 2 billion 650 million worth of exports. We seem to close this year with $ 2 billion 400 million. Despite all the negativity, I can say that we protected our market. The most important reason for this is the popularity and customer loyalty shown to Turkish jewelry in our Middle East market. Our export of $ 1.3 billion to the Middle East is more than half of our total exports. We exported $ 350 million to the European Union, the second biggest market in this area. In other words, the Middle East is clearly our most important market.

The failed coup attempt was a great threat to our country and to democracy. However the democracy of our country and the fate of our people made this humanity and nondemocratic initiative useless. Our country has survived this shock so fast that it is not in any country of the world. When the state and economic institutions survived, we did not have a huge problem due to the failed coup attempt, of course. We are leaving behind a fluctuating year with movements in foreign exchange and interest rates. We foresee that this situation will leave its place in 2017 with the increase in stability and exports. The most important parameter for this is that political stability and legal institutions are working. We believe that safe ports for foreign investment again. We aim to export $ 12 billion in 2023 for jewelry industry.

est Mediterranean Exporters Association’s export volume was $ 1.4 billion in 2015. Although, the export volume objective was to exceed $ 1.6 billion of 2014, the unstability in surrounding countries and decline in global economy prevented us to do so. Russia imposed restriction on agricultural trade after plane crisis with Turkey. Hence, it caused us to have struggles in early weeks of 2016. In order to increase fruit and vegetable exportation we attempted to enter new markets as well as to penetrate current markets even more. The struggle had been defeated by participating in fairs abroad and devoted performance of sector representatives. If we had never experienced forementioned setbacks, we would have been talking very different things right now. 2016 was a rough year for our region’s exporters which we never want to experience again. We look forward to future with hope. Our aim is to increase our last year gains. As it is known that Russia have taken the restrictions off regarding citrus products. We wish firstly tomato and then all vegatable products exportation to Russia to get permitted soon. Our region’s natural stone exportation has been increasing over the years and our objective is to increase it more. Also we will conduct operations to boost other sectors’ export volume. Recent incidents that we faced should guide to our future strategies in terms of market diversification, increasing quality, R&D and innovation practices. Especially, we must develop processed products in fruit and vegetables sector which will enable us to export perishable goods to countries that we have never exported before. Consequently, on behalf of exporters and producers, we hope 2017 will be much more productive and in to be parallel with our objectives.

Textile And Raw Materials Industry New Trade Relations with New Markets The goal of textile sector is to increase its share in USA, EU and far-eastern markets, to assure its trade and profitability.

7.2 T

BILLION EXPORT IN 2016

12%

Increase of export to the bıggest market ıran

5,6%

Sector’s share ın total export

Billion The Industry’s 2023 Export Goal

JANUARY 2017 ISSUE 42

extile and Raw Materials industry is one of the driving forces of Turkish economy, which assists both in exports and employment figures. Textile has been an important part of Turkey’s economy ever since Turkey is a noticeable textile products producer and seller. World trade always depends on international politics and conflicts and the latest events that affected the world affected not only the Textile sector, but also the other industries. However, there are plenty of fish in the sea and keen foresight and able management pilots a ship well amidst the waves. The goal of textile sector is to increase its share in USA, EU and far-eastern markets, to assure its trade and profitability. The agreement between Turkish parties and Aachen Institut für Textiltechnik signed in recent years is a proof this tendency. The thing that will have a positive effect is to seek collaboration and cooperation with foreign parties, especially in terms of research and development and know-how, as it will increase the profit per kg and per unit thanks to value added as a result of technical developments. According to the chair of Textile and Raw Materials Exporters Union İsmail Gülle, Trade missions and delegations in Iran and Japan will increase the bilateral relations and boost the export rates. Textile industry’s future is promising and industry representatives are hopeful as the crisis in the surrounding regions is expected to settle down and new trade relations with new markets are proving profitable.

İsmail Gülle Textile and Raw Materials Councilman

We will continue to work intensely. 2016 was a challenging year for our country and industry. Russian jet crisis affected the whole year but our president Erdoğan’s initiatives normalized our relations with Russia after September. Moreover, Turkish textile industry continued to work with conscious and eagerly. As Istanbul Textile and Raw Materials Exporters Association (ITHIB), we participated international fairs and trade visits during the year to represent our products, industry and country. As of November 2016, we reached the export rates of last year. Our export rate increased %8 and reached $5 billion with Europe. With our visits and organizations to Iranian market, we increased %12 our exports compared to the last year. In the last days of 2016, we have followed the economic decisions announced by Prime Minister with great happiness. We believe that these policies will effect to our industry and the citizens in short term. Regarding 2017, our first aim is to catch export value that we caught in 2016, taking into consideration regional problems and global economic stagnation. Finally, we will continue to work intensely to reach our 2023 targets.

33%

Olive

and Olive Oil Industry

1.8

Hazelnut and Hazelnut Products Industry

BILLION

ıncrease ın export ın2016

EXPORT IN 2016

3.8

75%

BILLION

Mehmet Emre Uygun Olive and Olive Oil Industry Councilman

2023 Export Goal

İlyas Edip Sevinç Hazelnut and Hazelnut Products Industry Councilman

total export share ın the world

3.5

BILLION

2023 Export Goal

The production quantity and quality of olive oil has increased with the modernization of olive squeezing facilities.

