ISSUE 81 20

NEWSLETTER NOVEMBER’

TURKEY ENJOYS NEW HEIGHTS OF SUCCESS WITH GAS FIND AND INFRASTRUCTURE BREAKTHROUGH Page 2-3

PRESIDENT ERDOĞAN COMMISSIONS Page 3 ’S LATEST CITY HOSPITAL IN

Page 4 OCTOBER INDICATORS TURKEY OFFERS SIGNAL RECOVERY GLOBAL INVESTORS FOR TURKISH UNEQUALLED ECONOMY OPPORTUNITIES Page 4

R&D SPENDING RENEWABLE ENERGY RISES IN TURKEY CAPACITY INCREASES Page 7 IN SEPTEMBER

TOGG ANNOUNCES PARTNERSHIP Page 9 WITH FARASIS Page 8

INVESTMENT OFFICE WEBINARS & TURKISH EVENTS GRAND PRIX SET TO MAKE FIERY Page 11 RETURN TO F1 Page 12 NEWSLETTER November’20 NEWSLETTER November’20

Message from TURKEY ENJOYS the Investment NEW HEIGHTS OF Office SUCCESS WITH The discovery of the hydrocarbon reserves in the GAS FIND AND was a turning point in Turkey’s energy roadmap. INFRASTRUCTURE President Recep Tayyip Erdoğan broke the good news that, as a result of Turkey’s BREAKTHROUGH further exploration activities, On October 17, right after natural gas reserves in the billion cubic meters in total,” said at the Tuna-1 zone will be connected to region have reached 405 inspecting the drilling vessel President Erdoğan. Turkey with a platform to be set up.” billion cubic meters in total. on board, President Recep Preferring to use national devices In the meantime, infrastructure Tayyip Erdoğan announced that Describing the find as the largest for exploration activities, Turkey investments and activities to Turkey’s natural gas reserves amount of hydrocarbon reserves in employs Kaşif (Explorer), a attract more FDI further sped Turkey’s history, President Erdoğan homegrown remotely operated up in Turkey. Latest examples discovered in the Black Sea were the inauguration of reached 405 billion cubic meters. added, “Along with Tuna-1 zone of underwater vehicle, for drilling the Konya City Hospital by the Sakarya field, Fatih, Turkey’s observation. Kaşif contributed President Erdoğan and the “On August 21, the good news of the 320 first-ever drillship owned by the state- to a large extent to the drilling investor conference held by billion cubic meters of natural gas reserves run Turkish Petroleum Corporation activities in the Black Sea following Citibank with the attendance of Minister of Treasury and was given to our nation. In the wake of the (TPAO), will further maintain its drilling its involvement in Turkey’s energy Finance Berat Albayrak. tests, analyses and detailed engineering activities in the Türkali-1 zone as well. fleet, and the process gained Addressing global investors works, 85 billion cubic meters have further We hope to receive good news also speed. Being able to dive deeper via videoconference, Minister been discovered. As a result, the natural from the Türkali-1 zone in the soonest than divers, Kaşif can dive as deep Albayrak said, “Turkey offers gas reserves in the Tuna-1 zone of the FDI investors unmatched possible time. The newly-discovered as 3,000 meters, outpacing the opportunities. In the new era, Sakarya field have reached a total of 405 405 billion cubic meters of natural gas likes of other robots. government-owned enterprises will also be potential FDI co-investors who will provide international investors stronger local representation.” PRESIDENT ERDOĞAN Improving economic indicators once again proved COMMISSIONS TURKEY’S LATEST Turkey’s resilience in turbulent times. New investments CITY HOSPITAL IN KONYA made by Gilead Sciences and QTerminals set examples On October 2, President Recep Tayyip Erdoğan officially for Turkey’s reliability as a manufacturing and export opened Konya City Hospital, which had been partially hub. With its up-to-date commissioned in August. Poised to provide services for incentives scheme, Turkey both domestic and foreign patients, the mega complex is ready to welcome global investors more than ever. aims to help Turkey raise its healthcare tourism during and after the COVID-19 outbreak. As part of our promotion acitivities in global platforms, Addressing the attendees at the Hospital has 1,250 beds, including the Investment Office will be the “Founding Partner of inauguration ceremony, President 256 for intensive care units, 108 the Formula 1 DHL Turkish Erdoğan said, “City hospitals are for emergency services and 30 for Grand Prix 2020”, which will dubbed the landmarks of our dialysis services. be run on November 15 at the healthcare system, and Konya City Park. Hospital is one of the largest among The complex is named the 16th President, Investment Office them.” city hospital inaugurated by the A. Burak DAĞLIOĞLU Turkish government as part of According to a statement released infrastructural development plan by the Ministry of Health, Konya City for the national healthcare system.

