Volume 8 Issue 33 - New York State Special Issue

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INDEX PUBLISHER TurkofAmerica, Inc. CO-FOUNDER & GENERAL MANAGER Ömer Günefl – omer@turkofamerica.com

14 FROM GOVERNOR PATERSON TO TURKISH INVESTORS

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“Our links with Turkey are strong and long-sanding. Nine

CO-FOUNDER & MANAGING EDITOR Cemil Özyurt – cemil@turkofamerica.com

Turkish firms have offices in New York City and Long Island.

ART DIRECTOR Sinem Ertafl

University of New York, earning degrees jointly conferred

Over 1,700 Turkish students currently study at the State here and in Turkey.”

EDITOR Patricia Russo, DEPUTY PHOTO EDITOR Necdet Köseda¤

16 MARISA LAGO – EMPIRE STATE DEVELOPMENT PRESIDENT & CEO

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SENIOR ASSOCIATE PHOTO EDITOR Ayhan Kay WRITER-REPORTERS Ayfle Önal Zambo¤lu, Ali Ç›nar, Demet Cabbar, Duygu Uçkun, Maureen Ertürk, Melda Akansel.

“Turkey, certainly, has emerged on our radar screen as a strong contender for a potential future office for New York State. We intend to build on relationships like the one with Turkey to better position New York State for future economic

CONTRIBUTORS Burcu Gündo¤an, Halim Özyurt, Melanie Vander Valk (D'Amico), Laura Magee .

growth.”

ADVISING COMMITTEE Ali Günertem, Egemen Ba¤›fl, Ekmel Anda, Ferhan Geylan, G. Lincoln McCurdy, Hakk› Akbulak, Mahmut Topal, Mehmet Çelebi, Osman (Oz) Bengür, Tolga Ürkmezgil, U¤ur Terzio¤lu. MAIN OFFICE TURKOFAMERICA, Inc. 445 Park Avenue, Suite 936 New York, NY 10022 Tel: +1 (212) 836 4723 Fax: +1 (917) 322 2105 info@ turkofamerica. com www.turkofamerica.com

24 NATAPOFF PROMOTES NEW YORK STATE TO INTERNATIONAL INVESTORS Sam Natapoff, had meetings with Turkish businesses in Turkey and he says, “Turkish companies have a great potential to invest in New York State, especially in the organic food, renewable energy and medical science industries.”

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Niagara Falls Mayor Dyster says; “Niagara Falls is on some

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REPRESENTATIVES IN THE U.S. CALIFORNIA (Los Angeles): Barbaros Tapan btapan@ turkofamerica. com Tel: +1 (213) 924 8027

28 CITY OF NIAGARA FALLS BUILDS ON THE PAST, SEEKS A BRIGHTER FUTURE people’s list of places that they have to see before they die. Istanbul is my place to see before I die.” Besides seeing Istanbul, he wishes to see some Turkish investors in his town as well.

CALIFORNIA (San Fransisco): Ayfle Önal Zambo¤lu – aozamboglu@ turkofamerica. com Tel: +1 (650) 938 1764

34 MAJOR TURKISH INVESTORS IN NEW YORK STATE

CONNECTICUT Ali Ç›nar – acinar@turkofamerica.com Tel: +1 (203) 722 4339

More Turkish companies opened U.S. braches and some of

MASSACHUSETTS Mustafa Aykaç – maykac@turkofamerica.com Tel: +1 (857) 205 8318

textiles, jewelry, construction and wire.

them made big investments in different industries such as

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38 WILL BUFFALO RISE ONCE AGAIN?

NEW YORK (Rochester) Ersoy Yildiz – eyildiz@turkofamerica.com Tel: +1 (585) 414 4300

Nowadays, Buffalo is the second largest city in the state of New York. The city itself has a population of 292,648 (2000 Census), and the metropolitan area 1,170,111 (2000 Census),

EUROPE: Yasin Ya¤c› – yyagci@turkofamerica.com Tel: +31 (624) 66 92 23

the 46th largest in the United States. Mayor Brown talked to TURKOFAMERICA.

TURKEY

42 NEW YORK STATE: HEAVEN OF COLLEGES AND UNIVERSITIES

GENERAL COORDINATOR Nuri Özyurt – nozyurt@turkofamerica.com

The 65,000 foreign students studying in New York State

MARKETING & SALES P›nar Özçelik- turkiye@ turkofamerica. com SUBSCRIPTION & DISTRIBUTION Nispetiye Caddesi Peker Sokak Aky›ld›z Apt. No:26/4 1.Levent Istanbul, Turkey Tel:+ 90 212 282 37 11

during the 2006-2007 academic year directly contributed a

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total of $1.86 billion to the statewide economy. Daniel

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Doktori, Director of Higher Education for Governor Paterson, answered TURKOFAMERICA’s questions.

PRINT: Promat Bas›m Yay›n San. ve Tic. A.fi. Adile Naflit Bulvar› 122. Sokak No:8 34513 Esenyurt - ‹stanbul - Turkey Telefon: + 90 (212) 622 63 63-pbx Fax: + 90 (212) 456 63 73 E-Mail: info@promat.com.tr

58 SPECIAL SECTION ISTANBUL CHAMBER OF COMMERCE The Istanbul Chamber of Commerce, with its 127-year history and its consequent experience, is the oldest and biggest non-governmental organization in Turkey. It is also one of the most outstanding chambers of commerce in the world.

Most articles in the magazine are translated by Citlembik Ltd. Tel: +90 (212) 292 3032 www.citlembik.com.tr

73 INVEST IN IZMIR Turkey’s third most developed city, ‹zmir is on the edge of

TURKOFAMERICA is a member of Independent Press Association. TURKOFAMERICA is a member of Turkish American Chamber of Commerce Industry. Cover Photo: The New York State

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making a big leap, attracting foreign direct investment (FDI) for the unlimited potential of the city. By using the advantage of the ‹zmir Development Agency (‹ZKA).


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14-15 Governor Paterson

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14-15 Governor Paterson

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FROM THE EDITOR

Governor Paterson Welcomes Turk›sh Investors ince David Paterson became governor, New York Sta-

Ste has faced enormous political challenges, from the

state’s budget gap of more than $4 billion to the state’s worst fiscal crisis since the mid-1970s. In his first speech as Governor, on March 17, 2008, one of the crucial issues on which Governor Paterson led the charge for New York’s future was the putting forth of a statewide renewable energy strategy to harness the power of the sun and wind. Cemil Özyurt cemil@turkofamerica.com

Governor Paterson desires to bring more international companies to New York State and he wants to welcome more Turkish companies in New York State as well.

To accomplish his strategy, Governor Paterson pays a great deal of attention to New York State’s lag behind other regions. Under Governor Paterson’s leadership, Albany, Buffalo and Niagara Falls met with the largest foreign trade mission in New York's history, 60 representatives from 39 different countries. Another trade delegation will be visiting Long Island next fall. To make New York more open to foreign-based companies, Governor Paterson desires to bring more international companies to New York State and he wants to welcome more Turkish companies to New York State as well. New York State is not only important for Turkish companies for doing business, but also a good market for Turkish students. As Governor Paterson stressed, the State University of New York has a very strong relationship with Turkish universities and 1700 Turkish students are studying at SUNY campuses. The Turkish students alone who study at SUNY contribute approximately $50 million to the New York State economy yearly.

According to the Open Doors report published annually by the Institute of International Education (IIE), in the 2007/08 academic year, the number of students from Turkey, the eighth leading sender, increased by 5% from the previous year, to 12,030. Every year, Turkish students contribute an estimated $335 – $350 million to the U.S. economy. Due to the business and educational potential of Turkey, the relation between Turkey and New York States keep growing warmer. Last January, Governor Paterson sent his senior advisor for international commerce, Sam Natapoff, to Adana, Turkey to explore its business potential. Governor Paterson has long been aware of the importance of Turkey’s business potential, but this needs to be improved upon by Turkish organizations and businesses. As you may have read on the previous page, Governor Paterson wrote an open letter to Turkish investors in which he stated, “Our links with Turkey are strong and longstanding. We work closely with the Turkish Consulate in New York City to help new Turkish firms succeed here.” I believe that this issue, which is supported by Governor Paterson, Zafer Caglayan, the State Minister of Turkey, and many strong Turkish associations, is a very important step for business relations between Turkey and New York State. In the future, the relations have to be built up by the state officials on both sides as well as leaders of business organizations. I am sure both parties will greatly benefit from a closer relationship in ways that right now they may not even imagine. The possibilities are nearly limitless, and the future looks bright.

Governor Paterson with Cemil Ozyurt, Editor-in-Chief of TURKOFAMERICA. TurkofAmerica • 15


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MARISA LAGO – EMPIRE STATE DEVELOPMENT PRESIDENT & CEO

Mar›sa Lago:

“Turkey Is a Develop›ng Strateg›c Partner for New York State” s home to 94 Fortune 500 companies for 2009,

A310 academic institutions, and hundreds of leading businesses - including companies in the biotech, high tech and financial industries – New York outranks many other big states in terms of economic growth.

Turkey, certainly, has emerged on our radar screen as a strong contender for a potential future office for New York State.

IBM’s 2007 Global Location Trends Report ranked New York State number one in attracting international investment among all North American destinations—including the United States, Canada and Mexico. With co-headquarters in Albany, Buffalo and New York City, supported by a network of 18 additional locations throughout the state and around the world, Empire State Development (ESD) is New York State's lead economic development agency. The agency also oversees the marketing of “I LOVE NY,” the state’s iconic tourism brand. In August 2008, Governor David A. Paterson announced his nomination of Marisa Lago, Global Head of Compliance at Citi Markets & Banking, as President and Chief Executive Officer of Empire State

Marisa Lago, Empire State Development President & CEO.

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Development (ESD). Prior to joining Citi Markets & Banking, Lago worked at the U.S. Securities and Exchange Commission (SEC) as Director of the Office of International Affairs. Marisa Lago, Empire State Development President & CEO, answered TURKOFAMERICA’s questions. What are Empire State Development’s plans to bring more international companies to New York State? ESD has international offices in different countries. Will you consider opening one in Turkey? Our network of offices, both throughout New York State and throughout the world, is vital in promoting New York State’s interests in the area of economic development through international trade and foreign direct investments. Looking ahead, our international trade specialists will continue to assist businesses that wish to relocate or establish a presence in New York State, as well as help New York State businesses in the expansion of existing operations to overseas markets. This is accomplished through both technical and financial assistance services, including site selection and logistical assistance; demographic, wage, tax and utility cost data; networking with local government officials and private businesses; and access to state and local government incentive programs, including those focused on financing, tax benefits and job training. We will continue our evaluation of the locations and effectiveness of our offices abroad. Recognizing that Turkey is a developing strategic partner for New York State, Sam Natapoff, who not only serves as Empire State Development’s Senior Vice President of International Economic Development but also as


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Senior Advisor to the Governor of New York State on International Commerce, recently traveled to Turkey to meet with business leaders. Nine Turkish firms have offices in the New York City and Long Island regions, primarily in finance, air transport and real estate. We also have fantastic State University of New York (SUNY)-Turkey educational initiatives led by U.S. Ambassador to Turkey Robert Gosende. Turkey, certainly, has emerged on our radar screen as a strong contender for a potential future office for New York State. We intend to build on relationships like the one with Turkey to better position New York State for future economic growth. Since you were appointed to the position, what has been the most important development for ESD? As the world faces challenging financial and economic times, so does New York. I am pleased, however, that New York State has confronted this challenge head-on. ESD continues to support business growth and development throughout New York State. While Governor Paterson has called for fiscal restraint, he also recognizes that we must continue to make smart investments that help to create jobs, stimulate private sector investment and improve the state’s business climate. In more specific and international terms, I am also extremely proud that ESD organized two trade missions to New York regions this year for foreign trade commissioners (FTCs)—one to Albany and one to the Buffalo/Niagara region. The trade missions were designed to foster investment and job creation between international business interests and local business. During these missions, FTCs heard from senior New York officials, learned about investment opportunities in New York State, met with local businesses and trade partners, and became acquainted with the strengths of the respective regions. Turkish representatives were present on both of these missions. Two more trade missions are planned for later this year, for the Rochester/Syracuse region and the Long Island region. You have work experiences with Citigroup, SEC and the city of Boston. What is the most significant thing about working with New York State? What are the differences between working for the world’s biggest bank and the world’s most famous city? I’ve seen the power of what the public sector can do, having worked for two New York City mayors, running the Boston Redevelopment Authority, and leading the U.S. Securities & Exchange Commission’s Office of International Affairs. Most recently, I spent seven years in the financial services industry, heading Compliance globally for Citigroup’s investment bank. Whether in the private or the public sector, or whether working in economic development or financial services, one thing has guided me: a belief in giving back to the city, state and country that have been so good to my family and me. Heading ESD is different because the corporation has a critically important role to play in focusing on, planning for, and investing in the industries that create jobs for New Yorkers. In that role, we serve as a bridge— a cultural translator—between the private and public sectors. New York City is a global city, but regions beyond New York City are not well-known to foreign investors. If we ask you to say something to foreign investors, what would your message be? Quite simply, New York State is home to business, and we are ideally positioned to compete and lead in the global economy. In fact, IBM’s 2007 Global Location Trends Report ranked New York State number one in attracting international investment among all North American destinations—including the United States, Canada and Mexico. What we call “upstate New York,” the area north of New York City,

already boasts a high-tech economy, and is rapidly becoming a world-class technology center that fosters innovative ideas and pioneers programs focused on bringing the most advanced, cuttingedge technological products to the market. Upstate New York also has a superior infrastructure, with transportation and telecommunications networks, abundant water and power, and accessibility to domestic and international markets that can meet virtually every need. Finally, New York has an extremely productive workforce that is ranked fourth in the nation in worker productivity, a per worker productivity level that surpasses the national average by 25 percent. In the past, western New York was a very important commerce hub but the region now needs more development and investors. What is your prediction for the region? Will it become a center of business again? Western New York, which contains the second largest metropolitan area in the state (Buffalo), has a comprehensive list of regional assets, including being the major commercial and industrial center of upstate New York; serving as a vital link between the Midwest, Eastern U.S. and Canadian markets (about 55 percent of the U.S. population and 62 percent of the Canadian population reside within 500 miles of the region); and is home to New York State’s largest, most comprehensive public university (The State University of New York at Buffalo). The traditional reputation of Buffalo as “blue collar” no longer applies. Today, the regional economy contains a mix of diverse sectors including advanced manufacturing, financial services, healthcare, food and beverage and service providing. Further, western New York has tremendous assets that position the region to convert its “Rust Belt” infrastructure into the “Green Belt” of the future. It has abundant natural resources like water and wind, top-tier colleges and universities, an educated workforce and under-utilized manufacturing facilities—all which will be vital to the green industry. And, in New York State, we are fortunate that Governor David Paterson is a solid advocate for the growing green business sector. As I look toward the future of Buffalo, I see that we can replicate the success of our Albany Nano-tech campus, where we’ve built upon one of our state’s key resources, our university system, to create a world-leading public-private partnership that both pushes the boundaries of research, and then commercializes it, creating jobs. We have the ingredients for this type of transformational project here in Buffalo, with its strong biomedical cluster, and numerous public-private partnerships. When you compare New York State to the other states, what are the three most important reasons for investors to make an investment in New York State? Why not California, Texas or New Jersey? There are a wide variety of reasons for investors to make an investment in New York State. The state is optimally positioned at the center of the world’s largest, richest and most active consumer marketplace. For countries around the world, New York State is the gateway to the U.S. market, and specifically, this country’s Northeast and Midwest regions. Additionally, New York is an easy base from which to service your existing and potential customers. We possess industry clusters in the forefront of future development: Life Sciences, Nanotechnology, IT Telecom, Renewable Energy, Green Technology, Optics and Imaging, as well as a tremendous workforce and excellent higher education institutions to collaborate with these emerging technologies. Lastly, New York State remains at the core of the expanding international marketplace and a leading magnet for foreign investment in the United States. TurkofAmerica • 17


18 NYSTAX INCENTIVES

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TAX INCENTIVES

New York State Tax Incent›ves Encourage Bus›nesses ew York offers an array of incentives to encourage

Nbusiness investment and economic development

New York’s tax incentives, which take the form of credits, deductions, or allocation formula changes, can help reduce a company’s overall effective tax burden to as low as the statutory minimum tax.

18 • TurkofAmerica

within the Empire State. New York’s tax incentives, which take the form of credits, deductions, or allocation formula changes, can help reduce a company’s overall effective tax burden to as low as the statutory minimum tax. All incentives are explored on a case by case basis. New York State offers the following tax incentives: - Investment Tax Credit (ITC). Businesses that create new jobs and make new investments in production property and equipment may qualify for tax credits of up to 10% of their eligible investment. New businesses may elect to receive a refund of certain credits, and all unused credits can be carried forward for 15 years. - Research and Development Tax Credit. Investments in research and development facilities are eligible for a 9% corporate tax credit. Additional credits are available to encourage the creation and expansion of emerging technology businesses, including a three-year job creation credit of $1,000 per employee and a capital credit for investments in emerging technologies. - Sales Tax Exemptions. New York State offers exemptions for purchases of production machinery and equipment, research and development property, and fuels/utilities used in manufacturing and R&D. Other exemptions may be available through local Industrial Development Agencies (IDA). A list of IDAs can be found at: http://www.empire.state.ny.us/pdf/idalist.pdf. - Real Property Tax Abatement. To encourage development, expansion, and improvement of commercial property, 10-year property tax abatement is available to offset increased assessments due to improvements to business and commercial property. - No Personal Property Tax. Unlike many other states, which tax both real property and personal property, property taxes in New York State are imposed on real property only. Personal property, whether tangible or intangible, is exempt from state and local taxes.

INVESTMENT TAX CREDIT NYS offers one of the most generous investment tax credit programs in the nation. Benefits include: - A 5% credit against the corporate franchise tax on new capital invested in buildings and/or depreciable tangible personal property used primarily in production by manufacturing, processing, assembling and certain other types of activities. - A 4% credit to personal income taxpayers and corporation investing more than $350 million - A 9% credit against the corporate franchise tax (7% against the personal income tax) for investment in qualified research and development property. - New businesses (generally those operating in New York State for less than five years) may take a refund of unused credits. - Pollution Control Credit for State Taxes on Business Income. - Employment Incentive Tax Credit. - Qualified Emerging Technology Employment Credit (QETC). - QETC Capital Tax Credit. - Sales Tax Exemptions on Telecommunications - Computer System Hardware Exemption. - Internet Access Credit. - Credit for Hiring Persons with Disabilities. - Alternative Fuels Vehicle Credit. - Insurance Tax Credit for Certified Capital Companies. - Targeted Tax Credit. New York State has enacted several targeted tax incentives supporting the high-tech industry: • Sales tax exemptions for computer system hardware used in testing and developing software. • Exemption from sales tax on sale of internet service and start-up charges. • Expansion of the Qualified Emerging Technology Tax Credit Sales Tax Exemption for Web Site Design Hardware and Software.


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NEW YORK STATE TAX INCENTIVE PROGRAM

Emp›re Zones Program Attracts New Bus›nesses

New York State Capitol Building in Albany.

ew York State’s Empire Zone program was created

Nto stimulate economic growth through a variety of

The Empire Zone program awards tax credits for businesses that create jobs and improve their facilities. Tax exemptions are given for property and sales taxes.

State tax incentives designed to attract new businesses to New York State and to enable existing businesses to expand and create more jobs. Today, there are over 8,780 certified businesses employing more than 344,397 people in 85 Empire Zones statewide. Empire Zones expire in June 2010. The $520 million program has 9,200 members. PROGRAM HIGHLIGHTS Zone-certified businesses are eligible to apply for these benefits: - Wage Tax Credit: Available to companies hiring full-time or full-time equivalent employees in the zone. Unused credits can be forwarded indefinitely. New businesses are eligible for a 50% refund of unused credits. - Investment Tax Credit: Available to companies for investments made in the zone for depreciable property and/or equipment principally used in manufacturing, processing, assembly, industrial waste treatment or air pollution-control facilities, R&D or financial institutions. The credit is 10% of the eligible investment (8% for personal income tax filers). Unused credits can be forwarded indefinitely and new businesses are eligible for a 50% refund of unused credits. - Employment Incentive Credit equal to 30% of the investment tax credit is available for each of the three years after the Investment Tax Credit (ITC) is claimed if employment is increased over the year prior to when the investment is made.

- NYS Sales Tax Refund: A refund available for the purchase of building materials used in the construction or renovation of industrial or commercial property located in a zone. ELIGIBILITY - Companies located in areas designated as Empire Zones. - Companies outside the zones that obtain “regionally significant project” designation by showing they will make specified capital investments or create a specified number of jobs PROCESS - Local Empire Zone Boards must sponsor businesses for certification. - Criteria for certification include review by the NYS Department of Labor. - The Commissioner of the Department of Economic Development is the sole authority to certify and decertify Empire Zone firms. - Once certified, a business may qualify to claim the tax benefits indicated a when filing its annual tax returns with the State Department of Taxation. Finance and by completing sales tax forms. CONTACT INFORMATION Tel: 00 1 (518) 292-5240 ESD Empire Zone Office Local Empire Zone Coordinators http://www.empire.state.ny.us/pdf/Zone_Coordinators.pdf TurkofAmerica • 19


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LINKED DEPOSIT PROGRAM FOR EXISTING NYS FIRMS

the statewide rate; or a city, town, village or county with a population of one million or more for which the ratio of the full value property wealth and the ratio of the income per resident are each 55% or less of the statewide average for the year of the most recent census. How does an applicant apply for a Linked Deposit Loan? The applicant (borrower) must make application for the loan to a participating lender, and the lender will complete and send the LDP application to the Linked Deposit Program Office of Empire State Development (ESD). The application will be either approved or rejected within 28 days. (The average LDP approval time is 5 business days.)

Improve Your Company Compet›t›veness w›th the L›nked Depos›t Program he Linked Deposit Program aims to help existing New

TYork State firms obtain reduced-rate financing so The LDP is an economic development initiative created to encourage and assist small businesses within the State to make investments and undertake eligible projects that will contribute to

they can undertake projects to improve their competitiveness, market access and product development; modernize their equipment and/or expand their facilities for productivity growth or to introduce new technologies; to facilitate ownership transition; and to promote job creation/retention. Dolores O’Connor, Assistant Manager of Empire State Development Linked Deposit Program answered some questions about the Program. What is the Linked Deposit Program? The Linked Deposit Program (LDP) is an economic development initiative created to encourage and assist small businesses within the State to make investments and undertake eligible projects that will contribute to improving their productivity, performance and competitiveness by reducing the cost of capital through interest subsidies. Under LDP, eligible businesses can obtain commercial loans from authorized commercial banks, savings banks, savings and loan associations, farm credit institutions or the New York Business Development Corporation at an interest rate that is 2 or 3 percentage points lower than the prevailing rate on such loans, thereby making borrowing less expensive. Lenders are compensated with a deposit of State funds at comparably reduced rates.

improving their productivity.

20 • TurkofAmerica

What lenders (banks) can participate in the LDP? Commercial banks, savings banks, savings and loan associations, and farm credit institutions that are, or are qualified to become, approved depositories for NYS linked deposit funds. The New York Business Development Corporation (NYBDC) is also an approved lender. Who will make the credit decision regarding the loan and LDP application? The lender will make the credit decision. ESD will make the decision on whether or not the applicant and proposed project are eligible under the terms of the program, and will authorize the linked deposit to be made. New York State will neither make nor guarantee the loan; the linked deposit is a compensating balance deposit. The loan will be made and serviced by the lender. What businesses and types of loans are eligible for LDP? 2% interest rate reduction for: - Manufacturers with 500 or fewer full-time employees in New York State. - Service firms with 100 or fewer full-time employees in New York State that are independently owned and operated and not dominant in their field. 3% interest rate reduction for: - Empire Zone certified business with 100 or fewer full-time employees in New York State. - Businesses in highly distressed census tracts with 100 or fewer full-time employees. - Certified Minority- or Women-Owned Business Enterprises (MWBEs) that need financing to fulfill a New York State or federal procurement contract. Personal and professional service businesses, start-up businesses and retail businesses not located in a Highly Distressed Area or Empire Zone are not eligible for the program.

CONTACT INFORMATION What is a highly distressed area? A highly distressed area is an area which, based on the latest census data available, has a poverty rate of at least 20% for the year of the census; or at least 20% of the households in the area are receiving public assistance; and an unemployment rate of at least 1.25% higher than

Empire State Development Linked Deposit Program Attn: Dolores O’Connor 30 South Pearl Street – 7th floor, Albany, NY 12245 Telephone: (518) 292-5261 Fax: (518) 292-5882 Linkeddeposit@empire.state.ny.us


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22-23 FOREIGN

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FOREIGN DIRECT INVESTMENT IN NEW YORK STATE

New York State: Home of 2000 Fore›gn Foreign Ent›t›es Entities

Almost 400,000 jobs come from foreign companies in New York State and the State is ranked #1 in location for Fortune 500 companies. ocated in the heart of the biggest concentration of po-

Lpulation in North America, New York is within one

day’s highway travel of more than 55 percent of the nation’s population and more than 60 percent of the population of Canada. Many of the nation’s major cities, including Milwaukee, Pittsburgh, Chicago, Louisville, Charlotte, Raleigh, Washington, D.C., Boston and Portland, Maine are within one day’s drive of New York locations. In fact, New York’s location has made it a preferred location for distribution activities serving the Northeast, Midwest, and Mid South. New York offers businesses and residents a superior infrastructure that enhances their quality of life and economic well being. Its Northeast crossroads location and 22 • TurkofAmerica

shared border with Canada make it an ideal location in which to base a business. The State has over 500 airports and landing facilities; direct flights to over 150 cities worldwide; thousands of miles of rivers and 33 deepriver ports; ready access to the Great Lakes, St. Lawrence Seaway and the world's oceans; and 112,000 miles of roadways. New York State is at the core of the expanding international marketplace and a leading magnet for foreign investment in the United States. The State is optimally positioned at the center of the world’s largest, richest, and most active consumer marketplace. New York State represents overseas interests in almost


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every industry, including finance and banking, retail, business services, transportation, distribution, and manufacturing. New York’s strengths include a highly skilled workforce and an unparalleled transportation network. New York is recognized internationally for its great schools and dedication to research and development. More and more investors from around the world look to New York for their investment needs. $62.1 BILLION OF FDI IN NYS New York State is home to almost 2,000 foreign entities and its share of gross product ranks third in the nation behind California and Texas. With over $62.1 billion of FDI in NYS, major investing countries include: UK ($14.1 B), Canada ($9.3 B), Japan ($8.1 B), Germany ($7.1 B), France ($ 5.7 B), the Netherlands ($4 B), and Switzerland ($ 3 B). Almost 400,000 jobs come from foreign companies in New York State and the State is ranked #1 in location for Fortune 500 companies. Today New York houses pockets of specialized technology throughout the State through the Centers of Excellence network, a $1 billion partnership of academia, business and government to stimulate research and the rapid commercialization of scientific breakthroughs. The established Centers are Bioinformatics in Buffalo, Environmental Systems in Syracuse, Photonics in Rochester, Nanoelectronics in Albany, and Wireless Internet and Information Technology in Long Island. In the initial development stage are Centers focused on Biotechnology in Westchester and Medical Research and Biotechnology in New York City. Underscoring New York’s new status as a high technology leader, the State was chosen as the future base for International SEMATECH North, a global consortium of 12 prominent computer chip manufacturers. The group will locate its next generation computer chip research and development center at New York’s Center of Excellence in Nanoelectronics at Albany.

