The Turkish Perspective 01 Contents

YOUR COMPLIMENTARY COPY Ex cLUSIve InTERview The Minister of Youth and Sports, Suat Kılıç shared his views on Turkey’s future in sports.

MARCH-APRIL 2013 ISSUE 15 ECONOMY BUSINESS FOREIGN TRADE ANALYSIS

Turkey sprınts toward the gold As it reignites its athletic culture through investments and by hosting world-class sporting events, Turkey now aims for the top as a candidate host for the 2020 Summer Olympics. TURKISH EXPORTERS ASSEMBLY IS WORKING T O R E A C H T U R K E Y ’ S 2023 EXPORT TARGET OF 500 BILLION DOLLARS The Turkish Perspective 01 Contents

05 | Africa: The New Address for Exporters 38 IN DEPTH 06 | SCO a Significant Export Market Turkey Gets Active 07 | Fastest in the World From tennis to skiing, swimming, 07 | Automotive Industry Export and golf, Turkey is hosting Champion for January numerous sports tournaments 08 | Turkey Enters Top Ten in the on an international scale. With Gold League investments and its young 09 | Turkish Airlines’ Passenger population, Turkey is preparing for Volume Grows 23% in January a strong future in sports. 09 | European Investment Bank Grants Turkey Credit 09 | Turkey and India Collaborate on Investment

30 COVER Turkey sprınts toward the gold Having hosted a great number of incredibly successful sporting events, Turkey now aims for the very top with 08 candidacy for the 2020 Summer Olympics. 38

10 PANORAMA 12 BRIEFING Tedhe Ne for Managers (and 12 | Medical Industry Draws 22 | Turkey Climbs to the 12 Individuals) with Global Minds Tourists to Turkey Top in Egg Exports Prof. Nakiye Boyacıgiller, PhD, Medical tourism, lately one of The Turkish egg industry’s export discusses the need for “global Turkey’s rising stars in the export figures cause it to raise the bar minds” to shape the future of of services, could be one of the with the addition of new markets management. country’s greatest playing cards in every year. reaching its 2023 targets. 24 | The Asian Finance Giant’s 18 | Turkish Furniture Makers Plans for Turkey PhillipCapital became the first Stand Up to China East Asian investor in the Turkish The furniture industry, a driving finance with its acquisition of Hak force of Turkey’s economy, Menkul Kıymetler. continued to develop as a critical component of Turkey’s exports 26 | Turkish Airlines Aims with the positive performance it for World Leadership exhibited in 2012. Turkish Airlines aims to expand its flight network to 110 destinations 20 e| Turkey R writing the in 2013. Rules of the Auto Game With a total export of $19 billion 28 | New Markets Critical 18 in 2012, the Turkish automotive for 2023 Target industry is growing constantly. For exporters to achieve the $500 billion export target for 2023, they must attain sustainable growth in 10 new markets. 26 02 Content

52 ın depth 52 | Turkish Food Chains Go Worldwide with Franchising MANAGEMENT The dozens of Turkish food Publisher on Behalf of Turkish Export- chains that have grown through ers Assembly/ CHAIRMAN of The Turkish franchising have set their eyes Exporters Assembly abroad. These companies now MEHMET BÜYÜKEKŞİ have the Middle East, Europe, Manager In Charge and America in their sights. İSMET YALÇIN PhD PUBLICATION BOARD 48 EXCLUSIVE Interview M. İlker aycı, BÜLENT AYMEN, İBRAHİM BURKAY, MUSTAFA ÇIKRIKÇIOĞLU PhD, 48 | Master of the Seas ALİ NEDİM GÜRELİ, AHMET KELEŞ, TEMEL KOTİL PhD, ŞAHİN OKTAY, Following on the heels of TAHSİN ÖZTİRYAKİ its acquisition of marinas in Croatia, D-Marin, Doğuş 44 EXCLUSIVE Interview PUBLICATION MANAGEMENT Group’s marina-industry brand, President Serkan Ünal has partnered with the largest “THE NEXT GAME CHANGER MAY BE ENERGY STORAGE GROUP Coordinator marina chain in Greece. Having TECHNOLOGY” Mehmet Mücahİd Demİr doubled its capacity in a short Carl D. Hughes has been the Global Industry Leader Finance Coordinator time, D-Marin today possesses for Energy and Resources at Deloitte Touche Tohmatsu Selİm Kara the largest international Limited (DTTL) since 2011. After leading Deloitte UK’s Edıtorıal marina chain of the Eastern Energy and Resources practice for ten years, Mr. Hughes Editor In Chief Mediterranean Basin and now works with established and emerging companies Serdar Turan Adriatic Sea. delivering market-leading projects, across all of Deloitte’s EditorS services including auditing, tax work, finance, risk Aynur Şenol altun, management, and consulting. Nesrİn koçaslan, Can gÜrsu, 58 Brand HÜLYA KESKİN, ALTAN ORHON 58 | Sarar Gets Ready to Design Surprise Design Director Founded in 1944, Sarar was 58 65 ÖZKAN ORAL passed down from grandfather DEPUTY Design Director to grandson. Now representing AHMET ÇELİK PINAR GÜVEN the third generation in the Photo Editor company’s administration, CEO ŞEREF YILMAZ Emre Sarar spoke about this nearly century-long journey and Contributors PROF. nakİye boyacıgİller (PhD) its milestones. ELNUR KULİYEV, GÜZİN GÜZEY, GİZEM GÜZEY 61 | The Unstoppable Rise of Parex PRıntıng Founded two years ago as a BİLNET MATBAACILIK BİLTUR marketing company, Parex is Basım Yayın VE HİZMET A.Ş. 63 | A Voyage Leading from the 68 AGENDA Dudullu Organİze Sanayİ Bölgesİ 1. Cadde No: 16, continuing to grow rapidly Esenkent – Ümranİye 34476 - İstanbul Grand Bazaar to the World Tel: (0216) 444 44 03 • www.bilnet.net.tr following its partnership with FAIRS, EXHIBITIONS, SUMMITS, AND Digicom. As the company’s 65 | The 40-Year Story of a Cup MEETINGS IN THE NEXT TWO MONTHS market share grows constantly of Coffee: Kahve Dünyası every month, it stands head- After opening its first branch in 70 FIGURES to-head with global players on London, Kahve Dünyası started THE FINAL INDICATORS OF TURKEY supermarket shelves. seeking new markets. Today, it is IN 2012 planning to open branches in New York, Boston, Vienna, the Gulf countries, and the Turkic contact [email protected] republics. www.infomagyayincilik.com Neither text nor photographs from this publication may be reproduced in full or summary without acknowledging the source and without prior permission from the publisher.

MARCH-APRIL 2013 ISSUE 15 The Turkish Perspective 03 Editorial Mehmet BüyükekŞi President (TIM)

2012 World Short Course Swimming Championships Istanbul Sprints toward 2011-2013 WTA Tour Championships 2012 Euroleague Final Four the Olympics As a city that emerged from all of these 2020 large events with flying colors, we believe As the world observes Turkey’s accomplishments, ambitious Istanbul has great chances for 2020. undertakings, and continued economic success in awe and Dear readers: I would also like to briefly mention economic expectations for the surprise, the country is mobilizing to have Istanbul—saddling year 2013. Although Turkey has been fol- two continents, a confluence of cultures and a commercial lowing a successful path in both exports hub as important today as it was centuries ago—host the and employment, 2012 was quite a challenging year for the world’s economies. 32nd Summer Olympic Games in 2020. A period occurred in which economic stagnancy put several developed countries stanbul is a member of a rare of the greatest advantages has in these into dire straits and consumer confidence I breed of metropolises, attracting the Olympics is its young population. Fur- plummeted. We are receiving positive attention of the entire world to every- thermore, the importance Turkey gives signals that this pessimistic picture will thing from its rich historical backdrop to to sports and the great support provided change at least somewhat in 2013. The its natural beauty, nonpareil geographic by our Prime Minister and our govern- IMF and World Trade Organization pre- position that connects two continents, ment to the Olympics bear emphatic dict 5% growth in global trade for 2013, and vibrant culture. mention as well. while the World Bank predicts 6%. This Istanbul is also the heart of the Turkey is a country that has passed the indicates a general worldwide recovery of economy of Turkey, accounting for half trials of many such large sporting events, sorts. of Turkey’s foreign trade on its own. With some of which are listed below: We are of the opinion that in the year its polyphonic culture and tourism, too, 2005 UEFA Champions League 2013, which will be more hospitable to Istanbul is Turkey’s greatest, leading city. Final, world trade relative to 2012, Turkey, too, We dedicated the cover story of this 2009 UEFA Cup Final will utilize this positive atmosphere as issue of our magazine to a matter that 2010 World Basketball best as it can. concerns Istanbul, Turkey, and the entire Championships Once again, I wish for 2013 to be a year world: Istanbul’s candidacy to host the 2012 World Indoor Athletics in which economic prosperity increases, 2020 Olympics. Championships wars end, and peace prevails worldwide. Yes, it is true that besides our own beautiful Istanbul, Madrid and Tokyo are also candidates for the 2020 Olympics. We believe that Turkey—meaning Istan- bul—will finish this challenging race as the victor. And this is no mere wish; for us, it is a reality: in recent years, Istanbul has been climbing to the top as a rising star of a city, and Turkey has also been shining brightly in the world with the reforms and progress it achieved in every area from democracy to its economy. The entire world is discussing the accomplishments of Turkey, from its success in exports to its rapid growth, and from its rising employment to its political and economic stability. And one

5 Content: SCO a Significant Export MarketP6 Automotive Industry Export Champion for January P7 The World Under Your Wings P8 Turkish Airlines’ Passenger Volume Grows 23% in January P9 Editor: Can Gürsu

First FOREIGN TRADE, FUEL, AVIATION, SPORTS, BANKS, FINANCE, ENGINEERING, CONSTRUCTION, AUTOMOTIVE...