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TURKEY OFFERS GLOBAL INVESTORS UNEQUALLED OPPORTUNITIES Minister of Treasury and Finance Berat Albayrak attended an event titled ‘Republic of Turkey Investor Conference’ held by Citibank on October 27. Addressing international investors via videoconference, Minister Albayrak gave insight into many topics such as global economy, Turkey’s resilience during the COVID-19 outbreak thanks to its dynamism, its strengths and its INDUSTRIAL PRODUCTION macroeconomic outlook. UPSURGES IN AUGUST Turkey’s industrial production index soared in August 2020. Turkish Statistical Institute (TurkStat) The sub-sectors of industry, mining unveiled August industrial production and quarrying indices increased by 5.2 data. Accordingly, industrial production percent, manufacturing industry index increased by 10.4 percent annually, 11.4 percent, and electricity, gas, steam while a 3.4 percent monthly increase and air conditioning manufacturing was recorded in the month of August. and distribution indices by 2.3 percent OCTOBER INDICATORS SIGNAL compared to the same month of 2019. RECOVERY FOR TURKISH ECONOMY Commenting on the latest industrial These sub-sectors posted monthly production data, Minister of Treasury increases of 2.5 percent, 3.6 percent Various economic indicators show that Turkey’s economy and Finance Berat Albayrak said, “With and 1.3 percent respectively in August. is gaining ground in October 2020. these figures, we rank st1 among OECD members and 2nd worldwide.” According to the Turkish Statistical On a side note, a survey led by Institute (TurkStat) data, sectoral the Central Bank of the Republic confidence indices recorded a of Turkey (CBRT) showed that real Industrial Production Index (OECD, August 2020, yearly %) noteworthy improvement in October. sector confidence index jumped Reaching 79.7 points with a 6.4 from 105.3 points in September percent increase, the services sector to 108.1 points. confidence index recorded the highest spike among other indices. CBRT further observed a recovery in the manufacturing industry TurkStat also revealed that the retail in Turkey, which utilized 75.4 trade sector index posted a 1.7 percent of its capacity in the percent monthly rise, reaching 95 in month of October. The capacity October. Along the same line, a slight utilization rate (CUR) of the rise was recorded in the construction manufacturing industry increased sector confidence index, which saw 0.8 percentage point on a 83.8, going up by 0.6 percent. monthly basis.​​

Stemming from these increases, economic confidence index in October came at 92.8 with an increase of 4.8 percent when compared to September.

Source: Turkish Statistical Institute

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TURKEY In his statement, Minister Varank provided detailed information on INCENTIVIZES the results of Turkey’s investment TRY 18.3 BILLION incentives in the first 8 months of 2020. Accordingly, compared to the same WORTH OF period of 2019, the first 8 months of INVESTMENTS 2020 saw the number of incentive certificates rise by 98 percent, projected “We have issued TRY 18.3 employment by 54 percent and fixed billion worth of investment investments by 32 percent. incentives in August, OCTOBER EXPORTS HIT paving the way for new job Of all the projected investments, opportunities for 28,411 57 percent were in the manufacturing RECORD OF ALL TIMES citizens,” Minister of sector, 24 percent in the energy sector, Industry and Technology 16 percent in the services sector, Commenting on the figures, Minister Turkey hit the highest monthly Mustafa Varank 2 percent in the agriculture sector, Albayrak said Turkey’s exports export volume in October with announced on October 12. and 1 percent in the mining sector. USD 17.3 billion,” said Minister increased by 5.6 percent in October of Treasury and Finance Berat 2020. “We are entering a new era in Albayrak in a statement on which exports are rising and current account balance is maintained,” he November 2. added. R&D SPENDING RISES IN TURKEY

