Turkey - Industrial Engineering

Market Report

Reform, economic growth and EU Accession

Turkey’s rapidly expanding economy, political and economic stability, and the possibility of EU membership have created unprecedented levels of growth.

Turkey began negotiations to join the EU on October 3, 2005, and the process is likely to take at least a decade to complete. Integrating the Turkish economy into the West, specifically into the EU, remains a high government priority. Harmonization of Turkish laws and standards with those of the other member states continues as the country moves toward membership. Consequently, significant demands for specific areas of technology and expertise have been created as they work to fulfill their requirements and obligations as both EU and NATO members.

Widespread privatisation, infrastructure development, re-structuring of the building and construction sectors, modernization of buildings, major airports, factories homes and the enforcement of new health and safety regulations, are just some of the reasons for these new demands. If Turkish companies are to remain competitive and address the requirements locally, individual industry sectors need to upgrade in key areas to allow them achieve the necessary productivity and technical standards. The implementation of the Action Programme to Enhance the Competitiveness of Turkish Industry next year is intended to provide local industry with access to the solutions it needs to meet the new demands over the next 15 years.

In the National Programme for the Preparation for Membership of the European Union, the Turkish government state that the survival and growth potential of Turkish industry lies in the modernisation of construction processes and management skills, and by engaging industry more strongly in international co-operation and trade.

Since 2001, Turkey’s market reforms have created a strong and stable economy that attracts foreign investment, which are being followed by desperately needed capital improvements and procurement of new products and services. Strong growth and economic and political stability have attracted large amounts of Foreign Direct Investment. In 2006 and again in 2007, Turkey attracted almost $20 billion a year in Foreign Direct investment.

Turkey has achieved remarkable success in industrialization and this is considered to be the fundamental factor in Turkey’s development. The funding of construction sector will involve manufacturing facilities in iron and steel, construction, machinery handling systems , , , sectors. The rapid increase in the population and living standards in Turkey have resulted in the need to produce more and better quality goods.

This demand and the need to comply with the regulations accompanying forthcoming EU membership has created a significant need for products, equipment and expertise in the following key sectors;

Machinery & Materials

Construction Machinery & Tools
Pneumatic Equipment
Trucks & Diggers
Drainage Systeme
Cement Mixing Equipment
Paints & Coatings
Building Materials
Safety Equipment

Welding

Welding and Cutting Machinery and Equipment
Welding Automation Systems
Welding and Filling Materials
Welding Services

Electrical

Generators
Power Supplies
Electric Motors,
Drills
Test Equipment

Materials Handling

Cranes and Transport Systems
Load Cells Safety Systems
Logistics Planning and Consultancy Services
Weighing Systems
Complete and Turnkey Materials Handling Systems
Logistics, Intralogistics and Software Systems
Materials Handling and Logistics Services
Magnets & Magnetics

Turkey’s dynamic domestic market is brimming with opportunities for investors. Over 15,000 foreign capital establishments are located in Turkey (over 8,000 of which are EU-based), including 104 of the ‘Fortune Top 5000’ companies. In 2007 GNP per capita reached $432.5 billion and this rose again in 2008 to $455.5 billion.

Foreign investment is encouraged in all kinds of businesses in Turkey, and opportunities are plentiful.

Agents and Distributors

The most effective means of selling in Turkey is through a reliable and qualified local representative. Personal contact is extremely important in Turkish business in both private and public sectors. When dealing with government tenders, an agent is an absolute necessity in view of complicated bureaucratic procedures and the language barrier. Agency agreements under Turkish law are private contracts between two parties and their stipulations vary according to mutual consent. There are no fixed commission rates.

Agency Agreements can be for a period of a year to be renewed depending on the success of the agent. In cases where a large volume of government business is expected, it is essential either to appoint an Ankara firm or an Istanbul firm with a branch office in the capital.

Establishing Business Relationships

The one overarching point to consider before doing business in Turkey is that business is personal. The key to any good business venture relies heavily upon a good personal relationship

Although facts, figures and projected profit margins do go some way towards getting contracts signed and deals done, the relationship is crucial. Your Turkish counterpart will need to have trust in you, both as a person and a professional, and also like you on a personal level. This combination spells a long-term association