INVESTMENT SUCCESS STORIES FROM INTERNATIONAL CLIENTS WHO CHOSE NYS “Empire State development played a tremendously important role in our ongoing efforts to build our first foreign Maitake Mushroom growing facility in Sullivan County, New York. We are excited that we could deliver a new, unique product to the United States. Our new site in Sullivan County should be perfect for our operation with great access to areas within the Northeastern U.S. and beyond. With beautiful, rich natural resources, a highly trained and educated workforce and solid financial support programs provided by the State and the County, I am confident this new plant will be a huge success.” Kazunori Kameyama, President & CEO

YUKIGUNI MAITAKE MFG. CORP. OF AMERICA “In moving our operations to the Griffiss Business and Technology Park in Rome, Empire Aero Center (formerly Commodore Aviation, Inc.) made a strategic decision to set up a new facility that will provide a proper base to meet our long range business plan that requires room for growth and a reduction in operating costs. We are very eager to work with the local community. The existence of a professional and skilled work force in Rome was a major factor in our selection process." Joseph Reinherz, President, Empire Aero Center

Top 10 NYS Exports (2007) 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Canada* Switzerland UK* Israel* Hong Kong* Belgium Germany* Japan* China* Mexico*

*ESDC has international offices in these countries

Global Competitiveness Index (2008-09 Report) 12345678910-

United States Switzerland Denmark Sweden Singapore Finland Germany Netherlands Japan Canada

5.74 5.61 5.58 5.53 5.53 5.50 5.46 5.41 5.38 5.37

**The Global Competitiveness Report is a yearly report published by the World Economic Forum.

GDP 2009 (International Monetary Fund) 12345678910111723-

United States Japan China Germany France United Kingdom Brazil Canada India Mexico South Korea Turkey Switzerland

14,571,382 4,803,336 4,772,362 3,773,305 3,011,101 2,734,161 1,587,725 1,570,387 1,350,265 1,192,224 1,019,445 789,072 480,010 TurkofAmerica • 23


24-25 SAM NATAPOFF

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EMPIRE STATE DEVELOPMENT

ESD PROMOTES NEW YORK STATE TO INTERNATIONAL INVESTORS n late April, Governor David A. Paterson hosted 63

IForeign Trade Commissioners (FTCs) representing 37 countries in Buffalo/Niagara during a two-day trade mission with regional business leaders. The trade mission was designed to foster investment and job creation between international business interests and local business in Western New York. It was the largest trade mission group to ever visit western New York. TURKOFAMERICA was the only press which joined the two-day trade mission.

Natapoff says that New York State offers many grants, incentives, advantages and opportunities for businessmen, especially those interested in upstate New York.

The Buffalo/Niagara trade mission followed the success of a similar event hosted by Governor Paterson on February 4 and 5, when nearly 30 Foreign Trade Commissioners convened in Albany for the first Upstate trade mission. Additional trade missions are being planned for Long Island and central New York. The names of those behind the largest trade mission in the history of New York State were Sam Natapoff, Empire State Development (ESD) Senior Vice President for International Economic Development and Senior Advisor to the Governor on International Commerce, and his team. When Natapoff was living in London, he was invited to a wedding ceremony and he realized that the only foreigners in the wedding were his family. 600 Turkish people were dancing and singing. He says, “We had so much fun and that was the first time I tasted Turkish food.” Natapoff’s first business trip to Turkey took place last January. With the Turkish American Chamber of Commerce Industry delegation, he visited Adana, the fifth largest city of Turkey, in the Mediterranean region, and Istanbul. He attended the 3rd Adana Economical Forum (12-13 Jan 2009) with the support of the Adana Chamber of Commerce and he had a chan-

24 • TurkofAmerica

Sam Natapoff, ESD Senior VP for International Economic Development and Senior Advisor to the Governor on International Commerce.

ce to taste Adana Kebab, a long, charcoal grilled, minced meat brochette mounted on a wide skewer. It is named after Adana. He still remembers the taste and he is dying to go again to taste it. In addition to tasting food, Natapoff had meetings with Turkish businesses in Turkey and he says, “Turkish companies have a great potential to invest in New York State, especially in the organic food, renewable energy and medical science industries.” Natapoff says that New York State offers many grants, incentives, advantages and opportunities for businessmen, especially those interested in upstate New York. Future growth, marketing, and attraction efforts for upstate New York focus on Agriculture, Advanced Materials, Bio/Life Sciences, Clean Tech/Energy, Homeland Security/Defense, Information Technology and Nanotechnology/Semiconductors. According to Natapoff’s observations about Turkish companies, agriculture companies could make in-


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vestments in upstate New York and be able to deliver their products all over the U.S. If a Turkish company decides to invest in New York State, what should they do? Natapoff stresses clearly: “They should call my office.” Natapoff points out that New York State’s pro-business environment and highly competitive economic incentives make it the ideal location for all types of business. He is very pleased to inform us that Sarkuysan, the Istanbul-based Turkish copper company, invested $10 million in Albany to open its factory and he believes that others will follow Sarkuysan.

Sam Natapoff

A Letter to Turkish Businessmen Dear Turkish Investors: At the center of the world’s largest, richest, and most active consumer marketplace, New York State has always offered investors a competitive edge in the global marketplace. A diverse economic structure, highly skilled workforce, innovative industries and technologies, world-renown academic and research institutions, and support from proven economic development programs with tailored incentives – all of these world-class components attract intelligent business leaders to invest and locate in New York State. As the leader in international trade and investment attraction, New York State offers extraordinary access to the world markets, and excellent services, transportation, energy, and expertise for businesses launching or expanding international activity. The New York State Department of Economic Development’s network of highly qualified professionals are ready to assist with financing, incentives, and site selection to help your business grow, create jobs, and prosper. Located in the heart of the biggest concentration of population in North America, New York is within one day’s highway travel of more than 55 percent of the nation’s population and more than 60 percent of the population of Canada. New York’s extensive transportation system includes superb harbors, deep water ports and waterways, the largest containership facilities in the world, thousands of miles of modern highways and railways, and hundreds of air handling facilities, including one of the world’s largest air cargo centers, John F. Kennedy International Airport. New York State is also home to nearly 4,000 foreign-owned operations and New York State leads the nation in foreign direct investment and represents overseas interests in almost every industry including Life Sciences, Agriculture, Biotechnology, Nanotechnology, Renewable Energy and Green Technology, Imaging & Optics, Information Technology, Transportation and Aviation industry clusters. New York State’s Centers of Excellence and Centers for Advanced Technology which include Nanotechnology Center in Albany and Bioinformatics and Life Science Center in Buffalo are truly the world leaders in technology developments. To assist your investment project, New York State’s International Division provides a wide range of services through a network of 21 offices throughout the State and worldwide. The following is a few examples of our assistance. 1. 2. 3. 4. 5. 6. 7. 8.

Creating a business plan to maximize your business opportunities Identification of potential sites and buildings Providing demographic, wage, tax and utilities cost data Access to New York’s incentive programs such as financing, tax credits and training assistance Information about quality of life in communities under evaluation Networking with local government officials and private business people Expedited assistance with the procurement of state permits, charters, etc. Project coordination and facilitation through a network of regional and foreign offices

Should you have any questions regarding New York State’s business environment or services, please do not to hesitate to contact me at any time. I will be pleased to show what we can offer you.

NEW YORK STATE BEYOND NYC Natapoff, who worked in the Clinton administration, has also worked at the European Central Bank, the German Bundesbank, and the European Parliament. He has extensive international government experience, having worked with nine government institutions in five countries. His international knowledge helps international businesses to create new investment opportunities in New York State. He emphasized that “There is more to New York than New York City. We invite Turkish businessmen to explore the many opportunities that New York State has to offer their companies. We're sure they will discover a wealth of services and locations that are perfect for their business needs.” Through ESD, New York State maintains 12 international offices in key world markets in North America (Toronto, Montreal and Mexico), Latin America (Brazil and Chile), Europe (UK, France and Germany), South Africa, the Middle East (Israel), and Asia (Hong Kong, Beijing and Shanghai). In addition, ESD and the NYS Department of Economic Development (DED) oversee New York’s international business development programs, which provide targeted assistance to New York firms to help advance their global competitiveness and international market access.

We look forward to assisting you in your future business endeavors. Sincerely. Sam Natapoff

Natapoff received his Ph.D in political science from George Washington University and his B.A./M.A. from Balliol College, Oxford University. TurkofAmerica • 25


26-27 Rochester

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ORGANIC FOOD

Organ›c New York ew York State ranks among the top ten states in the

Ncountry for the number of organic farms. The U.S.

Organic food sales have increased approximately 20% annually. Over the last 10 years, the number of farmers and the acreage dedicated to organic farming has been increasing steadily.

Census identified 1,027 organic farms in New York State in the year 2007, with nearly 121,000 acres in production, although only 736 of these farms are known to be certified organic. “Organic dairy farms are the largest segment of the organic farm community in New York State with nearly 400 farms,” said Sarah Johnston, Organic Agriculture Specialist of NYS Department of Agriculture and Markets. The Census, which was released in February 2009 and is the most current information available, also found that 562 farms were transitioning another 30,687 acres to organic production. In addition, there were more than 100 organic processors doing business in the State, including coffee roasters, bakeries, pasta manufacturers and animal feed grain mills. Organic dairy farms are the largest segment of the organic farm community in New York State. According to the Cornell University College of Agriculture and Life Sciences, the demand for organic foods has doubled in the past decade and continues to grow. Organic food sales have increased approximately 20% annually. Over the last 10 years, the number of farmers and the acreage dedicated to organic farming has been increasing steadily. Farmers, consumers, food advocates, academics, businesses, gardeners and many others have contributed to the growing interest in organic and local foods in New York State and around the country. Following is the contact information for farm-based groups that have activities pertinent to organic agriculture in New York State. NEW YORK STATE BASED ORGANIC FARM ORGANIZATIONS Northeast Organic Farming Association of New York, Inc. (NOFA-NY) The NOFA-NY Certified Organic, LLC has been the primary farm certification program in New York State since 1984. For the farmer and processor, organic certification is a marketing tool which assures customers that the product is organically grown and processed. Consumers

26 • TurkofAmerica

purchasing food that is "Certified Organically Grown" are encouraging the expanded use of organic farming practices that promote healthy soil, water and air, thus healthy animals, plants and environment. There are currently 569 farms, dairies or processors certified organic by NOFA-NY Certified Organic, LLC for 2009 with 35 farms remaining transitioning to organic certification pending. (www.nofany.org) Alfred State College The Center for Organic and Sustainable Agripreneurship at Alfred State College develops entrepreneurs who will sustainably and profitably manage natural resources to produce healthy food and renewable energy. The college is developing its newly created Center for Organic & Sustainable Agriculture. (www.alfredstate.edu) The North East Organic Network (NEON) NEON was initiated with a major organic research and extension grant received in 2001 by Cornell University, NOFA-NY and other partners from around the Northeast. Funded with a $1.2 million grant from the US Department of Agriculture's Initiative for Future Agriculture and Food Systems, this multi-state, multidisciplinary team will be conducting research and extension and education programs on organic agriculture throughout the Northeast. www.neon.cornell.edu Cornell University College of Agriculture and Life Sciences The College of Agriculture and Life Sciences prepares students for a world being shaped by the new life sciences, a global marketplace, and emerging technologies. The College’s 23 majors in 26 departments reflect four program priorities. www.cals.cornell.edu Organic Certification Fee Reimbursement Program New York State Department of Agriculture and Markets administers a certification fee reimbursement program that is funded with federal dollars. Farmers may apply for reimbursement of organic certification fees and receive 75% of the total fee up to a maximum of $500. (www.agmkt.state.ny.us )


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28-29 Nigara

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NIAGARA FALLS

C›ty of N›agara Falls Bu›lds on the Past, Seeks a Br›ghter Future hat is the similarity between being a mayor of

Wthe City that is one of the U.S.’s top ten tourist

“Niagara Falls is on some people’s list of places that they have to see before they die. Istanbul is my place to see before I die.”

destinations and being a professor of international affairs at a university? The best person to answer that question may be Paul A. Dyster, the mayor of Niagara Falls. He is not an ordinary politician who spent a lot of time building a political career through political campaigns. After earning a doctorate from Johns Hopkins in Baltimore, Maryland, he settled in at Catholic University of America in Washington, D.C., where he eventually rose to become Director of the Graduate Program in International Affairs. For five years, he taught international relations to graduate and undergraduate students. He won the Niagara Falls mayoral election and took office in January 2008. He said that some people say he is overqualified for the office, but he doesn’t think that way. The city receives many visitors from all over the world but now needs more investors for its empty old manufacturing buildings, because most of manufacturing plants closed or moved away, or some of them have been converted to manufacture other products. Niagara Falls' current development strategy is focused on a pragmatic approach to revitalizing vacant and underutilized buildings in the downtown area as high profile catalyst projects with real economic impact. Niagara Falls doesn’t have many Turkish people but Niagara University has two academicians of Turkish descent; Mustafa Gokcek, Assistant Professor of History Department and Murat Demirbas, Assistant Pro-

fessor of Department of Computer Science and Engineering. Niagara Falls Mayor Dyster says; “Niagara Falls is on some people’s list of places that they have to see before they die. Istanbul is my place to see before I die.” Besides seeing Istanbul, he wishes to see some Turkish investors in his town as well. Mayor Dyster answered TURKOFAMERICA’s questions. Could you tell us why the city of Niagara Falls is important for investors? Niagara Falls is one of the larger small cities in the New York State with a permanent residential population of around 55,000 individuals but it’s a very unique city in terms of economic opportunities. We usually get approximately 6-8 million visitors each year. It’s a relatively small city market in terms of residence, but there are economic opportunities here in the tourism industry based on the large number of visitors. In terms of where customers come, from there is virtually no country in the world that doesn’t have people visiting Niagara Falls. The most densely populated, fastest growing regions of Canada are those located directly across the border, what we call the “Golden Horseshoe” which extends south from Toronto, Ontario. We are at the western end of New York State and of course we have this orientation toward New York City, but it is also the case that 1.5 hours to the north we have this great expanding metropolis of Toronto in Ontario. In the global economy we’re very well situated in between the two centers of population in North America. There’s also a very large portion of population of the U.S. located in the northeastern part of the country. That means Niagara Falls is within a few hours drive of Cleveland, Pittsburg and many other urban areas. Being located in the midst of your potential market becomes more and more important. In the past chemical, steel, and manufacturing plants were very strong in Niagara Falls. What is the current position of those industries? There are two traditional industries broadly found in Niagara Falls’ economy: Petrochemicals and steel. Two things happened. The first thing is a decline in competiveness of those industries over time. In so-

28 • TurkofAmerica


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Paul A. Dyster, the mayor of Niagara Falls.

me cases they redefined themselves. In other cases, a factory was opened for one purpose and now it’s been reopened for other purposes. Some of the companies that have been located here for some time are now manufacturing new types of products. Can you give some examples for those companies? For example, one of the large employers for many years in the area was the Carborundum Company. The company made braces for grinding wheels. Today the company is called Saint Gobain, it’s a subsidiary of a French company. It’s manufacturing among other things high tech low mass armor plating for both personnel protection and for armored vehicles. The same process used to manufacture armor plating is also used to manufacture other industrial components requiring a high degree of strength, very low weight, and a high degree of precision manufacture. That’s a example of a company totally transforming what it is doing within the same ownership structure. We have also some large companies that are still in the same industry, but the industry has gone through some changes. Praxair is one of them. It’s a large industrial gas manufacturing company located in Taiwan and Niagara Falls. They are a major player in the hydrogen industry, which is becoming far more important than it was before because of the emergence of technology in the industry fuel sources. Praxair has changed their operations. They are still in the industrial gas industry, but now they are increasingly looking at 21st century markets and products. What will be an important area of development for the future in Niagara Falls? We think the important area of development in the future is going to be electrical storage devices. You put up wind towers but wind doesn’t blow at the same speed. You put up solar panels, it’s not sunny every single day. We are going to have the same issue with regard to electricity that’s created using the wind or using the sun. We have to store the energy in order to use it at time when it’s needed. Storage devices are going to be very important. Could you tell about your Green Project, which is one of your priorities as Mayor of Niagara Falls? We have clean hydropower here and it’s renewable. We try to utilize the hydropower that we have in order to subsidize the creation of a renewable energy industry. We are looking for opportunities to take the clean renewable power that we have and use it to generate more clean renewable power in the future. If we could run, for example, police patrols with electricity, which we are going to do this summer in tourist areas, that allows us to use renewable forms of energy for other things.

One of the things that we are very proud of is the Globe project, that we are using 40 Megawatts of hydropower to run the forces at Globe for silicon production. For the 40 megawatts of hydropower we invest each year, once a plant is fully operational, we will be generating enough solar grade silicon to produce solar panels each year that can produce 500 megawatts of clean solar power. President Obama and the Governor of New York are very supportive of green technology. How does this support develop your region? Governor Paterson has recognized that New York State needs to be a leader in not just the national economy but the leader of the global economy and seek to recapture the position of prominence in the fields of science and technology that NYS had at the beginning of the last century. We were so prominent 100 years ago in science and technology. We frankly become a little bit lazy. We were not reinvesting in the renewal of those industries so they would be competitive in the future, but that’s changed. We need to look 20 years or further into the future as we are making current investment decisions. We must look not only at the U.S. market but also look at the global market. That’s why NYS is seeking to redefine its place in the global economy, to reach out, looking for strategic partners in other parts of the world that we could work with. As a professor of international affairs, what do you think about Turkish-US relations? I was very excited to see that President Obama made a special point of visiting Turkey. It was his first overseas visit and I thought it was very appropriate. This is maybe a very good time for U.S. and Turkish relations. New York will be a particularly good place to benefit from that. Senator Hillary Clinton always used to say that New York State has the largest Turkish American population. Now she is Secretary of State, and you have somebody who is very familiar with Turkey. It’s very clear that the Obama administration is seeking to redefine America’s role in the Middle East, going forward. That is a recognition that Turkey could be a very critical partner in that. The Turkish Government has encouraged the U.S. government for some time to try to increase dialog. Maybe with some entities there would be hostility over U.S. interest. Turkey has volunteered itself to establish a dialog. President Obama was signaling Turkey that it is a very important partner. Did you ever have a chance to visit Turkey? Unfortunately I did not. Niagara Falls is on some people’s list of places that they have to see before they die. Istanbul is my place to see before I die. I worked for the State Department and I had a chance to meet a NATO expert group in Brussels. We worked in the NATO office of the State Department. I had an opportunity to have contact with Turkish diplomats, but I did not have a chance to visit Turkey. TurkofAmerica • 29


30 binghamton

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BIOSCIENCE

The Future of the B›omed›cal Industr›es ew York State is home to many of the world's preeminent surge-

Nons, physicians, scientists and a skilled, high-tech workforce.

According to the Biotechnology Industry Organization, New York accounts for 5 percent or more of national employment in three bioscience subsectors—drugs and pharmaceuticals (also concentrated with a location quotient of 1.11); research, testing, and medical laboratories; and medical devices and equipment. New York ranks among the top 10 states across all additional key bioscience metrics. Academic bioscience research expenditures totaled $2.53 billion in 2006, led by medical sciences ($1.4 billion) and biological sciences ($963 million). During the past 6 years, $1.2 billion was invested in bioscience venture capital, led by medical diagnostics and human biotechnology. Drugs and pharmaceuticals were the largest category of 5,139 patents issues over the same period, followed by biochemistry and surgical and medical instruments. According to the National Science Foundation’s Division of Science Resources Statistics, New York State is ranked second in the nation for academic research and development expenditures at nearly $3.5 billion and ranked second in the number of scientists and engineering doctorates awarded in 2005 at 2419. ASSICIATIONS * The New York Biotechnology Association is a not-for-profit trade association dedicated to the development and growth of New York State based biotechnology related industries and institutions, and to strengthening the competitiveness of New York State as a premier global location for biotechnology/biomedical research, education and industry. (www.nyba.org)

122 Nobel Laureates trace their roots to NYC. NYC’s vast financial resources include nearly 100 venture capital firms investing in healthcare companies. New York area biotech companies received more total venture dollars in 2008 than in 2007, up 38% from last year. The City is also headquarters to four major pharmaceutical companies and over 125 bioscience companies. NYC has the world’s largest concentration of Academic Medical Research Centers. ACADEMIC MEDICAL RESEARCH CENTERS IN NYC Albert Einstein College of Medicine, Columbia University Medical Center, Hospital for Special Surgery, Memorial Sloan-Kettering Cancer Center, Mount Sinai School of Medicine, New York University, SUNY Downstate, The Rockefeller University, Weill Cornell Medical College.

SELECT NYC BIOSCIENCE COMPANY FUNDING HIGHLIGHTS Paradigm Spine, LLC ZIOPHARM Oncology Intercept Pharmaceuticals Small Bones Innovations Enzo BioChem IRX Therapeutics Vivaldi Biosciences SIGA Technologies Stemline Therapeutics

$82M $86M $50M $62M $61M $60M $23M $17M $12M

* BIO is the world's largest biotechnology organization, providing advocacy, business development and communications services for more than 1,200 members worldwide. (www.bio.org) * The mission of the Health Care Industries Association is to help ensure the success and retention of the existing health care companies and institutions in region, and through collaboration, foster the growth of new startup companies, and create an environment and an infrastructure that will attract other health care/life science industries to Western New York region. (wings.buffalo.edu) * Academy for Medical Development and Collabioration. (www.amdec.org) BIO NEW YORK CITY New York City has the most developed medical infrastructure in the United States, with 26 Research Centers and 58 hospitals including the Hospital for Special Surgery, Memorial Sloan-Kettering Cancer Center, and New York-Presbyterian Hospital. With $1.3 B in NIH funds (after Boston, ranked #2), the largest concentration of academic medical institutions, over 120 bioscience companies and the #1 metro area in bioscience employment, New York City (NYC) has a thriving scientific community. With the creation of two new research parks, East River Science Park and BioBAT, NYC is well-positioned for continued growth in commercial bioscience. 30 • TurkofAmerica

Source: bio.org

CONTACTS NEW YORK STATE Indusrtry Specialist Jeff Janiszewski , Industry Director Tel: (518) 292-5247 Email: jjaniszewski@empire.state.ny.us web: www.nylovesbiz.com NEW YORK CITY Lenzie Harcum Vice President, Biosciences Tel: (212) 312-3806 Email: lharcum@nycedc.com www.nycbiotech.org


31 Trade mission

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OPINIONS ABOUT WESTERN NEW YORK

W›ll Renewable Energy and Agr›culture Industr›es Make Western New York R›se Aga›n? mpire State Development (ESD) International Division

Eorganized a two-day trade mission trip to Niagara Falls

Foreign trade commissioners talked to TURKOFAMERICA about their observations of the Western New York

Dr. Harold Robertson (Consulate General for Trinidad and Tobago): We knew the city of Buffalo and its sports teams but we were largely unaware of the educational facilities and business environment. The two-day trip was very enlightening about what Buffalo is about. The three significant things I observed in the region are, first, the medical facilities, which conduct research on human disease, cancers. Second were the companies that work on renewable energy sources, because we are all happy to use carbonbased energy sources but we aware that those sources are not replaceable. Renewable energy is of particular interest and we have to look where we can find it and how we will develop it in our country. The third important thing for me in the region was Buffalo University’ studies about the affects of earthquakes on structures and buildings.

Photo by Darren McGee

region.

and Buffalo, two cities in western New York. The trade mission visited Buffalo City Hall, the Buffalo Niagara Medical Campus, University at Buffalo and the Niagara Power Vista, among other points of interest. 60 Foreign Trade Commissioners, representing 39 countries, participated in the trade mission trip. TURKOFAMERICA was the only press which joined the two-day trade mission. Some participants’ opinions about business opportunities in western New York follow: Vassilios E. Sitaras (Secretary for Economic & Commercial Affairs – Consulate General of Greece): Buffalo and Niagara had a very bright period of industrialization in the 19th and early 20th century. Then the region had a big decline. It is still common to see empty buildings, indications that recovery is still needed. Many incentives and tax credits are available for investors. It seems that once again the area will be an attractive place for potential investors. It is a very central location which is very close to many major cities in the northeast. The region is very good for companies that need big warehouse and look for big storage. We see plenty of space is available for very good prices. Some potential investors had asked my opinion about upstate New York and I already suggested they should invest in the Buffalo area. For financial companies NYC might be much more attractive but Buffalo is definitely good for manufacturing companies. Jasmin Devlic (Consul, Consulate General of the Republic of Croatia): Croatian companies might be interested in ag-

ricultural business for producing wine and food. In the region the cooperation of universities and businesses is very admirable. It’s strong and the two areas work together very well. I got much useful information from them and we can try to implement the same methods in Croatia. The most interesting part for the Croatian companies would be the agriculture business and organic food production. Also renewable energy would be an important topic in Croatia. We have had some contacts with American companies which want to do business in Croatia concerning wind and hydro energy plants. Comparing Buffalo/Niagara to Albany, Buffalo/Niagara is more suitable for our needs. Albany’s companies are more focused on bio/nano science technology. We don’t have that development in Croatia.

60 commissioners of foreign trade from the around the world, are in Buffalo Niagara Medical Campus.

TurkofAmerica • 31


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SYRACUSE

Syracuse A›ms to be the Center of the Green Technology Industry ocated in the center of New York on the southern

Lshore of Lake Ontario, Syracuse is a scenic treasure amid rolling hills, tranquil lakes and picturesque forests. Beside its natural richness for visitors, the fifth largest city in the state focuses on attracting the green technology industry. The city of Syracuse is one of the few cities that participates in both the New York State Empire Zone program and the Federal Empowerment Zone program as well. From 2001 through 2006, investment in Syracuse exceeded $900 million, representing more than 100 economic development projects in all sectors of the city. The city was named 14th in a list of the top 25

From 2001 through 2006, investment in Syracuse exceeded $900 million, representing more than 100 economic development projects in all sectors of the city.