October figures also unveiled that The Turkish Statistical Institute released the ‘Research and export/import coverage ratio in Turkey Development Activities for 2019’ report and revealed Turkey’s reached 95.3 percent excluding gold. latest R&D spending to GDP ratio. Accordingly, Turkey’s R&D expenditure to GDP ratio rose to 1.06 percent in 2019. Following the record high exports, Commenting on the results, Minister of EXPORT CLIMATE Turkey’s PMI Export Climate Index Industry and Technology Mustafa Varank surmounted once again the threshold underlined that the outcome is a “record INDEX ABOVE level in September 2020. in the last ten years” and said, “The private sector has been revealing the THRESHOLD The ICI Turkey Export Climate Index innovation spirit just as the way we want released by the Istanbul Chamber of it. The Turkish private sector provided IN THREE Industry has unveiled Turkey’s latest 64.2 percent of the country’s whole figures. R&D expense and 56.3 percent of its CONSECUTIVE financing.” Signaling strengthening demand MONTHS conditions in export markets, the index In addition, the amount allocated for was recorded as 51.9 in September, R&D activities by the Turkish government marking the third month in a row over reached TRY 14.9 billion in 2019, read 50.0 level during the novel coronavirus. TurkStat report.

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TOGG ANNOUNCES PARTNERSHIP WITH RENEWABLE FARASIS ENERGY CAPACITY Following the remarkable RISES IN TURKEY introduction of its first Turkey’s total installed indigenous car stereotype, power capacity showed a Turkey is getting ready to noteworthy improvement produce battery cells by in September 2020 thanks partnering up with a global to sustainable sources. company. Turkey’s installed capacity posted an In terms of the resources, natural With the attendance of top officials of Releasing a statement on the increase of 184.3 MW in September gas took the lead with an installed both companies, Turkey’s Automobile partnership, Minister of Industry to reach a total of 93.2 GW, with capacity of 25,632 MW, followed by Joint Venture Group (TOGG) and Farasis and Technology Mustafa Varank renewable energy accounting for a hydropower sources with 21,877 MW. Energy – a leading Chinese battery said, “The battery cell and package 92 percent share in this increase. manufacturing company established of Turkey’s homegrown car will be In addition, the number of the power in the US – signed a letter of intent produced in partnership with Farasis plants in Turkey hit 8,990. to produce battery cells for Turkey’s in Turkey. Thus, new abilities in battery first homegrown automobile at the IT technologies will be developed in our Valley in Kocaeli province of Turkey on country, import dependency will be October 20. lowered and mobility ecosystem will be enhanced.”

TURKEY TOPS RECOVERING COUNTRIES IN AVIATION INDUSTRY LIST Mastercard, a leading company Turkish Airlines has suspended testing the pulse of global trade, its international flights for a recently released a report entitled certain period due to the novel “Recovery Insights: Travel Check- coronavirus and resumed as of In”, and announced that Turkey is June 11. The company ranked the 5th fastest recovering country 1st with 649 flights as of October globally in the aviation sector 22, according to the European during the COVID-19 pandemic. Organization for the Safety of Air Navigation (Eurocontrol) HASANBEY LOGISTICS CENTER CONNECTS The company said Turkey traffic data.​ owed this success mostly to its ESKIŞEHIR TO THE WORLD domestic flights along with its On October 19, Eskişehir province of Turkey was officially wide scope of destinations and connected to Turkish ports with the launch of the Green Road flights from the Europe. Project. The signing ceremony took place in Middle East, Central Asia and China by Eskişehir Chamber of Industry (ESO), train without a second handling. and the protocol was signed by ESO and the General Directorate of Turkish The logistics center—serving as a hub State Railways. Ahead of the ceremony, for domestic and international freight the first freight train departed from transportation, distribution, storage Hasanbey Logistics Center in Eskişehir and customs clearance—has a capacity to carry goods to the port of carrying 1.5 million tons of goods located in the northeastern province annually. Kocaeli. Accordingly, block trains are slated to In addition, railway transportation will depart per week in the initial phase, be started on the Baku-Tbilisi- yet in the following months they are Railway, so containers loaded from planned to operate three days a week. Eskişehir will be able to reach the