urkey, with its geographical position and its Mediterranean climate, is the leading olive and olive oil producers in the world together with other Mediterranean countries such as Italy, Spain, Greece and Tunisia. Export figures are also rising in the olive industry, where Turkey has invested heavily in recent years and has increased its tree presence from 90 million to 170 million in the last 15 years. It has not been a surprise that this increase has taken place in recent years thanks to the improvement of climatic conditions and the work of new olive seedlings planting. In parallel with the positive developments in olive production in recent years, the production quantity and quality of olive oil has also increased with the modernization of olive squeezing facilities. With the beginning of the export season the table olive in September and olive oil in October, table olive export is the level of 10 thousand tons in the period of 3 months. As of November, olive oil exports increased by 224 percent in volume, increased from 718 tons to 2 thousand 330 tons, compared to November of the previous year. According to the first report, olive and olive oil in period of 2016/2017 is expected to be more successful than last season. It is very important to support the natural conditions in order to achieve this goal. Iraq, Romania, Bulgaria, Germany and the United States are the target markets for table olive exports. Saudi Arabia, the United States, Iraq, China and Japan are seen as outstanding export markets in olive oil export. According to the declaration of the Turkish Exporters Assembly, the sector that increased exports most in November was the olive and olive oil sector with an increase of 33 percent. The sector which reaches to achieve its targets in 2023, aims to increase this export rate every year.

Turkey exports hazelnut over 90 countries. The hazelnut, which is known to exist since 2838 years ago, has been described as a natural wonder in terms of its taste and health benefits. The first place where nuts are grown in history is known as China but the homeland of it is Turkey. Besides being the biggest hazelnut producer in the world, Turkey is also the biggest hazelnut exporting country. Turkey as one of the few countries in the world having suitable air and solid conditions for hazelnut growing produces 75% of the world production and exports almost 70-75 % out of total exports in the world. Turkey’s hazelnut export is mainly aimed at the European Union countries and the share of these countries increase in parallel with the increase in our exports. The share of the EU countries in our total exports is about 80-85%, though it changes over the years. As for our hazelnut export to other countries, Turkey exports hazelnut over 90 countries. According to the export figures announced in November, 67 thousand 714 tons of hazelnut were exported between September 1 and November 30, 2016 and 623 million 203 thousand 22 dollars were provided for this. In the same period of last season, 87 thousand 330 tons of hazelnut were exported and 851 million 874 thousand 746 dollars provided for this. The failed coup attempt against our democracy affected this numbers undoubtedly. It is also expected that this income will increase again in the direction of 2023 targets in the coming years. During this period, standard natural hazelnuts were traded at an average of 872 dollars. And also 53,818.9 tons of exports were made to EU countries. 4 thousand 499 tons of hazelnut were sold to European countries outside the EU. 6 thousand 664 tons of hazelnut were sold to overseas countries and 2 thousand 730.7 tons of hazelnuts were sold to other countries.

Machinery and Machinery Accessories Industry Despite the Crises, Safe and Sound

Turkish machinery industry’s main goal is not to sell more, but sell at a higher price.

4.8 T

BILLION EXPORT IN 2016

100

$ Billion

2023 export goal

3.7%

Sector’s share ın total export

JANUARY 2017 ISSUE 42

urkish Exporters’ Assembly and Ministry of Economy set the export goals for 2023 to honor the 100th anniversary of establishment of republic. In 1923, Turkey was a war-weary country with an obsolete infrastructure agricultural economy. However, in 2023, Turkey is determined to be one of the top ten economies, a prominent industrial country with a great share in whole global trade. Machine and Machinery Accessories Industry is one of the driving forces of Turkish economy. The export goal of $100 billion worth total export for 2023 is a proof of its significance in Turkish economy and trade. The industry is expected to lend a fifth of total exports of Turkey in 2023. A robust growth, convenient infrastructure and research and development is required for this goal for 2023. Thanks to innovation, research and development increases the range of products and their quality. In turn, this increases the ratio of profits per unit. To sell at a higher price is the main aim, instead of selling more and this aim only can be achieved by embracing the understanding of high-tech culture. Adnan Dalgakıran, Machinery and Machinery Accessories Industry Councilman, have positive predictions about the next year with the help of great impact on the domestic market with the “Growth Machine” campaign. The 2023 goal of industry is a vision, not an ambiguous dream and it needs the visionaries to accept responsibility, improve and improvise at the same time. It will result in success and well-deserved pride when they fulfill the requirements of being a visionary.

Adnan Dalgakıran Machinery and Machinery Accessories Industry Councilman

We believe that we will make a great impact in 2017 Growth in the world economy slowed down by 2.4 percent in 2016, a year that the contraction in world merchandise trade continues. On the other hand, as the machinery sector, by the end of November, we were able to increase the export compared to the same period of the previous year when Turkey’s total exports are declined compared to the previous year. While the total exports of the machinery sector in the 11-month period was amounted as 12.2 billion dollars, the share of the sector in total exports of Turkey was over 9%. Our exports were affected from the July 15 period. We have taken great care to be in constant with our foreign contacts in July 15 period in order to ensure that the process in our country can overcome without any damage. In particular, we tried to inform industry professionals working in positions such as production managers, technical purchasing, engineers and financial decision makers. In the messages we sent, we emphasized that there is no impact on the domestic and foreign commercial relations in the process we have experienced and that the economic reforms in Turkey will continue at full throttle and that we are willing to work harder to intensify our collaborations. We are optimistic for 2017. We believe that we will make a great impact on the domestic market with the “Growth Machine” campaign. We see the recovery in the growth in our target markets as a promising development for export. Especially in the US, the acceleration of investments with the new administration and the expectation of faster growth make this market attractive.