Prime Minister Recep Tayyip Erdoğan said, “We want to establish a lasting coop- Africa: The New Address eration with Africa. for Exporters Turkish exporters have started efforts to cultivate trade with Africa, under the leadership of Prime Minister Recep Tayyip Erdoğan.

isiting Gabon, determined to increase volume, said Erdoğan, representatives in Ga- has been giving great V Niger, and trade volume with Ga- and he went on to bon, Turkish Exporters importance to Africa Senegal, the export- bon. Erdoğan indicated state that this figure is Assembly Chairman in recent years. We are ers exchanged bilateral that they aim to grow insufficient. By work- Mehmet Büyükekşi expending great efforts promises to develop the volume of trade ing harder in this new pointed out the fact to both further deepen and strengthen through with Africa to $50 bil- process, said the Prime that Gabon is undergo- our friendship with agreements coopera- lion for the year 2015, Minister, they will cul- ing massive infrastruc- all countries on the tion with the region. adding that trade with tivate cooperation in tural development. African continent and Gabon will be brought every area. “The continent of develop our investment Gabon was the first stop to new dimensions. Africa is a territory that and trade relations,” he of the visits Based on figures for B üyükekşİ: “We’re physi- is physically distant to said, and he added that Prime Minister the first 11 months of cally distant to Africa, us. But our hearts are Turkey is open to coop- Erdoğan emphatically 2012, Turkey attained but our hearts are close” very close to you. For eration with Gabon in stated that they are a $41 million trade Meeting with NGO this reason, Turkey all sectors. 6 First

On the second stop investments in health of the African tour, care, tourism, educa- Niger, roughly 700 tion, the environment, bilateral business and food were met meetings were held with gladness in Sen- with representatives egal. He also indicated from more than 300 that the portion al- Nigerien firms lotted to Senegal in In the speech he de- the Eximbank credit livered at the Turkey- set aside for the pur- Niger Business Forum pose of supporting held in Niamey, the economic activities in capital of Niger, Prime Africa had not yet been Minister Recep Tayyip used. The use of these Erdoğan said, “We resources would also want to establish a help develop economic lasting cooperation relations, he pointed with Africa based not in value and that the Forum held in Dakar, Turkey established out. “2015 must be our on a unilateral colo- government would the capital of Sen- business councils and first target, and on that nialist mentality but continue to support egal—the final stop works with 16 coun- date, let’s go up to 250 on a foundation of them, particularly on the trip—Erdoğan tries on the African million dollars,” said mutual benefit of re- so that SMEs will be said, “Senegal is the content, said Erdoğan. Erdoğan. The neces- spect, through which able to increase their first point of Turkey’s He noted that the es- sary legislative arrange- both sides will win.” investments in the reunion with Africa.” tablishment as quickly ments for this would Erdoğan indicated country. The Prime Minister as possible of a busi- be implemented, he that he has furthering indicated that the two ness council between added. For Senegal’s the volume of trade In Dakar, the last stop governments’ priority Turkey and Senegal growth, development, between Turkey and on the trip, a promise targets are to establish would accelerate eco- and progress into the Niger in mind, and he to increase trade to the necessary legisla- nomic activities. future in stability and expressed that Turkish $250 million tive infrastructure for Prime Minister Re- peace, Turkey is ready firms’ recorded invest- In the speech he de- investors and provide cep Tayyip Erdoğan to contribute in every ments in Africa have livered at the Turkey- incentives for them to stated that the Turk- way, the Prime Minis- exceeded $5.5 billion Senegal Business invest and trade. ish business group’s ter declared.

EXPORTS CONSTRUCTION SCO a Significant Turkish Contractors’ Export Market Projects worth xports gles with economic E accounted for $11 crisis, is in a decline— billion of Turkey’s total in 2010, the EU ac- $26 Billion trade in 2012, while counted for 41.7% of imports accounted for Turkey’s foreign trade. he Turkish Contrac- As of year-end 2012, the num- $51 billion. Turkey’s This figure has fallen Ttors’ Association released ber of countries in which the exports to member continually since then, a sectorial analysis that ad- contractors were active had countries of the down to 40.8% in dresses the shift of the focus of reached 100, with a total of Shanghai Cooperation 2011 and to around risk from the financial market 7,000 projects in these coun- Organization (SCO) 37.7% in 2012. Ac- to political developments in tries, worth the equivalent of constituted 7.5% of cording to data from 2013. The report announced $240 billion. The analysis indi- its total exports, while TurkStat, the SCO has that contractors undertook cates that the construction sec- imports from SCO a 16% share in Tur- 433 projects abroad, worth tor grew 0.3% in Q2 2012 and countries constituted key’s total foreign trade $26 billion in total, in the year 0.4% in Q3, and that the sec- 21.6% of total imports. volume, while the EU 2012, of which 65% were in tor’s total 1.5% growth over the Turkey’s trade with the has a share of around Turkmenistan, Iraq, Russia, first six months of the year fell EU, as the latter strug- 37%. Iran, and Saudi Arabia. to 1% after the ninth month.

MARCH-APRIL 2013 ISSUE 15 The Turkish Perspective 7

INVESTMENT SPORTS AUTOMOTIVE Expected FDI Zafer at Least $15 Fastest Billion In The World Çağlayan The survey was con- HINTS AT ducted among YASED DOMESTIC members. FDI in 2013 is expected to total $15– Automobile 20 billion by 49% of the participants, $20–25 Minister of Economy billion by 20%, and un- Zafer Çağlayan ex- der $15 billion by 27%. pressed intent to The survey suggests that encourage the develop- such sectors and indus- ment of a domestically tries in Turkey as energy, produced automobile. financial services, health Indicating that their care, automotive and its aims are to increase subsidiary industries, he world’s risingstar, Lena Aylin Erdil became the rates of local sourcing FMCG, agriculture, and T Turkish Airlines is con- world’s second-fastest woman in existing investments IT will draw interna- tinuing this year the support surfer. Congratulating Erdil on and to create a Turkish tional investment in the it has provided since 2008 her success, Turkish Airlines’ brand, Çağlayan said, coming term. to Lena Aylin Erdil, Turkey’s Sponsorship Investments and “Local sourcing in the wonder-woman windsurfer. Publications Manager Murat automotive industry in Clocking in at 45.74 knots in Öz said in his speech that Turkey is 56 percent, SPORTS the Luderitz Speed Challenge Turkish Airlines will always meaning that while held in Namibia from Novem- suppor progress in Turkish every 56 dollars out of ber 5 toDecember 2, 2012, sports. 100 dollars in produc- TURKISH tion stays in Turkey, 44 AIRLINES dollars goes to purchases from abroad. Our LEADS ON THE AUTOMOTIVE aim is to raise this level SOCCER PITCH to around 85 percent. Automotive Industry The more we localize The team that reached our sourcing, the faster a happy ending in the Export Champion for January we will approach our Istanbul U15 League’s own brand. The two Group 5 was none other are a simultaneous pro- than the Turkish Airlines cess. That is to say, this Sports Club’s U15 squad. journey will eventually Waging a fierce battle for bring to us a brand of the big championship our own.” with Istanbul Trab- zonspor all season, the red-and-whites defeated Bakırköyspor 5—2 in their last week on the pitch to finish two points ahead of their rival. With 12 wins, one draw, and one defeat, the team ccording to Turkish export the most by value was the scored 47 goals and had A Exporters Assembly (TIM) automotive industry with $1.49 14 scored against it. Their data, Turkey’s January exports to- billion in exports. Ready-to- aim now is get through taled $11.25 billion, which corre- wear clothing took second place the Istanbul eliminations sponds with a 5.6% increase over with $1.41 million and chemical and go to the Turkish the same month last year. On a materials third place with $1.32 Championship. by-industry basis, the industry to million. 068 First

FOSSIL FUELS BANKS S hell to Take a Dip in the Black Sea he Turkish Petroleum Corporation and Shell Tsigned a cooperation deal for deep-sea exploration and production of oil and gas in the western Black Sea. Shell, the fourth company to begin petroleum ex- plorations in the Black Sea after Petrobras, Chevron, and Exxon, will conduct 3D seismic exploration in a 1,500-square-kilometer area in the western Black Sea and drill at least one well.