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INVESTMENT FDI NEWS OFFICE WEBINARS & EVENTS

US-BASED GILEAD OCT 8 – INVESTMENT OFFICE CALLS ON MAKES NEW ITALIAN COMPANIES AT A GSC WEBINAR INVESTMENT Global Supply Chains: Why Should Italian Companies Consider Turkey IN TURKEY as an Optimal Destination for Investments?” on October 8. US-based biopharmaceutical company Gilead Sciences will invest in Turkey’s Pharmactive to produce HIV and Hepatitis In addition to Investment Office drugs in Turkey. President Burak Dağlıoğlu, Steering Committee Member at the World According to a statement released surpassed USD 6 million, along with 30 Manufacturing Foundation Cinzia by Gilead Sciences, the investment is clinical research centers. Guido, Former EU Ambassador expected to reach TRY 350 million, Investment Office held a webinar to Turkey Stefano Manservisi, including the machinery and equipment According to Gilead Sciences, in collaboration with CeSPI, an and Corporate Finance Partner at for local manufacturing, capital Turkey will become a potential independent Think Tank based in KPMG Turkey Gökhan Kaçmaz were increase and transfer of know-how pharmaceuticals export hub with this Italy, entitled “Transformation of featured as panelists at the webinar. as part of the partnership agreement new investment, while the partnership signed among the two companies back will enable Turkey to produce in 2019. new therapies and will eliminate OCT 15 – INVESTMENT OFFICE pharmaceuticals imports to an extent of Gilead has been active in Turkey USD 250 million until 2024. HOLDS A JOINT EVENT WITH GYODER since 2007 and the company’s total investments in the country have already

Investment Office held a webinar in Investment Office President Burak collaboration with the Association Dağlıoğlu delivered a speech on the of Real Estate and Real Estate investment environment and the Investment Companies (GYODER) recent outlook of real estate industry on October 15. in Turkey during the event.

OCT 22 – INVESTMENT OFFICE MAKES A PRESENTATION ON THE POST-COVID-19 EMERGING MARKETS Global Ports Holding Plc (GPH) has signed an GLOBAL PORTS agreement with QTerminals for the acquisition of Port Akdeniz in the province of Turkey. Yunus Emre Institute’s Seoul branch HOLDING in Hankuk University of Foreign Studies and Industrial Bank of According to a statement released by GPH on Korea held a joint event entitled RECEIVES October 21, the total value of the transaction is ‘Post-COVID19 Emerging market’s INVESTMENT USD 140 million. Economic Outlook’ on October 22. FOR PORT Port Akdeniz is the largest port in Global Ports Investment Office South Korea Holding’s portfolio and the company has the Country Advisor Lyn Sung made a AKDENIZ operating rights of the port until 2028. presentation at the event.

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After 9 years of TURKISH absence, Turkey is preparing to return GRAND to the Formula 1 races. According to the Investment Office will be announcement made by a sponsor as the Founding Formula 1, Turkey has been Partner of the Formula 1 confirmed to host one of the DHL Turkish Grand Prix 2020 PRIX final four races for the 2020 that is going to take place for season. The Turkish Grand the first time in nine years Prix (GP) will be the 14th under the auspices of the round of the 2020 Formula 1 Presidency of the Republic SET TO Season. of Turkey. The Turkish GP will be Built in 2005 to host F1 run on November 15, races, Moto GP and other MAKE FIERY 2020 at the Istanbul Park. international sports, Commenting on Turkey’s Turkey’s Istanbul Park lastly return to the races, F1 Chief took part in the 2011 season RETURN Executive Chase Carey said, of F1. “We are proud to announce that Turkey will be part of TO F1 our 2020 season.”

12 13 TURKEY: HUB FOR INNOVATION AND GROWTH

Within 4-hours flight, easy access to multiple markets of USD 25 trillion GDP, USD 7.8 trillion trade, and 1.7 billion people.