Cement

And Soil Products Industry

2.5

Livestock

and Aqua Products Industry

BILLION EXPORT IN 2016

1.7 BILLION

EXPORT IN 2015

1.9%

1.3%

Sector’s share ın total exportexport

Sector’s share ın total export

BILLION

2023 Export Goal Ali Özinönü Cement, Glass, Ceramic and Soil Products Industry Councilman

Enlarging the market with innovation and strong strategy

ement and Soil products industry is a strong and well-established sector in Turkey. In the last decade, Turkish construction industry have grown with a huge rate and became an enormous sector, which enhanced the growth of related and sub-industries, one of which is of course, Cement and Soil Products Industry. The sector provides direct employment to 65 thousand people with close to 10 thousand members. Besides, it contributes to Turkey’s foreign trade balance by exporting our products to more than 200 countries. Nowadays, the cement sector uses completely domestic resources in terms of raw materials and can meet the need of our country with its production. The Turkish cement sector is manufacturing in compliance with EU norms with costcutting modernization investments. Concentration of urban transformation projects in our country is very important for the growth of both construction and cement sector. In spite of the negative course of events experienced in the Middle East and Russia, the sector exports to developed countries such as Germany, England and the USA recorded increases of up to 30 percent, strengthening our motivation. Today when the global economic conditions change rapidly, achieving sustainable growth of the Turkish economy is the common goal of the cement, glass and ceramic sectors, as is the case with all sectors. Turkey is the 2nd place in world cement exports, 17th place in ceramic exports and 17th place in glass exports. The sector’s export performance is generally increasing every year and it aims to realize an export of 7.3 billion dollars with an average annual growth of 7 percent in the year 2023. It is predicted that in 2023, cement production will reach 99.8 million tons as infrastructure and construction works will continue to increase the cement demand. The Turkish cement sector employs 16,500 people with a total of 67 cement factories, including 49 integrated facilities and 18 grinding and packaging facilities.

Ali Can Yamanyılmaz Livestock and Aqua Products Industry Councilman

We are on schedule to reach our 2023 goals

n the January-November period of 2016, Turkey’s Aquaculture and Animal Products sector exported approximately $ 1.7 billion worth of goods with an increase of 2% compared to the same period of 2015. We exported 886 million tons with an increase of 14% in quantity. Iraq was the country with the highest export share with 28.5% share. After Iraq, the Netherlands with 9% and Germany with 6% were the countries that we exported the most. Fish with 21% share, poultry with 19% share and eggs with 15% share achieved the first three orders in our exports. Powered milk exports, with 500% increase, was pretty remarkable. Turkey exhibited unity and solidarity with the nation and the state against the failed coup attempt that will take place as a black day in our country’s history. Unfortunately, this failed coup attempt, to be carried out against the democracy of the country, has made a great noise abroad. It also has harmed the image of the Turkish brand, which we tried to create with great efforts for years. We wish to close the year 2016 with an increase in our exports. In 2017, we aim to open new markets and realize export of 2.4 billion dollars with the increase in exports in our current markets. Despite all the negativities that are experienced, we believe that the sector will reach its target of 5 billion dollars in 2023. We must work hard to achieve this goal and we must create alternative markets to promote our products to the whole world.

HVAC/R Industry Embrace an Innovative Approach

The corporate activities of Turkish and international investors are opening the gates of international marketing and distribution.

$3.2 BILLION

Export ın 2016

2.5% Sector’s share ın total export

BILLION

2023 Export Goal

JANUARY 2017 ISSUE 42

he Turkish companies involved in HVAC-R products had started operating in the 50’s. Since the 50’s, except during crisis periods, The Turkish air-conditioning and heating sector has been rapidly developing both in production and capacity. In fact, the increase in population and living standards has resulted in the need to produce more HVAC-R products. However, the actual market development began in the late 80’s. The number of companies and the type of equipment available on the Turkish HVAC-R market increased rapidly in the 90’s. This was also in line with positive developments in the economy of the country. Today, Turkey is the one of the largest HVAC-R markets in Europe. The percentage of domestic air conditioners being used is assumed to be around 3% of the total population of 80 million people. In recent years, companies in the industry have begun to form joint ventures with international firms that they had previously represented for years, thus creating technology transfer opportunities both for Turkey and HVAC-R industry. At the same time, the corporate activities of Turkish and international investors are opening the gates of international marketing and distribution. In order to accomplish 2023 goals, HVAC-R industry should concentrate on decreasing the cost and looking for new markets, embrace an innovative approach and immunize the industry to the volatility of currencies.

Salih Zeki Poyraz HVAC-R Industry Councilman

2017 will satisfy our expectations, not only as a sector, but as a whole country. Considering the general political and economic situation in the world, and particularly the deceleration in HVAC&R sector worldwide, we can say that Turkish HVAC&R sector performed well in the last year. To illustrate, there has been an 11% increase in Air Conditioning products. With the sector’s dynamic structure, highly-educated labor power, and thanks to the investments by internationally leading actors, Turkish products are globally approved; these products are exported to as many as 209 countries across the globe. What matters is what steps we take in the face of global developments. We are about to complete the establishment of a Turkish Trade Center in Dubai. Our companies have been participating in various fairs around the world. That participation in these events did not decrease, and indeed in some cases increased, lays further ground for the sector to be full of hope for the future. In our trips abroad, we have clearly seen that the coup attempt has been a great misfortune for our country, having a massive impact on the image of Turkey as a powerful country. It now falls upon us as well as every Turkish citizen to wipe out these negative impressions. We are also working on preparations for a big organization here in Turkey, where many foreign companies will be invited. To be honest, rather than focusing on the negative, we would much rather talk about how to overcome such setbacks promptly and this is basically the focus of our endeavours lately. Data regarding the last few months of 2016 was more favourable compared to 2016, and, indeed, this has been a significant source of motivation for us. Undoubtedly, every new year comes with new hopes and new opportunities. However, I would prefer taking a more realistic stance. Unfortunately, there is fierce competition for every product group in the world, and we can be sure that 2017 will be tough yet at the same time full of new opportunities. I personally think that we must work and try to find new markets for our product and leave no room for complacency. In this context, I genuinely hope that 2017 will bring about prosperity and satisfy our expectations, not only as a sector, but as a whole country.