Matthew J. Driscoll, 49, the 52nd mayor of the city of Syracuse, elected to a second four-year term.

32 • TurkofAmerica

medium-sized cities for doing business by Inc. online magazine. Matthew J. Driscoll, 49, the 52nd mayor of the city of Syracuse, elected to a second four-year term, answered TURKOFAMERICA’s questions. Can you please tell us why a foreign investor should make an investment in your city? Could you give us some information about the city’s business environment? Syracuse is the center of a viable five county region. We work closely with Onondaga County and our private Economic Development partners to encourage investment in our region. Foreign investment is al-


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York Region. Examples are Bristol-Myers Squib, Welch-Allyn, Lockheed-Martin, Magna Power Train, Carrier Corporation, Sensis Corporation, and Anheuser-Busch. There is a highly trained workforce in Central New York with our outstanding education institutions. Currently, there is a shortage of engineers. Turkish companies are very strong in the textile, food, natural stone and construction industries. How do you suggest these companies expand their businesses in your city? Central New York is a strong agricultural region. The food industry would be very viable here. In addition to the business aspect of your city, could you provide us with information on tourist attractions in your city? The city of Syracuse is within 2 hours of some of the finest tourist destinations in the Northeastern United states: The Finger Lakes, the Thousand Islands, and the Adirondack Mountains. Within the city itself, there is the Carrier Dome, the Rosalind Gifford Zoo, and the Carousal Mall. Downtown Syracuse contains many attractions including Armory Square, The MOST, the Everson Museum, and a first rate Civic and Convention Center. Each year approximately 12,000 Turkish students come to the U.S. for educational purposes and contribute $1 billion to the economy each year. For your region could you provide us with information about colleges, universities and their importance? Central New York is the location of some of the finest universities and colleges in the country, including Syracuse University and Cornell. There are several branches of the New York State University System (SUNY) in this region, including the Upstate Medical Center, SUNY Oswego, SUNY Cortland, and the School of Environmental Science and Forestry (ESF). Finally, there are excellent smaller private colleges such as LeMoyne and Clarkston.

ways welcome. The city of Syracuse is one of the few cities that participates in both the New York State Empire Zone program and the Federal Empowerment Zone program. These programs provide tax incentives to businesses and investors that create jobs in the city. Can you give us some details about your city’s most important industries to invest in, especially for foreign investors? Some of the critical industrial clusters in the city include financial services, medical, and education. A focus of our local and regional marketing efforts is the attraction of green technology industry. Core areas include Indoor Environmental Quality, Healthy Buildings/ Sustainable Design, water quality and water resources, and renewable industry. In your region, do you have any international companies and how long have they been in business? Is there any problems finding a skilled workforce for these international businesses? There are several major international industries in the Central New

Can you please give us the contact information for Turkish investors looking to invest in your region? Investors could contact the City’s Department of Economic Development: David Michel; 315-448-8104. They could also contact our Regional Economic Development partners including the Greater Syracuse Chamber of Commerce: Darlene Kerr; 315-470-1800; the Metropolitan Development Corporation: Robert Simpson; 315-422-8284; and the Onondaga County Office of Economic Development: Mary Beth Primo; 315-435-3770.

CITY OF SYRACUSE County: Onondaga Incorporated (City): 1847 Area: 25.6 sq mi (66.4 km2) Population (2006): City 140,658, Metro 732,117 Airport: Syracuse Hancock International Airport Web: www.syracuse.ny.us TurkofAmerica • 33


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TURKISH INVESTORS

Major Turk›sh Investors ›n New York State urkish investors want to take a bigger share in the

More Turkish

TU.S. market. Especially in the past 10 years, the

companies opened

number of Turkish companies have been increasing in the U.S. More Turkish companies opened U.S. braches and some of them made big investments in different industries such as textiles, jewelry, construction and wire.

U.S. braches and some of them made big investments in different industries such as textiles, jewelry, construction and wire.

Jeans-wear companies Mavi and LTB, menswear brand Sarar, high-end diamond company Gilan, general contracting and construction management services company Kiska, and the latest investor, Turkey's largest wire manufacturing company Sarkuysan chose New York State as the place in which to invest.

Godiva Chocolatier, the Belgian chocolate maker, was sold by Campbell Soup Company to Yildiz Holding, a firm based in Istanbul that owns Ülker Group. The acquisition is significant in that for the first time a Turkish company has acquired an international brand leader. GSM-based mobile communication company Turkcell’s shares have been traded on the New York Stock Exchange (NYSE) since July 11, 2000 and it is the first and only Turkish company ever to be listed on NYSE. Turkish investors investing in New York State are listed below: GODIVA TRANSFORMS INTO A TURKISH DELIGHT Godiva Chocolatier, the Belgian chocolate maker, was sold by Campbell Soup Company to Yildiz Holding, a firm based in Istanbul that owns Ülker Group, a big Turkish conglomerate with a major business in food, manufacturing cookies and candy as well as chocolate. On Dec. 20, 2007 Ülker signed an agreement with the Campbell Soup Company to purchase Godiva for $850 million “with all its international participations, brands, facilities, trade secrets and patents.” The acquisition is significant in that for the first time a Turkish company has acquired an international brand leader. The Godiva chocolate company was first established in Belgium in 1926, and was purchased by the Campbell Soup Company in 1974. Today, the firm manufactures chocolate in Belgium and the US, and sells its products all over the world through its own boutiques, franchised shops, posh department stores and over the internet. Ulker Group’s facilities in Egypt and Pakistan started production in the first quarter of 2008. Thus, the company is operational in eight foreign countries. There are now over 270 retail locations as well as over 2000 wholesale doors. Godiva's world headquarters are located in midtown Manhattan.

TURKCELL: FIRST AND ONLY TURKISH COMPANY ON THE NEW YORK STOCK EXCHANGE GSM-based mobile communication started in Turkey when Turkcell began its operations in February 1994. As of December 31, 2008, Turkcell has made 7.7 billion US dollars worth of investment in Turkey, which doesn't include the price of the license. Again as of December 31, 2008, with its 37 million subscribers, Turkcell is not only the leading operator in Turkey, but is also the third biggest GSM operator in Europe in terms of subscriber numbers. 34 • TurkofAmerica


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Turkcell’s shares have been traded on the Istanbul Stock Exchange (IMKB) and New York Stock Exchange (NYSE) since July 11, 2000 and it is the first and only Turkish company ever to be listed on NYSE. The company has investments in Azerbaijan, Georgia, Kazakhstan, Moldova, and also in the Turkish Republic of Northern Cyprus, Ukraine and Belarus. In August 2008, Turkcell announced that it had completed the acquisition of an 80% stake in Belarusian Telecommunications Network (BEST).

Gilan has succeeding in attracting popular artists and well-known people from high society to wear its products. Pop singer Christian Aguilera, Alicia Keys, Jennifer Morrison, Selma Hayek, Penelope Cruz, Drew Barrymore, Melissa George, and Lucy Liu are among celebrities who prefer Gilan. Gilan opened its first store in the Covered Bazaar in Bursa, Turkey in 1981, run by the brothers Ferhan and Muharrem Geylan. In 1986, the brothers went to Istanbul to grow their business. There, they built a large workshop. During this time, they started to design and manufacture jewelry for celebrity families and artists. The Geylan brothers, after establishing a design brand with Levent Piskiner in 1993, opened their first store in Istanbul’s Akmerkez shopping mall and started to sell the jewelry they designed under the name "Gilan”. MAVI JEANS: THE BEST-KNOWN TURKISH BRAND IN THE US Founded in Istanbul in 1991, Mavi Jeans designs a full collection of jeans-wear, for young women and men. After producing garments and jeans for many international brands, Sait Akarlilar, the President of Mavi Jeans, decided to develop his own brand- Mavi, which means blue in Turkish.

SARAR: A BRAVE INVESTMENT AFTER SEP. 11 Sarar USA was founded just after the September 11, 2001 attacks. Sarar greeted its first customers in Woodbury Common Premium Outlets, a favorite New York area shopping center in 2001.

Today, Mavi is sold in more than 50 countries. The company has more than 3,000 employees and 3,220 selling points all over the world. Mavi has about 7 million in sales, more than half in exports - 90 percent of this is in the U.S., Canada and Germany. In the future, the company is planning to open more stores - they currently have 85 in Turkey and have opened flagship shops in Vancouver and New York. Next, it will be Frankfurt and Berlin with other important cities of the world to follow. Mavi Jeans opened the doors to its 3,500-square-foot flagship near Union Square in New York City, its first store in the U.S., in March 2003. The company also has a store in Vancouver, Canada. Mavi’s operations are run by Ersin Akarlilar. GILAN: FIRST TURKISH STORE ON FIFTH AVENUE Gilan started operations in the USA in 2001, they opened their first private jewelry salon in December, 2003 on Fifth Avenue, in the prestigious Crown Building. Gilan gained experience in the American market through this boutique and in September 2005 took yet another step and opened a flagship store on Fifth Avenue and became neighbors with such world famous brands as Louis Vuitton, Chanel, Gucci and Prada. The store is located between Bergdorf Goodman Men's and Louis Vuitton. TurkofAmerica • 35


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TURKISH INVESTORS

Sarar Group is one of the leading menswear brands in the world with more than a hundred stores around the world. The company has become the worldwide manufacturer of major global fashion labels such as Hugo Boss, Burberry's, Banana Republic and many more. In an effort to extend SARAR's retail fashion distribution network, Sarar USA established their flagship boutique, located in the heart of New York City at 375 Madison Avenue at 46th Street in The Roosevelt Hotel in January 2008. Beside its Madison Avenue flagship and Woodbury Common Premium Outlets stores, Sarar has stores in Paramus (New Jersey), Las Vegas, Dallas and Chicago. KISKA THE BIGGEST TURKISH CONSTRUCTION INVESTMENT IN NEW YORK KiSKA-USA is a subsidiary of KISKA Construction Corporation, an international company based in Ankara, Turkey. KiSKA USA is a general contracting and construction management services company. Its diverse areas of experience and expertise range from infrastructure to high-rise construction. Since its establishment in 1987, KiSKAUSA, with a near billion dollar volume, has developed a strong presence in the construction of shafts and tunnels for water and transportation systems, as well as the rehabilitation and reconstruction of bridges, highway viaducts, and industrial facilities. KiSKA Developers, Inc., KiSKA Property Marketing & Management, Inc. and Wildflower Estates Developers, Inc. offer a range of property development and real estate services in addition to KiSKA-USA's general contracting and construction management capabilities. The Marmara, Inc., another subsidiary of KiSKA, owns and operates The Marmara Manhattan, a luxury extended-stay hotel. The Marmara-Manhattan, at 301 East 94th Street, opened its doors in April 1998, with 102 luxurious, extended-stay apartments. The Marmara hotel chain has nine hotels in Turkey and one in Manhattan. Oguz Gursel is the founder of Kiska Group and Erden Arkan runs Kiska operations in the U.S. SARK USA WIRES ALBANY TO ISTANBUL Sark Wire Corp., a subsidiary of the Sarkuysan Group of Companies in Istanbul, Turkey's largest wire manufacturing company, opened its first U.S. operation in a former printing plant in Albany's west end. The company, which makes electrical copper products, is opening a $10 million processing plant in Albany, N.Y. Sark Wire Corp. bought a vacant building at 120 Industrial Park Road near Everett Road in Albany and will renovate it for the processing plant. The plant will initially employ 30 people when full operations begin, which is expected to be in the second half of 2009. The plant will be located in an Empire Zone, which means the company will be eligible for state tax credits and incentives in exchange for creating jobs. Sark has been exporting products to the U.S. and other countries for more than 25 years and has a distribution facility in Saddle Brook, N.J. Sarkuysan was founded in 1972. The publicly owned company employs more than 750 people in Turkey and has gross annual sales in excess of $1.5 billion. Tolga Kaan Isik operates Sark USA operation in the U.S. (The Business Review, September 10, 2008. (Albany) LTB JEANS: DENIM LOVERS PREFER Manufacturing 17,000,000 pieces of clothing annually on an area of 150,000 square meters, Çak Group has grown into a major force in the Turkish textile market. Little Big denim, also known as LTB, is very well known for the high quality of its jeans. 36 • TurkofAmerica

The Istanbul-based company, which originally began as a textile maker, opened its denim flagship store in 2003 on Broadway in SoHo, New York City. The brand has rapidly developed a cult-like following of denim lovers ranging across media figures, celebrities, and retailers. Jennifer Garner, Katherine Heigl, Hayden Panettiere, Eva Longoria, Lindsay Lohan, Cameron Diaz, Hilary Duff, Lauren Conrad, Ornella Mutti, Anna Falchi, Pamela Camassa, Giada de Blank, and Valon Behramihave all been donning their LTBs. LTB has over 100 shops and 4000 selling points worldwide, excluding its home country. Ugur Altintas is in charge of LTB operation in the U.S.

13 TURKISH COMPANIES IN FORBES MAGAZINE’S LIST 13 Turkish companies placed among the 2,000 biggest companies in the world in Forbes Magazine’s list. Forbes Magazine listed the 2,000 largest companies from 62 countries according to their income, profit, assets and market values. U.S. General Electric ranked the top in the list, followed by Royal Dutch Shell and Toyota Motor. Turkish companies in the list and their market values are as follows; - 331st Is Bankasi (5.31 bln USD) - 410th Koc Group (2.51 bln USD) - 427th Akbank (6.91 bln USD) - 452nd Garanti Bankasi (5.11 bln USD) - 527th Sabanci Group (2.60 bln USD) - 714th Turkcell (10.93 bln USD) - 741st Turk Telekom (8.02 bln USD) - 779th Halk Bankasi (2.63 bln USD) - 850th Vakiflar Bankasi (1.59 bln USD) - 942nd Enka (4.37 bln USD) - 1262nd Erdemir (2.24 bln USD) - 1340th Dogan Holding (0.73 bln USD) - 1879th Anadolu Efes (2.86 bln USD)


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38-39 Buffalo

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BUFFALO

W›ll Buffalo R›se Once Aga›n? he village of Buffalo was originally surveyed and

Tlaid out for the Holland Land Company in 1804 by

Joseph Ellicott. The Holland Land Company had purchased western New York, bounded by the Genessee River to the east, Lake Ontario to the North, the Niagara River and Lake Erie to the west and Pennsylvania to the south. Buffalo of 1830's was a boom town on the Erie Canal. Nowadays, Buffalo is the second largest city in the state of New York. The city itself has a population of 292,648 (2000 Census), and the metropolitan area 1,170,111 (2000 Census), the 46th largest in the United States.

Buffalo is the second

By 1900, Buffalo was the 8th largest city in the country, and went on to become a major railroad hub, the largest grain-milling center in the country, and the home of the largest steel-making operation in the world. The latter part of the 20th Century saw a reversal of fortunes: by the year 1990 the city had fallen back below its 1900 population levels. Buffalo Mayor Byron Brown answered TURKOFAMERICA’s questions.

We have extremely warm, welcoming people in this community. Buffalo is an international city in many ways. When you look at our public schools, there are over 60 languages spoken in the public schools of Buffalo. The final thing is that real estate values are very reasonable here and investors can find good buildings and lands at very reasonable prices as compared to other cities. What industries might be interesting for Turkish businessmen? There are a number of industries that could be interesting. Over the past ten years, the bio-technology and life sciences industries have been growing. There has been substantial private and public investment in what is called Buffalo/Niagara Medical Campus. In the area of downtown Buffalo, there has been over $500 million invested and over several thousands jobs created. The Green industry is another area. The tourism industry is another important area. We think imports and exports are other important areas in which international businesses could participate in this community.

largest city in the state of New York. The city itself has a population of 292,648 (2000 Census).

Can you tell us the five main reasons businessmen should invest in Buffalo? Buffalo is very close to other major American cities. Also, in the past three years, we have reduced our property tax burden. Residential and commercial taxes have been lowered. Buffalo is known for its good neighbors.

Mayor Byron Brown took the Oath of Office as the 58th Mayor of Buffalo, New York on December 31, 2005.

38 • TurkofAmerica

Can you tell us about the Buffalo business environment for international businesses? For a foreigner investor, how long does it take to establish a company? We have a number of entities that work on business development that has streamlined the process


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close to the Canadian border? We have an extremely close relationship with Canada. In fact there is a coalition of border mayors. We get together on a regular basis to talk about issues of business development, trade and border access. We also meet with the Canadian consulate regularly to make sure that the needs of businesses in our community are met. They can successfully operate on both sides of the border. When businesses have issues, we can assign some of our economic development staff to try to help resolve any difficulties. Some investment projects in big cities have failed in part due to high production, rent and labor costs of big cities. What are your suggestions for companies that have made unsuccessful investment attempts in big cities? As you mentioned, oftentimes when international businesses think about New York State, they think about New York City. They don’t know there are several other cities in NYS. Buffalo is the second largest city of New York State. If you drove from NYC to Buffalo, it would take you 8 hours to do that. But the cost of buying an office building, the cost of buying real estate, the cost of buying a home, the cost of hiring employees in Buffalo, is a fraction of what it is in NYC. International businesses could operate in Buffalo at substantially less cost than they could in New York City, in New Jersey, in Pennsylvania and in Connecticut. We have a very low cost business environment. When it comes to the cost of real estate, real estate certainly retains value in this community. We are also blessed very skilled workforce in this community that works at a much lower cost than a comparable workforce in New York City. Mayor Brown with Cemil Özyurt, Editor-in-Chief of TURKOFAMERICA.

of doing business in Buffalo and western New York. Those agencies work together to assist businesses which want to relocate, expand and start-up in our area. They really try to expedite the process. They worked to reduce the period of time it takes to move business forward in our community. Any of those entities, including the city, could work as lead agency to assist international business. We also have over 12 sister cities relationships where we have members of our community who have relationships, in connection with the international community, in different countries that also partner with us to assist businesses trying to establish themselves in Buffalo. Which international companies are located in Buffalo? A couple of examples come to mind. One is New Era Cap Co. They are the supplier of baseball caps for Major League Baseball. They do business all over the world and they bring a lot of customers and business partners into Buffalo. Another international company is Labatt USA, a Canadian beer company. Their sales headquarter is in Buffalo. The company exports their products not only across the U.S. but also all over the world. We have many more than 20 other smaller companies that also do great deal international business in other parts of the country. They bring customers and clients into our community. Also the Buffalo/Niagara International Airport is extremely conveniently located. Even during the busiest periods, you can get from the airport to anywhere in Buffalo in 10-20 minutes maximum. On a good day you can get to downtown Buffalo within 5 minutes from the airport. When a company invests in Buffalo, that company should consider the Canadian market as well. What are the advantages of being very

In 2005, you were elected with over 60 percent of the vote. What was your secret and are you going to run for another term? I think the secret was campaigning aggressively and spending time on every single section of Buffalo, trying to present a platform that made people feel hope and opportunity. We have been successful in reducing crime over all. We have been able to reduce taxes. We have seen economic development activity increase. The city was losing population but we have seen that trend begin to slow. We are moving in the right directions. I think we have been able to accomplish a lot of things. There are a lot of people who would like to see me run for reelection. I haven’t formally made that announcement but certainly I’m looking very favorably on moving in that direction.

CITY OF BUFFALO County: Erie First Settled: 1789 Founded: 1801 Incorporated (City): 1832 City: 52.5 sq mi (136.0 km2) Population (2007): City 272,632, Metro 1,254,066 Airport: Buffalo Niagara International Airport Web: www.city-buffalo.com TurkofAmerica • 39


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DISCOVER THE NEW YORK STATE

The white sandy beaches of Jones Beach, Long Island

New York State – The Adventure Cont›nues Beyond the C›ty

here’s more to New York than just the City. In

Tfact, you’ll be surprised by all that you can see and do in New York State.

Visitors spent $53 billion in the local economy in 2008.

Places to Visit New York State’s 11 vacation regions offer activities for all ages and interests. • Discover the white sandy beaches on Long Island. • Experience New York City’s rich and varied music scene. • Travel back in time to America’s Gilded Age with a tour of the Hudson Valley’s stately mansions. • Bike, hike and even tube your way through the Catskills.

Family Fun at the State Fair in Syracuse

40 • TurkofAmerica

• In the Capital-Saratoga region, take in Albany’s stately architecture, active riverfront and ornate theaters. • Enjoy summer at an Adirondack Great Camp, on a historic train ride or on a hike to the summit of one of New York’s 46 High Peaks. • Fish, swim and explore underwater seascapes amid the magical castles of the Thousand IslandsSeaway region. • Step into a portrait of classic Americana in the Central-Leatherstocking region. • Discover the wineries, museums and scenic countryside of the Finger Lakes. • Marvel at Buffalo’s architectural gems and enco-

The Vanderbilt Mansion in the historic Hudson Valley


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unter the majestic falls in the Greater Niagara region. • In the Chautauqua-Allegheny region, immerse yourself in culture at the renowned Chautauqua Institution or get away from it all amid the rustic splendor of Allegany State Park. Things to Do Throughout the state you will find tremendous amounts of adventure, food & wine, family fun, shopping, culture, history and a host of other “must-do” activities. There’s always another reason to LOVE New York. Adventure - People who love the outdoors will find adventure here at every turn. We have dozens of world-class golf courses, 2,000 miles of hiking trails, and 3,000 pristine lakes. Not to mention the six million acres just in our Adirondack Park. You can also ski or snowboard in magnificent Lake Placid, home of two Winter Olympics. Find a camping hideaway in the breathtaking Thousand Islands. Or cast a line in Lake Champlain, with its world-famous bass fishing and many friendly, local opinions on how to catch them. New York gives you an infinite number of ways to make the perfect getaway. Food & Wine - No matter what you eat or drink in New York State, you’ll taste the care and love in every bite or sip. In our five wine regions, try award-winning bottles that hold their own on any list — like a Cabernet Franc from Long Island’s North Fork, or a fragrant Riesling from the Finger Lakes. New York City may get all the glory, but New York State is home to The Culinary Institute of America, where tomorrow’s superstar chefs learn their craft — and share a constant ingredient: local pride. Family Fun - From the parents in the front to the kids in the back, New York keeps everyone on the edge of their seats. Take a ride on the Cyclone at Coney Island, but don’t leave without trying a famous Nathan’s hot dog. And no childhood is complete without a trip to the National Baseball Hall of Fame and Museum in Cooperstown. Just about anywhere in New York makes for an unforgettable family trip. Shopping - Spend your limit in a New York minute, or search all day for the smartest bargains. At Woodbury Common Premium Outlets, you can browse in over 220 stores, including one of the world’s largest collections of designer brands. The Fashion Outlets of Niagara Falls are only 20 minutes from Buffalo. And the picturesque Hudson Valley region has antique treasures dating back to colonial times. Anywhere you find yourself in the state, chances are good that you’ll go happily home with more than you came with. Culture - Throughout its history, New York State has made important contributions to the worlds of music, art, film, theater, architecture – and the list goes on. Catch a prime example of Frank Lloyd Wright’s work by visiting the Darwin Martin House in Buffalo. See where peace, love and the spirit of the famed 1969 Woodstock Festival still carry on at the Bethel Woods Center for the Arts, just two hours from New York City. And check out the George Eastman House in Rochester, the world’s foremost museum of photography. History - From the Erie Canal to the Brooklyn Bridge. From the Underground Railroad to the New York City subway. And, from the Miracle on Ice to “A Miracle on 34th Street.” New York has been making history — and you can be a part of it. Just two hours outside of the City,

Arial view of Niagara Falls

visit the Hudson Valley’s historic homes, from the palatial Vanderbilt Mansion to Springwood, lifelong home of Franklin Roosevelt. You can even step inside Fort Ticonderoga, built in the mid-1700s. Or watch a reenactment of the Battle of Saratoga, where the tide turned in a fight for liberty. Tourism Economy Investors should know that according to a study commissioned by the New York State Division of Tourism, visitors spent $53 billion in the local economy in 2008. That is why despite the nation’s economic crisis, New York remains on track to meet an aggressive tourism spending goal of $60 billion by the year 2020, as set by Governor David Paterson. Furthermore, the tourism sector has proven a vital and growing component of the state’s economy, generating over $14 billion in taxes, including $7 billion in state and local revenues. This revenue has much to do with tourism being the ninth largest employment sector in New York, as tourism retained 678,000 jobs or 6.1 percent of all employment in the state in 2008. To attract even more visitors and investors to New York State in the future, I LOVE NEW YORK is aligning resources at the state and local levels, focusing on the development of value deals. Because the state and localities are speaking with one voice, potential travelers are receiving and engaging with our common message - causing investors to take note of its effect. Our value travel deals and all-inclusive vacation packages have been motivating travelers to come to New York and this trend is likely to continue. Visit www.iloveny.com for more information a getaway to New York State. TurkofAmerica • 41


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NEW YORK STATE EDUCATIONAL OPPORTUNIES

New York State:

Heaven of Colleges and Un›vers›t›es

Columbia University is the oldest institution of higher learning in the State of New York.

Baruch College is one of ten senior colleges of The City University of New York, the largest urban public university in the United States.

The 65,000 foreign students studying in New York State during the 2006-2007 academic year directly contributed a total of $1.86 billion to the statewide economy.