Booming economy reaching USD 754 billion in 2019, up from USD 236 billion in 2002.

Over USD 220 billion of FDI between 2003-H1 2020, while the total amount of FDI attracted between 1923-2002 stood at USD 15 billion.

ACCESS TO Russia MULTIPLE GDP: $1.66 trillion Import: $240.2 billion MARKETS Population: 144.5 million

Europe

GDP: $20.2 trillion Import: $6.8 trillion Central Asia & Caucasus Population: 600.4 million GDP: $0.3 trillion Import: $81.7 billion Population: 89.1 million

MENA

GDP: $3.61 trillion Import: $751.6 billion Population: 448.9 million

TOTAL GDP: $25.77 trillion Import: $7.9 trillion Population: 1.3 billion

Source: World Bank (2018), Comtrade (2018) NEWSLETTER November’20 NEWSLETTER November’20

AVERAGE ANNUAL REAL GDP GROWTH (%) (2003-2019)

Turkey 5.3 HIGHLIGHTS Ireland 4.6 Poland Israel Slovak Republic 3.8 Chile 3.7 The fastest growing economy in Europe and one of the S. Korea 3.6 fastest growing economies in the world with an average annual Iceland GDP growth rate of 5.3% Estonia 3.0 over the past 17 years. Latvia (2003-2019, TurkStat) Luxembourg Australia Czech Republic New Zealand 2.7 Sweden Mexico SOPHISTICATED CONSUMER BASE Hungary Slovenia Switzerland A population of 83 million, United States Turkey half of which is under the age of 32.4. Canada was the (2019, TurkStat) Belgium fastest growing Norway economy of the Austria Largest youth population United Kingdom OECD members compared with the EU. Netherlands (2019, Eurostat) Germany during Denmark 1.4 2003-2019, Spain 1.4 with an average France 1.3 76.6 million Finland 1.3 annual growth fixed and mobile broadband internet subscribers. Japan 0.8 rate of Portugal 0.7 (2019, ICTA) Italy Greece -0.7 5.3% Source: IMF World Economic Outlook (October 2018) SKILLED AND 220 DEDICATED LABOR FORCE • Investment incentives as well as R&D support. CUMULATIVE FDI INFLOWS • Equal treatment to national and global investors TO TURKEY guaranteed by law. (USD BILLION) Over 32 million More than • 7 days to set up a company young, in Turkey, while it takes an 800,000 students average of 8,5 days in OECD well-educated graduate annually from

high-income countries. (USD BILLION) and motivated professionals. 207 universities. (World Bank Doing Business 2020) 2003-H1 2020 (2019, TurkStat) (2019, CoHE)

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TURKEY’S INFRASTRUCTURAL DEVELOPMENT

According to the European Investment Bank, Turkey ranks 1st in Europe in total value of Public-Private Partnership (PPP) projects during the 2015-2019 period. 8,600 km Total length of motorways (toll roads) in Turkey by 2035 once the 660 km currently under construction and the USD 4,600 km of planned projects 130 billion are completed. Total value of PPP contracts in Turkey during the 2003-2019 period. 5,500 km Total length of high-speed railways in Turkey by 2023 once the planned projects with total length 179 of 4,300 km are completed. Total number of PPP projects in Turkey during the 2003-2019 period.

44,350 35% 65% Expected growth in Number of hospital beds to be introduced Targeted share of renewable Turkey’s total installed once 31 integrated health campuses are sources in Turkey’s total power generation capacity put into operation across Turkey. Of those, installed power generation from 2018 to 2023 (from 20 will be PPP city hospitals with a total capacity (planned increase 88 GW to 110 GW). bed capacity of 30,750. from 59% (52 GW) in 2018 to 65% (72 GW) in 2023).

For more info 200 million invest.gov.tr/en/Sectors/Pages/infrastructure.aspx Annual passenger capacity once all stages of the newly commissioned Istanbul Airport in Turkey are completed.