Sectoral Facts and Figures 2016 Exports to top 10 Countries

Country (BILLION$)

2016 JAN - Nov

UNITED KINGDOM IRAQ UNITED STATES FRANCE SPAIN IRAN NETHERLANDS SAUDI ARABIA

10,57 6,47 5,63 5,43 4,94 4,57 3,81 2,82 2,74 2,38

Country (Thousand$)

2015 JAN - Nov

2016 JAN - Nov

Change %

BULGARIA

1.512.598 2.798.330 2.132.631 6.069.350 1.015.165 2.417.000 1.162.217 1.238.287 12.018.750 4.362816

2.157.232 3.269.732 2.458.294 6.722.699 1.123.595 2.653.406 1.255.605 1.321.115 12.619.222 4.553542

42,62 16,85 15,27 10,76 10,68 9,78 8,04 6,69 5,00 4,37

NETHERLANDS POLAND ITALY UKRAINE ISRAEL MOROcCO GREECE

* Among the countries exported over 1 billion dollars

GERMANY SPAIN

The top 6 sectors that increased exportsrate most

Turkey has enjoyed a great year ın the meanıng of export rates. THANks to the ınnovatıon and transportatıon possıbılıtıes many sectors has ıncreased ıts effect ın turkey’s stable growth. Accordıng to tım data 6 sectors ıncreased their export rate Most are:

Top 10 Exporting sectors sectors (Thousand$)

2016 LAST 12 MONTHS

Automotive

23.384.573 17.025.500 13.924.550 9.974.042 8.919.483 7.854.928 6.291.309 5.964.787 5.313.922 4.098.096

Apparels Chemicals and Chemical Products Industry (Bin$)

Change %

DEFENSE AND AVIATION

13,1 12,0 10,08 4,9 0,9 0,6

TOBACCO AUTOMOTIVE ORNAMENTAL PLANTS Cereals pulses, Oil Seeds and Products Apparels

SHARE %

12,619 7,729 6,722 6,481 5,891 5,451 4,553 3,361 3,269 2,844

Germany ITALY

Top 10 countries with the highest export growth*

Electrical - Electronics and Service Ind. Steel Textile amd Raw Materials Cereals pulses, Oil Seeds and Products Ferrous and Non Ferrous Metals Machinery and Machinery Accessories Wood and Forestry PRODUCTS

In Depth / Turkey Innovation Week Lorem Ipsum

Turkey InNovatÄ±on week 2016

DECEMBER 2016 ISSUE 42

The Turkish Perspective

Turkey InNovatÄąon week 2016 The 5th Turkey Innovation Week, during which dozens of innovation leaders from 10 different countries in various disciplines met, was held on December 8-10 in Istanbul Convention Center. By KEMAL TUNĂ&#x2021;SEL

In Depth / Turkey Innovation Week

Turkey Innovation Week, which was organized for the fifth time this year, attracted a great deal of interest.

Özlü underlined the importance of nnovation Week, which was innovation in writing Turkey’s new organized by Turkish Exporters’ economy narrative in his opening reAssembly (TİM) along with the marks. “A production and export-based Ministry of Economy, is seen as growth model does not describe propthe largest organization in Turkey in erly what Turkey needs. A model that its own category. Prominent profesis based on research and development sionals, industrialists, academics and and innovation is much more approstudents from various backgrounds priate to define what we need. We have came together during the event, which often spoken about Turkey’s foreign is sponsored by Arçelik, TEB, Turkish trade deficit and current Airlines, Sabancı Holdaccount gap. These are an ing, Çalık Holding and obvious result of Turkey’s Turkcell. technology gap, which The opening ceremony is the main problem of at the Istanbul Congress Turkey. If we close this gap, Center was hosted by the other gaps will automatiPresident of Turkish Excally be closed” he said. porters’ Assembly (TİM) In a speech addressing Mehmet Büyükekşi, more than 2,000 students and was attended by from 140 universities, the Minister of Science, Büyükekşi said Turkey can Industry and Technology reach its 2023 targets and Faruk Özlü, the Govbecome a technology-proernor of İstanbul Vasip ducing country under the Şahin, and many leading Mehmet Büyükekşİ leadership of young peobusinesspeople. President ple. “In developed counRecep Tayyip Erdoğan said Turkey can tries, innovation is now and Prime Minister Binali reach its made through software. Yıldırım made a speech targets and become Some 15 percent of the and important names a technologyworks in the United States such as the President of are expected to be underTurkish Exporters’ Asproducing by robotic solutions sembly and Minister of country under the taken or software with artificial Economy took the floor at leadership of young intelligence by 2025. the opening ceremony of The world is set to see the event. populatıon.

2023

DECEMBER 2016 ISSUE 42

an economy with a steep unemployment problem. What is needed to be achieved is to lead in design, research and development, brand development and innovation” he added. At the event, many institutions and organizations in different fields such as health, education, agriculture and art are waiting for the participants to participate to their stands. These stands offer many benefits such as various competitions, gifts, catering services, job applications, job interviews and product presentations. The main purpose of these events of the Innovation Week is attracting the attention of education community, especially universities; however, there is a great interest to the events of Innovation Week from the business world as well. In the first day of the event, the world jet-ski champion Franky Zapata also took part in the event with his revolu-

The Turkish Perspective

Prominent professionals, industrialists, academics and students from various backgrounds came together during the event.