42 • TurkofAmerica

ew York is home to over 250 colleges and univer-

Nsities, one of the highest densities of institutions

of higher education in the world. There are also approximately 120 private not-for-profit institutions in the state. State-wide, there are approximately 1,160,000 students enrolled in New York State (NYS) institutions of higher education. The 65,000 foreign students studying in NYS during the 2006-2007 academic year directly contributed a total of $1.86 billion to the statewide economy. At SUNY, there are approximately 1,800 students enrolled in dual-diploma programs between SUNY insti-

tutions (across 9 campuses) and 9 Turkish universities. Daniel Doktori, Director of Higher Education for Governor Paterson, answered TURKOFAMERICA’s questions about NYS educational opportunities. How many colleges and universities are located in NYS? What would be your suggestions to students who don't have any idea about the universities in NYS? New York is home to over 250 colleges and universities, one of the highest densities of institutions of higher education in the world. New York is home to two Ivy league institutions (Columbia and Cornell)


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and seven institutions which are part of the prestigious American Association of Universities. (Columbia, Cornell, NYU, SUNY Stony Brook, SUNY Buffalo, Syracuse University, and University of Rochester). We have two public institutions here in the state, the State University of New York and the City University of New York (CUNY). SUNY is the largest single system of public higher education in the state with nearly 420,000 matriculated students enrolled across 64 campuses. CUNY is the largest single urban system in the country, with over 250,000 matriculated students across 23 campuses in all five boroughs of NYC. Between these two systems, there is an incredible wealth of diversity and opportunity for students-- from the Fashion Institute of Technology (FIT) in NYC [a SUNY college] to City College at CUNY (one of the most famous colleges in the history of the state) to Binghamton University (consistently ranked as a top 10 value in the whole of the U.S.) and more. New Yorkers attending senior colleges at SUNY pay approximately $5,000 per year in tuition, far below the regional and national averages. Students attending community colleges pay about $3,000 per year in tuition. How many not-for-profit institutions are there in the state? There are also approximately 120 private not-for-profit institutions in the state. This sector boasts such famous names as Columbia, Cornell, NYU, Vassar, Hamilton, Colgate, the Culinary institute of America, Skidmore and others. Finally, there are 50+ for-profit institutions, which primarily offer focused programs in vocational areas. In terms of where to direct students, the Governor and his Department of Economic Development are currently developing an organization called "Study New York" which will launch a website in the near future detailing most of the state's institutions of higher education. However, that is not yet launched. Could you give some information about the number of total students and how many of them are international students? State-wide there are approximately 1,160,000 students enrolled in NYS institutions of higher education. That breaks down to 928,000 undergraduate and 232,000 graduate students. Of those approximately 74,000 (or 6.4%) are international students. Do you have an exact number for Turkish students in graduate and undergraduate education? That information is available primarily with regard to the SUNY program. At SUNY, there are approximately 1,800 students enrolled in dual-diploma programs between SUNY institutions (across 9 campuses) and 9 Turkish universities. The primary destination for Turkish students is Binghamton University (one of the state's most prestigious institutions) which is located in what is known as the southern tier area of New York State. How much money have international students contributed to NYS? For the data we have available, the 65,000 foreign students studying in NYS during the 2006-2007 academic year directly contributed a total of $1.86 billion to the statewide economy. The more up-to-date data show that NYS today has over 74,000 foreign students, so the impact is even greater. One of the Governor's goals is to establish NYS as the premier destination for international students seeking

Daniel Doktori, Director of Higher Education for Governor Paterson.

higher education. Our partnership programs between SUNY and Turkey are an important part of that strategy. Most people know about universities in the downstate part of New York, but there are many prestigious universities and colleges located in upstate New York. Can you discuss the differences between studying in the different parts of NYS? While you are partially correct that many people know about the more famous downstate universities such as NYU, Columbia, Stony Brook etc., in fact many of our upstate institutions are just as well known. I mentioned Cornell, Syracuse, SUNY Buffalo, and SUNY Binghamton earlier as well as some of our most famous liberal arts colleges such as SUNY Genseo, Vassar, Hamilton, Colgate, Skidmore, and others. I would say that the primary difference is the campus experience. While attending school in NYC offers an incredible opportunity to students seeking to be exposed to one of the greatest cities in the world, an upstate New York college offers the classic campus experience full of tree-lined streets, and sports fields and small towns. As Director of Higher Education for Governor Paterson, what does your office do to bring more students to NYS? My role is to help enable the experts at the various institutions to recruit international students. Part of that is ensuring that tuition is affordable at public institutions. Another part of that is helping to ensure that the quality of education remains high through encouraging the hiring and retaining of high quality faculty. A third part of that is helping to advertise New York's wealth of opportunities through the Study New York initiative. Finally, we ensure that foreign and domestic students alike have beautiful campuses at which to study. For international students, what is the yearly median spending per student for college education in NYS? The yearly tuition at SUNY and CUNY for out-of-state (including international) students is about $12,000. When you add the costs associated with fees, room, meal plan etc., the costs rise to approximately $25,000, depending on a variety of factors associated with the location. Students attending private college have a far wider range of costs associated with attendance. The average tuition is $25,000 and, including associated costs, the total costs can be well over $40,000 to attend private college. TurkofAmerica • 43


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A GREEN ENERGY INVESTOR FROM WESTERN NEW YORK

NYS IS THE HOME OF RENEWABLE ENERGY PROJECTS

Energy Industrial park. Buffalo was the number one grain port in North American back in the days when we moved massive quantities by boat and train from the farms to the big cities in the North East, and beyond to Russia. What were Buffalo's advantages for investment? Buffalo has the massive infrastructure to move large quantities of biomass into an industrial are for processing to green energy. Can you explain the future of renewable energy and what an energy corridor means to Buffalo? How would it contribute to Buffalo’s economy? It is clear that Americans cannot continue importing oil and must diversify our energy sources. Oil is still inexpensive, but it will not stay this way, and there is a real commitment to develop sustainable, renewable energy. Even though today’s technologies are crude and costs are high, they are being developed to prepare the market for larger scale renewable technologies of the future. This is an exciting time and Buffalo has unique infrastructure on the lake and main line rail, with lots of available brown field real estate. This is why we have the first urban wind farm in the country, with much more to follow.

The $185 million dollar RiverWright Energy project in Buffalo, NY.

uffalo, NY - The $185 million dollar RiverWright

BEnergy project in Buffalo, NY will begin produRiverWright Energy project in Buffalo, NY will begin producing ethanol in mid 2010. The plant will employ 65 people. The plant will purchase 40 million bushels of corn from farmers.

cing ethanol in mid 2010. The plant will employ 65 people and will operate 24 hours a day, 350 days a year. The plant will purchase 40 million bushels of corn from farmers in upstate New York, Pennsylvania, the Midwest and Canada and sell 110 million gallons of ethanol to supply regional gas blenders who want to distribute E10 gasoline. An expected doubling of per-acre corn productivity for ethanol in the next few years, which would mean using 15 percent of the corn crop, would cut the 124 billion gallons of gas made from imported oil that we use each year by 10 percent. That’s a savings of $37.2 billion at $3 a gallon, $49.6 billion at $4 a gallon. The RiverWright plant in Buffalo will be one of 200 producing about 12 billion gallons of ethanol annually, saving an equivalent amount of $100-plus barrels of imported oil. Greg Stevens, President and CEO of RiverWright, LLC., answered TURKOFAMERICA’s questions about his energy project. Could you tell us about your the RiverWright plant in Buffalo? Why did you prefer to invest in Buffalo? RiverWright acquired the abandoned grain elevators in Buffalo, and is redeveloping them as a Green

44 • TurkofAmerica

Wasn’t making an investment under the current circumstances a big risk? How long will it take you to regain your investment? Risk is high in any new technology sector, but so are the rewards. This is the new “dot.com” boom and we are at the front end. But there are also lots of secondary plays that are less risky, in land, in services, in components. What if some Turkish investors were interested in the Buffalo energy corridor? What would be your suggestions? Come visit us. We are friendly and open to new investors. We will help you find the right opportunity. What type of investment is possible in the region beside energy? Grain and food processing investments are possible. American farmers are the most productive in the world, and the world needs food as badly as it needs energy and water. Buffalo has large tracts of land and factories zoned for food processing, and can ship to 60% of North America, including Canada, in a one day truck ride, as well as export. Can investors benefits from tax exemptions, grants and intensives? Yes, especially for renewable energy. Anything you would like to add? It was a pleasure meeting you and remembering my pleasant days in Istanbul.


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RENEWABLE ENERGY COMPANIES IN NEW YORK STATE* The western half of New York State has a rich history and vibrant present in renewable energy. Today western New York companies large and small are creating new technologies, products, and services to create fuels, systems, and components to generate energy from renewable sources. The Renewable Energy Network of Entrepreneurs in Western New York, or RENEW NY, is helping young (< 5 years old) companies work through the challenges in commercializing renewable energy products and services. BIO FUELS Blue Sky Optimum Energy, of Buffalo, NY offers a processing system that can produce wholesale Biodiesel at $1.10/gallon, comparable to current wholesale Diesel fuel prices of $1.10-1.30/gallon.

SOLAR TECHNOLOGY & INSTALLERS Canrom Photovoltaics in Niagara Falls, NY is a manufacturer of solar cells, systems, and related products for home, industrial, and custom uses. (Canrom.com) Conserval with an office in Buffalo, NY provides thermal heating products, an efficient way to solar heat large buildings. (SolarWall.com) National Solar Technologies of Depew, NY develops and manufactures innovative off-the-shelf and custom products for solar/wind energy power sources and solar lighting systems. (NationalSolarOnline.com) Performance Systems Contracting in Ithaca, NY provides a wide range of installation services to residential customers. (pscontracting.com)

Empire Biofuels, a farmers cooperative LLC, plans to build a 50 million gallons/year corn to ethanol facility in Romulus, N.Y.

Prime Energy Solutions in Scipio Center, NY designs and installs solar PV, solar thermal, wind and other renewable energy systems. (Prime-NRG.com )

McGraw Mechanical Inc., located in Lockport, NY, specializes in geothermal and HVAC design and installation. (mcgrawmechanical.com)

Quality Solar Concepts of Brockport, NY provides solar products including solar street lighting and other renewable energy products with a national marketing focus. (solar4me.com)

Mesa Reduction of Auburn, NY has developed patented size reduction, harvesting, conveying, and storage systems to handle a wide range of materials. (mesareduction.com) NextGen Fuel has patent-pending, biofuel technology based on new approaches to chemical processing that are generally referred to as chemical process intensification. (nextgenfuel.com) Northeast Biofuels in Fulton, NY is building a plant to produce 100 million gallons of ethanol per year. Northeast Biofuels will have the 3rd largest plant in the nation, and will be the first plant in NYS and the northeast. (esf.edu/energycenter/bioproeng/default.htm) Northern Biodiesel is an Ontario, NY startup company providing biodiesel to a distributor as well as government and private sector fleets in the greater Rochester, NY area. (northernbiodiesel.com) Renewable Alternative Fuel Systems in West Bloomfield sells a line of Wood, Corn, and Switchgrass Boilers and pellet fuels for heating. United Environment & Energy, LLC is a research and development organization in Orchard Park, NY that is working on a heterogeneous catalyst to produce viable, cost-competitive biodiesel fuel. (unitedee.com) Western New York Energy is engaged in construction of a 50 million gallon/year ethanol plant in Shelby, NY. (wnyenergy.com)

Renovus Energy in Ithaca, NY is an installer of wind and photovoltaic electric and solar heating systems for home, industrial, and government. (renovusenergy.com) Rochester Solar Technologies of Rochester, NY sells, installs, repairs, and maintains solar systems in New York and southern Ontario, Canada. (SolarRochester.com) Rochester Solar & Wind LLC of Rochester, NY sells, installs, repairs, and maintains solar and systems in the Rochester area. (RochesterSolarandWind.com) Solar Sentry Corp. in Pittsford, NY is a startup company developing a monitoring system to pinpoint operating problems in solar photovoltaic systems and report them over the internet for appropriate dispatch of service personnel. (SolarSentry.com) Solar & Wind FX Inc. is located in Bristol Center with an Off-Grid Renewable Energy Design and Training Center. (solarandwindfx.com) Syracuse Solar & Wind LLC of Syracuse, NY sells, installs, repairs, and maintains solar and systems in the Syracuse area. (SyracuseSolarandWind.com) Wakonda Technologies Inc. of Fairport, NY is developing solar cells and modules that enable the low cost production of high efficiency of III-V semiconductor photovoltaics. (WakondaTech.com)

Geothermal Caster Drilling Enterprises, LLC is a fourth-generation drilling company that specializes in the design and complete installation of geothermal systems throughout NY and PA for residential and commercial customers. (casterdrilling.com)

WIND ENERGY Lake Effect Energy in Buffalo, NY develops responsible and commercially viable wind power projects in western New York. (lakeeffectenergy.com)

e-vanhee of Rochester, NY is a full design, install and service company specializing in geothermal and solar hydronic heating and cooling systems, key to a zero net-energy building strategy. (vanheeheating.com)

Lorax Energy Systems in Webster, NY is the North American distributor for the Fuhrländer Wind Turbine Company which builds state-of-the-art wind turbines in 30, 100, 250, 800, 1000 and 1250 kW sizes. (lorax-energy.com)

Phoenix Geothermal Services, Auburn, NY is a designer, developer, and reseller of geothermal heating systems. (phoenixenergysupply.com)

Sustainable Energy Development of Ontario, NY is a reseller and developer of wind energy systems. (sed-net.com) *Source: renew-ny.org

TurkofAmerica • 45


46-47 AKDO

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A SUCCESS STORY

A BLESSING IN DISGUISE ridgeport, CT - “A blessing in disguise,” is

Bthe best phrase to describe Hakki AkbuAkbu-

Hakki Akbulak found out that his brother Erdogan had a malignant tumor. He asked him to come to the U.S. for treatment. When he persuaded him, he made a promise as well:

lak’s business adventures in the U.S. AkbuAkbulak, a Turkish born businessman, left Turkey when he was 17 to attend a college in GerGermany, become a CPA, then started to work for KMPG, a global network of professional services firms proviproviding audit, tax and advisory serviservices. He moved to the U.S. to work for KMPG’s U.S. branch. While he was building his career, he felt something was missing. When he moved to Germany, his brother Erdogan was 12 years old and they were not able to spend time togettogether as he wished. Everything started to change in 1990. Hakki Akbulak found out that his brot her Erdogan had a malignant tumor. He asked him to come to the U.S. for treattreatment. When he persuaded him, he made a promise as well: “If he recovered, I would quit my career as a CPA and start a new company with him.” Erdogan survived and Hakki kept his promise and founfounded AKDO in 1990.

“If he recovered, I would quit my career as a CPA and start a new company with him.”

Hakki Akbulak, President of AKDO.

46 • TurkofAmerica


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They decided to work together, but what could they do as a business? The Akbulak brothers researched what products they could import from Turkey to the United States. Hakki Akbulak settled on natural stone and within a short while granite, marble, limestone, travertine and slate became the brothers’ passion – imported not only from Turkey but from 25 other countries as well. He remembers those first two years of business by saying that “The stone industry was in the Stone Age and dealing with people was not easy.” PROUD OF UNIQUE DESIGN Supported by the manufacturing capability of AKDO's sister company Silkar in Turkey, AKDO customers enjoy the flexibility and support that only a vertically integrated company offers. AKDO’s clients also have access to a team of experienced architects, engineers and mosaic artisans. Akbulak says, “We catch the fish, Silkar take care of them.” AKDO (the name comes from the first syllable of his and a former partner’s last names) has built its reputation on “adding value to product” principles. There are plenty of natural stone companies in the region in which AKDO operates but Akbulak is proud of their unique design and products. For example, the company produced a 330 sq meter mosaic Piri Reis map, a reproduction of a famous pre-modern world map compiled in 1513 from military intelligence by the Ottoman-Turkish admiral and cartographer Piri Reis, for the wall of a shopping mall in Ankara.

AKDO created a 4,000-square-foot showroom so designers and clients can see and touch the array of choices for themselves.

“Our mosaic designers have mastered the art of creating original patterns that are instant classics, sure to stand the test of time. The key to the success of the products is that cutting-edge products are produced from classic stones to generate mosaics that have an appealing aesthetic, suitable for both contemporary and traditional environments,” Akbulak explains. PRODUCTS FROM ALL OVER THE WORLD The company’s customers are architects, designers and builders, rather than the homeowner. Hakki created a 4,000-square-foot showroom so designers and clients can see and touch the array of choices for themselves. AKDO deals with retail and commercial projects and sell its marble, travertine, and mosaics to hotels, casinos, condominium projects and so on. The company imports all over the world but 50 percent of the products come from Turkey. AKDO’s sister company Silkar is a leading manufacturer of granite, marble, antiqued stones and mosaics in Turkey. With two large facilities in Bilecik, the company has sizable investments in quarrying and processing of natural stones. Apart from the Connecticut location, which supports a staff of over 100 people, there is a thriving Californian location, a manufacturing facility in China and imminent operation in Atlanta, Georgia. There are two Silkar/AKDO showrooms in Turkey, one in Antalya, and one in Istanbul. The company’s sales increased by around 15 per cent last year. In 2007, AKDO’s turnover was $30 million, which went up to about $35m in 2008. According to Emirates Business, the company has plans to enter the Persian Gulf region in a big way. The company was recently awarded a contract in Qatar and is currently in negotiations with several developers in the UAE to obtain new projects.

AKDO imports not only from Turkey but from 25 other countries as well.

TurkofAmerica • 47


48-49ALI CINAR

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GREEN NEW YORK CITY

New York C›ty Goes Green, Needs Investors n July 2008, Mayor Bloomberg put forth a long-term action plan to achieve the PlaNYC goal of reducing energy consumption and greenhouse gas emissions from the city’s municipal buildings and operations by 30 percent by 2017. AECOM Energy assisted the development of the Long Term Plan to Reduce Energy Consumption and Greenhouse Gas Emissions from Municipal Buildings and Operations with Mayor Bloomberg’s Energy Conservation Steering Committee. To meet its 30 percent reduction goal by 2017, the city must produce 1.68 million fewer metric tons of carbon dioxide equivalents (CO2e) annually compared with 2006 levels. City government accounts for approximately 6.5 percent of New York City's total energy usage and 10 percent of its peak electricity demand. One of the people who worked with New York City on the project was a young Turkish professional, Özlem Örnektekin. Örnektekin says Turkish investors might be interested in capital-building energy retrofit pro-

I

Ali Ǜnar acinar@turkofamerica.com

“Turkish investors

jects as opportunities are large since NYC’s municipal portfolio has over 4000 buildings in five boroughs. “Another opportunity may be in clean energy production through cogeneration and solar PV projects. According to the plan, the city should generate about fifty megawatts in multiple new cogeneration plants and two megawatts of electricity from solar PV,” she said. Özlem Örnektekin has worked for AECOM Energy for over two years as a project manager, primarily in energy conservation and energy master planning projects, as well as sustainable design. TURKOFAMERICA talked to Örnektekin about New York City’s energy plan. Could you tell us about yourself? I was born in Istanbul. Due to my father’s work, we moved to Iskenderun when I was 7 and I completed my primary and secondary education there. Inspired by my mother’s exchange year experience in the US when she was in high school, I become a foreign exchange student in the United States as a senior in high school. Then the University of Denver (DU) gave me a scholarship which convinced me to continue my studies in the US. Once I got my mechanical engineering degree at DU, I moved to the East Coast, as I have always wanted live and work in New York City. My first job in New York was mainly focused on energy and transportation sectors as a project and design engineer. I most enjoyed sustainable design and energy engineering and decided to take my career path in that direction. Outside of my profession I keep involved in the community through the Rotary Club of Metro New York City, through club projects and programs. I love the outdoors so I go skiing or play tennis whenever I can.

may be interested in capital-building energy retrofit projects as opportunities are large since NYC’s municipal portfolio has over 4000 buildings in five boroughs.”

Özlem Örnektekin of AECOM Energy assisted the development of the Long Term Plan to Reduce Energy Consumption and Greenhouse Gas Emissions from Municipal Buildings and Operations with Mayor Bloomberg’s Energy Conservation Steering Committee.

48 • TurkofAmerica


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Which company do you work for and what areas are you focusing on? I have been working at AECOM Energy for over two years as a project manager, primarily in energy conservation and energy master planning projects, as well as sustainable design. Before joining my current employer, I worked for a global infrastructure company for about five and half years. As a professional interest, I contribute to USGBC’s Indoor Air Quality Technical Advisory Group and ASHRAE’s Thermal Comfort Standard 55. These days, my focus is on energy planning and carbon management. In the age of climate change due to staggering greenhouse gas emissions, my profession has become more relevant than ever. As a world community not do only we have a huge responsibility for future generations to find clean and alternative energy sources but also to use our current energy resources most effectively and plan strategically to curb the global warming trend. What are the energy investment opportunities in NY? Could you give some information about business opportunities in the state of NY? Which energy areas could be interesting for Turkish investors? About a year ago, we at AECOM Energy assisted in the development of the Long Term Plan to Reduce Energy Consumption and Green House Gas Emissions from Municipal Buildings and Operations (Long Term Plan) with Mayor Bloomberg’s Energy Conservation Steering Committee. Since then, we have been helping the steering committee implement this long term plan, which is very comprehensive and focuses on demand reduction as well as clean energy production to achieve Mayor Bloomberg’s goal of a 30% reduction in greenhouse gas emissions in municipal buildings and operations by 2017. Turkish investors may be interested in capital-building energy retrofit projects as opportunities are large since NYC’s municipal portfolio has over 4000 buildings in five boroughs. Another opportunity may be in clean energy production through cogeneration and solar PV projects. According to the plan, the city should generate about fifty megawatts in multiple new cogeneration plants and two megawatts of electricity from solar PV. The plan also has room for innovation and emerging technologies and Turkish investors might find opportunities to pilot new energy conservation or clean energy production technologies in the city’s municipal asset portfolio. Because the time frame is finite and explicit, NYC is expected to see major activity in the energy sector over the next 10 years. How do entrepreneurs get information about energy bids and projects? New York bids and solicitations are public and available online at City Records (http://a856-internet.nyc.gov/nycvendoronline/home.html) for New York City and The NY State Contract Reporter (www.nyscr.org) for New York State. The entrepreneurs should also register with the NYC Vendor list at http://www.nyc.gov/html/selltonyc/html/new_vendors.html and contact the Department of Small Business Services. What are the advantages and disadvantages of working with NYC? The biggest advantage of working with NYC is the number of opportunities available currently and in the future. The only disadvantage is that it is very competitive. After climate and energy, what do you think is the most important environmental issue facing the nation? The next big issue facing the nation and the world is water. It is impor-

tant to note that all the environmental issues are very closely connected to each other and not mutually exclusive. Energy, climate change, water, air and soil quality are intertwined so changes in one will naturally affect the others. What role can the New Yorkers play in advancing the cause of green energy? There is a lot can be done by everyone as we all make a difference to our surroundings one way or another by the choices we make in our day to day lives. As companies, governments and individuals, we all have a carbon footprint and collectively our carbon footprints add up to cause major issues. At an individual level, we can be advancing the cause of green energy by selecting the apartments we reside in based on their energy performance, improve the energy performance of our living spaces through lighting and HVAC upgrades and better controls and we can purchase environmentally friendly products and appliances. The companies have to do some strategic energy planning for their assets and reduce their carbon footprints and follow in the footsteps of NYC government’s long term plan. It appears that Obama and Congress will pass a cap-and-trade bill. What’s your position on that idea? Would a carbon tax be a better idea? Personally, the cap-and-trade bill is a step in the right direction but may fall short of the stringency required to significantly reduce greenhouse gas emissions. The idea of imposing more taxes may not be a feasible approach, especially during this financial crisis. In the future, however, a carbon tax may come to the table again as a supplement if the cap-and-trade bill does not meet the need. You have been a guest speaker at the many energy conferences. What kind of questions do you get? I have spoken to various constituencies about energy planning through conference and trade meetings. Usually the questions are about financial feasibility and the cost of implementing energy conservation projects. And the good news is that with the available technology, energy conservation measures can have a good payback, making it an attractive field for investment. TurkofAmerica • 49


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A TURKISH INVESTOR

Mehmet Bayraktar, CEO of U.F.U.K. Group.

Ufuk Serves Global Bus›ness Hor›zons

implement a universal strategy. Each sector is affected differently by this “crisis”. We are conservative spenders and investors, and fortunately we operate with low overhead costs. Our investments are all made deliberately in order to reduce unnecessary risk and preserve our market position. We do, however, foresee additional international opportunities in developing countries.

ccording to the study Critical Factors to Company

ASuccess in the Construction Industry conducted U.F.U.K. Group has recently partnered with a well-known American real estate development company to construct both commercial and residential units. Recent international investments include both hydroelectric and wind power plants in Turkey as well as healthcare projects in Iraq.

50 • TurkofAmerica

by G. Arslan, and S. Kivrak, the Turkish construction industry is one of the major industries in Turkey. It represents approximately 6% of Turkey's Gross National Product (GNP). Turkey started to export contracting services in the first half of the 1970s. Currently, many Turkish contractors have been operating within the international market. The Turkish Contractors Association announced that they have carried out $65 billion worth of projects internationally so far. The majority of them have been operating in the Russian Federation, Middle East Republics, Northern Africa and Far East regions. There are more than 30,000 active local firms and approximately 130 firms operating internationally. U.F.U.K. Group is one of the construction companies extending their operations to the U.S. market. Having developed projects in Iraq, Libya and Turkey, Mehmet Bayraktar, CEO of U.F.U.K. Group, said that he recognized their ability to establish a larger market presence. It was then that he decided to make a formal move to America and institutionalize their organization. Mehmet Bayraktar told U.F.U.K. Group’s story: What is U.F.U.K. Group’s growth strategy given the current financial crisis? How will your plans change once the economy improves? Our philosophy, regardless of the economic climate, is portfolio diversification. Since U.F.U.K. Group— aka Orizzonte Development— is internationally involved in a variety of industries, it is impossible to U.F.U.K. Group has recently partnered with a well-known American real estate development company to construct both commercial and residential units.


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Can you tell us about your current projects? The construction portion of our business is very active. Domestically, we have recently partnered with a well-known American real estate development company to construct both commercial and residential units; independently, we are constructing residential buildings and luxury boutique hotels. Recent international investments include both hydroelectric and wind power plants in Turkey as well as healthcare projects in Iraq. Your team is not only involved in many different industries (energy, construction, real estate & finance) but is also active in many countries. What are the advantages and disadvantages to your position in the economic crisis? We love having the ability to select from a wide variety of projects. Our diversity allows us to be less distracted by both industry-specific and regional crises than we would if our business was narrowly focused. We also relish the opportunity to travel and explore original concepts in foreign economies. Do you prefer to form strategic partnerships or manage projects independently? My philosophy is that people should work together in order to achieve common goals. Therefore, though Orizzonte is composed of individuals with both a shared vision and work ethic, we recognize that there are projects we are attracted to that greatly benefit from colla-

boration. We enjoy forming strategic partnerships with industry experts for mutual benefit. One must adapt to foreign work cultures when doing business abroad. How would you compare the business culture of the United Sta tes to those of other countries with which you do business? The primary attributes that define a quality organization-- such as goals, proper leadership and efficiency-- are universal. Other elements will differ from country to country. Culture, politics and legalities certainly may have an effect on business relationships, but they’ve never prohibited our business from being successful. What advice would you give to a company trying to establish a business in the United States? Please address the five most important points. Being knowledgeable about both your industry and your consumer is the most important factor in positioning your business in any market. Your knowledge will not only determine the way you market your product or service in relation to your competitors, but it also may highlight opportunities to be innovative and fulfill an industry need. Differentiation in today’s economy is essential to success. If you are not aware of the existing market players and the potential challenges you may face, then you may be unprepared to handle situations that will ultimately destroy your business. The best way to gain this knowledge is to network and become familiar with industry leaders. Even if you already have local contacts, research your competitors and the businesses that complement yours. You can learn from their experiences and even create allies. The teams you create will be your most important asset. Whether it be establishing your own loyal organization—or strategically collaborating with others, as Orizzonte often does—mutually beneficial partnerships almost always result in accelerated performance. What are your future expansion plans? For example, forming new partnerships, becoming a publicly held company, or entering new markets? We are always interested in expanding our company. Though we have no immediate plans to become a publicly held company, our strategy is to assess each opportunity on a case-by-case basis. Is there any particular meaning behind the U.F.U.K. name? “Ufuk” means “horizon” in Turkish. Not only does it refer to the diversity of our business prospects across all industrial and global horizons, but it also indicates our desire for continual self-improvement. We believe that regular innovation enables us to outperform ourselves as we pioneer across future horizons. “Orizzonte” is the Italian translation of “ufuk”.

estate ts.