Turkey Enters Top Ten in the Gold League he Central Bank of ary 3, 2013 to $123.344 mil- TTurkey’s total foreign lion in value as of January 25, currency reserves, including 2013, corresponding to a 337% gold, has exhibited an increase increase over a decade. While over the past decade of 337%, banks’ gold reserves totaled reaching historic record levels $1.73 billion on January 3, with a value of $123.34 bil- 2003, they reached the equiva- lion. According to information lent of $19.79 billion as of Jan- AVIATION gleaned from Central Bank uary 25, 2013. Over the past data, total foreign currency ten-year period, gold reserves reserves including gold rose grew by a rate of 1.447%, being THE WORLD UNDER YOUR from $28.29 billion on Janu- multiplied by a factor of 15.5.

WINGS BANKS ith the world’s est city, Douala, were Wfifth-largest flight launched on January 31. network and flights to A Colombo (Sri Lanka) Ten Turkish Banks more countries than route was added on Feb- any other airline in the ruary 1, as of which the among the World’s world, Turkish Airlines airline’s Starting from still continues to add new this date, the airline’s 500 Most Valuable Banks flight destinations. The five-times-weekly Istan- airline, which opened 34 bul–Maldives flights will en Turkish brands er. Akbank, with a brand eq- new routes in 2012, is be routed Istanbul–Mal- T entered the latest edi- uity of $2.121 billion, ranked planning to add another dives–Colombo. Drawing tion of the study “Top 500 86th on the worldwide list 33 in 2013. As part of on strength from its past, Most Valuable Banking as Turkey’s most valuable the expansion, thrice- Turkish Airlines contin- Brands,” which has been banking brand. Ranking first

weekly flights to the ues to march straight published annually for six worldwide was US-based y AA b Gabon capital, Libreville, ahead with confidence in years by Brand Finance in Wells Fargo with a $26 bil- via the country’s larg- its future success. cooperation with The Bank- lion brand equity. photograph MARCH-APRIL 2013 ISSUE 15 The Turkish Perspective 079

ENGINEERING AVIATION E uropeans Drawn TO Change Turkish Airlines’ M. Ali Bulut, President of Passenger Volume INVESTMENT the Demolition Contrac- tors Association of Turkey, Grows 23% in January announced that a $10 Turkey billion demolition mar- Turkish Airlines, which was named Europe’s Best Airline ket will emerge with the in 2012 by travelers, surpasses its goals once again. and India implementation of Turkey’s COLLABORATE several new urban renewal projects. Companies from on Germany, France, Spain, Investment Italy, and the Netherlands have expressed interest in Minister of Economy investing and partnering Zafer Çağlayan ex- with Turkish companies. pressed intent to Foreign parties are prepar- encourage the developing to enter the market ment of a domestically before the second phase produced automobile. in the project, said Bulut. Indicating that their On March 7, the Istanbul aims are to increase Demolition Conference will rates of local sourcing bring together demolition in existing investments companies both foreign and to create a Turkish and local. Fifteen European brand, Çağlayan said, companies are set to par- “Local sourcing in the ticipate in the event so far. automotive industry in n a press release by its a head start on the year 2013. “The Turkey is 56 percent, Imedia relations department, number of passengers carried in meaning that while ECONOMICS Turkish Airlines announced that January 2013 was 3.2 million, an every 56 dollars out of its total passenger volume grew increase of 23 percent over 2012. 100 dollars in produc- TurkStat 23% in January. According to the On domestic routes, the increase tion stays in Turkey, 44 release, the airline exceeded its tar- was 9 percent and on international dollars goes to purchas- CLARIFIES EFFECT gets last year by carrying more than services, 34 percent,” stated the es from abroad. Our OF TOURISM 39 million passengers and gained release.percent,” stated the release. aim is to raise this level to around 85 percent. INCOME REVISION FINANCE The more we localize ON CURRENT our sourcing, the faster we will approach our ACCOUNT DEFICIT European Investment Bank own brand. The two Grants Turkey Credit are a simultaneous pro- Birol Aydemir, the Presi- cess. That is to say, this dent of TurkStat (the journey will eventually Turkish Statistical Insti- he European Investment Bank bring to us a brand of tute), held a press confer- T(AIB), the EU’s long-term financing institu- our own.” ence in Istanbul at which tion, granted €2.14 billion in credit to Turkey he spoke about the effect last year, with an increase of 5%. Turkey became of the revision to tour- the bank’s seventh-largest customer among EU ism income figures on countries and largest customer from outside the balance of payments. the EU. Roughly half of the amount granted to Aydemir stated that this Turkey by AIB was earmarked as SME credit to revision should affect the be granted via banks. The grant was also used to figures for the current ac- provide €175 million to TÜBİTAK, €100 million count deficit in 2012 by to Arçelik, and €70 million to Türk Telekom for a net $2.2 billion initially. the purpose of R&D projects. b y AA photograph 10 Panorama Panorama By PROF.Nakiye Boyacıgiller, PhD

The Need for Managers (and Individuals) with Global Minds

s the dean of one of the most important While scientific debates on the conceptualization and management schools of Turkey—one that has strong measurement of the global mind are ongoing, management ties to business—I often think about what our school schools and the international management community have must do in order to help our students to develop the reached a consensus that the number of people with global necessaryA skills to handle issues they will face throughout their minds plays an important role in attaining institutional suc- careers. I also see that high-level managers are spending much cess. This is because the global mind helps leaders see the time and effort toward cultivating a workforce for the future. With world from different perspectives, make effective decisions regard to workforce development, the importance given to busi- both locally and globally, and raise the competitiveness of their ness ethics and global context has increased especially in recent companies in the global market. years. An important matter here is how management schools and companies will work together to determine the qualities and com- Is the global mind important? mitments we expect from the managers and leaders of the future. Cultural and institutional differences and local contexts con-

I call these qualities the “global mind.” tinue to be of critical importance today. Meanwhile, the global N Gİ What is a global mind? In the early 2000s, my colleagues and challenges we face as humankind (global warming, the struggle R Gİ T A

I conducted a study to understand exactly what the global mind against poverty, illness, war, and so on, and the organization of our D E S

was. Informed by the comprehensive results we obtained, we financial system) require an understanding of global citizenship Y

defined the global mind as the ability to think about the world and responsibility, as well as comprehensive solutions. These chal- ON B I T in several different ways, with a sophisticated perspective that lenges can only be overcome by managerial teams that possess A

embodies a positive approach and cosmopolitanism. global perspectives. USTR ILL MARCH-APRIL 2013 ISSUE 15 TheThe Turkish Turkish Perspective Perspective 1111