tionary Flyboard model. “I dreamed of flying and created the Flyboard. At first, I thought we would have small scale of sales in France. I put it on YouTube and got orders from 2 thousand people the next morning. It spread to the world in a short time. In just five years, we invented the Flyboard sport and industry” he said and pointed out that the first condition of innovation is to set the goal. Hugh Herr, who is known as the Leader of the Bionic Age was another guest of the Innovation Week, with his groundbreaking developments in bionic limb technologies that gave hope to physical disabled people. “In the future, healthy people will use the new generation synthetic motors to increase their power and speed” said Hugh Herr, Head of Biomechanical Research Group at the MIT Media Lab. “One or 100 years later, you will see such people walking around the streets of Istanbul

or Paris” he said. On the second day of the 5th Turkey Innovation Week, Minister of Energy and Natural Resources Berat Albayrak made a speech and said that innovation is a very important instrument in closing the economic, cultural and political gaps between institutions, states and countries at such a time when global economic competition is increasing. He said that the more innovative the innovation is, there will be more added value that will carry the countries in the global league elsewhere. He also added that Turkey has also started a process to combine domestic and renewable energy sources with technological developments in order to bring these resources into a value-added economy. Albayrak said that Turkey’s economic success over the last 14 years has been supported by the growth in energy and that with the gross domestic product

in energy, the installed power of 30 thousand megawatts has increased to 80 thousand megawatts. In his speech at the Turkey Innovation Week Event organized at the Istanbul Congress Center, President Erdoğan said “Using the national currency instead of foreign exchange is our decision, it is not an attempt against the economy of another country”. Referring to the importance of innovation in every field, President Erdogan said in his speech: “Turkey can only be built on an innovative understanding. We have seen promising developments in this regard, but it is clear that there is a distance that we still need to go. If we cannot achieve innovation, others will take their shift, and we will do their peddling. Turkey’s 2023 targets are very serious. I think innovation is a change of mind before anything else. First we need to understand this”. All in all, the Turkey Innovation Week, which was organized for the fifth time this year, attracted a great deal of interest, just like the events of the past years. Thanks to the event, people from different sectors and students had the chance to come together. Also, the event hosted innovation leaders from many countries who made name in different sectors. For these reasons, events to be organized under the name of Innovation Week in the coming years are highly anticipated by everyone.

In Depth / Turkey Innovation Week

free thanks to technology. Eyeglasses solved eye-related problems. Sooner or later a cure for the other organs or parts of the body will be possible.

My cut off legs guided me to innovative ideas

comıng soon: bıonıc men Hugh Herr, who lost his last leg in a tragic accident and is still CEO of the MIT Media Lab Biomechatronics Group, told the story of a $ 50,000 bionic leg, and he also gave information about the developments in bionic technology.

ugh Herr, who gave a presentation on the New Age of Bionic Technology during the 5th Turkey Innovation Week organized by the Turkish Exporters Assembly (TIM) under the coordination of the Ministry of Economy. He touched upon a lot of inspiring points in his speech.

I’m completely free thanks to technology.

My legs froze after a mountain crash. When my legs were cut off, they said I’d be cripple from now on and I kept climbing high mountains. Some of us are born to be different. In society we have narrow thoughts, there are views as you can’t do that, a woman should be such and such, a person mustn’t do this or that but I believe we can crush these rules. And that is the point we should go. Many illnesses lead to problems due to technological deficiency. I’m completely DECEMBER 2016 ISSUE 42

My cut off legs guided me to innovative ideas. My interest in math, physics and science increased after the accident. We started out from the working systematics of the brain when we were trying to develop the bionic leg. After the accident, I had prosthesis legs but they weren’t all right. I established the Extreme Bionics center realizing the needs of people like me. And I started to research subjects like how we can recreate extra cells to the body, and how we can run the brain functions in the lack of some parts. The brain coordinates our emotions and thoughts. Indeed what makes the brain very complex is the communication of different types of cells with each other. We have produced bionic legs named Bionnex. We couldn’t build the maths behind the brain cells to the fullest but we keep working on the problems.

Perhaps after some 50 or 100 years, people won’t look as they are today.

I don’t find the method in which the bionic organs are moved by giving the muscle electric power a healthy one, sweating commands are often transmitted wrongly. In the method we developed, we inject a special kind of a virus to the muscle that is to be controlled. We know that light-sensitive method can reach the nervous system. When you stick your hand in a hot pot you draw it out in 15 milliseconds. Thus we’ve found a way to build the communication of nerve cells with each other in a quick fashion. 60 million dollars were invested in the Bionnex bionic organs. Now each leg together with its sensors and interfaces is sold to 50 thousand dollars but in the future, I think the product will be served at more modest prices. I think humanity will, in time, be able to use more efficient organs. I have a hard time predicting 100 years of time, perhaps after some 50 or 100 years, people won’t look as they are today.

The Turkish Perspective

“The need” is the mother of all inventions OREN SIMANIAN

Believe in yourself even if everyone believes otherwise FRANKY ZAPATA

Turkish Exporters Assembly’s supports are so important for all industries ALİ ERKİN

I think that luck is about being prepared for the opportunity. Be brave to be an entrepreneur. You have to find the unique feature in Turkey. This is really important. What is your natural source? Tourism or medical sector can be. For example; there are not many natural resources in Israel. That’s why, we set up solar panel because it is desert. We find solutions for agriculture because there is no water. “The need” is the mother of all inventions. You need to reveal a unique and different element. Every ecosystem has to be its own brand. So you can attract foreign capital and interest. The biggest problem in the future will be neither water nor food. The problem is unemployment. The hardest thing is to wake up in the morning and do nothing. And then, you will look yourself in the mirror and say, “I am unemployed”. I think that government and private sector need to work together on the upcoming competition and to manage the human resources factor properly.