Please tell us a little bit more about yourself. How long have you been in the business? My family is also in the international construction business, so I began formulating my ideas at an early age. I initially came to America to receive my education, but upon completing family projects in Iraq, Libya and Turkey, I recognized our ability to establish a larger market presence. It was then that I decided to make a formal move to America and institutionalize our organization. After careful research, I introduced more of a global business model to our firm and began implementing strategic marketing. I deliberately chose the members of my team and formed alliances with experts. As a result, I am proud to say that we have established an organization that is prepared to serve global business horizons. TurkofAmerica • 51


52 Turkey tanitim

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TURKEY & NEW YORK STATE

New York Loves Turks zation in Turkey. The Chamber supports and encourages its members to develop more business relations with New York State and the other states. • One of the leading organizations of Turkish textile industry, THE TURKISH TEXTILE EMPLOYERS’ ASSOCIATIONS, located in Istanbul, wants to gain a fairer share of the US market. They hope that the proposal, which came before the US Senate, in the early 2000’s, about arranging a trade agreement with Turkey similar to those the US has with Egypt, Lebanon, and Israel (QIZ), will boost the trade volume between two countries. It is estimated that the total amount invested in Turkey in textiles is over 150 billion US dollars. rom 1855 to 1890, 12 million immigrants entered

Fthe U.S. through Castle Garden, America's first official immigration center, today known as Castle Clinton National Monument, a pioneering collaboration of New York State and New York City.

New York State is a leading destination for international immigration. The first wave of Turkish immigration arrived in New York State in the

After the Ellis Island immigration center opened in 1892, more than 12 million people came into the United States through it. The Ellis Island immigration center was active from 1892 to 1954. Nearly half of all Americans have ancestors who came here through New York City, but this was only one of many ports of entry for ships; some others were Philadelphia, Boston and Baltimore. New York is known for its history as a gateway for immigration to the United States and its status as a financial, cultural, transportation, and manufacturing center. It is also a destination of choice for many foreign visitors.

• THE ‹ZM‹R CHAMBER OF COMMERCE, with its 124 years of history and nearly 70,000 members, is one of the strongest professional organizations in Turkey. Organic farming in Izmir is getting stronger every day. Product diversity is over 200. The Chamber thinks that all organic products should attract great attention in America. In addition, they want to see more of our olive oil products in American markets. • THE ‹ZM‹R DEVELOPMENT AGENCY,(‹ZKA) whose structure is deemed to be a revolutionary step towards multilevel governance, ‹zmir wants to soon get more popular on the global investment agenda. Especially for American companies. ‹zmir is the 3rd most developed and competitive city in Turkey. The Agency provides consultancy in every step of the investment process and coordinates and follows up the official license and permission applications. All the services are provided free of charge.

1860’s. Downtown Manhattan was their first destination, and they usually worked in manufacturing jobs.

According to the United States Census Bureau, New York State had the third largest state in population after California and Texas, with an estimated population of 19,490,297 as of July 1, 2008. New York is home to the largest Turkish population in the United States. The New York City borough of Brooklyn is a major locus for Turkish-Americans. TURKS LOVE NEW YORK Many Turkish organizations from different parts of Turkey want to do more business with New York State and bring more companies to the state. These organizations are as follows: • THE ISTANBUL CHAMBER OF COMMERCE, with its 127-year history and its consequent experience, is the oldest and biggest non-governmental organi-

52 • TurkofAmerica

• THE TURKISH EXPORTERS ASSEMBLY is the biggest contributor to Turkish American business relations. The Turkish Exporters Assembly is the umbrella organization of 45,000 Turkish exporters. Turkey is planning to reach a volume of $500 billion in exports in 2023, which will be the 100th anniversary of the foundation of the Turkish Republic. The American market is one of the targets for Turkish exporters. • THE ISTANBUL MINERAL AND METALS EXPORTERS' ASSOCIATION is one of the establishments organized on the basis of materials subject to export. It considers the products of the six Associations in its body, trying to increase exports as this is accepted as the priority goal for the development of Turkey.


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ZAFER ÇA⁄LAYAN, MINISTER OF STATE

New York Has a Spec›al Place as Our Pr›mary Trade Partner ›n the US

The US’s investments in our country have also reached significant levels. By the end of 2008, the investments of 929 active US companies in Turkey equaled $10 billion.

henever Turkey-US relations are being exami-

Wned, trade affairs and economic dimension are

shadowed by defense and politics-oriented relations between the two countries. Naturally, this was one of the matters discussed during US President Barack Obama’s recent visit to our country. As a result of the dialogues with President Obama, the obligation of supporting strategic relations between the two countries through advancements in trade and economic relations has been agreed on. This goal is complimented by our government’s primary objectives and already established policies. Although the density of our political relations with the US is not equally reflected in the trade and economic sec56 • TurkofAmerica

tors, it is an undeniable fact that trade affairs and economic relations are, through the works of the Undersecretariat, increasingly being emphasized. In 2007, the US ranked seventh among the countries we export to, and fifth among our import partners. According to the data from 2008, the US remained seventh in exports but moved up to the fourth place as regards to our imports. As these data also reflect, the US is a significantly important trade partner of ours and this bilateral trade relation continously expands. However, the trade balance is tipped in favor of the US. While our trade capacity in 2007 amounted to $8.1 billion in imports and $4.2 billion in exports, totaling a volume of $12.3 billion, in 2008 the total capacity reac-


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hed was $16.3 billion. However, of the $16.3 billion, nearly $12 billion was due to imports from US and $4.2 billion due to our exports to this country. This means that in the year of 2008 there was an increase of 46.9% in imports, while increase in exports was only 4.9%. Despite this situation, it is observable that some of our exported goods still have an important place in the US market. For example, Turkey is the US’s second largest supplier of towels, third in tobacco, fifth in marble, hunting rifles, and home textiles, sixth in olive oil, and sixteenth in iron and steel. Additionally, the US’s investments in our country have also reached significant levels. By the end of 2008, the investments of 929 active US companies in Turkey equaled $10 billion. This is an indication of US investors taking note of the advancements in our country’s intellectual and industrial property rights, as well as the opportunities presented as an aspect of our country’s geographical importance and its human power. However, in the past year, as a result of the slowing in the US economy and the Turkish lira’s increased value, a stagnation has been experienced in our exports. It shouldn’t be overlooked that this pause in our exporting to the US will probably persist throughout 2009, during which the impact of the current crisis is expected to be felt further. Under these circumstances, we need to provide solutions to shift the course of this path. Since the early 2000’s, Turkey has begun to implement an economic diplomacy that is action-orieted, proactive, and wholistic. One of the earliest examples of this approach is the establishment of the ‘Neighboring and Regional Countries Strategy.’ This was then followed by our ‘Africa Strategy,’ which was initiated in 2003. Under this framework of our strategic approaches, when the US’s role in the world economy and the potential of our bilateral trade and economic relations, along with the current realities, are evaluated, it is apparent that there exists a need for the formation of special policies towards our relations with the US. STRAYEGY FOR DEVELOPING TRADE Along this line, our ‘Strategy for Developing Trade and Investment Relations with the US,’ which was started in 2006 as a result of a detailed and goal-oriented early prepartions process, will serve as an important mechanism in our efforts to vitalize our trade and economic relations with the US under the current economic conditions. When this strategy was developed, the USs’ state-system was taken into account, each state’s unique social and legal make-up was considered, and a ‘state’ and ‘sector’ based approach was followed. Under the framework of this approach, targeted states are New York, California, Texas, Georgia, Illinois, and Florida; and targetted sectors are textiles and manufactured clothing, food, chemical goods, ironexclusive metals, leather and leather products, electronics and machines, the secondary automotive industry, processed natural stone and ceramic products, furniture, and jewelry products. A significant element of the targeted states is that they are located in different parts of the US. In light of this, a homogenous distribution is the objective.

NEW YORK HAS A SPECIAL PLACE Among the selected states, New York has a special place as our primary trade partner in the US. Our exports to New York in 2006 amounted to $1.5 billion, and this increased to $1.6 billion in 2008. On the other hand, whereas our imports from New York were worth $1 billion in 2006, it more than doubled in 2008, reaching $2.2 billion. Since New York’s economy is larger than that of several countries around the world, it also has a significant potential in increasing mutual trade affairs. To work towards making this potential real, the ‘Turkish Textile Products Fair’ and the ‘Food and Drink Sector Fair’ were organized in New York in the months of January and June, respectively, in 2008. Another special role New York plays in our strategy is that it stands as a starting point in our efforts to realize the true trade potentials with other states in the US. Consequently, it has been one of our strategic objectives to direct our companies towards distribution centers that are outside of New York and less known by Turkish firms. Numerous activities have taken place since 2006, with the partnerships of Turkish-American organizations in the US, Trade Consuls, Attaches, and Honorary Consuls, in order to strengthen the image of Turkey and Turkish products, gain American investors’ attention, and increase our exports. Trade committees, fairs and conferences, and introductory seminars in the US and Turkey are some of the activities undertaken. Our country, despite the ongoing economic crisis, is showing maximum effort to realize its trade potential with the US. By keeping in mind that patience is essential in achieving this potential, implementation of the current trade strategy will also be followed in the upcoming years. On the other hand, in a time period where even the most developed countries have taken recourse to support programs to increase their competitiveness, the role of the ‘Generalized System of Preferences’ (Genellefltirilmifl Tercihler Sistemi –GTS- in Turkish) on our country’s exports to US is important. In 2008, our country’s exports to the US, under the GTS, had a value of $962 million. Turkey is one of the most important users of the GTS. However, it has been reflected in the US media that this system, which has been extended to be functional until December 31, 2009, could take on a different course that would exclude Turkey, along with Brazil and India. In order for our country to continue benefitting from the GTS, there have been certain undertakings by our Undersecratariat of the Prime Ministry for Foreign Trade, with the US trade offices. I also mention and emphasize, in all related dialogues, the importance of the GTS for our country. For our country to get out of the current global economic crisis with the minimum damage possible; to continue to support, during this period, Turkey’s image as a quality product supplier in the US, and to advertise Turkey and Turkish products in the US market; and, as a result, to increase trade relations between the two countries, also by closing the gap that is currently to our disadvantage, our Undersecratariat of the Prime Ministry for Foreign Trade continues to carry on numerous activities. TurkofAmerica • 57


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ISTANBUL CHAMBER OF COMMERCE SPECIAL SECTION

Murat Yalc›ntas: “The B›ggest Obstacle ›n Front of Even Closer Relat›ons ›s the Lack of Informat›on” urat Yalç›ntafl (along with his team) has been re-

Melected president of the ‹stanbul Chamber of The Istanbul Chamber of Commerce, with its 127-year history and its consequent experience, is the oldest and biggest non-governmental organization in Turkey. It is also one of the most outstanding chambers of commerce in the world.

58 • TurkofAmerica

Commerce (‹TO), having received 133 out of 243 votes in an election held last February. Yalcintas will continue on in the chamber's top position for a second term. Yalcintas answered TURKOFAMERICA’s questions about his plans for his second term. You have been re-elected president of the ‹stanbul Chamber of Commerce. What was your concentration in your previous term? At the Chamber elections held in February our members brought us to power once again, which flattered us deeply. It was an honor for us. During our previous term, we concentrated on the principle tasks of increasing our service quality in our member-focused activities. At the same time, we made efforts to increase the volume of trade and overcome the difficulties confronting this. We will certainly continue this way in this second term, as well. Member-focused activities will be definitely at the center of our work program, again. Our projects directly related to our members include an e-ITO carrying all of our transactions into the electronic medium, a Green ITO addressing energy efficiency especially in industry, and a Start Exporting Program aiming at training SME’s for preparing them for international markets. This last has currently been selected as a finalist for the “Best International Project Award” at the World Chamber Congress. What will be your priority in the next term? What is your plan for international business relations? We carry out numerous tasks for our members so that they become involved in global trade more and develop their competitiveness in foreign markets. On top of these comes the organization of Turkey’s presence in international fairs on which we put a great emphasis with regard to both quality and quantity.

Additionally, we try to play an active role in international commercial and economic platforms. ASCAME (Association of Mediterranean Chambers of Commerce and Industry), representing more than 200 chambers from 22 countries around the Mediterranean Basin, has the priority among these platforms. Our Chamber, running its Presidency since 2007, plays an important role for ASCAME to become an active actor in its region and to increase its effectiveness, especially in the European Union. Recently we have started to work on improving relations with the USA, for which we are planning a business visit to Washington. We put a great importance on the American market. We aim at improving bilateral relations with the “Expand Your Exports to the USA” Program we started in 2007 and the USA Communication Campaign we are planning to conduct in the fall of 2009. In the first time in American history, the President of the U.S. visited Turkey in his first 100 days. What do you think about Turkish-U.S. business relations in this new period? With his meaningful visit, President Obama not just increased the bilateral relations to the top level, but also gained full sympathy from our society. As many specialists assessing this visit have expressed, our impression is that the relations between our countries have been carried to a new dimension, too. The first definition used to define our affairs used to be “strategic partnership”, which referred to a limited scope. However, the definition made by President Obama refers to a much broader area, implying that our countries understand each other much better now and will cooperate in many other aspects from now on. We hope and expect that our cooperation, which was mainly based on military and defense areas, will extend to trade of consumer goods, service and bilateral investment.


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You had “Expand Your Exports to the USA” Project with USCHAMBERS. What did you achieve with that project? The “Expand Your Exports to the USA” Project, initiated with USCHAMBERS and implemented with the MWW Group is a project we are proud to present in numerous platforms. Our aim with the project is to overcome problems arising from lack of information and to foster bilateral trade relations by establishing a bridge of information between Turkey and the United States. The first phase of the project took place in Istanbul, where American experts trained Turkish SME’s on topics such as the US market, marketing, legal transactions, taxes, customs, logistics and distribution channels, and trade fairs in selected sectors of processed food, natural stone, and furniture. As a second phase, we targeted American businessmen with the aim of informing them about the trade and investment opportunities in our country. We organized “Doing Business in Turkey” seminars in Chicago, Dallas, Atlanta, Mobile and Los Angeles, in which Turkish experts and representatives from Turkish companies informed businessmen about the Turkish market, thereby promoting our country and giving American businessmen a chance to ask questions about the risks and opportunities in the Turkish market. For the final phase of our project, we have put “www.us-istanbul.com” at the disposal of Turkish and American businesses. This portal provides relevant information such as economic data for the two countries, potential sectors, customs regulations, free zones, investment incentives, banking regulations, etc.

Murat Yalcintas, President of ‹stanbul Chamber of Commerce.

Another positive and concrete consequence of Obama’s visit has been the re-consideration of qualified industrial zones by the government. The business circles welcomed the fact that this project, which is expected to increase our exports to the US by another billion dollars, was put on the agenda again, after 10 years of being frozen. What is the biggest obstacle confronting Turkish-American business relations? The direct investment flow from the USA to Turkey has been 900 million USD. Our trade volume has been 16 billion USD with 12 billion in imports and 4 billion in exports. However, the Turkish business community wants to take a bigger share from the opportunities of the US market, which is still the biggest economy of the world despite the recent crisis. We believe that the biggest obstacle in front of even closer relations is the lack of information about opportunities provided by the markets mutually. The USA is seen as a distant and difficult market by the Turkish business people who are mainly focused on the European market. Furthermore, textiles and apparels industries in particular, which have a proven world-wide quality, find it difficult to enter the American market because of the quotas, tariffs, and similar restricting regulations. Similarly, the American business people do not have sufficient knowledge about Turkey’s promising opportunities and the logistical advantages it offers for reaching neighboring markets.

Which industries do you suggest to American investors who are eager to invest in Istanbul? In fact, Istanbul and New York may not be comparable in terms of regional disparities. Istanbul is a city that already grew beyond its borders in terms of both residential and industrial and commercial activities. Therefore, tailor-made strategies are being developed to preserve its historical texture against this uncontrolled expansion. As part of this strategy, Istanbul is promoted as the center of culture, fashion, trade, finance, and tourism. Therefore, relocation of centers of manufacturing and logistics such as factories, terminals, or ports to suburbs is on the agenda. This solution will not only ease life in the city for dwellers and visitors, but also ensure that the manufacturers and traders will get more appropriate services in these new campuses, especially in logistics and transportation. Likewise, the formation of “clusters” is encouraged, which bring together the enterprises operating in the same sector so that they both compete and help each other to develop. In this regard, our Chamber has been supporting clusters such as Giyimkent (Textiles City) and Kuyumcukent (Jewelry City). Istanbul will host the Cultural Capital of Europe project in 2010. How will Istanbul benefit from this project in the short and long term? The nomination of Istanbul -which we try to promote as a center of trade, finance, tourism, fashion, arts and culture- as the European Capital of Culture will naturally bring commercial profit besides the publicity opportunities. In addition to expected earnings arising from tourism and shopping, this free advertisement addressing especially the foreign business circles can be considered as another break for more income. In other words, this project is also an investment for the future of Istanbul. With the infrastructure investment made on this occasion, we will have venues with appropriate technical equipment, audience capacity, etc. to host international congresses and cultural event on a wider scale. TurkofAmerica • 59


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SPECIAL SECTION – ISTANBUL CHAMBER OF COMMERCE

TURKEY’S INVESTMENT-EAGER SECTOR:

RENEWABLE ENERGY he progress of civilizations is directly proportional

Turkey’s

Tto their use of energy resources. The way resources

growth rate as an

are being utilized becomes increasingly important in contemporary industrial societies.

emerging country has been paralleled by the increase in its energy demand. In this respect, an amount equal to 130 billion US dollars is scheduled to be invested in the Turkish energy sector in the next decade.

The ever-industrializing East strengthens its position thanks to its rich energy resources. Turkey harnesses its geo-strategic advantages by playing a key role in transmitting fossil fuels to the West. The need to minimize dependency on fossil fuels and the increasing emphasis on environmental factors made it necessary to resort to novel methods for the industrializing West. All factors taken into account, including the existing utilization levels of renewable energy resources, it is evident that those who invest in renewable energy today will have a say in the future. Unless the rate of consumption changes, the estimated lifetime remaining for oil is 30-40 years and for natural gas 100 years. These figures indicate that fossil fuels will not be able to meet to the soaring demand. Moreover, in addition to rising carbon emission levels and global warming, fossil fuel resources are also a link in this chain of lifethreatening factors. The cost of the environmental threat created by fossil fuels is equivalent to nearly 5 trillion US dollars. $130 BILLION INVESTMENT FOR THE NEXT 10 YEARS Turkey’s growth rate as an emerging country has been paralleled by an increase in its energy demand. In this respect, an amount equivalent to 130 billion US

60 • TurkofAmerica

dollars is scheduled to be invested in the Turkish energy sector in the next decade. This makes Turkey an attractive and key energy market for foreign investors. Turkey regulates its energy sector through establishing the required legal infrastructure and organizing the market, hence liberalizing the oil and LPG market. The Renewable Energy Law (2005) and Geothermal Law (2007) were enacted in line with strategies to encourage greater use of renewable resources.


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SPECIAL SECTION – ISTANBUL CHAMBER OF COMMERCE

A lot of enterprises operating in Turkey seized on this potential in the energy sector and shifted their production accordingly. In order to benefit from this potential, many power plants need to be installed and operated. Strong consortia among local and international partners are being established in order to run this process. Information concerning the tender procedure and licensing in the energy sector is available at the Energy Market Regulatory Authority. http://www.epdk.gov.tr/english/default.asp HYDRAULIC ENERGY Under average rain conditions, Turkey enjoys a gross hydraulic potential of 433 TWh/yr. While 216 TWh/yr of this potential is technically producible, 125 TWh/yr is economically feasible. 510 hydraulic power plants are due to be constructed with a total installed capacity of 34455 MW in order to generate 125 TWh/yr. The 150 hydraulic power plants currently operational in Turkey have an installed capacity of 13395 MW, which corresponds to 36% of the overall potential. In addition to that, smaller water resources, which are estimated to have a potential of around 25 TWh, can be alternative investment areas. SOLAR ENERGY Turkey is among the countries with high solar energy potential thanks to its geographical location. Average sunshine duration is 2,640 hours per year and 7.2 hours per day. Turkey’s solar energy potential is calculated to be 380 billion KWh/yr of electricity. This figure is equivalent to the electricity generated by a natural gas cycle plant with a total installed capacity of 56,000 MW. In particular, Konya, Antalya and the Southeastern Anatolian Project (GAP) region have remarkable potential in generating electricity out of solar energy. Installed solar collectors mainly used in the Mediterranean and Aegean regions are equal to 12 million m2 and the technical solar energy potential is 76 TEP. Annual generation volume is 750,000 m2. Turkey ranks second among European countries in terms of its solar energy potential. WIND ENERGY The amount of wind-based electricity generation in Turkey, which was 55 million 147 thousand KWh in 2004, jumped to 357 million 551 thousand KWh in 2007. As of February 2009, the total installed capacity of the 17 licensed wind turbines in operation is 433.35 MW and the total capacity under construction is 402.40 MW. The total value of projects with a turbine supply contract is 667.60 MW, whereas the grand total value is 1,503.35 MW. The capacity of wind turbines in Turkey, which was 17 MW in 2002, presently amounts to 433.35 MW. The goal is to increase this figure to 15,000 MW by 2020. More efforts have recently been undertaken to build wind turbines locally, which created a 15-billion-USD market. If it makes good use of its potential, Turkey has the capacity to become a leading country in Europe in the area of wind energy. In particular, the Aegean and Eastern Thrace regions enjoy the highest wind energy potential. 62 • TurkofAmerica

The 150 hydraulic power plants currently operational in Turkey have an installed capacity of 13395 MW, which corresponds to 36% of the overall potential.


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GEOTHERMAL ENERGY Located on the Alpide belt, Turkey has a tremendous geothermal potential. It is among the top five countries in the world in geothermal heat and spa facilities. Turkey ranks 7th in the world and 1st in Europe with a geothermal energy potential of 31,500 MW. Majority of this potential, namely 78%, rests in Western Anatolia. 55% of the geothermal areas in Turkey are appropriate for heating purposes. 1.2 million sq m of greenhouse area and 65 thousand households in 15 locations are heated by geothermal energy. Although 1500 MW of Turkey’s geothermal energy potential is appropriate for electricity generation, the actual amount used for this purpose is 27 MW. A geothermal power plant with a capacity of 25 MW is currently under construction. According to the ninth development plan drawn up by the State Planning Organization of Turkey covering the period of 2007-2013, the required amount of total investment to attain the targets in geothermal electricity generation, heating, greenhouse heating, drying and thermal tourism is USD 3.25 billion and the consequent economic value to be created is USD 16 billion per year. The 2013 objection for electricity generated by this method is 4.4 billion KWh/yr. BIOFUEL ENERGY Biofuel is defined as any fuel with an 80% minimum content by volume of materials derived from living organisms harvested within the ten years preceding its manufacture. It is used in the forms of biodiesel, bioethanol, and biogas. Biodiesel:. Compared to the 22 million tons total fuel consumption in Turkey, the installed capacity for biodiesel is 1.5 million tons. Among the oilseeds used to produce biodiesel, Turkey cultivates mostly sunflowers (more than 1 million tons) and cotton (nearly 1 million tons). In line with the suitability to agriculture, the Aegean and Mediterranean coasts of Turkey are the regions that produce most of the biodiesel. Bioethanol: Compared to the 22 million tons total fuel consumption in Turkey, the installed capacity for bioethanol is only 160,000 tons. Biogas: The amount of producible biogas equivalent to Turkey’s animal waste potential is 3.2 billion m3/yr. Turkey’s biomass resources are agricultural, forest-based, animal, organic and urban wastes. The existing waste potential is around 8.6 million TEP, 6 million of which is used for heating.

TYPES OF RENEWABLE ENERGY Hydraulic Energy Solar Energy Wind Energy Geothermal Energy Biomass

Installed Capacity 13395 MW 420.00 TEP 433.35 MW 27 MW 6 million TEP*****

Potential 36000 MW 380 billion kWh/yr* 78,000 MW** 1,500 MW*** 8.6 million TEP****

*

Equivalent to the amount of electrical power generated by a natural gas cycle plant with a total installed capacity of 56,000 mw. ** Approximately 78,000 MW worth of application was received as a result of the call issued by EMRA on 01.11.2007. *** Turkey’s geothermal energy potential is 31,500 MW, 1500 MW of which is appropriate for electrical energy generation. **** 2 million TEP of this amount can potentially be utilized as biofuel. ***** The amount used for heating

TurkofAmerica • 63


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TURKEY IS THE SHINING STAR OF ORGANIC FOOD PRODUCTION

The production and export of organic products has predominantly concentrated on hard shelled fruits (hazelnuts, pistachios, walnuts, almonds and the like), dried fruits (apricots, mulberries, apples, pears, plums and similar products), frozen fruit and vegetables, fresh fruit and vegetables, spices, and legumes. Other organic products that have been produced and exported include rosewater, rose oil, olive oil and cotton. Among the countries of the European Union, the markets that present the greatest export potential are those of Germany, the Netherlands, Switzerland, the United Kingdom, Finland, and the Scandinavian countries (Sweden, Norway, Denmark.) Outside the EU, the markets with the greatest export potential are the United States, Canada, Australia and Japan.

Turkey ranks 37th in the production of organic food, estimated to be at a level of about 48 billion dollars, but the country is among the highest ranking in both Europe and the world in some specific products.

64 • TurkofAmerica

hroughout the 60-year period from

Tthe founding of the Turkish Re-

public until 1980, when a transition was made to export-based industrial production, agriculture preserved its identity as the fundamental sector of the Turkish economy. Today, despite the fact that it has yielded somewhat to industry and the service sectors as a result of economic change and development, agriculture still remains a strong and significant force in the economy. The onset of globalization and technological advances led to changes in methods of agricultural production. As more economical and organic farming methods began to be practiced, the goal of agricultural production shifted from searching for high-productivity and high-efficiency solutions for providing food for the population to the concept of organic farming--an environment-friendly, low-input process that sorted out all production expenses through fine economic and organic filters.