The development of a global perspective is of vital importance academic year, Turkey ranked sixth in terms of academic student for Turkey in particular. Turkey is aiming to become one of the mobility and secured an increase of roughly 15% over the previous world’s largest economies in the coming term. But to achieve year with a mobility of roughly 10,000 people.1 Despite this, in or- this, Turkish companies must assume larger roles in the global der to reach the targets set in Bologna for the year 2020, partici- markets and effectuate a deep transformation from the local to pation from Turkey must increase 22% annually and the number the global. And global minds in managers are the most important of outbound students must reach the level of 80,000 annually. 2 element that will trigger and lead this change. Joint gains for companies, management schools, and society How can we CULTIVATE global mindS? There are two important institutions that provide accredita- Coca-Cola Company CEO Muhtar Kent and Renault-Nissan tion to management schools: the AACSB and EFMD. These CEO Carlos Ghosn are typical examples of global leaders. Both of institutions emphasize the appreciation of global perspective them had various cross-cultural learning experiences as they took and cultural diversity as critical factors of success in manage- great strides toward leadership and embraced opportunities to ment education. Opportunities for multicultural education work in different countries and cultures throughout their careers. that people could access without leaving their houses emerged So, instead of waiting for global leaders to emerge on their own to as the outcome of the combination of the economic limita- save the day, what can we do to increase their numbers? tions faced by many schools with the innovative teaching tools When managerial candidates are being selected in global com- brought by developments in communication technology. But panies, it is important to be able to recognize I still do not believe anything could serve as individuals who exhibit the aptitude to develop a substitute for international exchange. As global minds (meaning they possess sophisti- management schools push these programs cated, cosmopolitan perspectives). Managing to the forefront on account of their curricula, complex projects in the past, the ability to companies could play an important support- separate and combine information, and suc- ive role. I hope that students being asked in cesses exhibited on the part of these individu- job interviews why they did not participate in als could be considered indicators that they international exchange will encourage more possess the ability to think with sophistication. Turkish of them to participate in these programs. Cosmopolitanism could be assessed by looking companies must And companies can offer more international at such factors as being educated in multiple internship opportunities to contribute to the countries, having family ties to different na- assume larger cultivation of global minds. tions, and skill in foreign languages. roles in the global International travel, multicultural team- Conclusion work, intercultural training, and expatriate markets and It is expensive to place employees in other assignments are the main methods applied by effectuate a deep countries as expatriates. On the other hand, companies to develop teams of workers who compare the cost of sending a twenty- possess global minds. But the management of transformation something student abroad for one term or multicultural teams and expatriate assign- from the local to year with that of sending a high-potential ments is very difficult, with such undertakings employee in his or her thirties abroad. Why often resulting in disappointment. Broad cul- the global. wouldn’t you hire someone who already pos- tural differences are often blamed for failures, sesses one of the most important manage- but being unable to adapt to the cultural habits ment skills? Just as how foreign languages are of a certain country is just a small part of the problem. In truth, best learned at early age, gaining such transformative experi- the lack in individuals of global minds that would allow them to ences at an early age ensures that their effects will be deep and open up to new things is generally the most significant reason. lasting. If companies were to show more demand for students with global minds and open more doors for them, students will What are management schools DOING TO CULTIVATE global want to develop these skills even further. In connection to this, minds in students? we will see management schools investing more to develop these Over the past 20 years, management schools made significant aspects in students. As always, the management community investments to increase students’ international experience via needs both pressure (by rules of accreditation and curricula) and exchange programs, international internships, and educational encouragement. The driving force that will facilitate growth in tours. Additionally, increased cultural diversity in many schools the number of people who possess global minds is our obliga- helped to establish a multicultural class environment that made tion to face the global challenges that stand before us as human-

N it possible to develop global skills. For instance, the Erasmus pro- ity. I hope we are not too late for this struggle.

R Gİ gram, whose stated purpose is to “contribute to the development T Gİ of a pool of well-qualified, open-minded, and internationally 1 Ülgür, İlyas. (2012). Erasmus İstatistikleri ve Genel Değerlendirme. Center experienced young people as future professionals,” enabled two for European Union Education and Youth Programmes: http://www.ua.gov.tr/ docs/erasmus-/erasmus-%C4%B1statistikleri-ve-genel-degerlendirme.pdf million students in Europe to gain rich educational experiences in 2 Ülgür, İlyas. (2011). Erasmus Hareketlilik Faaliyet Genel Değerlendirme. T I ON B Y S E D A different countries since it was founded in 1987. Turkey is exhibit- Center for European Union Education and Youth Programmes: http://www.

USTR A ing ever-greater participation in this program. In the 2010–2011 ua.gov.tr/docs/erasmus-/2009-2010-genel-degerlendirme.pdf ILL 12 The Turkish Perspective Content: Ispat at Full Gear P15 Turkish Furniture Makers Stand Up to China P18 Turkey Rewriting the Rules of the Auto Game P20 Turkey Climbs to the Top in Egg Exports P22 The Asian Finance Giant’s Plans for Turkey P24 Turkish Airlines Aims for World Leadership P26 New Markets Critical for 2023 Target P28 Editors: Can Gürsu

Briefing health, ınvestment, Furniture, automotıve, POULTRY FARMING, AVIATIOn, INT’L AFFAIRS...

The development of HEALTH Turkey’s health care sector and growing investments have had a positive effect on the medical tourism Medical Industry Draws industry. Tourists to Turkey Medical tourism, lately one of Turkey’s rising stars in the export of services, could be one of the country’s greatest playing cards in reaching its 2023 targets.

By NESRİN KOÇASLAN By CEVAHİR BUĞU

urkey has yet another patients, establishing offices introduced in 2002 and the With this share, the industry T playing card to help it abroad, employing person- growth of the industry in is important to the $500 grow and reach its targets nel specializing in this area. recent years through invest- billion export target for the for 2023. Medical tourism, Turkey’s health care sector is ments and reforms,there year 2023 as well. The export which exhibited significant thus growing in a “win-win” is a visible increase in the of services, which includes development in recent years, fashion. industry’s contribution to medical tourism, is expected is an important matter on exports. According to data to account for $150 billion of the government’s economic Turkey’s Share in Medical from the Ministry of Health’s the total target, and medi- agenda. In turn, the private Tourism Increases Medical Tourism Unit, cal tourism is expected to sector is showing greater With the “Transformation medical tourism accounts contribute $20 billion to this interest in international in Health” policies that were for $1 billion of total exports. figure.

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Free Zone Preparations Turkey has taken important steps to advance medical tourism. “Foreigners who receive health care will speak of how advanced Turkey is in health when they return to their countries, contributing to Turkey’s image in social and political terms,” says Dr. Dursun Aydın, President of the Ministry of Health’s Medical Tourism Unit. In his speeches, he often emphasizes how important free medical zones are to the industry. “We must offer this system to the world with a unique conceptualization. Investors will be given Medical tourism, P aTIENTS FLOCK to Turkey tax-related advantages and which exhibited The effects of the tangible bureaucratic services will significant steps taken by Turkey in be expedited. To encour- development in the field of medical tourism age Turkish physicians who can be observed statisti- 1 recent years, is an MILLION have served abroad for long cally. While the number of years to come to free medical important matter patients coming to Turkey in Medical tourist target zones in Turkey, we plan to on the government’s 2008 was 56,276, this figure for 2023 exempt them from com- economic agenda. rose to 156,000 in 2011, pulsory service,” says Aydın, corresponding to an average underlining the importance increase of 150%. Ceylan Turkey is giving to medi- Pirinçcioğlu, Chairman and cal tourism. According to CEO of VIP Tourism, affirms the Medical Tourism Unit’s these figures. He states that $20 plans, 85% of the free medi- in the past, patients would BILLION cal zones to be established travel from Turkey to Europe Medical tourism revenue will be set aside for the care due to inadequacies in health target for 2023 of international patients, care services in the country. with the remaining 15% be- As he points out, this situ- ing designated for local use. ation has changed in recent years. The development of Turkey’s health care sector I ncOMING INTERNATIONAL Patients and growing investments International patients are choosing medical institutions in Turkey for have had a positive effect 500 almost every matter on the medical tourism THOUSAND industry, said Pirinçcioğlu. THOUSAND International patient 175 Growth in this field will pro- target for 2015 vide a positive contribution 150 Number of INTERNATIONAL to tourism overall as well, he 125 Patients VISITING added. 100 TURKEY STAR BRANCHES 75 International patients are $7 50 choosing medical institu- BILLION tions in Turkey for almost 25 every matter. Certain Medical tourism revenue target for 2015 0 branches in the sector shine 2008 2009 2010 2011 particularly brightly and Data: Medical Tourism Unit attract the most patients; Data: namely ophthalmol- Medical Tourism Unit 14 Briefing