I imagined flying and then I created the Flyboard. I thought at first we would have small-scale sales in France. After that, I uploaded a video to YouTube and got an order from 2 thousands people the next morning. It spread to the world in a short time. In a short period of five years, we brought out the Flyboard sport and industry. We tested the first Flyboard model I developed with my friends on the beach. I couldn’t even take off 10 cm because of choosing fine pipes. My friends and those who watch me with curious eyes on the beach were laughing. It is very important to believe in your imagination. Then, I made new calculations and I did it. The first conditional of innovation is determining an objective. Our goal was to fly when we were designing Flyboard. I dreamed about flying and I went after my dreams to the end. I never strayed from my main purpose. If you want to work in the field of innovation, you should think of money as a tool, not as a destination. If you work hard, you will definitely reach your destination.

The Innovation Week is a really good opportunity for reputation of domestic products. Our new game, Mount & Blade: Warband is one of these domestic products and now we have positive sales and feedbacks, mostly from USA, United Kingdom and Germany. Since we started, our total sales was reached 7 million. Taleworlds’ aim is increasing the sales and export rates with the support of sponsors. Also this summer, PC Gamer announced that Mount & Blade: Warband is 30th in PC Gamer’s Top 100 Games of All Time and defined the game: ‘’ A single paragraph will never be enough to convey all the excellence packed inside this endearing medieval nobility simulator. It’s the kind of robust RPG you could lose months of your life to in a bid to become king. Or maybe I’ll just be a humble merchant instead. Turkish Exporters Assembly’s supports are so important for all industries. The events that they organized, their helps during the export process in foreign countries were making easier everything for Turkish Exporters.

Brands / Lorem

The Turkish Perspective

Editor: İbrahim Avcı

Contemporary ART, faır, exhıbıtıon, gallery

The Madame Tussauds Museum includes the wax sculptures of 55 famous figures.

Istanbul HOSTS Madame Tussauds museum 21st center of the world’s largest wax museum Madame Tussauds opened its doors at the Grand Pera building on Istiklal Street. Wax figures of 55 celebrities from Turkey and the world are receiving visitors since 28 November.

Brands / Madame Tussauds Museum

The world’s most famous wax museum, Madame Tussauds has been leaving visitors excited and star struck with the wide array of A-list celebrities featured since it first opened on 1835.

Madame Tussauds Wax Museum was founded by Marie Grosholtz, commonly known as Madame Tussauds, a native of Strasbourg, France. First Madame Tussauds Wax Museum was established by Marie Tussauds and with her sons, in London at ‘The Baker Street Bazaar.’ The museum is one of the most crowded places in London today.

The museum started an overseas expansion in 1970, when it opened a branch location in Amsterdam. On November 28, the world’s 21st Madame Tussauds museum in the world was opened on Istanbul’s historical İstiklal Avenue. The museum includes the wax sculptures of 55 famous figures from national and international art, history, sports and the political world. Local figures include founder of the Republic of Turkey, Mustafa Kemal Atatürk, 13th-century poetphilosopher; Mevlana Rumi, the tenth and longest-reigning sultan of the Ottoman Empire; Süleyman the Magnificent, the Ottoman sultan who conquered Istanbul; Mehmed II and JANUARY 2017 ISSUE 42

the Ottoman Empire’s most renowned architect; Mimar Sinan, a Turkish football player of Barcelona; Arda Turan, a Turkish former professional basketball player; Hidayet Türkoğlu. Co-founder and former CEO of Apple Steve Jobs, Barcelona Football Club’s star Lionel Messi, pop singers Madonna, Justin Bieber and Rihanna, an American actress and model Marilyn Monroe, Jamaican sprinter Usain Bolt and American professional boxer and activist Muhammed Ali are among the international stars that are featuring. Sarper Hilmi Suner, Cluster General Manager, LEGOLAND® Discovery Centre and Madame Tussauds said: “Wax figures of 55 celebrities from history,

Madame Tussauds Istanbul is set to welcome its visitors 7 days a week between 10:00 am and 19:00 pm

culture & arts, science, and sport from both Turkey and the world are now in place to welcome visitors. We are planning to expand our collection with 3-4 new surprise figures every year. Madame Tussauds brings an entirely new perspective to museums. We strived to create an interactive environment where our visitors can see up close, touch, and comfortably have photographs together with the extremely realistic figures of the stars as an entertainment center as well as a museum. We went through a very busy as well as very entertaining preparation period for Madame Tussauds Istanbul. And our reward for our efforts is the happy moments our visitors will spend at our center. That’s

The Turkish Perspective

A long market research and focus groups were conducted to determine whose figures would be created.

why we invite anyone who wishes to touch the stars to visit Madame Tussauds Istanbul.” About the preparation process of Madame Tussauds İstanbul and the wax figures Sarper Hilmi Suner explained: “A long market research and focus groups were conducted to determine whose figures would be created. A long list of celebrities who are likely to be placed in one of the six different sections at the center was created. Following the creation of a shortlist by Madame Tussauds London Studios, shortlisted names, their managers or legal representatives were contacted. During the preparation phase of the wax figures, persons who are still alive attended detailed

photo shoots and their measurements were taken during the up to 3-hourlong sessions in Istanbul, Barcelona, and Los Angeles. Face masks of the celebrities were also created with the help of a 3D modeler. For figures of the deceased celebrities, a long and detailed research was conducted both visually and in the written archives. Meetings and conversations were held with their families or legal representatives to get to know each person better.’’ “For figures of the deceased celebrities, a long and detailed research was conducted both visually and in the written archives. Meetings and conversations were held with their families or legal representatives to get to know each person better.