TURKEY RANKS 37th IN THE PRODUCTION OF ORGANIC FOOD Although a large portion of the organic products produced in Turkey have been exported, recently an increasing demand in the domestic market has caused expansion in the share of the domestic market in total organic food production. Supermarket sales have also consequently increased, influenced by a rising consciousness on the part of both producers and consumers. As it is today in many countries such as Germany, in Turkey too, organic markets have emerged on a neighborhood basis, bringing lively activity to the sector and significant opportunities to investors. Turkey ranks 37th in the production of organic food, estimated to be at a level of about 48 billion dollars, but the country is among the highest ranking in both Europe and the world in some specific products. In 2008, 14,926 registered farmers produced 530,000 tons of organic products on 167,000 hectares (ha) of farmland. Out of Turkey’s total organic production, standing at an estimated 200 million dollars, a portion corresponding to 30-40 million dollars is exported. In recent years, due particularly to the demand of the European, US and Canadian consumers, an increase has also been seen in the export of organic fabrics and textile raw materials.


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On the other hand, Turkey meets the need for certain other products through imports. Turkey obtains products such as organic sunflowers, wheat, oats, muesli, biscuits and chocolate from a number of countries that include Germany, Belgium, Russia, the countries of Central Asia, and Syria. WHY CHOOSE TURKEY FOR ORGANIC PRODUCTS AND FOOD PROCESSING? Since a good portion of farming families work at low wages, labor-intensive organic farming provides a golden opportunity for investors in Turkey looking for inexpensive labor. At the same time, since synthetic chemicals are almost never used, it is much easier for Turkey to make the transition to organic farming. The existence of all four seasons in different parts of the country, rich water resources and the productive nature of the soil all allow different crops to be grown in different regions of Turkey. It should always be remembered that the same crops can be produced with the use of organic methods. In addition, the present potential of organic production in the country can be clearly seen when it is considered that farming in Turkey has still not been completely modernized and that there is still a wide population working in agriculture. It must be acknowledged that farmers in the agricultural sector who have not gone through modernization will find it easier to pursue organic farming methods. The unpolluted soil and water resources available, the agricultural biodiversity and the cultural legacy of traditional knowledge and experience that actually supports organic farming may be cited as some other driving forces that contribute to creating investment opportunities in organic farming in Turkey. Additionally, Turkey’s predominantly young population is another reason that justifies the growing number of organic products and organic food production facilities around the country. Turkey complies with EU agricultural regulations as well as general world standards, making every effort to implement these norms. From another perspective, Turkey’s proximity to major food markets and the strength of its ability to access foreign markets makes the country a land of opportunity for foreign investors interested in organic food production.

exporter certification costs. The organization also takes on the cost of analyses carried out at DTM laboratories. The Special Provincial Administrations also support irrigation, certification and analysis costs within their own budgets. Turkey plays an important role in cooperating with the world’s leading organic food suppliers and exporters such as the Good Food Foundation, Organic Republic and Slow Food. Enterprises and agricultural organizations in Turkey as well, such as the Koç Group, Ülker, the P›nar Group, Elite Naturel, CarrefourSa, Tarifl, Çaykur, and Fiskobirlik, also engage in organic food production.

STATE SUPPORT FOR ORGANIC FOOD PRODUCTION State support for organic food production also constitutes another valid reason investors are attracted to Turkey. In this context: The Ministry of Agriculture and Rural Affairs provides a subsidy of TL 18 per thousand square meters. Ziraat Bankas› (Agricultural Bank) applies a 60% interest reduction on loans to organic food farmers. The Foreign Trade Undersecretariat (DTM), subsidizes 50 percent of TurkofAmerica • 65


66-67SAGLIK

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HUGE POTENTIAL IN HEALTH TOURISM FOR INVESTORS

Güral Harlek Thermal Resort & Spa in Kütahya.

urkey is a prominent destination in global health

Ttourism with respect to its abundant springs. TurAlthough the current revenues obtained from health tourism are a mere 375 million dollars, this market is expected to reach 1 billion dollars in Turkey in 2010.

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key’s geothermal energy potential has always attracted attention thanks to the presence of more than 200 thermal centers and popular tourist destinations such as Istanbul, Izmir, Marmaris and Fethiye. Since Roman times, Western Anatolia has been renowned for its spas and baths. Furthermore, Seljuk and Ottoman hamams and modern physical therapy and rehabilitation centres boast a significant place in the health tourism sector. With the advance of contemporary alternative medicine, Anatolia has become a venue which has plenty to offer to local and international patients alike. Beside therapeutic tourism, Turkey ranks 7th in the world and 1st in Europe in terms of its thermal springs. In addition to natural springs, climate is another important contributor to health tourism. Altitudes ranging from 800 meters to 2,000 meters above sea level create healthy climatic conditions. Turkey has a highly favourable location in this respect. Superior-quality services offered by thermal tourism resorts and the world-famous healing springs of spa resorts such as Yalova, Gönen, Bolu, Balçova, Sand›kl›, Pamukkale,

Harlek, Sivas-Çermik and Erzurum-Pasinler contribute to the growth of this sector. In this area of tourism, which meets both therapeutic and entertainment expectations, Turkey offers world-class healthcare services thanks to over 1000 spas, abundant bed capacity and the public-private cooperation that has flourished particularly in the last 5 years. Consequently, Turkey can compete with European countries in the quality of the services it offers, which is at the same level or higher than European standards. 365 PRIVATE HOSPITALS AND 18,500 BEDS Health tourism is readily associated with thermal therapy centers and hotels. However, the sector’s contribution to the manufacturing industry should also be emphasized. Low-cost and affordable treatment programs and remarkable planning skills to maximize the effectiveness of the treatment during a short stay make Turkey an even more attractive destination. 365 private hospitals with an existing capacity of 18,500 beds and investments in state-of-the-art medical products strengthened the position of the country in this sector. There are 62 public hospitals with a bed capacity of 24,551 and 139 private hospitals with a bed capacity of 7,861 in Istanbul alone.


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Turkey is a centrally located and thus easily accessible destination. Spas, alternative medicine practices, fully-equipped healthcare personnel and advanced healthcare technologies are other advantages Turkey can offer. Moreover, in addition to labor being qualified and cheap, foreign currencies such as the Euro, the British pound, and the dollar have a high purchasing power in Turkey. Turkey has other attractions, such as a rich historical heritage, natural beauties and entertainment centers. All these features account for Turkey’s huge potential in health tourism. There are big price advantages Turkey offers in medical procedures specifically. Extended delays in healthcare services provided by the state and the high cost of private healthcare services encourage patients from Western Europe to travel to Turkey. In addition to low prices, favorable exchange rates make Turkey an even more attractive destination. It is very important to note that a surgical procedure, which, for instance, costs ? 3000 in Germany, can be performed in Turkey with the same precision and quality at approximately one-third of the cost, including the flight, accommodation, hotel and other travel expenses. Furthermore, Turkish physicians can practice in all fields of contemporary and alternative medicine simultaneously and with the same level of expertise as their counterparts in the most developed countries. The affordable rates in dental care and dentistry, eye surgery, infertility treatment, aesthetic surgery and alternative medicine practices are attractive particularly for U.K and US residents who are not covered by health insurance at home. Cancer treatment, brain surgery, orthopaedic procedures and aesthetic surgeries are the key specialization areas which can potentially contribute to Turkish health tourism. Institutional and individual efforts have been influential in the development of health tourism in Turkey. Thanks to communication media like the internet, patients have realized that health tourism is more than just thermal and spa resorts. The demarcation line drawn between thermal/spa tourism and medical health tourism prompted the Ministry of Health and the Ministry of Culture and Tourism to take action.

PATIENTS FROM ACROSS THE WORLD Support mechanisms have been instituted to attain world-standard infrastructure and boost marketing activities. For example, World Eye Centers (Dünya Göz Hastanesi), which established an external relations department to cater to the increasing number of foreign patients in 9 languages is a hallmark of the progress achieved. The number of private hospitals receiving patients from across the country and the world for diagnostic and therapeutic purposes keeps rising. There are plenty of Turkish hospitals with internationally recognized medical expertise in specialization areas such as Medical Oncology, Radiation Oncology, Cardio-Vascular Surgery, Neurology and Plastic Surgery-Aesthetics. Anadolu Medical Center (Anadolu Sa¤l›k Merkezi), which is annually audited by the John Hopkins International Committee in line with its strategic partnership with John Hopkins International to ensure maintenance of service standards; Ac›badem Health Institutions (Ac›badem Sa¤l›k Grubu) which has cooperated with the Harvard Medical International Hospital since 2003; Medical Park Hospitals (Medical Park Hastaneler Grubu) which applies the standards of and is accredited by the Joint Commission International (JCI), thus becoming an almost global center, are a few such examples. Recently, these hospitals have remarkably increased the number of foreign patient admissions and made subsequent investments. Patients who come to the country to receive treatment do not only contribute directly to the overall national economy but also provide indirect support by promoting the host country and attracting more tourists. The average annual yield of 145 billion dollars obtained from global health tourism justifies the urgency to make the essential infrastructure investments. Although the current revenues obtained from health tourism are a mere 375 million dollars, this market is expected to reach 1 billion dollars in Turkey in 2010.

Anadolu Medical Center has brought together US board certified doctors and the foremost academicians of Turkey to lead the health care field in ‹stanbul, Turkey.

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TURKISH TEXTILE EMPLOYERS’ ASSOCIATIONS SPECIAL SECTION

Halit Narin:

“The Turk›sh Text›le Industry Isn’t Rece›v›ng Enough Attent›on from the U.S.” ne of the oldest civic organizations in the world,

Othe International Textile Manufacturers AssociUS officials should never forget that Ataturk’s Republic of Turkey has the status of the US’s most important ally in this region.

Halit Narin, President of International Textile Manufacturers Association and the Turkish Textile Employers Association.

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ation, the ITMF, was established in 1904 in Zurich following the lead of English cotton producers. Halit Narin, who was elected to the presidency of the organization in the year of its 100th anniversary, 2004, is an attentive businessman familiar with the trends in the Turkish and international textile sectors. Currently managing Narin Textile, which was established in 1934 by Narin’s father, he has also been the president of the Turkish Textile Employers Association since 1972. Narin spoke to TURKOFAMERICA about the economic crisis of today and its impact on the textile sector. As the president of the ITMF, what is your analysis of the current global crisis? How is this crisis affecting the world’s textile sector? The crisis has caused serious damage to the textile and manufacturing sector, along with all other sectors. The difficulty first arose as a result of the bre-

akdown of the credit loan sources and the shrinking of the market. In almost all groups of products, a decrease has been observed, especially after September 2008. There are various speculations about how long the crisis will last. How we are to get out of the crisis or in what time phase we will is actually dependent on not only the political and economic policies that we will present, but also on to what extent we will gain the trust of people. Unfortunately, I think we are having some problems especially with the notion of trust. Otherwise, we would have expected all of the economic packages arranged and implemented by numerous countries to at least significantly decrease the uncertainty created by the crisis. As a result of the inability to act quickly and in a timely manner on implementing certain proposed solutions, and also as a result of opportunistic behavior engaged in by some, the efficiency of the agreements have, unfortunately, lessened. Although the crisis had a truly destructive impact on especially the financial sector, we notice that Turkish banking sector has not been affected by this at all. What is the reason for this situation? As opposed to the impact it made on many other countries, the crisis caused shrinking in the real parts in Turkey, not in finance. As you know, the Turkish economy experienced a serious crisis stemming from the financial sector in 2001. The Banking Regulation and Monitoring Council (BDDK), established following this crisis, put the banking sector under surveillance and increased its regulations in this sector through its radical decisions. The Turkish banking sector has not been affected by the global crisis at all; it has started funding international financial institutes, and reached serious profit levels. In the core of the crisis, insufficient supervision of the finance sector and risky maneuvers made in the


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high-competition atmosphere have played significant roles. When Lehman Brothers declared bankruptcy, the proportion of their risky credits were 25% instead of 5%, and their leverage proportion was 1/45 instead of 1/13. These were unbelievable numbers, especially for a country like the USA which was considered to be transparent. Turkish officials in BDDK had presented a report for the USA about the risk factor that the US banking sector carried, but apparently treasury officials did not pay much attention to this report. What is the condition of the Turkish textile and manufacturing sector? The Turkish textile and manufacturing sector carries with itself a significant accumulation and experience stretching from the Ottoman period to our day. We are trying to complement our experiences in production with our creativity in order to increase our shares in the world market. Especially in the aftermath of the removal of quotas in 2005, the increase of import pressure from the Far East impacted Turkey, as it has several other countries. In light of this change, the sector shifted from what we call the basic production to a different model of production involving more advanced technological goods, and innovative products with high profit potential. Our sector is still going through this stage and, with the help of the dynamism and flexibility it possesses, it protects its strong role in the world market despite certain disadvantages. Turkey, with its population of 70 million, the majority of whom are young people, is a big market. With the flexible model we have carried from the past to our times, Turkey is trying to get out of this crisis with as little damage as possible by maintaining a client-focused approach in production. How do you analyze the status of the Turkish textile and manufacturing sector in the US market? Turkey is one of America’s most important allies within the region. Strategic partnerships have been achieved on various issues. Such relations, especially in relation to military and strategic questions, have reached out abroad. In Korea in the Far East, in Afghanistan in Central Asia, in Yugoslavia in Europe, US and Turkish forces had made efforts in the name of world peace. However, as of now, there hasn’t been enough progress in the economic field as there has in military alliance. The biggest reason for the Turkish textile sector to not receive a sufficient share in the US market is not related to the elements of manufacturing but rather to the Turkish investor and the industrial sector not receiving enough attention and support from the USA. For example, although a proposal came to the US Senate, in the early 2000’s, about arranging trade agreement with Turkey similar to those the US has with Egypt, Lebanon, and Israel (QIZ), the expected consensus was not reached. US officials should never forget that Ataturk’s Republic of Turkey, with its over 80 years of republican history and over 600 years of statehood experience, has the status of the US’s most important ally in this region. There are significant similarities and common ground in the world view of the two societies. Turkish industrial man has the experience and courage to invest in every part of the world but nevertheless it is important for these two socieities to create synergic attempts together. As Turkish businessman and on behalf of our union, I would like to emphasize that we are in support of Americans’ attitude towards those institutes and companies functioning in a manner that violates human rights. How do you expect US-Turkish relations will be shaped by the elec tion of the new US president, Obama? President Obama has been a source of hope not only for the Ameri-

can people but for several other countries in the world. Obama offers a great opportunity to fix relations damaged in the aftermath of 9/11, and to avoid the claimed clash of civilizaitons between Christianity and Islam. Obama, with his past and leadership, has been welcomed by the Turkish people very quickly; and especially due to his visit to Turkey, short after his election, and his stand and behavior during this visit, receieved all of our appreciation. Obama’s visit, from the point of view of Turkey, is an indication of the importance he places on our country and our commonalities. This visit stands as a support for further collaboration in the attainment of our common interests in the future. However, this visit just by itself, of course, will not suffice. What needs to be done is to determine the political and strategic paths to be followed in regions of common interest, such as the Middle East, Central Asia, the Far East, the eastern Mediterranean, and Europe, and in issues of mutual concern, such as terrorism, Cyprus, the European Union, nuclear weaposn, secure energy attainment, and trade. The US and Turkey, with its roots coming from Central Asia to Europe and Northern Africa and with its thousand years of experience in statecraft, are important players for world peace. Common advantages are evident. Turkish foreign policy, since the inception of our republic, has been shaped and doctrined by our founder Ataturk’s words: “Peace at home, peace in the world.” ABOUT ITMF The International Textile Manufacturers Federation (ITMF) is one of the oldest non-governmental organizations. It was founded in 1904, at a meeting held in Zurich and convened at the initiative of the British cotton spinning industry. It established its headquarters in Manchester, England. For many years, and throughout both World Wars, the Federation represented and promoted the interests of the cotton spinning and manufacturing industries of the world. The Federation in 1978 changed its name to "International Textile Manufacturers Federation.” On the basis of its present structure and scope, the Federation is qualified to represent the broadest possible segment of the world's textile industries. WHO IS HALIT NARIN? Halit Narin was born in 1930 in Istanbul, Turkey. After Istanbul Erkek High School, he studied Textile Engineering at the Bolton College of Technology in the United Kingdom. He is Chairman of the Board of Narim Tekstil Isletmeleri A.S., which was founded by his father Mr. Nurullah Narin in 1934. Narin Textile is a producer of denim and corduroy with a capacity of 50 tons per day. Narin is the President of the Marti Otel Isletmeleri A.S., which is a listed tourism company with hotels, holiday villages and marinas having 2,500 beds and a 370-yacht capacity. He is one of the founders of the Turkish Textile Employers Association and Chairman of the Board since 1972. He was the Chairman of the Turkish Confederation of Employers Associations (TISK) between 1974 and 1989. He is still the Honorary Chairman of the confederation. He was the Chairman of the Istanbul Textile and Apparel Exporters’ Association (ITKIB) between 1975-1978 and 1987-1989. He was elected Vice President of the International Textile Manufacturers’ Federation (ITMF) in September 2004. He is also an active member of many other associations and organizations. Narin has built 11 schools, which currently serve 10,382 students. He is member of educational, health, sports and art organizations and also some foundations. Narin is married and has four children, some of them active in his business. TurkofAmerica • 69


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TURKISH TEXTILE EMPLOYERS’ ASSOCIATIONS SPECIAL SECTION

The Largest Investors ›n Text›le Mach›nes

Turkey follows China as the second largest investor in textile machines in the world. It is estimated that the total amount invested in Turkey in textiles is over 150 billion US dollars.

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he Turkish Textile Employers’ Associations (abbreviated as TTSIS in Turkish) is a dynamic civic organization that is active in the textile sector and brings under its roof the leading companies within the sector. As an organization formed in 1961 in Istanbul by eight industrial institutes, the Union (TTSIS), through its experiences since then, has been representing the Turkish textile sector with success on both national and international stages.

T

Our union had also gained the trust of actors in the social arena as the first employers’ union in Turkey to sign group labor contracts with labor unions, and also as an organization that is considerate of employers’ and workers’ views in all eras. It holds to the principle that continuity in the work force is maintained and strengthened through social dialogue. TTSIS performs various activities with the purpose of seeking solutions to the difficulties its member companies encounter in the working environment; protecting, under legal frameworks, their interests in economic, judicial, and social fields; advancing the existing standards; and meeting the technical and legal needs brought by modern living conditions. ACTIVE ROLE IN THE INTERNATIONAL ARENA The main reasons for our union taking an active role in international organizations are to make possible, on an international level, the realization of the sectoral strength possessed by Turkey, one of the leading countries in textile, and to promote implementation of fair trade agreements and protection against unfair competition. Conscious of the primacy of the responsibility of raising modern and well-adapted individuals for the better future of our country, our union takes part in numerous projects related to education and research. With a main theme of university-industry collaboration, our union organizes a number of seminars and publishes many research reports and other publications. As part of the union’s work, our activities are publicized through our own publications as well as other print and visual media channels; current issues related to the textile sector in general are monitored and watched through national and international media sources. In addition to presenting our country and our sector in the most active manner possible, our union also emphasizes, as an element of its activities abroad, developing networks with potential international partners and clients. In light of his enduring active performances on the international stage, the current President of TTSIS’s Board of Directors, Halit Narin, was elected as the president of the world’s largest civic organization in the textile sector, the International Textile Manufacturers Federation (ITMF), in October of 2008.

As an organization placing great value on international cooperation since its establishment, our union, in addition to its strong affiliation with ITMF, is also being represented through high-level positions in Eurocoton and Eurtex; and, aside from its influence in the Turkish textile sector, it is taking leading roles in shaping the international politics in the sector. TURKISH TEXTILE SECTOR WITH NUMBERS With its integrated organizational structure, including stages of production from cotton to thread, thread to fabric, fabric to manufacturing; and with its experienced human strength, its innovative and adaptive characteristics, and the volume of its domestic market, as well as its geo-strategic place, the Turkish textile sector stands as one of the most significant actors of the world’s textile sector. Today, the Turkish textile sector, as a result of the level of export power it has reached and its quality employment capacity, is one of Europe’s two biggest trade partners, along with China. Turkey also follows China as the second largest investor in textile machines in the world. It is estimated that the total amount invested in Turkey in textiles is over 150 billion US dollars. Within the Turkish economy, which is ranked as the 17th in the world, and 6th in Europe, the textile sector, with its high share in the total of the industrial capacity, has a locomotive status in the country. Contemporarily in the textile sector in Turkey, there are nearly 43,000 active companies, of which 25% export. Among the 500 largest industrial institutes in Turkey, about 20% work in textiles. Turkey’s total export value gained in textiles is nearly $25 billion; of these goods, 60% is exported to the European Union, to which Turkey stands as the second largest supplier in the sector. Following the pressure that emerged as a result of the low-cost production wave in the Far East, the Turkish textile sector entered into a phase of serious change and shifted its production efforts from basic goods to more advanced technological and innovative items. Of all the foreign companies actively investing in manufacturing in Turkey, 20% do so in the textile sector. TurkofAmerica • 71


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Advertorial – TURKISH AIRLINES

in 2001, the figure thrived by 120% and grew to 22.5 million in 2008. While the number of passengers who flew with Turkish Airlines increased by 114 percent from 2003 to 2008 to hit 11.5 million, the share of domestic passengers has boomed by 118 percent. The airline hosted 11 million domestic passengers in 2008. In the last half decade, Turkish Airlines has attracted 12.1 million more passengers and achieved a 116 percent growth. Turkish Airlines is projected to host approximately 26.7 million passengers and serve more than 2 million passengers per month in 2009.

TURKISH AIRLINES’ PASSENGERS FEEL LIKE STARS urkey’s flag carrier airline, Turkish Airlines, works

Thard to make Istanbul an import hub of the region.

While Turkish Airlines served 10.2 million passengers in 2001, the figure thrived by 120% and grew to 22.5 million in 2008.

Turkish Airlines achieved a significant result with a 15% increase in its number of passengers even as the market was experiencing a serious contraction. “Despite the prevailing grim expectations, however, we would like to continue our growth in 2009 as well, indeed to boost it even further with additional new successes. This year is going to be one of new objectives and innovations for Turkish Airlines,” said Temel Kotil, CEO and Member of the Board of Turkish Airlines. Kotil stressed that they had already reaped the results of the fuel conservation measures they introduced for the first time in the middle of last year with the IATA Green Team and achieved a savings volume of 114 million dollars at the end of the first year. “However, from our standpoint, the environment-friendly consequences of this project are more valuable,” he added. Turkish Airlines has increased its fleet size from 65 to 127 in the past five years. Nine new aircrafts are scheduled to join the Turkish Airlines fleet in 2009, which will increase its fleet size to 132. Turkish Airlines ordered 59 new aircrafts in 2005 and their accession to the fleet was realized in the following years. DESTINATIONS Turkish Airlines has boosted its flight network by 44 percent over the past five years. While the total number of destinations has varied between 103 to 107 since 2001, the figure rose to 142 in 2008. Flights to and from Ufa, Meshad, Sao Paolo, Binghazi, Dakar, Nairobi have started on international routes. Flights to Goteborg, Lviv and Toronto are planned within the 2009 calendar year. BOOM IN TOTAL PASSENGER NUMBER While Turkish Airlines served 10.2 million passengers

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BUSINESS CLASS PASSENGERS The number of business class passengers increased from 571 thousand in 2006 to 766 thousand in 2007. This upward trend in premium passengers continued in 2008 and the passenger count reached900 thousand, indicated a 57.5 percent growth since 2006. Parallel to the growth in fleet size and destinations, Turkish Airlines’ seat capacity demonstrated a significant rise after 2004. As of 2003, total seat capacity was 15.4 million. This figure grew by 101 percent in 2008 and reached 30.1 million. NUMBER OF FLIGHTS The declining trend in Turkish Airline’s number of yearly flights continued until the end of 2003. However, with the new aircrafts joining its fleet and new destinations introduced, the number of yearly flights began to boom after 2004. While we undertook around 101 thousand flights in 2003, this rose by 88 percent to 190 thousand flights at the end of 2008. BOOM IN PROFITS As for financials, Turkish Airlines’ net profit increased by 328 percent in 2008, actualized as 874 million dollars. Turkish Airlines’ net profit has improved by 748 percent in 3 years, from $103 million in 2005 to $874 million in 2008. Turkish Airlines’ operating profit was $70 million in 2005. This number has grown by 496% in 3 years to reach $334 million at the end of 2008. The increase in Turkish Airlines’ operating profit was 26 percent. FINANCIAL PERFORMANCE COMPARISON Turkish Airlines announced a net profit of 599 millions Euro, only 1 million Euro less than the net profit of Lufthansa, the German carrier whose revenues are approximately 8 times higher than those of Turkish Airlines. Major airlines operating in Europe, such as Air France – KLM, Austrian airlines, Scandinavian and Finnair, have announced losses in 2008. 2008 was not a bright and positive year for the carriers operating in United States, either. While carriers such as United Airlines, AA, US Air and Continental declared net losses, Southwest Airlines managed to make a profit of 346 million Euro. Under such circumstances, Turkish Airlines performed better financially than the above-mentioned American carriers, as of 2008.


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INVEST IN ‹ZM‹R SPECIAL SECTION

Why Should You Invest In ‹zmir? ‹zmir is the third biggest city of Turkey. ‹zmir has the second largest industrial capacity, after Istanbul. From the past to the present day, one of the most important Mediterranean port cities. ‹zmir has four ports: Alsancak, Alia¤a, Dikili and Çeflme. Alsancak is the second biggest container port of Turkey. A population of 3,739,353 with an average age of 28. Most European and Asian countries are quite reachable from ‹zmir with a flight of 4 or 5 hours. There are 18 organized industrial zones, 2 free zones, and a technology development center in ‹zmir. Seven universities with an average of 16,000 graduates per annum. 52% of the workforce are engaged in the service sector, 31% in industry and 17% in agriculture. Geographically blessed with a warm climate, 300 days of sunshine a year and a fertile agricultural hinterland.

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‹ZM‹R CHAMBER OF COMMERCE SPECIAL SECTION

MAKING THE BEAUTIFUL ‹ZM‹R A WORLD CITY AND BRAND CITY zmir has an importance in Turkish-American rela-

‹tions as well. The first American company that made

investment in Turkey was David&Orfey Company which was established in 1811. Also the first American Consulate was established in ‹zmir.

Populated by more than 3.8 million people, ‹zmir is the third biggest city of Turkey.