ogy, dentistry, orthopedics, Today, the Turkish health cardiology, oncology, plastic care sector stands out with surgery, and neurosurgery. its well-educated, trained human resources. Most patients come from Germany, the Netherlands, France, the Turkic republics, Austria, and Middle Eastern countries. Of the patients who come from abroad, 92% opt for private hospitals and 8% choose public hospitals. Dr. Melike Külahçı, General Manager of Transmed Klinik, which is active especially in the fields of plastic surgery and hair transplantation, says they have secured a 50% increase in the number of international patients over the past five years. Klinik 32 General Manager Ilgaz Özer says the number of stands out not only for its incoming international pa- medical success but also for tients corresponds with the the additional services it strengthening of Turkey’s offers to patients. economy and its increasing recognition abroad Medical Tourism to CONTINUE every year, and he adds that GROWING Turkish Airlines’ successful Today, the Turkish health I lgaz Özer Dkr. Melİ e Külahçı strategy and the expansion care sector stands out with General Manager, Klinik 32 General Manager, Transmed Clinic of its flight network to more its well-educated, trained countries has helped the in- The number of patients With advertising and marketing human resources. The fact dustry to become a powerful coming in from abroad incentives, the state has recently that private hospitals and player internationally. Small is increasing every year started providing conveniences the state are attaching so in proportion to the to institutions that want to formations that large clinics strengthening of Turkey’s branch out abroad. These must much importance to medi- and private hospitals used economy and growing increase, and the application cal tourism is influential in to assemble themselves have recognition abroad. Thanks stages must be relaxed as well. the industry’s rapid growth. been replaced by a large especially to Turkish Airlines’ Furthermore, especially in the While recent actions by successful strategy and the field of hair transplantation, organization that includes expansion of its flight network there are more than two hundred the Ministry of Health tourism agencies and is sup- to more countries, this establishments that can be may have delighted the ported by state incentives, market—virtually untouched characterized as clandestine. private hospital industry, says Ilgaz, and he empha- five years ago—has become These kinds of operations, which Turkey still has much to sizes that medical tourism a large industry with many should normally be performed by accomplish in this area. players. Small organizations plastic surgeons, are being done has gone beyond being that large clinics and private by unauthorized individuals. International investors who a subsegment of general hospitals used to attempt by Carried out in unhealthy recognized this potential in tourism and grown into a their own means in the past environments, these operations Turkey have already started genuine industry of its own. have now become a large can lead to various complications partnerships with private organization that includes for the patient. And, of course, Istanbul Cerrahi Hospital tourism agencies and is the patient might not be able hospitals in the country. Chairman Melih Us notes supported by state incentives. to obtain the desired aesthetic So long as people continue that two million operations Medical tourism has gone result. Negative feedback that to be ever-more interested were conducted in Turkey beyond being a subsegment these kinds of establishments in their health, Turkish a decade ago and that this of general tourism and grown might generate could affect health care services remain into a genuine industry of medical tourism negatively, figure has reached nine mil- its own. While we are very causing new patients to prefer internationally competitive, lion today. With its acquired selective and bound by other countries. Therefore, the and the cost differential experience, Turkey has be- capacity, we welcome 50–60 state must audit more frequently remains as a key factor, come a country of choice for international patients per year to play a more active role in medical tourism in Turkey on average. halting the activities of such international patients, says places. will continue to grow at Us, and he adds that Turkey ever-greater speed.

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Mr. Aycı said: “Our election to the Vice Presidency of WAIPA coincides with ISPAT’s increased efforts to promote Turkey’s investment environment”.

INVESTMENT Ispat At Full Gear Turkey at the Helm of the World Association of Investment Promotion Agencies Obtaining two-thirds of the votes of the 122 countries that came together in Geneva for their annual meeting, the Investment Support and Promotion Agency of Turkey (ISPAT) was elected to the Vice Presidency of the World Association of Investment Promotion Agencies (WAIPA) for the years 2013–2015.

NUMBER 2 IN THE GLOBAL Established in 1995, WAIPA objective to improve coopera- between IPAs, strengthen the FDI SCENE: ISPAT IS is a nongovernmental orga- tion among IPAs on a regional system of gathering informa- ELECTED TO VICE PRESI- nization based in Geneva, and global basis, as well as to tion and exchanging networks, DENCY OF WAIPA Switzerland. In 2008, the facilitate the exchange of expe- help member IPAs gain access In the elections held on association had 228 member riences in attracting FDI. to technical assistance and February 12, 2013, ISPAT agencies from 156 countries, In the elections, as Turkey training through referrals to obtained 65% of the votes whereas now it has 249 mem- replaced Spain, the presidency relevant international or multi- in the General Assembly of ber agencies from 157 coun- was transferred from Brazil to lateral agencies, and assist IPAs WAIPA, thus making ISPAT tries. WAIPA is recognized as Hong Kong. Both newly elect- in advising their respective gov- President Mr. M. İlker Aycı the largest global forum for ed agencies will be leading the ernments on the formulation of the second-in-command of investment promotion agen- way to promote and develop appropriate investment promo- WAIPA. cies (IPAs), with a primary understanding and cooperation tion policies and strategies. 16 Briefing

Upon his election to the Upon his election to the Vice Presidency of the ISPAT for the election of the Vice Presidency of the WAI- Vice Presidency. ISPAT at- PA, Mr. İlker Aycı said: “Our WAIPA, Mr. İlker Aycı said, “Our election to taches great importance to election to the Vice Presiden- the Vice Presidency of WAIPA coincides with cooperate with the regional cy of WAIPA coincides with ISPAT’s increased efforts to promote Turkey’s development agencies in ISPAT’s increased efforts to investment environment and to develop Turkey. Mobilizing their local promote Turkey’s investment resources, the regional devel- environment and to develop sector-, country-, and even product-specific opment agencies in Turkey sector-, country-, and even strategies to attract international investors” are a great asset for ISPAT. product-specific strategies to attract international in- Turkey as a focus country vestors. Complemented by Advisory Services’ survey, the the primary function of which on the global stage Turkey’s rise as an economic “Global Investment Promo- is “to promote any country, ISPAT’s efforts to promote and political powerhouse in tion Benchmarking” report, political subdivision of a Turkey since its establish- the global arena, this success ranked ISPAT 13th among country or other uncontested ment in 2006 have not gone will strengthen our resolve 189 national IPAs in 2012, territory, as a destination for, unnoticed by the internation- to better present our country and the ISPAT website (www. or source of, investments.” al business community. Tur- to international investors.” invest.gov.tr) was ranked as WAIPA aims to improve co- key’s FDI has witnessed—in ISPAT’s growing popularity seventh best in the same year. operation among IPAs on re- a very short period of time— among international business gional and global levels and to the direct effects of deep authorities is a clear indicator WAIPA: the largest global facilitate the experience trans- structural reforms. Successful of its high-quality services platform for investment fer on drawing investment. In economic performance is offered to the investors. promotion agencies this regard, ISPAT will both also encouraging experts and WAIPA has been an excel- benefit from and contribute to international institutions to Vice presidency at a young age lent platform for IPAs to ex- WAIPA’s activities. make confident projections Despite being a young institu- change and share experience. Led by ISPAT, Turkey about the future of the Turk- tion, ISPAT’s performance in Through its wide range of is also represented within ish economy. For example, promoting Turkey and facili- activities, WAIPA offers IPAs WAIPA by regional develop- according to the OECD, tating investment has been the opportunity to network ment agencies, namely, the Turkey is expected to be the remarkable. While initially and exchange best practices in İzmir Development Agency fastest-growing economy ranking ISPAT as the 15th investment promotion. WAI- (IZKA), the Middle Black Sea among the OECD’s members best-performing investment PA has always dedicated—and Development Agency (OKA), from 2011 to 2017, with an promotion agency among 181 continues to dedicate—time the Mevlana Development annual average growth rate national IPAs in the world in and effort toward building the Agency (MEVKA), and the of 6.7%. 2009 (only three years after human resources capacity of West Mediterranean Devel- As a result of the ever- its establishment), the World its member agencies. Mem- opment Agency (BAKA). increasing awareness about Bank’s Foreign Investment bership is open to all entities, They closely worked with Turkey’s economic success

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over the past decade, Turkey “Prof. Cevdet Akçay, PhD, Chief Economist for Yapı Kredi Bank, has been the focus country of one of the leading banks in Turkey, many international debates, delivered a presentation in the plenary summits, and conferences. session of “Rebuilding Global Econo- mic Governance: Role of G-20” Most recently, Turkey was the focus country of the Global Partnership Sum- Turkey has become the mit for Enduring Growth, bridge not only to Europe which was organized by the but also to Central Asia, Indian authorities and the the Middle East, and North Confederation of Indian Africa, attracting increasing Industry and held in India interest from global inves- in late January 2013. The tors.” Mr. Aycı highlighted names from ISPAT Team the growing importance who attended the summit of Turkey in forging global are; President; Mr. İlker partnerships through its Aycı, Vice President; Mr. dynamic force on the global Indian companies seeking increasingly active role as a Arda Ermut, Country Advi- stage. Major Indian com- new markets and opportuni- global manufacturing hub sors; Mr. Sanjeev Kathpalia panies are becoming mul- ties worldwide. Turkey offers and an important link in the and Ms. Fariha Ansari and tinational in outlook, seek- global investors, including global value chain of dynam- Project Directors Mr. Bekir ing opportunities in other Indian investors, great op- ic businesses across sectors. Polat and Mr. Ahmet Burak markets and driving up the portunities across a variety Mr. Bahadır Kaleağası, the Dağlıoğlu. The summit proportion of their turnover of industries, such as auto- International Coordinator brought together over 1,000 from overseas. Bolstered by motive, ICT, energy, iron & of the Turkish Industry and businesspeople, experts, and new economic agreements steel, agriculture, chemicals, Business Association, also investors, as well as govern- with regions and countries, and petrochemicals. Turkey gave a speech at the summit. ment officials from 45 coun- Indian enterprises are look- is also an excellent platform Mr. Kaleağası said Turkey, tries. The timing, location, ing into ways to expand their for Indian companies to ac- with its unique location at and selection of Turkey as growth, thus creating jobs cess rich markets in Europe, the crossroads of Europe the focus country were not a and livelihood opportunities the Middle East, and Africa. and Asia, offers distinctive coincidence. across the globe. Turkey has Speaking at the event, advantages for integration Among the participants been a major destination for President Aycı said, “Today, through the global value were also Mr. İlker Aycı, chain. Citing the example President of ISPAT; Mr. of Turkey’s Customs Union Burak Akçapar, Turkey’s Turkey was the focus country of the Global agreement with the EU, he Ambassador to India; Partnership Summit for Enduring Growth, said that it not only helped and Prof. Osman Cevdet Turkey diversify its exports Akçay, PhD, Chief Econo- which was organized by the Indian authorities basket, but also enabled it to mist for Yapı Kredi Bank, and the Confederation of Indian Industry and trigger partnerships in the one of the leading banks held in India in late January 2013. current global context. in Turkey. Ambassador Akçapar honored the open- Mr. Ilker Aycı, President of ing of the “Turkey: Exclusive ISPAT and Mr. Burak Akçapar, Turkey’s Ambassador to India Focus Country” session and made their speech in the highlighted the importance of “Turkey: Exclusive Focus Country” session. cultural, economic, and political relations between Turkey and India. Prof. Cevdet Akçay, PhD also delivered a presentation in the plenary session of “Rebuilding Global Economic Governance: Role of G-20.” At a time of global economic crises, emerging economies like Turkey and India have been gaining more economic significance in the world. Indian entrepreneurs have recently emerged as a 18 Briefing