After the names of the figures are decided, another timeconsuming yet important period starts to discuss the period and pose in which the figure would be depicted. During the production phase, a mask which was created by a sculptor using 3D modeling as well clay busts based on the other measurements. The molds created based on this bust were filled with wax. Hair and eyebrows were planted one by one using real hair by a team of experts before the hair styled in accordance with the real figure. Materials that would present the most realistic look were chosen for the teeth and the eyes. The eye color was determined using Madame Tussauds’ extensive eye color design range featuring all eye colors. Paint is applied using a special technique to mark by hand

Face masks of the celebrities were also created with the help of a 3D modeler.

one by one the capillaries and lines using capillaries and lines using a special technique. Some celebrities donated their original clothes and accessories. Others made sure that all clothing and accessories suitable for the date and period in which the figure is described by the fashion office at the London Studios, making sure that all appropriate clothing and accessories for relevant the date and period are specially produced. Throughout the production process of the figures, contact was maintained with either the celebrities or their representatives and their approval was secured before proceeding with each phase.” Madame Tussauds Istanbul is set to welcome its visitors 7 days a week between 10:00 am and 19:00 pm. Situated on an area of 2,000 square meters on the first floors of the Grand Pera project on İstiklal Avenue, Madame Tussauds Istanbul will offer interactive and unmatched entertainment in sections entitled history, arts and sciences, cinema, music, sport, and party. In each section, stars are exhibited against special backgrounds suitable to their respective characters.

Brands / ATRAX Fair

Sportive cities are more fun

One of the problems that emerged in Turkey in recent years as a result of rapid urbanization is the increased need for sports and recreational areas and events on the part of people living in cities. By yulet ecehan döşkaya

n December 1-3 İstanbulExpo Center hosted ATRAX- Amusement and Attraction Industry Exhibition 2016 which is the only specialized exhibition of Turkey and the region where large projects in the entertainment industry are carried out. Filling an important niche of sector related events in the ever growing amusement, recreation sector, ATRAX Exhibition is attracting the record number of visitors from Europe, Africa, Balkan and Middle Eastern countries, Russia, United Arab Emirates and Turkic Republics via Istanbul’s unique geography and strategic location. This year, ATRAX introduced the latest innovations, technologies, products and projects of the amusement sector to the professionals and investors of the sector as part of an international organization. In the current edition, ATRAX Exhibition hosted its participants and professional visitors with a lot of improvements. With the integration of sports into new generation attraction areas, this year, with its new theme “Sportive cities are more fun…”, ATRAX emphasizes events, attraction and recreation areas that require active participation and demand physical activity from its visitors. Sports, in JANUARY 2017 ISSUE 42

addition to creating a healthy generation, entertains and helps people socialize and strengthens emotional bonds and creates peaceful cities with happy residents. In the past, there was a need for recreational and leisure spaces with which the people of the day were spending time with their family and loved ones. In recent times, especially the most important institutions that meet this need are emerging as local administrations. The recreation areas they create and municipalities, which are the most important stakeholders of the sector, contribute to the growth of the sector with new investments every day. Again this need has created an opportunity for producers, investors and service providers by creating their own

The Atrax team carried out promotional campaigns as a reflection of the local government’s new mission to offer more recreational sport options for its citizens.

economic and industry. Indoor entertainment centers, shopping centers, water parks-themed areas in tourism facilities, and all these activities have made shopping malls, hotels, tourism facilities and activity companies the other important stakeholders of the sector. This year’s conference provided a strategic roadmap for the growing potential of the industry, as well as assessing issues and recommendations between producers, investors, and stakeholders who bring these products/services to people. With this, ATRAX 2016 theme of the conference focused on the significance and importance of sports and recreational activities in the context of “Sports cities more fun ...” will come together in this framework will come together mayors, academicians, relevant

Brands /Lorem Ipsum

The Turkish Perspective The Turkish Perspective

This year’s conference provided a strategic roadmap for the growing potential of the industry, as well as assessing issues and recommendations between producers, investors, and stakeholders.

domestic and foreign managers. ATRAX 2016 shades light on the future of the sector with its comprehensive conference content aimed at the constantly growing amusement, attractions, parks and recreation industry. Also, it has International Exhibitor Profile with Professional Visitors from all around the world. This forms an opportunity for investors when international companies meet in Istanbul. In this event, people can Reach Public and Private companies and Meet New Business Contacts. It helps Strengthen Your Brand Image Manage the Perception of Your Customers with the chance of Following the Development and Demands of the Sector Closely Improve your Advertising Effectiveness and Increase your news presenceThe first and only contest of the

Turkish entertainment and recreation industry “Shining Star Awards 2016 - Entertainment Awards” is organized for the fourth time this year. Shining Star Awards-Attraction Awards Ceremony is organized by Tureks Uluslararası Fuarcılık as part of ATRAX Exhibition. The Shining Star Awards is organized to contribute to the development of awareness and agenda for the entertainment and recreation areas that are becoming an important necessity, contributing to the development of the industry and contributing to the social, cultural and economic value by providing more qualified products and services. In the competition where successful works are at the forefront, applications in three different categories are examined by a

jury composed of experts from the industry. The winners’ awards are presented at the Award Ceremony held at the ATRAX Fair Gala Night. The Shining Star Awards, which encourage new projects that bring out the contributions of people and institutions in the sector, and honor their achievements, are opening doors to world-class ethical competition and respect for their opponents. The Atrax team carried out promotional campaigns as a reflection of the local government’s new mission to offer more recreational sport options for its citizens. Nergis Aslan, general manager of Tureks, the company which organises Atrax, said: “We’ve received very positive feedback and created great repercussions. And based

on this great feedback, we’ve decided to use the same theme in 2017 as well.” Hence the birth of an event like Atrax, the only specialized exhibition of attractions of its kind in Turkey and dedicated to recreation, which aimed from the beginning to contribute to the development of investment of 12 billion US dollars in ‘ industry attractions, hosting numerous projects. Introducing the “Shining Star Awards” competition, aimed right at the municipalities that are investing in recreational projects, which are evaluated and rewarded based on certain criteria. In recent years, several municipalities in Turkey have started to show great interest in recreational projects developed with the aim of helping people to stay away from the “bad habits” such as smoking and alcohol, fought by the Islamic community, and this purpose, the adoption of a more active lifestyle, seems to be the ideal solution. Which can also be facilitated by the use of construction of family entertainment centers and theme parks. To facilitate this new trend, the same municipalities have started to make significant investments in attracting and leisure facilities with the aim, of course, to improve the quality of life of their inhabitants.