The city has 90 years of fairs tradition. ‹zmir International Fair that is among one of the biggest international fairs in the world and ‹zmir hosts more than 30 specialized trade fairs. Among these fairs, it is possible to find worlds biggest, such as marble fair. ‹zmir Chamber of Commerce, with its 124 years of history and nearly 70.000 members, is not only ‹zmir’s but also one of the strongest professional organizations of Turkey.

It has the second largest industrial capacity, after Istanbul.

Ekrem Demirtas, President of the ‹zmir Chamber of Commerce answered TurkofAmerica’s questions about ‹zmir and its future. Would you give brief information about ‹zmir Chamber of Commerce? What are the studies of your Chamber to increase the foreign trade of ‹zmir in particular? ‹zmir Chamber of Commerce, with its 124 years of history and nearly 70.000 members, is not only ‹zmir’s but also one of the strongest professional organizations of Turkey. Our Chamber, gaining its strength

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from law, is working on one hand to improve its members’ trade and provide competition for trade activities of its members and on the other hand continues its activities on the vision of “Making the beautiful ‹zmir a world city and brand city”. E-Chamber project is successfully implemented and technological developments are always included in work processes in our Chamber. In addition, different activities are organized by our Chamber’s dynamic and experienced staff. In accordance with the demands of our members, educational courses are organized, research studies are conducted for sectoral development and meetings are gathered. We conduct special studies especially for our members that are massively gathered, and we closely follow ‹zmir’s all problems. In addition to our projects that are conducted for making ‹zmir a brand city, we also give great attention to projects regarding social responsibility. In the context of all these studies, foreign trade, fairs and tourism have a special place. As if considered that we cannot reach our desired wealth by doing trade only among ourselves, we are working to carry our members to foreign markets. Our Chamber is the first and only Chamber in Turkey giving fair incentives to its members. In accordance with this target, we organize foreign and domestic missions, organize umbrella stand organizations and give foreign trade education.


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To use the experience of our EXPO candidacy, we established “International Events Department” in our Chamber and we took the results of this department’s studies in a short time. Firstly, in September 2008, we organized “I. Mediterranean Port and Trade Cities: Past and Future Congress” in which the presidents of chambers of commerce and academicians came together. We decided to organize this congress every year in ‹zmir. Thanks to this, ‹zmir gained an international congress. After this congress, in November 2008, we organized the 9th North South European Economic Forum in which we hosted the presidents of Croatia, Montenegro, Bosnia with our President. On the other hand, I would like to remind that ‹zmir has 90 years of fairs tradition. In addition to ‹zmir International Fair that is among one of the biggest international fairs in the world, ‹zmir organizes more than 30 specialized trade fairs. Among these fairs, it is possible to find worlds biggest, such as marble fair. Therefore, we give great importance to support fairs. Our Chamber continues to study for taking big international organizations to ‹zmir in 2009 in the fields of culture, economy and sport.

We help and give great support to foreign investors’ that are keen to cooperate with our members and invest in ‹zmir. I would like to underline that we are ready to give all kind of support to American companies and work as a guide for them in ‹zmir in terms of investment and trade. What are the ways to make ‹zmir, as being opening gate of Turkey to the world, an international magnet? Several cities in the world are economically developed by organizing successful international activities. For instance, Olympics of Barcelona in 1992, Montreal EXPO in 1967, Olympics of Sydney in 2000 paved the way for fundamental transformation in these cities and these cities became magnet. These kind of successful organizations not only contribute to the economy of the city but also develop tourism and contribute to job creation. Therefore, cities face challenging candidacy race to host Olympics, EXPOs, world cups and cultural festivals. When a city organizes an international activity, this activity works as a driving force. Our Chamber organizes cultural, sportive, political and economic activities in order to make ‹zmir “a brand city” in global sphere and attract the attention of press and media. We believe that such kind of activities keep city’s liveliness. We began the process in 1992 to host EXPO 2000. The evidence of difficulty to be a member of these organizations is our accepted candidacy for 2015 that we started the way for EXPO 2010. Our Chamber was the driving force during our EXPO candidacy. ‹zmir’s EXPO candidacy caused liveliness and great excitement in the city. Although we lost against Italy’s Milano, our city had great success for being a brand city, voiced its name in the world and made infrastructure works. The most important thing here is ‹zmir learned to play for high stakes. Today, big infrastructure investments, which were in our candidacy dossier, are being implemented by government and local authorities.

If one of the American Company plans to invest in ‹zmir, which sectors can be considered? Sectors like clear energy and organic food, which are raising sectors in America, have potential in ‹zmir? If we look at the foreign companies in ‹zmir, we see that they mainly focused on wholesale and retail trade, and manufacturing industry. There are different sectors in ‹zmir for foreign investors; some of these sectors are construction, agriculture industry, logistics, renewable energy, cruise tourism, thermal tourism, health tourism and IT industry. Organic farming in ‹zmir is getting stronger every day. In the first years, few products were produced organically but today product diversity is over 200. The organic production of agricultural products like apple, tomato, wheat, grape, olive, olive oil, lentil, hazelnut, apricot, berry, fig, cruet, pea and pistachio are increasing. From organic honey to organic wet fruits and vegetables and dried tomato, I think all organic products should attract great attention in America. In addition, we want to see our olive oil products more in American markets. Today, we export 11.000 ton olive oil to U.S. and we continue to work to increase this volume. For renewable sector, ‹zmir has great opportunities. ‹zmir is the third important region of Turkey in terms of wind potential. ‹zmir has 31 % of Turkey’s wind electricity station power; however it uses just 1 % of its potential. In addition to wind energy potential, ‹zmir’s geothermal energy potential is very powerful. ‹zmir’s geothermal energy resources, with its very high temperature, are very suitable for electricity energy production. ‹zmir has an importance in Turkish-American relations. The first American company that made investment in Turkey was David&Orfey Company which was established in 1811. Also the first American Consulate was established in ‹zmir. Regarding the last 200 years, what are the projects of ‹zmir Chamber of Commerce in order to reanimate the trade relations with the United States? A century ago, from the inner port that used to take place in front of our Chamber’s building, ships were leaving for New York once a week. As you underlined within your question the first American Consulate was established in ‹zmir. Definitely there are strong ties between Turkey and the United States. Regarding the strong ties, United States’ strong economy and the potential of our region, we find the relations between ‹zmir and the TurkofAmerica • 75


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‹ZM‹R CHAMBER OF COMMERCE SPECIAL SECTION

Especially at the beginning of the 1990’s thousand of Turkish Jews from ‹zmir immigrated to the United States. Today, there are still Americans who see themselves as from ‹zmir. Do you think of benefitting from those connections in implementing the commercial potential of ‹zmir? What will be your demand from your citizens living in the United States with the mediation of us? Our citizens, who are from ‹zmir, living in the United States can pioneer the promotion of ‹zmir in the United States. Our citizens can help us in organizing bilateral trade delegations. Bilateral trade can only improve with the bilateral meetings. At this issue ‹zmir Chamber of Commerce is ready to cooperation and ready to help. What are sectors that the businessmen from ‹zmir want to make connections in the United State? Which products or services from ‹zmir can attract the customers in the United States? Those sectors can be underlined as ready wear products, processed natural stones, machines and tools, jewelry products, vehicle parts, food products and tobacco. Besides the ready wear products, there are great opportunities in food, tobacco and jewelry products in ‹zmir. The productions in these sectors are not only made according to the international standards for the world markets and the production capacity is extremely high. In order to increase the export of those products from ‹zmir to the United States, it will be useful to make special promotions and to increase the fair participations.

President of the Executive Board of the ‹zmir Chamber of Commerce

United States deficient. For that reason we are building projects. United States Office of the Commercial Counsellor is working in our Chamber’s building. We give great important on this issue because we believe with the help of the Commercial Counsellor we can improve the relations between ‹zmir and the United States. We have strong relations with the Commercial Counsellor. With the closure of the United States Consulate in ‹zmir, we took great effort to reopen the Consulate; but we did not reach to a conclusion. For a period of time the Counsellor worked as a representative but then it was again closed. Although we did not reach to a conclusion in reopening the American Counsellor in ‹zmir, we will continue to work on this issue. It is important to have direct flights from the United States to ‹zmir. There must be direct flights from New York to ‹zmir. We are currently working on this issue. Our Chamber gives great importance in order to improve tourism in ‹zmir. In this context we are working on a special project in order to improve the cruise tourism in ‹zmir. We got the outcome of our project. In five years time, ‹zmir started from zero and became one of the first three cruise ports in Turkey. Also we give importance hosting the American tourists coming by the cruises to ‹zmir. Starting from 2007, also with the initiative of our Chamber, American cruise lines started coming to ‹zmir. When we look at the figures, in 2006, 11.000 American tourists visited ‹zmir with the cruises. In 2007, this number nearly tripled and reached to 37.594. And in 2008 the number of American tourists reached nearly to 39.000. We want to increase this number. We are still working on this issue. Lastly we attended cruise fair in Miami and promote our city. 76 • TurkofAmerica

By the end of 2007 the number of American companies in Turkey reached up to 57. Is this figure enough for the potential of ‹zmir? What can be done in order to increase this figure? I believe, whether the number of 57 American companies in ‹zmir increases ten times, this figure is not enough for the potential of ‹zmir. Within the global economic system, ‹zmir is an improving city and every single day ‹zmir economically grows bigger and bigger. For that reason the potential of the city is not stable. ‹zmir Chamber of Commerce is working hard in order to increase not only the number of American companies but also the number of other companies as well. Together with the symposiums, fairs and roadshows organize and by giving great importance to the promotion of the city, ‹zmir Chamber of Commerce is working hard to increase the number of foreign companies in the city. The last official visit by the ‹zmir Chamber of Commerce to the United States took place in May 7-15, 2000. From that period of time a lot of American officials, the ambassador, consular and commercial attaché, visited the ‹zmir Chamber of Commerce. But no other visits were made in order to examine the American market. Are there any plans in order to make visits to the United States aiming to accelerate the trade relations especially at the post-Obama period? We invited President Obama to ‹zmir right after his visit to Turkey. His visit to ‹zmir is important in the promotion of ‹zmir and the historical relations between ‹zmir and the United States. Besides, we are planning to organize road-shows to various countries. We are planning to promote ‹zmir and take the attention of the businessmen during our visits. New York is one of the cities we planned to organize a road-show and we are still working on this issue. What is more, ‹zmir Development Agency Investment Support Office will organize a visit to the United States. We may also join this visit.


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REDISCOVER LIFE: ‹ZM‹R ith a history of thousands of years and unique

‹zmir is one the rare cities maintaining its identity characterized by port and trade from ancient times to today.

Wnatural position, ‹zmir deserves the name “the Pearl of Mediterranean”, not only of Aegean; and it had become the center of civilizations flourished in the region. As one of the most modernist and dynamic cities of Turkey, with the historical, cultural, economic and social values it retains, ‹zmir has been influenced by every civilization it had hosted throughout the history, and the cultural diversity accrued has paved the way for enriching today’s texture of the city. Amid the intersection of roads on land, sea and air; the city of ‹zmir has a unique geographical position that could be identified as unexampled location of Turkey in the world. With the history of nearly 8,500 years, ‹zmir is one the rare cities maintaining its identity characterized by port and trade from ancient times to today. As to the position of the city, ‹zmir provides an important trade center swaying the markets ranging from the westernmost of Europe to easternmost of

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Asia. Most European and Asian countries are quite reachable from ‹zmir with a fly of 4 or 5 hours. Populated by more than 3.8 million people, ‹zmir is the third biggest city of Turkey. It has the second largest industrial capacity, after ‹stanbul. More than half of the ‹zmir population is under 30 age, and 73 % of the population constitutes the labor force of ‹zmir. ‹zmir provides 11 % of industrial production, 8 % of foreign trade, and 4.4 % of agricultural production of Turkey. According to 2008 data, ‹zmir exported $7.8 billion and imported $8.2 billion. FOUR PORTS ‹zmir has four ports; Alsancak, Alia¤a, Dikili and Çeflme. Alsancak, the largest among others, is the second biggest container port of Turkey. Alsancak Port has an annual commodity capacity of 12 million tones, and serves for 18 % of export and 12 % of import of Turkey. Also, 90 % of total foreign trade of Aegean Region is made through this port. Addition to the existing ports, Çandarl›


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Port is in the project phase and planned to be constructed at the end of 2010. Once the Çandarl› Port project is finished, the port’s annual commodity capacity will reach 20 million tones. In recent years, ‹zmir has become an attraction center for passenger transportation by cruise ships. Thanks to the efforts of ‹zmir Chamber of Commerce, the number of tourists coming by cruise ships visiting ‹zmir increased to 320 thousands in 2008, which was zero in 2005. More than 360 thousands of tourists are expected to visit ‹zmir in 2009. The Chamber publishes “‹zmir Guide” in eight languages every year to be distributed to passengers of cruise ships. Besides, the experts of the Chamber welcome the tourists and provide all kinds of information for them at the port. There are 18 organized industrial zones, 2 free zones, and a technology development center in ‹zmir. Especially, the free zones in ‹zmir provide great opportunities for businessmen thanks to proximity to ports and Adnan Menderes Airport, high standards in servicing, developed and running infrastructure. FIRST FREE ZONE Aegean Free Zone (ESBAfi) was established in 1990 by a Turkish-American partnership. ESBAfi is the first free zone founded by private entrepreneurship. It is the largest free zone in terms of employment, and the second largest in terms of trade volume in Turkey. Currently, the companies within ESBAfi provide employment for nearly 15,000 people. Furthermore, the third US Space Camp in the world exists within ESBAfi. The other free zone, called Menemen Leather Free Zone, is the only free trade zone in Turkey specialized in leather industry. The free zo-

ne applies competitive technologies in processing leather and manufacturing leather products. International ‹zmir Fair, which greatly contributes to promotion of Izmir in the world and increases the trade opportunities, has made Izmir a fair-city by means of various activities organized throughout a year. The Fair attracts thousands of visitors every year and it is the place where the latest innovations are first presented to Turkish customers. ‹zmir has made a name for itself as educational center with long-established and successful high schools and universities. Currently, ‹zmir has 7 universities, three of them being state, and the rest being foundation universities.

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‹ZM‹R DEVELOPMENT AGENCY SPECIAL SECTION

‹ZM‹R: T THE RISING CITY OF AEGEAN AND TURKEY

urkey’s third most developed city, ‹zmir is on the edge of making a big leap, attracting foreign direct investment (FDI) for the unlimited potential of the city. By using the advantage of the ‹zmir Development Agency (‹ZKA) whose structure is deemed to be a revolutionary step towards multilevel governance, ‹zmir will soon get more popular on the global investment agenda.

‹ZM‹R: AN OVERVIEW The historical, cultural, geographical, social and economic advantages of ‹zmir all together constitute a perfect environment for investors. The city is a welcoming region in all aspects, considering its physical, social and economic advantages. As of 2008, ‹zmir is the 3rd largest city in Turkey with its population of 3,795,978 following ‹stanbul and Ankara. It reflects higher levels of population density and urban population compared to national average but at the same time, the city is also a region of vast and fertile green fields, river basins and mountains, coastal lands which provide a wide range of social, cultural and economic dynamism for the city. According to several studies held by public and private institutions such as State Planning Organization or International Competitiveness Research Institute, ‹zmir is the 3rd most developed and competitive city in Turkey. The developed and competitive nature rises not only from the city’s physical and historical advantages but also from its highly skilled human capital.

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The city hosts a very young and dynamic population with a highly developed education level and vocational skills. There are 5 universities in ‹zmir offering a wide range of academic and technological studies almost in any field and 2 more are on the pipeline, starting education in the 20092010 academic year. These universities also offer R&D and innovation services for public and private sectors. There are also a wide range of vocational training opportunities in ‹zmir in terms of both geography and institutions. The city also hosts several international high schools offering education in many European languages. American Collegiate Institute, Lycée Saint Joseph d’‹zmir, DSI German School are amongst them. ‹zmir has always been a gateway for different cultures as the city is located as one of the most significant opening gates of Anatolia, the world’s oldest bridge between the West and the East. Therefore, the city has a historical nature of intercultural dynamism where different cultures meet in terms of social, cultural and economic activity.

‹zmir can be reached by land (road and rail), air and the sea. It is connected to national highway and railway networks. International access is provided by the recently extended Adnan Menderes Airport, which is just 18 km from the city center and has a capacity of 9 million passengers per year, and through ferry connections to and from Alsancak and Çeflme International Seaports. 55% of Turkey’s container exports pass through ‹zmir Alsancak Seaport. Consequently, the city’s comprehensive integration into the national and international transportation networks provides easy and fast access to ‹zmir. A MAGNET FOR INVESTMENTS ‹zmir contributes a substantial 8% to GNP, with the main sector activities centering around agriculture, industry, commerce and tourism. The city is one of the busiest export gateways of Turkey. In terms of production, 15% comes from agriculture, 15% from commerce, 35% from industry and 35% from services and tourism.

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Important factors playing a substantial role in attracting investors and corporations are; developed logistics, fertile hinterland, organized industrial zones with modern infrastructure and export possibilities. The dense population of the city also makes it an important industrial center, and thus also a large market for the food industry. For industry, ‹zmir creates 11.7% of total added value and in addition, it handles 20% of national exports and 12% of imports. ‹zmir hosts 10% of the largest 500 industrial corporations of Turkey and nearly half of all industrial corporations of the Aegean Region. Organized industrial and free trade zones in ‹zmir are developed on 3 main axes (north, east and south) around major highways with a total area of more than 2000ha. The main organized industrial and free trade zones are: • Atatürk Organized Industrial Zone • Kemalpafla Organized Industrial Zone • Tire Organized Industrial Zone • Alia¤a Organized Industrial Zone • The Aegean Free Zone (ESBAfi) ESBAfi is the first free trade zone founded and operated by a private company in the country, which generates more than 4 billion USD per year in international trade. The Zone generates over 15% of the total trade volume of free trade zones in Turkey. Tourism sector is an important source of economic activity in the city. By 2008, approximately 1.074.088 foreign visitors accessed the city by air and sea. Main attractions are the natural beaches, with the following examples of tourist options: yachting destinations such as Çeflme, surfing opportunities in Alaçat›, pilgrimage destinations like Ephesus, Ayasuluk and Mount Parnassos, spas and facilities with therapeutic amenities in Balçova, Pergamon, Bay›nd›r and Çeflme. Sectors offering potential for investors in ‹zmir are renewable energy, logistics, agro industry, life sciences, hi-tech industries and education. With its abundant geothermal sources and wind energy generation potential, ‹zmir provides investors with many opportunities for the use of alternative energy. Primary renewable energy resources in ‹zmir are wind, geothermal and solar. Also, there are considerable incentives provided by The Renewable Law and Electricity Market Licensing Regu82 • TurkofAmerica

lation of Turkey. The logistics capacity of ‹zmir is currently not fulfilled; there is a need for new investments. Agriculture is a fundamental economic activity in many districts of ‹zmir. Food, beverages and textile sectors need to be further developed. Although ‹zmir’s indicators in health sector are better than the national average, health institutions are concentrated in the city center and there is a need for new health investments in many other districts. ‹zmir ranks 5th in Turkey in education. However, the sector needs improvement in quality and access. As of February 2009, 1.271 companies with foreign capital have been established in ‹zmir. 60 companies with US capital have been set up in ‹zmir as of end 2008. Giant international companies having investments in ‹zmir include British American Tobacco, Tesco, Hugo Boss, Krone, Delphi, Akzo Nobel, Japan Tobacco International, KT&G and Hayes Lemmerz. The investment climate in Turkey, which has gone through a reform in 2003, offers free (international) movement of capital, profits, divi-


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dends and salaries. There is no screening, approval, share transfer or minimum capital requirements for foreign investors.

ning a grant scheme system for the emerging fields of the city. The grant scheme is open to all willing to relocate in ‹zmir.

WHO CAN GUIDE YOU INVESTING IN ‹ZM‹R? ‹ZKA Investment Support Office is the one stop shop for all the business people who wish to relocate in ‹zmir. The Agency provides consultancy in every step of the investment process and coordinates and follows up the official license and permission applications. All the services are provided free of charge. Being the first development agency ever established in Turkey, ‹ZKA is promoting ‹zmir’s investment opportunities to investors seeking lucrative chances ahead. Investment promotion activities steam from the vision of regional development plans. ‹ZKA coordinates the planning of the city in accordance with the central government policies together with local authorities. Multilevel governance system introduced with ‹ZKA is fresh and exciting both for the locals and the potential business people of ‹zmir. ‹ZKA is also run-

WHAT DO THE GLOBAL CEO’s THINK ABOUT ‹ZM‹R? “‹zmir is a very organized city and according to my point of view, it is one of the typical Mediterranean cities, yet it is also one of the best. ‹zmir has a great future potential. ‹zmir is a young and fresh city. However, it is also an ancient city around which many civilizations were founded. We are happy to be here.” Simon King, Tesco Kipa, CEO “‹zmir is a surprisingly good city, with a lot of open minded people, excellent education level and lots of opportunities for the future. This city is much more exciting than the other cities of Turkey. ‹zmir has gone through a serious development process in years.” Paul Schwaiger, Sun Express, General Manager

“The city of ‹zmir provides an excellent base for the investors as it is ideally located as a gateway for both Europe and the Middle East. It boasts a world class airport making it easily accessible both directly, as well as via a short flight from ‹stanbul. Its infrastructure is both modern and efficient and this combined with its prime location, cosmopolitan business atmosphere and welcoming population give the city all the ingredients for any successful business venture.” Stuart Chase, Swissôtel Grand Efes ‹zmir, General Manager.

A new city center for ‹zmir is planned with skyscrapers dotting the landscape spanning 500ha. It is expected that 10 billion USD investments in this area will truly change ‹zmir's skyline.

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ADVERTORIAL

THE SHINING STAR OF THE TURKISH OLIVE OIL SECTOR ÜÇÜKBAY A.fi. , which delivers the pride of refined sunflowerseed, corn and soybean oil to all the kitchens that have adopted the priorities of health and taste for a quarter century with its‘’Orkide’’ brand, has also achieved the status of a preferred brand in olive oil in the last three years.

K

Kuçükbay A.S. procures its olives from the Edremit-Ayval›k environs where the most precious and preferred olives of Turkey grow and makes production under modern technological conditions without human touch.

KÜÇÜKBAY A.fi., established in 1979 in Izmir, is the leader of the vegetable oil sector today with its daily refined oil capacity of 1,000 tons and is rightfully proud of satisfying 35 percent of the yearly oil production needs of Turkey and 15 percent of liquid oil sales with its yearly 250,000 liquid oil capacity. Küçükbay A.fi. , which gained the trust of its consumers from the first day it started production, has become indispensible in Turkish and world kitchens by adding Riviera and extra-virgin olive oil to the healthy, delicious and qualified product range it produces to meet the intensive demand coming from its buyers worldwide and its domestic consumers as the consequence of the trust felt in the Orkide brand. Turkey, with the geographical position it is located in and the Mediterranean climate characteristics it has, is one of the leading olive and olive oil producers of the world along with the other Mediterranean countries such as Italy, Spain, Greece and Tunisia. The average annual production is around 140,000 tons. Nearly 60,000 tons of this amount is consumed domestically and the remaining 80.000 tons is exported. The olive oil obtained from the regions, ranging from the nortwest to the southwest, where oil olives grow shows variation in its aroma, flavor and texture depending on the olive type. Küçükbay A.fi. procures its olives from the Edremit-Ayval›k environs where the most precious and preferred olives of Turkey grow and makes production under modern technological conditions without human touch. THE CAREFULLY SELECTED OLIVES Orkide Extra-Virgin Olive Oil, which is produced from the carefully selected olives of Ayval›k and the Gulf region, which yield the highest quality natural olive oil of Turkey, carries the purity and health of nature to kitchens. The use of extra-virgin olive oil is mostly preferred in cold dishes, salads and hors d’oeuvres. The Riviera type of olive oil, which is produced by mixing refined olive oil obtained by physical and chemical refining with natural olive oil at the ratio of 20% and is the most consumed kind of olive oil, is preferred for cooking of all meals, both for its delicious taste and its lightness. Orkide olive oil, this miracle of nature, greets its buyer in a wide packaging range extending from classical glass bottles to fancy/boutique style glass bottles, pet bottles, and tin packaging.

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Ahmet Küçükbay, President of Küçükbay A.fi.