With high-quality materials and innovative approaches to design, Turkish furniture makers are preparing to stand up to China, the world’s largest producer of furniture, in the latter’s home cour.t

Furniture small, medium, or large—grew enormously. According to the Ministry of Science, Industry, and Technology’s “Furniture Turkish Furniture Makers Industry Report,” there were 61,728 such establishments (including retail stores) in Stand Up to FACE China 2012, providing employment to more than 258,000 The furniture industry, a driving force of Turkey’s economy, people. In recent years, great continued to develop as a critical component of Turkey’s exports leaps have been taken in the industry concerning branding. with the positive performance it exhibited in 2012. Thanks to the “brand boom,” the industry’s contribution By NESRİN KOÇASLAN to the Turkish economy via ndustrialized as of the ambitious is China’s marked exports grew significantly. I1970s and having moved strength in global furniture MASKO Chairman Hasan toward branding in the production and exports. But Karcı said: “Looking at the 2000s, the Turkish furniture with high-quality materials furniture industry worldwide, industry is growing rapidly, and innovative approaches we see that Germany sells fur- especially in exports. Turkish to design, Turkish furniture niture for 12.5 dollars per ki- furniture makers, which were makers are preparing to stand logram. We sell higher-quality focused on the countries of up to China, which has been products for 3.84 dollars per the Middle East and Africa Increased purchasing the largest producer in the kilogram. In furniture and ac- until recently, have set their world for the past five years. cessories, these figures are 2.92 sights on a new market—a power in China has dollars for Turkey and around very ambitious one, at that. been pushing up the THE LaTEST Situation in the 5 dollars for Germany. Poland In 2012, Turkish furniture value of high-quality, Turkish Furniture Industry sells its products for 5 dollars, makers launched efforts to well-designed Turkish Over the last 20 years, the while Italy—the first country focus on Central and East furniture in that number of furniture busi- to come to mind on mention Asia. What makes this so country as of late. nesses in Turkey—whether of furniture—sells for around

MARCH-APRIL 2013 ISSUE 15 The Turkish Perspective 19

12 dollars. The difference is Activity in Africa Must Go On entering the African market, too high. For this reason, if Although there has been we have been establishing we could increase the brand a noticeable increase in trade relations with various equity of our already high- exports to China, Turkish countries. Most recently, the quality products and raise furniture makers’ relations delegation sent to Angola per-kilogram prices, we could with the African market, showed that the steps we obtain significant increases in which they have shown have taken toward creating a export figures by the end of special attention toward distinct style of Turkish fur- the year.” in recent years, continue niture have yielded success- to be of key importance to ful results. As the outcome Making Inroads in Asia Turkey’s export strategy as a of the meetings we held, we In 2012, Turkey’s furniture way of maintaining and fos- expect our export volume of industry exported a total $1.7 tering the growth of existing one million dollars to rise to billion worth of furniture to markets. five million dollars. Our ef- 173 countries. In 2023, it is Ahmet Güleç, Chair- forts for promotion and co- expected to raise this figure man of MOSDER, said the operation in territories both to over $7 billion. Abdul- following in relation to the near and far will continue at lah Tever, Chairman of the above: “Since we started full speed. For Turkey, a fur- Istanbul Wood and Forestry niture-producing country, Products Exporters Associa- competition on the bases of tion, says global demand for quality, price, technology, Turkish furniture on the and design with countries rise. Should Turkey achieve that are themselves global its targets, he says, it will be brands in furniture is heat- able to take a 2% share of $1.7 ing up by the day. With their the world market. To achieve billion 173 ongoing efforts to handle this, Turkey must be active NUMBER OF export this, Turkish furniture mak- not only in Central and East TOTAL INDUSTRY countries In 2012 ers are reaping the reward EXPORT IN 2012 Asia but also in African of their labor in the form of countries, says Tever: “With rising export figures.” a 45 percent share, European countries rank first in the furniture exports of Turkish firms. The countries of the Middle East, Asia, and Africa are also among the export areas. The industry’s export is growing 18 to 20 percent every year. This year, we aim Davut Doğan Hı asan Karc Ahmet Güleç to surpass two billion dollars Chairman, Doğtaş Chairman, MASKO Chairman, MODSER in exports.” Hasan Karcı points out The furniture industry’s trade China had a competitive advan- Since we started entering the tage for many years through cheap that while 25% of the world volume is growing every day. African market, we have been labor. But most of the products establishing trade relations furniture market is domi- However, net profitability in developed countries is somewhat they produce are poor in terms with various countries. Most nated by China, Turkish fur- ahead of us. Unfair competition of quality. We also know that the recently, the delegation sent niture is far superior in terms in the furniture industry in our furniture they export generally to Angola showed that the of quality and workmanship. country is as influential on this as consists of hardwood, metal, and steps we have taken toward is the lower level of competition then rattan, bamboo, and plas- creating a distinct style of “There is no standard for the Turkish furniture have yielded in developed countries. While tic dining room sets. In parallel quality of furniture produced successful results. As the Turkey occupies a very important with economic growth in China, in China. The products outcome of the meetings we position in manufacturing, its middle class is growing richer, held, we expect our export exhibit constant variances. too. This now-richer segment pre- sufficient investment in R&D volume of one million dollars Furthermore, their prices are fers furniture that stands out for and design is not being made in to rise to five million dollars. no longer so modest com- our industry, and deficiencies design and innovative character- Our efforts for promotion and pared to previous years. The in subcontract manufacturing, istics, and Turkish furniture is of cooperation in territories both Turkish furniture industry, production technologies, a nature that can satisfy this need near and far will continue at with ease. I think our companies on the other hand, has at- international standards, and full speed. quality continue. To increase our will understand the importance tained a standard of quality. industry’s profitability, unfair of this potential even better and We don’t see China as a rival competition must be eliminated focus on this market in the period to us.” or reduced. ahead. 20 Briefing

automotive Turkey Rewriting the Rules of the Auto Game With a total export of $19 billion in 2012, the constantly growing Turkish automotive industry is climbing up in worldwide rankings thanks to its skillful manoeuvres in the global marketplace.

by can gürsu

cquisitions of foreign locomotive industry—as is the of the automotive industry, dollars,” he said. Ali İhsan A companies by Turkish case for other countries around points to its total export of Yeşilova, the chairman of companies have gained great the world—that drives the $20.4 billion in 2011 and its Yeşilova Holding, which sells momentum over the past five development of the country, its status as the country’s top aluminum profiles to the in- years. The world’s leading auto industrial transformation, the export industry for seven dustry, notes that the ability companies choose to invest in development of its approach consecutive years. “This suc- to adapt quickly to changing Turkey on account of its parts to quality, the spread of R&D cess once again exhibits our circumstances is of great and components industry, a consciousness, and the provi- export potential for all to see. importance for obtaining source of continual growth. sion of quality employment. The fact that our industry new markets. He confidently Always of great importance “Turkey is the seventeenth- maintained its leadership in expresses his belief that the to Turkey, the automotive in- largest economy and also the exports despite the recession industry’s export leadership dustry is exhibiting sustained seventeenth-largest country in EU countries was a source will continue at full throttle. progress. Ömer Burhanoğlu, for automotive,” he states. of morale and motivation These accomplishments Automotive Industry Chair- Automotive Industry for the entire sector. Our aside, another delightful man for the Turkish Exporters Exporters’ Association aim for 2013 is to win our development is the growth Assembly, says the automo- Chairman Orhan Sabuncu, eighth consecutive title with the rate of local sourcing in tive industry in Turkey is a emphasizing the sheer size an export figure of 20 billion automotive exports. Ömer AA