61 65

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

Agenda

EN E F F IC I

JAN.

11-12 JANUARY

The 8 Energy Efficiency Forum And Fair th

WOW Convention Center Yeşilköy / İstanbul

It’s the first and only fair in Turkey that focuses on energy efficiency. A speech will be given about new technological advancements, services, consultancy companies, supportive foundations related to energy efficiency and renewable energy. For improving relations with existing customers and gaining new customers, getting to know your competitors, traning of your employees, strengthening brand identity and to get to know the latest news in the industry, distrubutors of international companies, foreign participants and industry professionals will come together as part of fair, conference, panel, forum.

26-29

CNR IMOB 2017

IFM Yeşilköy / İstanbul 12-14 JANUARY

IFM Yeşilköy / İstanbul 10-15 JANUARY

Turkey has a very high potential on geothermal energy resources and is a leader in Europe and ranked as the 5th in the world on that area. Expo Geothermal Fair, which will take place for the 4th time, continues to contribute to the industry’s growth. In the fair, geothermal, biogas, storage, hydrogen, nuclear, coal energy technologies and remote control, tracking equipments will be unveiled.

Fair Gaziemir / İzmir 19-22 JANUARY

This year, 12th International Agriculture, farm machinery, husbandry, livestock and greenhousing fair will be held at Gaziemir Fairground. Equipments that focuses on farming technologies, greenhousing, seed, sapling, manure, irrigation technologies, livestock, animal health will be introduced.

13th CNR IMOB fair provides a chance to participating companies and international customers to come together and furniture manufacturers to show the reached point on the quality and design language of furnitures. The new home and office furnitures will be introduced at the fair that impress with their design language and make life easier to live.

TUYAP / İstanbul

Recognized as one of the top five tourism exhibitions in the world, the 21st International East Mediternnen Tourism and Travel Exhibition – EMITT will be held at Tuyap Fair, Convention and Congress Center between 26 – 29 January 2017. EMITT 2017 which will bring together 5.000 organizations and institutions from 80 countries will be held with corporate sponsorship of the Ministry of Culture and Tourism of Turkish Republic, Istanbul Metropolitan Municipality and

JAN.

Expo Geothermal

EMITT 2017

10-14

Bursa -JunioShow

TUYAP / Bursa

JUNIOSHOW is organized with the cooperation of Bursa Chamber of Commerce and Industry and Tuyap Bursa Fair Center, with the significant support of Baby and Kids Clothing Industry Industrialists and Businessmen’s Association (BEKSIAD). Bringing the bests of the sector in a single platform, Junioshow continues to offer participants and visitors a distinguishing experience of expo with trend areas designed by worldwide famous trend professionals; trend talks with the participation of major designers; and fashion shows.

DOOR FAIR 05-08 JANUARY

CBME Turkey

13-17 JANUARY Anfas Hotel Equipment Exhibition 18-21 JANUARY JANUARY 2017 ISSUE 42

Figures sectors ıncreasıng theır exports most

Turkey’s export rates are continuing to grow. Despite the fluctiations in world economy Turkey’s export maintain its solid structure. $ billions Automotive Industry

19,30 21,53

Cereals Pulses Oil Seeds and Products

5,58 5,75

Furniture, Paper, Forestry Products

3,38 3,75

Apparel Industry

15,57 15,64

Most succesful industries of November

2015

2016

Changing Rate ( ‘16 / ’15)

11,5% 2,9% 0,6% 0,5%

Despite of a tough year for whole the world, one of the leading industries succeded to increase their export rates compared the last year. Data: TİM

dreams becomıng true

the leadıng force of turkey’s export The automotive sector, which is the locomotive of the Turkish economy, is being expected to reach the second highest export figure after 2008, when the export record was broken all the time with $ 23.5 billion this year. Exports figures of the Turkish automotive industry in the last 10 years. Billions $

21.3

Numbers of the established companies in Turkey shows high entrepreneurship rates. Number of Established Companies and

Total Limited Corporation

24.7 16.9 17.4

20.4

19.1

21.3 22.3 21.2 21.5

Cooperative General Partnership Number of Established Company

2011 2012 2013 2014 2015 2007

2008 2009

2010

59.595 47.605 11.272 704 14

2011

2012

2013

2014

2015

53.409 38.887 49.028 57.710 66.701

2016 Data:TİM

Data: TİM

64 Figures

BELGIUM

NETHERLANDS

2,27

3,27

FRANCE

5,45 uk

7,72

ITALY

6,72

USA

5,89

SPAIN

4,55

SHARE OF Top 20 COUNTRIES IN TURKEY’S TOTAL EXPORT (bıllıon dollars) Turkish exports to most prominent 20 markets in first eleven months of 2016.

poland

2,46

RUSsıa

1,59

germany

12,6

ROMANIA

2,49

BULGARIA

2,16

china

2,07

IRAN

ıraq

saudı arabıa

6,48

2,84

Algerıa

1,57

EGYPT

ISRAEL

2,65

Data: TIM

JANUARY 2016 ISSUE 42

3,36

2,48

UAE

2,56