Küçükbay A.fi. is increasing its share of Turkish olive oil exports from day to day. In Japan, a country which consumes a great deal of olive is and which is known as a difficult and sensitive nation when it comes to food imports, Orkide olive oil is marketed by Baharu Corporation, a major Japanese food distributor. Küçükbay A.fi. which intends to realize the structure actualized and successfully ongoing in Japan in the U.S.A. as well, established a marketing and distribution company named TURKBAY LLC in October 2008 and initiated an important structuring to present Orkide olive oil to the American consumer. With its experienced sales staff and perfect infrastructure, TURKBAY LLC is today in a position capable of providing Orkide products to every preferred point of America. In addition to Japan and the USA, Orkide olive oil is exported to many countries, such as Hong Kong, Indonesia, Singapore, Norway, Germany, Tanzania, Uzbekistan, Barbados, the Netherlands Antilles, the Maldives and the Seychelles. THE MIRACLES OF OLIVE OIL The miracle of nature olive oil has a significant place in human health. -It accelerates the brain development and bone strengthening of children. - It contains mainly vitamin E and vitamins A,D,K. By virtue of these vitamins it is effective in renewal of cells and delaying aging of tissues and organs. - It nourishes the skin and protects hair. -Due to the linoleic acid it contains, it is given to babies weaned from mother’s milk(a few drops after 4-5 months) by mixing it into skimmed cow’s milk. It serves as natural nutrition for babies. -One of the most important properties of olive oil is its positive effect on cardiovascular diseases. It has been observed that its reduces the risk of heart attack. A tablespoon of olive oil (14 gr.) contains 120 calories. In weight-loss diets, it is extremely damaging to take olive oil out from meals. - It is again olive oil which makes the Mediterranean nutrition model so attrac-

tive and recommended by specialists. 60% of the Mediterranean diet consists of carbohydrates, 30% of oil and 10% of protein. Again olive oil can also efficiently be used in elimination of intestinal, urinary tract and gallbladder inflammation. REDUCING ARTERIOSCLEROSIS For non-Mediterraneans, olive oil carried the magic of distant countries until recent times. It was either used in exotic regional meals or just disappeared between kumquats and saffron on the shelves in special foods department of the markets. People were generally acquainted with olive oil in restaurants. It was unjustly thought to be heavy and fattening, because these restaurants used oils mostly of low-quality, and sometimes adulterated by various additives, from animal fats to glycerine. However, by virtue of research published in the 1970’s, olive oil started to gain a better reputation. The research revealed that the people with lowest rate of heart diseases in the West were the Mediterraneans. It was thought that olive oil, plentifully consumed by the Mediterraneans, played a part in this. Olive oil is rich in its mono-unsaturated fat ratio as well as in antioxidants, which help reduce arteriosclerosis. At the end of the 80’s, an unprecedented spike in olive oil consumption in western countries was experienced. This situation originated from the coincidence of a series of positive developments. Consumers were now much more interested in conscious nutrition, much more enthusiastic in prefering natural products which do not contain additives, and they were ready to pay high prices for good quality products. As people began to explore the attraction of many imported foods, from exotic mushrooms to Sumatra coffee, olive oil also started to take its own share in this. TurkofAmerica • 85


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WASHINGTON BACKSTAGE

Get ‘er Done, Terry! erry McAuliffe and I go back a long way. In 1991, my

Ttravel agency, AIM Travel, serviced Terry’s law firm

Ali Gunertem agunertem@turkofamerica.com

Politics is politics but I can guarantee you that Terry will be fair to Turkish American concerns. He is very familiar with Turkey and, in his own words, “Istanbul is my

McAuliffe-Kelly-Rafaelli’s travel needs. I was in Terry’s office at least three times a week, delivering airline tickets. In 1995, Terry was with President Clinton’s team, helping him to get reelected. I was there again with my cousin Sahir Erozan to raise money and host events at our family restaurant, called Cities, in Washington, D.C. We have done fund raisers, presidential dinners, inauguration parties and Terry did not miss any of them. They were his events! In the first half of the 2000’s, I was away from all this and busy starting a family. Coincidentally and –luckily-- I missed the last miserable eight years where Democrats were only a footnote. Then Terry reappeared, chairing the Democratic Party and thenSenator Hillary Clinton’s presidential bid. Once the dust settled after the presidential elections, I read in the Washington Post that Terry is running for Governor of Virginia. This is my own backyard: the state of Virginia! Since the current Governor Tim Cane got the appointment to chair the DNC from President Obama, the governor’s seat is up for grabs. This midterm election is scheduled for November 2009. For the Democratic primary, which will take place in June 2009, in addition to Terry, the candidates are Brian J. Moran, a former state delegate from Alexandria and Rep. R. Creigh Deeds from Bath County. On the Republican side there is only one candidate, former attorney general Bob McDonnell. Today, here I am again, this time to help Terry out and get elected. The company I work for is the only Green and Carbon Natural Telecom Company in the U.S, BetterWorld Telecom, and it happens to be located in Northern VA. Since I work for a green company I figured I could

favorite city in the world.”

Terry McAuliffe with Ali Günertem, TURKOFAMERICA Washington, D.C. representative and the member of Advising Committee.

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help him a great deal with the upcoming and happening green movement. Turk of America readers know that I have been writing about Turkish-American participation in US local elections for quite some time now. The timing of my last article about election strategies for Turkish Americans could not be any better. The time is now. Get involved! I ask all Turkish-American voters in VA to rally behind Terry McAuliffe. There are so many reasons. One important reason is Terry is a Get ‘er Done guy. If Terry decides to do something he gets it done. He is on the right side of issues like jobs, green jobs, education, energy, and bringing new business to VA. There is another big reason that he needs our help. Politics is politics but I can guarantee you that Terry will be fair to Turkish American concerns. He is very familiar with Turkey and, in his own words, “Istanbul is my favorite city in the world.” He has been there with former congressman Gephardt, and played a huge role in Clinton visits, both those of the president and of first lady Hillary Clinton. Terry McAuliffe is good for our state because he is a no-nonsense guy. He won’t climb the wall, he will burst through it. He is not a politician and he never was one; he never ran for office and never got elected. He is simply a determined entrepreneur who wants to make our state very competitive for jobs and business while improving education and energy issues. I am all for that. When our state was run like a business during the administration of former Gov. Mark Warner, now (D) US Senator from the state of VA, it was a golden era. I am sure Terry can take our state there again. Get ‘er Done, Terry.


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ESBAS INDUSTRIAL PARK AND FREE ZONE SPECIAL SECTION

TURKEY’S NUMBER ONE FOREIGN DIRECT INVESTMENT RECIPIENT:

ESBAfi The ESBAfi Industrial Park attracts the

he ESBAfi Industrial Park is located in Turkey’s second

Tlargest industrial and commercial city, Izmir. Pre-

sently, accommodating manufacturing and commercial activities of some 300 companies from 40 countries, the ESBAfi Industrial Park, employs 15.000 people and achieves an annual trade volume of around $4 billion. As one of the leading export bases in Turkey, ESBAfi’ location, only 15 minutes away from the Port of Izmir, and 5 minutes away from Adnan Menderes International Airport, presents a significant advantage and convenience for industrial and trading companies. The ESBAfi Industrial Park is developed and operated by ESBAfi, an American based Company. Some 360 people work at ESBAfi’ miscellaneous departments. ESBAfi holds a number of ISO certificates namely, ISO 9001, 14001, 18001 and HACCP. ESBAfi is the only Industrial Park in the world, besides having the advantages of being a free zone, holding all these certificates.

majority of foreign Current Status at ESBAfi Companies continue proceeding with their investment plans at the ESBAfi Industrial Park despite the global financial turmoil. One of the world’s leading companies in the automotive supply industry, Gates (an American based company), decided to build a plant in ESBAfi after having looked into investment opportunities in other countries. Gates will launch its manufacturing activities in 2010 in a 25,000 sq. meters facility. Furthermore, in the past year alone, nine companies have decided to expand their existing facilities in ESBAfi and by so doing added a total investment of 144,000 Euros and will provide an additional employment of nearly 3000 people.

direct investment among all free zones in Turkey. It alone accounts for one third of the total employment and investment of the 20 free zones in Turkey.

Turkey’s Number One Foreign Direct Investment Recipient: ESBAfi The ESBAfi Industrial Park, also enjoying free zone advantages, attracts the majority of foreign direct investment among all free zones in Turkey. The ESBAfi Industrial Park alone accounts for one third of the total employment and investment of the 20 free zones in Turkey. ESBAfi attracts what are called “Greenfield” investments which are of a permanent and sustainable nature. Some of the world’s most important companies are operating in ESBAfi. These include : Hugo Boss (Germany), Delphi Automotive (USA), Delphi Diesel (USA), Mahle (Germany), Aero (Germany), Stork Fokker Elmo (Netherlands), Lisi (France), Eldor Electronics (Italy), PFW Aviation(Germany), and Safe Spice (United Kingdom), among others. ESBAfi’ Food and Health Services & Sports and Art Facilities Companies meet the dining needs of their employees through the ESBAfi Industrial Kitchen capable of serving 17,000 meals per day. Two cafeterias and a restaurant, also operated by ESBAfi, are available for employees in the Park.

Kaya Tuncer, ESBAS Chairman of the Board.

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The day care and preschool needs of employees’ children


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are provided by the ESBAfi Child Care Center with a capacity of up to 150 children. Employees are able to engage in all kinds of sports activities in ESBAfi’ open and enclosed sports areas. ESBAfi also operates a medical clinic in the Park providing emergency medical service, medical tests and similar services to qualified employees in the Park. The medical clinic with three general practitioner medics and two specialist doctors and four nurses, is able to provide government provided prescriptions through the social security system for anyone working in the Park. An antique automobile museum displays some 20 cars going back to the 1920’s. A sculpture garden displays sculptures made of scraps metal from the factories, by local artists. Space Camp Turkey Space Camp Turkey, an ESBAfi enterprise, is a major attraction center for young people between the ages of 9-15 from many countries around the world as well as from Turkey. Since its opening in 2000, Space Camp Turkey has hosted over 80,000 young people from 45 countries including the USA, China, Greece, Germany, Israel, Russia, the United Arab Emirates, Bulgaria, Kazakhstan, Armenia, Azerbaijan, Uzbekistan, the Turkish Republic of Northern Cyprus, Jordan, Georgia, and the United Kingdom. ESBAfi also provides scholarships for financially disadvantaged children to attend the six-day summer camp sessions. New Initiatives from ESBAfi: “Sustainable Science Bridges” and “Aerospace Cluster” ESBAfi is working with TASSA-Turkish American Scientists and Scholars Association to initiate “Sustainable Science Bridge” project with the aim of developing relations between the Turkish scientists in the United States of America and those in Turkey, thus bringing new technologies to Turkey, as well as cultivating cooperation between universities and industries in both countries. ESBAfi aims to help set up and develop an “Aerospace Cluster” in Izmir in order to increase the competitive power of the companies within the cluster. Know-how transfers as well as the exchange of information leading to the manufacturing of innovative products by using the most developed

technologies will make the Park more attractive for foreign direct investors in the Aerospace sector. Now, a member of AeroPortal-Internet Portal for Aeronautics SMEs in Europe, ESBAfi aims to contribute to the start-up and development of collaboration between European SMEs and Turkish companies via the Izmir Aerospace Cluster project. Some of the Most Important Advantages of the ESBAfi Industrial Park and Aegean Free Zone: • Manufacturing companies are exempt from corporate tax, those that export the majority of their products are also exempt from income tax for their employees, • Turk Eximbank provides financial support for exporters, • No VAT is applied on Turkish goods and services for companies in the Park, • Earnings and revenues are transferred free of charge, • Operating licenses for up to 49 years may be issued to manufacturing companies, • Bureaucracy is minimized. Please visit our website at www.aegeanfreezone.com for further information or call us at 00-90-232-251-3851.

TurkofAmerica • 89


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THE TURKISH EXPORTERS ASSEMBLY SPECIAL SECTION

THE TURKISH EXPORTERS ASSEMBLY:

THE BIGGEST CONTRIBUTOR TO TURKISH AMERICAN BUSINESS RELATIONS

Turkey is planning to reach a volume of $500 billion in exports in 2023, which will be the 100th anniversary of the founding of the Turkish Republic.

90 • TurkofAmerica

Mehmet Büyükekfli, President of Turkish Exporters Assembly (T‹M).


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he Turkish Exporters Assembly is the umbrella organization of

T45,000 Turkish exporters. The Assembly represents 59 regional and sectoral exporter associations, 23 sectors, and 13 Secretariat Offices serving exporters and exporter associations in local and international arenas. As a solution center for export and exporter-related problems in Turkey, TIM assures coordination between public and private sector organizations, exporters and decision-makers, developing policies aimed at improving exports and providing exporters with a high-profile representation both locally and internationally. Turkey has a long-standing friendship and alliance with the USA. The great deal of cooperation so far between the two countries has yielded greater results than expected and has resulted in positive developments for the whole world. No matter the physical distance between the two countries, being the offspring of two nations that think alike, we believe that our cooperation in the new global order will increase even more. As two strategic partners and two leading countries, the positive impacts of our achievements together on the world’s destiny are unquestionable. However, economic relations and big joint projects aren’t as important compared to our strategic partnership. Commercial and investment–related relations between the two countries are below their potential. However, there are great opportunities in trade and investments which have already been supported by the diplomatic relations between the two countries. Moreover, there are several regional cooperation areas where Turkish and American companies can set up joint investments. When the foreign trade figures of Turkey in recent years are examined, it can be seen that Turkey’s exports have made great progress, especially in the last seven years. Turkey’s 25 billion dollars in exports at the beginning of the 2000’s rose to 132 billion dollars in 2008. With a target to enhance her role in world trade, Turkey is now concentrating on long term strategies.

With the assistance of Palladium, we are building road maps for our companies in 23 different sectors in order to accomplish this goal. Until the 1980s, exports did not contribute greatly to the growth of Turkey. But especially after the economic crisis in 2001, exports became the main engine of the Turkish economy and were instrumental in rescuing Turkey from deep economic crisis. US EXPORTS TO TURKEY INCREASE Turkey’s exports are rising steadily. Turkey’s foreign trade is also rising day by day. But in recent years, Turkey’s exports to the USA, compared to her imports from the US, did not rise satisfactorily. In other words, Turkish exports to the USA have not benefited as much as the current export boom in Turkey. One of the main reasons for the decline of Turkish exports to the USA can be stated as the appreciation of the TL with regard to the US dollar. However, Turkey does not seem to have problems exporting to other countries with dollar currencies. On the other hand, US exports to Turkey are increasing rapidly. In 2002, US exports to Turkey were valued at $3.1 billion dollars. This figure increased to $12 billion dollars in 2008, an increase of 286%. In the same period, Turkey’s exports to the USA increased only 28%, from $3.3 billion dollars in 2002 to $4.3 billion dollars in 2008. Despite the fact that Turkey and the USA are strategic partners and friendly two countries which are trying to improve their relations day by day, in economical terms, Turkey has not benefited as much as the USA in this relationship. QUALIFIED INDUSTRIAL ZONE Turkish exporters aim to improve their political and economic relations with the USA and to increase the volume of trade between the two countries. We should also act together to improve these relations. At this point the President Barack Obama's, visit to Turkey is a new chance for both countries to move their relations to the next level. We should evaluate this opportunity and take advantage of it.

BUILDING ROAD MAPS Turkey is planning to reach a volume of $500 billion in exports in 2023, which will be the 100th anniversary of the foundation of the Turkish Republic.

One of demands of Turkish businessmen is for the establishment of a new Qualified Industrial Zone (QIZ), which will have a great effect on improving the trade balance between the USA and Turkey. Other countries, such as Egypt, have QIZs and benefit from these zones. Turkey should have the same opportunity.

To hit this target, the Turkish Exporters Assembly is working with an international advisory company, Palladium, which was founded by Dr. Robert Kaplan and Dr. David Norton. Dr. Kaplan and Dr. Norton are recognized as experts in strategy execution in today’s world.

We believe that relations between Turkey and the US will grow in the future with the cooperation between businessmen and politicians. As the Turkish Exporters Assembly, we will try to be the biggest contributor to this process. TurkofAmerica • 91


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IMMIB SPECIAL SECTION - Turkish Chemicals and Chemical Products Industry

ONE OF THE FASTEST IMPROVING INDUSTRIES IN TURKEY urkey has achieved an amazing eco-

Tnomic transformation and adheres to

Turkey’s success in reaching this point is due in large part to the chemical and chemical products industry, a key sector in the 21st century.

92 • TurkofAmerica

global trade practices and regulations. It is a member of nearly all international, political and economic organizations and is determinedly moving ever closer to harmonization with and membership in the European Union. Consistently improving its world-standard modern infrastructure, Turkey, with its dynamic identity enhanced by a youthful and educated population of 70 million, is a leading actor in global trade, with annual exports exceeding $127 billion and a foreign trade volume that has exceeded $300 billion in 2008. Turkey’s success in reaching this point is due in large part to the chemical and chemical products industry, a key sector in the 21st century. Acknowledged as one of the global “locomotive” sectors, the chemical and chemical products industry has high added value and employs state-of-the-art production technology. By employing this advanced technology, the sector has made significant strides in production in recent years in terms of both quantity and quality, and now accounts for 10% of Turkey’s total industrial export. Turkey has achieved today’s competitive edge in the chemical and chemical products industry, which is acknowledged as one of the most promising sectors of the 21st century, through continuous advances in state-ofthe-art technology, highly skilled specialists, adoption of a modern management model, adherence to the principle of total quality, respect for universal values, chief among them protection of the environment, rapid delivery and a competitive pricing policy. The Istanbul Chemicals and Chemical Products Exporters’ Association gives important assistance to the chemical industry to achieve its export potential and enhance its ability to compete in the global market. RESPONSIBLE CARE COMMITMENT The Turkish chemical and chemical products industry is ready to share all the benefits derived from Turkey’s amazing potential and its high-quality, technologically advanced and environmentally friendly products. Turkish Chemical Industry pays great attention to human and environment health by fulfilling the requirements of “Responsible Care Commitment.” Turkey has succeeded in becoming a competitive force in the chemicals and chemical products industry, one of the most significant industries of the 21st century, with its developed and constantly-updated technology, specialized personnel, modern-day management vision, high quality production which respects univer-

sal values, particularly having to do with the environment, as well as rapid delivery and a reasonable price policy. The Turkish Chemical Industry is one of the main sectors that contribute to the development of the Turkish economy and also one of the fastest improving industries. Although it is a young industrial branch, the production is based on modern technology and investment has shown steady improvements in the industry. For instance, the area of petrochemicals, which provide raw materials for many other industrial products that are necessary for everyday life, is growing rapidly and soon it will be able to compete with those of other nations. Plastics and articles thereof constitute the propulsive force of the Turkish chemicals and chemical products industry’s exports. The inorganic chemicals industry appraises our country’s underground resources, transforming them to industrial goods which have export potential. The Dyes and Varnishes industry is another important branch of our chemical industry that can already compete with its quality in foreign markets. A large division that has taken great steps towards high technology in production is the area of cleaning materials. The Turkish pharmaceutical industry has become one of the leading sectors of the chemical industry and accounts for approximately 10% of the chemical industry’s production. PHARMACEUTICAL INDUSTRY The pharmaceutical industry is today capable of producing practically all forms of pharmaceuticals. Operating in line with international quality standards, it meets 81% of domestic demand. In recent years besides the finished products, it also started to export technical knowhow. The fertilizer industry is also another important sub-sector. Parallel to the progress in agriculture, the demand for fertilizers has risen and this demand is being satisfied by the fertilizer industry. The Turkish soap and detergent industry has shown very good performance in terms of quality and capacity. There are many companies in the soap and detergent industry. As one of the top five countries supplying chrome ore to the world markets, Turkey produces and exports some of the most important chrome chemicals, such as sodium bichromate and basic chrome sulfate. Turkey also enjoys a comparative advantage in boron chemicals (borax decahydrate, borax pentahydrate, boric acid and sodium perborate) due to the size of her reserves. Turkey has the largest soda factory in the Middle East. In addition to light and dense soda ash, refined sodium bicarbonate and sodium silicate are produced in Turkey.


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IMMIB SPECIAL SECTION - TURKISH NATURAL STONE SECTOR

THE LAND WHERE THE HISTORY OF NATURAL STONE PRODUCTION BEGAN

Turkey has 33% of the world’s reserves of natural stone. It has a natural stone reserve of 13.9 billion tons and is one of the oldest natural stone producers. Its 4000 years of production history began on Marmara Island.

urkey has a significant place in terms of world natu-

Tral stone reserves and is a country with a very high market potential with its various products in different colors and texture quality. The rapidly developing natural stone sector has not only surfaced as an important sub-sector of mining but has also become a candidate to be one of the most important building blocks for the sustainability of the Turkish economy. Turkey has 33% of the world’s reserves with its natural stone reserve of a total of 13.9 billion tons (5.2 billion m3). It is one of the oldest natural stone producers with its 4 000 years of production history, which began on Marmara Island. The natural stone sector is a strategic industry branch that will leverage Turkey’s competitive power in the

world markets and will allow it to gain a higher share from international trade. The level of production and related exports reached in a short time by the sector simultaneously provides investment, employment and an enhancement in quality. The growing trend towards processed product exports in the sector and higher added value brought in compared to block export is seen as a positive and happy development for the future. EXPORTING TO OVER 160 COUNTRIES Today, exports of Turkish natural stones go to over 160 countries. This is testimony to the awareness of Turkish stone in the world markets and the increase in its consumption. In terms of maintaining sustainable export growth, developing and diversifying the current demand TurkofAmerica • 93


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IMMIB SPECIAL SECTION - TURKISH NATURAL STONE SECTOR

structure in the markets, formulating promotion strategies for countries perceived as the target market, improving the efficiency of the sector in general, closely following up on new technologies, and prioritizing R&D studies for their production are all pertinent issues. Export and production of natural stone products have an important share in the mining sector, which has gained importance in parallel to the improvement of the industrial products exports in Turkey. In recent years, the growth rate reached in terms of investment, production and exports in the natural stone sector is quite above the world average. The fact that the $4 million in exports of natural stone in the beginning of the 80s has reached $1.4 billion as of 2008 clearly presents the development potential of the sector. The travertine import, which had been way lower in the past compared to processed marble, has almost caught up. This situation is being evaluated as a result of the US’s intensive interest in travertine in line with an increasing trend to use natural material in living environments. The US’s multinethnic structure and regional differences present a market which supports variations ranging from the kind of the natural stones to their application place for the exporter firms. Thus, evaluating the rising tendency of the United States towards natural stones and expanding the trade volume presents itself as one of the main goals of Turkish exporters. FINANCIAL CRISIS AND NATURAL STONE INDUSTRY However, in recent years, high construction costs of new buildings, the rise of investment interest, high energy costs, and the growth of residence stock have negatively affected the USA’s construction industry.

Construction dwindled rapidly after rising fluctuations with the market and mortgage crisis in the second half of 2007. After this year, the construction and natural stone sector ranks as one of the sectors that has been hit the hardest by the financial crisis experienced in the United States. All natural stone suppliers and producers are feeling the stagnancy within the natural stone sector. This stagnancy is causing the natural stone market in the United States, which had already been shrinking in the past few years, to get even smaller. With these two factors coming together, an increase in competition and a drop in the profit margin are coming into effect. In the past few months the increasing value of the dollar may have created an advantage for the producers, but the stagnancy in the market has brought down this advantage to the lowest possible level. Consequently, Turkey’s natural stone exports to USA have diminished seriously as a result of this fluctuation in the building sector, reduction in building activities in the southern states, existing saturation in the travertine market and the financial crisis. One of the most important product within the Generalized System of Preferences (GSP) for Turkey was travertine. The use of Turkish travertine was preferred by end-users due to its low cost. Therefore, Turkey’s exports of that product had increased to the level of the so-called competitive limit clause had been imposed on Turkish travertine and as of 30 June 2005 Turkish travertine has been left out of the GSP. Turkey claims that the competitive need limit for that product group should be waived since it does not create any harm to the industry in the USA or in any other country.


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IMMIB SPECIAL SECTION - Turkish Jewellery Sector

FROM A 5000-YEAR-OLD TRADITION TO THE BEST KNOWN DESIGN

he Turkish jewelry sector is the inheritor of a pro-

Tduction tradition of the Anatolian soil that can be

traced back to 5000 years ago. Today the sector producers combine this heritage with an understanding of the state-of-the art design and production with the help of developing technology. Listed amongst the first 10 countries in the world in golden ornament production, Turkey is shown as one of the two countries that are regarded as most important in design by the world jewelry authorities. The export of the jewelry sector in Turkey has been rising since the 1980s. While the sector gained knowledge, experience, and most important of all, confidence, by its export to the Middle East market until 1986, it made a real start when it entered the US market in 1987. On the other hand, the sector’s export revealed its true potential after 2000. As a result of this development, jewelry exports, which did not reach even $10 million in the early 1990s reached $1.5 billion at the end of 2008. Turkish gold and jewelry products, which blend together advanced design, knowledge and technology, are being exported to a total of 146 countries, from the USA to Japan, from Russia to S. Arabia.

Turkish gold and jewelry products, which blend together advanced design, knowledge and technology are being exported to a total of 146 countries, from the USA to Japan, from Russia to Saudi Arabia.

The jewelry sector has an great export potential with 15 giant companies that are using high technology, and 30,000 retail stores and around 2,500 small and medium-scale producers. U.S. applies its own Generalized System of Preferences (GSP) towards developing and underdeveloped countries. The gold production sector in Turkey benefits from this system as it allows the possibility of importing goods into the U.S. without customs fees. However, at certain points the U.S. removes from this system countries that have passed the criteria that it has set for example, during a reexamination period in 2007, it was decided that gold products in the 71131950 HTS category would be removed from this system as of July 2008 and this situation effects the sector deeply as it is the biggest sector which benefits from the GSP in Turkey. Nevertheless IMMIB applied for re-designation this year and awaits the decision of U.S government to give permission again for our sector. The effects of the great economic crisis have started to be felt deeply in Turkey and our exports. The recession suffered by the EU region where we had been intensively exporting products caused a significant shrinking in our markets, and the exports of the sector began to see a decline starting from the last quarter of 2008. It is important that the exporters should target alternative markets, pay much attention to exports that they are going to undertake in the said period, and establish a good balance between payables and receivables so that they can sail safely in the crisis. TurkofAmerica • 95


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IMMIB SPECIAL SECTION - Steel Sector in Turkey

TURKEY MOVES UP IN WORLD STEEL INDUSTRY he Turkish iron and steel industry is one of the big-

Tgest sectors when considering production, export

Turkey moved up to 11th place among the world’s largest steel producing countries and to 3rd place in Europe because of the high performance of the Turkish steel industry.

and employment. The Turkish steel industry has shown a stable growth trend since 2001. Turkey’s crude steel production capacity reached around 34.1 million tons in 2008, up by 72% from 19.8 million tons in 2000. Turkey moved up to 11th place amng the world’s largest steel producing countries and to 3rd place in Europe because of the high performance of the Turkish steel industry. Middle Eastern and Gulf countries are the main export destinations, with a share of 58% in Turkey’s total steel exports, followed by the EU region with a share of 16%. In 2008, Turkish steel producers diverted their exports from the EU to the Middle East-Gulf Region. Compared to the 2007 level, while the share of the EU in Turkey’s total steel exports declined from 33% to 16%, the share of Middle East and Gulf Region increased from 44% to 59%. In 2008, total iron and steel exports to the USA increased significantly compared to 2007. The main export items to USA are steel pipes and tubes, hot rolled flat products, and wire rod. After the global economic crisis which emerged in the USA in 2008 and continued in 2009, the “Buying American Act” was enacted by the US Government. With this act, the use of US Steel in public tenders was promoted by the Government. In addition to the Act, anti-dumping and safeguard investigations increased within this period. Despite the signals for increases in the global free market economy before the economic crisis, countries are now more protective against the highly competitive products to save and stabilize their domestic markets. Turkey is the biggest importer of ferrous scrap in the world. In 2006 the Turkish steel industry consumed 16.5 million tons (mt) of scrap, of which it imported 15.07mt, 2.71mt of which – worth approximately $723 million – were sourced from the USA. USA scrap represents 18% of Turkey’s total scrap imports, and is growing: imports of USA scrap metal to Turkey in the first three quarters of 2007 was up 73% on import volumes for the same period the previous year. ADVANTAGES OF THE TURKISH STEEL INDUSTRY Competitive position of the Turkish steel industry is firmly built on:

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- proximity to major markets, especially the Middle East and Europe. - ample availability of skilled, low-cost manpower. - efficient involvement and experienced entrepreneurs. - modern infrastructure. - up to date technology in existing facilities. - International Quality Certificates. These advantages alleviate threats and weaknesses which also significantly affect the competitiveness of Turkish steel industry, such as unfavorable access to raw materials, high energy costs and imbalance between flat/long product demand and installed capacities.




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