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“China is Turkey’s third largest trade partner and second largest import partner. As two major emerging economies in the world, it is our wish that the two countries will learn from Following the Toyota Way, we implemented each other and strive towards win-win goals the Toyota Production System to based on mutual needs in various fields.” produce high-quality

ICBC Turkey is a full-license bank provided a wide array of high-quality holding commercial bank, investment financial services for the Turkish motor vehicles bank, and asset management licenses economy. In the future, it will provide with 44 branches and 21 securities a greater contribution to promoting business offices with around 860 economic and social development, and in Turkey.​​ employees. Its branch network will continue to contribute more to the covers areas where the economy and deepening of the mutually beneficial banking industry are active in Turkey and win-win economic and trade (these areas cover nearly 70 percent cooperation between China and Turkey of GDP of Turkey). through the implementation of the “Belt As the world’s largest commercial and Road Initiative”. In the process, bank, ICBC attaches tremendous ICBC Turkey will continue to devote importance to the Turkish market. ICBC effort to building the links of economic Turkey is a young member of the ICBC and trade exchanges between China Group. Based on the growth potential and Turkey, playing the role of a think- of the regional market and the support tank, putting forward strategic and of local regulators and the ICBC group, forward-looking suggestions, taking we aim to become the leading bank of tangible integrated financial services the “Belt and Road Initiative” and the to promote investment and trade Toshihiko KUDO preferred bank of “Chinese elements”. contacts between China and Turkey, President & ​CEO, Toyota Motor Manufacturing Turkey As a key international subsidiary and improving Turkey’s global position of the group, ICBC Turkey has already in the finance industry.

Gao XIANGYANG Chairman, ICBC Turkey

Turkey is very There is a huge need for tires in The core of the Turkish national “ and around Turkey, as well as

45 years of economic agenda, and the key in Europe, Russia, the Middle

value for investors, is a dedicated attractive for East, and North Africa. Turkey effort to promote innovation, has great advantages such as experience enhance competitiveness, and production “ customs duty exemption to the encourage investment in global Customs Union agreement, and value chains. Dow has over 45 also the location of Turkey is very as a domestic years of experience as a domestic and exports convenient for transportation manufacturer in Turkey, and our to these markets. Considering manufacturer new joint venture with AKSA is all, Turkey is very attractive for a key example of how we can production and exports. bring together raw materials, a in Turkey high-skilled workforce, and most In addition, the Turkish importantly a booming downstream government supports foreign customer industry. With a strong, Norifumi FUJIMOTO and local investors from different pro-business government Former President & CEO, aspects such as incentives. At the Andrew N. LIVERIS in Turkey, the investment Sumitomo Rubber Industries Turkey same time, with the help of the Former Chairman & CEO, DOW environment makes sense. And it is Investment Office, we managed also easy to operate, thanks to the to team up with AKO, one of the Investment Office President and biggest tire distributors in Turkey, his entire team. and built a joint venture.

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• Presenting investment opportunities to the investors and providing assistance during all the WHO WE ARE WHAT stages of their investments. • Serving as the reference point for international investors and the point of contact for all institutions WE engaged in promoting and attracting investments at national, Investment Officeis the official organization that: regional and local levels. • Offering free-of-charge services • Promotes the investment environment of Turkey and DO including market information provides assistance to investors. and analyses, site selection, B2B meetings, coordination with relevant governmental institutions, • Reports directly to the President of the Republic of Turkey. and facilitating legal procedures and applications such as establishing business operations, incentive OUR applications, obtaining licenses GLOBAL and work permits. LOCATIONS HOW

WE UK GERMANY

ITALY JAPAN USA HELP SPAIN S. KOREA TURKEY

• Multilingual (Turkish, English, German, S. ARABIA UAE French, Italian, Arabic, Spanish, Chinese, Japanese and Korean) QATAR

• One-Stop-Shop approach SINGAPORE • Result-oriented

• Private sector approach with full confidentiality

• Focusing on high-tech, value-added and employment generating investments.

22 23 VISIT invest.gov.tr

WEB SITE BRAND NEW LOOK

Investment Office, the official investment advisory body of Turkey, is a knowledge-center for foreign direct investments and a solution partner to the global business community at all stages of investments. It provides customized guidance and qualified consulting before, during and after entry into Turkey.

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