H P HOFOGRA P MARCH-APRIL 2013 ISSUE 15 The Turkish Perspective 21

Burhanoğlu says, “The Turkey’s automotive industry, which has always been crucial imports map we are working for the country, is growing on jointly with the Ministry every day. of Economy shows the rate of local sourcing in automotive as 56 percent in the parent the above can be observed in industry and 65 percent in consumption, says Yeşilova. the subsidiary industry.” The automotive industry’s The global balance of projected contribution to Tur- players in the automotive key’s vision of a $500 billion industry worldwide is shift- export in 2023 is $75 billion. ing. The effects of the period From a macroscopic view, the in which the economic crisis manufacturing base, invest- had Europe and America in ment climate, infrastructure, its grip persist. The chairman skilled workforce, and subsid- of Yeşilova Holding states iary industry in Turkey pres- that there will be deep-rooted ent a hospitable environment, changes in the automotive in- indicates Ömer Burhanoğlu. dustry in connection to this: According to him, in order “I think the rules of the game for Turkey to increase its will be rewritten and that production capacity, it must certain actors’ positions in the default. “You must create re- and keeping up with innova- develop new models and shift rankings will change—or even sources for these issues,” says tion, the development of new its Asian investments in this disappear.” Yeşilova, and he indicates concepts, rigorous observa- direction. “If the rise of the R&D efforts play an that sustained profitability tion of consumer trends, and subsidiary industry’s ex- important role in the growth and innovation are how to knowledge of the require- ports, which account for a 45 of the industry’s trade accomplish this. Companies ments and expectations of percent of our total exports, volume. The constantly that are capable of these each segment were key to the continues to support growth, evolving nature of industry move on to success in the industry’s seventh consecu- we will approach our expecta- necessitates R&D support by global arena. Besides R&D tive win. The outcomes of tions,” says Burhanoğlu.

Orhan Sabuncu A anlİ İhs Yeşİlova Ş ahap Aktaş Ömer Burhanoğlu Chairman, Automotive Chairman, Yeşilova Holding Chairman, Aktaş Holding Automotive Industry Chairman, Industry Exporters’ Association Board Member Turkish Exporters Assembly The automotive industry is fore- The automotive industry is one of The ability to produce high value- most among the locomotive in- Turkey’s most important indus- The automotive industry in added vehicles, parts, and com- dustries for a country to become tries. Especially considering that ponents is indispensable for our Turkey is a locomotive indus- developed. Indirectly, our industry the 2023 export target is $500 bil- try—as it is worldwide—that 2023 targets. We must not forget is a large buyer for many indus- lion, the success of the automotive that reaching the 2023 targets is drives the development of the tries from machinery to chemicals industry, together with its subsid- country, its industrial transfor- impossible with our present pro- and from textiles to mining, and it iary industry, will contribute great- duction capacity, and we must mation, the development of its performs a duty that forces these ly to Turkey’s success. Despite the approach to quality, the spread invest in R&D and innovation, industries toward progress. The crisis environment in the EU, the and improve our design abilities. of R&D awareness, and the pro- fact that our largest market from industry in Turkey won the export vision of quality employment. In order to draw new investments the perspective of the automotive championship for the seventh to our country, the heavy tax The ranking of the world league industry is Europe and that the time. The successful performance in automotive is also a ranking burden especially on passenger automotive market in Europe has of Turkish exporters helped spare cars must be relieved and mea- of economies. Turkey is the 17th- shrunk six years in a row is forcing our country somewhat from the largest economy and also the sures should be taken to enliven us to enter new markets. I believe effects of the stagnation under way the domestic market. A competi- 17th-largest country for automo- this effect will bolster the Turk- in the countries of the EU. Our tive. If we want to enter the ranks tive exchange rate policy is indis- ish automotive industry’s posi- exporters learned to make use of pensable for our export targets. of the ten largest economies by tion in the years ahead and that we alternative markets in this period 2023, we must join forces to put Positive or negative develop- will continue to lead in exports for of stagnation. I believe we have ments in the EU market, which is our automotive industry into the many long years as we maintain escaped the negative effects of the top ten as well. our foremost market, will directly its competitive character without crisis with the discovery of differ- H BY AA affect our export targets, too. compromising on quality. ent markets. HOFOGRA P P 22 Briefing

POULTRY FARMING

ith the associations W created by groups Turkey Climbs to the of egg producers all over Turkey and the international egg commission of which Top in Egg Exports the country is a member, Turkey is closely following The Turkish egg industry’s export figures cause it to raise the developments that pertain Turkish Furniture Makers bar with the addition of new markets every year. As it climbs to achieving the envisioned upward in the ranks of worldwide egg production and exports, target for egg exports. Rank- Turkey shows improved dynamics in this area over past years. ing as the tenth-largest exporter worldwide with Stand Up to China 15.5 billion eggs produced, Turkey is growing despite BZy Gİ EM GÜZEY higher costs and a more Turkey Rewriting the challenging competitive environment by increasing its export figures and gain- Rules ing new markets. Over the first six months of 2012, the Turkish egg industry’s export of the Auto Game totaled $91.58 billion, corresponding to a 65% increase over the previous year. Most of Turkey’s egg exports are Turkey Climbs to the bound to Iraq and Azerbai- jan. Last year, Turkey broke an export record, with four Top in Egg Exports billion eggs—worth $351 million—being exported to 21 countries. With ongoing projects to expand its export markets in 2013, Turkey is climbing toward the top in egg exports. In their discussions of industry targets for 2013, egg exporters expressed an expectation of support to eliminate inadequacies and resolve certain issues. Egg giant Keskinoğlu states that while Turkey is successful in egg exports, investment in product diversity has been sorely inadequate.

Egg exporters are expecting support to reach their 2013 targets and to AA

resolve industry H P issues. HOFOGRA P MARCH-APRIL 2013 ISSUE 15 The Turkish Perspective 23

For instance, in the market it will also create increased for pasteurized eggs, which awareness of Turkish com- are used heavily in industry, panies for quality produc- Turkey holds a share of only tion in these countries, said around 2%. Turkey only pos- Keskinoğlu, and it added that sesses a share of around 2% it expects support regarding in pasteurized egg production this matter. at the moment. This figure is Derya Pala, Chair of the 35% for European countries Turkish Egg Producers As- and 40% for the US, and sociation (YUM-BİR), said according to this need in the egg production in Turkey is market, said Keskinoğlu, it is increasing annually, based on aiming to increase its market Turkey’s egg industry has annual revenues domestic consumption and share to around 30% by meet- of roughly TRY 3 billion. Directly and exports. However, producing this demand through a set ers are forced to pay for the of pasteurized egg products; indirectly, it employs around 100,000. profit of the intermediary namely yolks, whites, and Furthermore, by virtue of eggs being parties to consumers while whole eggs. significant sources of animal protein, selling eggs for low cost, and Keskinoğlu began studies it provides a nourishing contribution to these contradictions must be concerning animal welfare eliminated for the future of and natural production the Turkish diet. the egg industry, she empha- in 2008. It is able to cater sized. In 2013, producers will to the natural behavioral have to set aside consider- characteristics of its existing able time for registration/ chickens and has started to approval, cage improvement, place them in spacious new and the preparation of health cages with roosts, nesting plans, and another issue that boxes, and scratching areas, could await small producers said the company. These especially is the market- giant 1,750-square-meter ing of eggs, she indicated. cages allow chickens to roam Producers that rapidly adapt freely, with this change in to regulations and solve the production in turn leading to marketing issue will be in a more flavorful eggs. With the better position in the market coming into force of na- in this new period, she tional regulations on animal stated, adding that market welfare, Keskinoğlu decided demand would shape pro- to accelerate its investments duction. While most produc- in free-roam cages, which it ers in 2013 will continue the began with TRY 10 million in traditional method of pro- 2008. By 2015, said the com- duction, some may focus on pany, it will have completed a producing eggs with value- total additional investment of added characteristics (with TRY 25 million, transforming Omega-3 acids, selenium, or all cages to the free-roam va- low cholesterol, for example) riety that maximizes the level or organic eggs, stated Pala. of animal welfare, and raise Keskin Keskinoğlu Daerya Pal Egg producers cannot be ex- its egg production capacity Board Member and Marketing Group Chair, Turkish Egg Producers pected to solve such massive Chairman, Keskinoğlu Group Association (YUM-BİR) by 15%. In 2012, Keskinoğlu problems as costs, regulation started exporting eggs bound As Keskinoğlu, we multiplied In recent years, the Turkish egg compliance, and marketing for industrial use to Greece. our export tenfold in the last five industry has been standing out in alone, she expressed. Unity The company’s expectation is years. We export to 75 countries, the world with the progress it has within the industry must be including Azerbaijan, Albania, exhibited, and it maintains its that Turkish producers will Bosnia and Herzegovina, position in world egg production. strengthened with commer- be able to launch exports of the United Arab Emirates, With 1,100 commercial cial entities—the only way both industrial-purpose and Bahrain, Denmark, Guinea, establishments, 3,000 cages, for inputs to be obtained for consumer-bound eggs to Georgia, Hong Kong, Iraq, production in excess of 15 billion, lower costs, the product to be Israel, Sweden, Cyprus, Kuwait, and export figures that reached more EU countries in 2013. Malaysia, Kosovo, Saudi Arabia, $351 million as of 2012, our sold for the price it deserves, H BY AA Not only will this contribute Uzbekistan, Tajikistan, Greece, industry is trending toward and for production to remain to the national economy but and Yemen. constant growth. sustainable, she said. HOFOGRA P P 24 Briefing

PhillipCapital Menkul Değerler AŞ Deputy General Manager Ozan Savaşkan, telling of the Asian financial institution’s purchase of Hak Menkul Kıymetler, highlights Turkey’s significant role in PhillipCapital’s growth strategy.

a worldwide brand. Progress- ing confidently toward obtaining the title of a “leading global financial institution,” one that is held by very few in Asia, PhillipCapital has determined that Turkey is of considerable significance in attaining this goal. The Asian financial institution views Turkey as a root system for its growth.

Finding the Right Acquisition PhillipCapital Menkul Değerler AŞ Deputy General FINANCE Manager Ozan Savaşkan, telling of the Asian financial institution’s purchase of Hak Menkul Kıymetler, empha- The Asian Finance Giant’s sizes Turkey’s importance in PhillipCapital’s growth strategy. Savaşkan said the Plans for Turkey Asian company’s initial aim in Turkey was to acquire a Becoming the first East Asian investor in the Turkish bank; however, he notes, financial sector with its acquisition of Hak Menkul Kıymetler, the need for an intermedi- PhillipCapital sees Turkey as a gateway leading to Eastern ary institution with respect Europe, the Middle East, and the Turkic republics. to their planned business outweighed this goal. Hak By HÜLYA KESKİN By ABDULKADİR DEMİR Menkul Kıymetler satisfied the financial institution’s need ounded in 1975, Phil- Growing steadily, PhillipCapi- in equity capital, PhillipCapi- for an intermediary institu- F lipCapital ranks among tal ventured into a variety of tal employs more than 3,500 tion thanks to its successful the leading Asian finance com- sectors, including insurance, in Europe and Asia, and it activities in the stock market, panies that offer information leasing, and real estate. Having manages funds worldwide fixed-income securities, and technology and distribution expanded its presence from 19 that total nearly $20 billion. derivatives, says Savaşkan. channel services. Established local units at the start to 190, Active in the US, Australia, He summarizes the acquisi- with $2 million in capital for PhillipCapital is the company China, Dubai, Indonesia, tion process as follows: “In the sole purpose of stock bro- that holds the highest number France, India, Hong Kong, that period, Hak Menkul kerage in Singapore, the com- of local units in Singapore. The United Kingdom, Japan, Kıymetler had shares in pany attained many successes company, which has crowned Cambodia, Malaysia, Singa- Takas Bank, too. Further- in its path of growth using its growth with various awards pore, Sri Lanka, and Thai- more, PhillipCapital wanted information technologies and for its success, stands out as land, among other locations, to begin reaching its goal in distribution channels. Active a financial institution that PhillipCapital chose Turkey the Turkish market through in the foreign exchange market is active not only in foreign as the 15th country for its foreign exchange operations. since the ‘90s, PhillipCapital exchange but also in the stock investments. On March 9, And this was among Hak further enriched its experi- exchange, futures, and fixed- 2012, it bought Hak Menkul Menkul Kıymetler’s activities. ence when, in 1998, it became income securities. Kıymetler, entering the Turk- The Takas Bank shares, too, the first firm to establish a ish capital markets. Starting were suitable for Phillip- processing center in Singapore F unds ToTALING Nearly $20 Billion from its headquarters in Asia, Capital. Following meetings, for local electronics suppliers. With more than $1.3 billion the company aims to become with all these characteristics

MARCH-APRIL 2013 ISSUE 15 The Turkish Perspective 25

in mind, the sale took place. position in PhillipCapital’s difficulties concerning the not happen worldwide for Certain developments oc- international acquisition and future due to the fact that the another 10–15 years. But I curred after the acquisition of growth strategies is, accord- population consists heavily think we have seen the bot- Hak Menkul Kıymetler, too. ing to Savaşkan, as follows: of elderly people. Turkey’s tom and that it will recover Before the acquisition, the “PhillipCapital is truly a very growth figures also draw from now on. And from number of employees at Hak important financial institu- their interest. Reactions are Turkey’s perspective, we were Menkul Kıymetler had been tion in Asia. It is present in very positive. In particular, not even that affected by the reduced to 16 for the purpose many such locations as Japan, there are many from Japan crisis; we got over it with of shrinking and eventual India, and Dubai. It is active who want to invest in fixed- relatively less damage. But sale. Once again, with new in the UK with two banks. income securities with the the crisis in other countries hires, efforts to build up new Considering all of these, interest rates we have here. affected our growth as well, departments were begun. The investment in this region Other than this, there are although I believe 2013 will number of employees rose to seems quite logical, because some in Singapore who want be positive. I hope Turkey 30. Hak Menkul Kıymetler they see Turkey as a center. to invest in the foreign cur- will reach investment-worthy was already a bond broker Europe is in great difficulty at rency exchange market as status as a country with a wıth stocks and on Turk- the moment due to the crisis. well,” he explains. score increase. The crisis in Dex, the Turkish Derivatives And Turkey is an important Europe is affecting interna- Exchange. Activities were hub in terms of accessing the Hopeful OF 2013 tional economic relations as launched following the acqui- Middle East, Eastern Europe, The crisis in Europe influ- well. Turkey’s export figures sition to continue and grow and the Turkish republics. enced the financial markets are falling too. But still, 2013 this business, too. Meanwhile, For that reason, they decided significantly, states Savaşkan. will be a more moderate the restructuring process is to choose Turkey. In brief, He is hopeful for 2013, indi- year,” says Savaşkan. still under way.” there are two important fac- cating that he believes that tors in their selection. The the pessimistic air in Europe Istanbul as a Financial Center Other Acquisitions in Turkey a first is that they believe in and the drop in morale after Savaşkan also discussed Possibility Turkey’s potential and regard the announcement of the attempts toward transform- Savaşkan says the funds it as likely to progress; the latest figures would improve. ing Istanbul into a financial managed by PhillipCapital second is that the location of “In the general sense, of center. Singapore, one of worldwide total roughly $20 our country occupies a very course, the difficulties are the world’s most impor- billion. “For this reason, their special place vis-à-vis their not over. Spain’s situation tant financial centers, has investments are constantly growth targets.” Savaşkan is quite bad, and there are a population of five million under way. As you might adds that PhillipCapital is, problems in France as well. and per-capita national know, PhillipCapital had an beyond being just a financial Germany is in a relatively income reaches $56,000, he acquisition in India, too, after institution, known as an IT better condition. Growth states, and he emphasizes Turkey. It has a strategy of institution that offers IT and figures and great movements that all these advantages are constant growth. While noth- financial services. as there were in the past will solely the outcomes of being ing is certain yet, there are a financial center. “Wanting some investment opportuni- Asians Interested in Turkey’s to be a financial center and ties in the real estate field and Finance Sector the steps taken toward this in finance-related industries The way foreign investors are very important,” said that are being assessed. For perceive Turkey’s markets Savaşkan, and he added, this reason, we think Hak has changed since Phillip- “If the resolve for this is Menkul Kıymetler will not be Capital’s entry into the coun- $15–20 there, the target is definitely the only acquisition in Tur- try, points out Savaşkan. “As Billion in FDI within reach. But there is key,” he says, revealing some a country, we always turned much distance to be covered. details about the financial to face Europe, turning our Savaşkan believes Certain infrastructural work institution’s rapid growth backs to Asia somewhat. Turkey will attract and legislative arrangements strategy. Likewise, due to the mutual $15–20 billion must be done, and issues (non)interaction, Asia did in foreign direct in transportation must be The Importance of Turkey’s not know us very well. For investment in 2013, eliminated. The level of pros- Strategic Position that reason, explaining Tur- and perhaps even perity must be raised and the Listing the reasons why the key to them is of great ben- more. However, he structure of society must be Asian financial institution efit, and they really become notes,“Developments developed. When all of these entered the Turkish markets, surprised. What first draws are carried out at once, (the Savaşkan highlights the sig- their attention is the fact that in Europe are very city) could reach its target of nificance of Turkey’s young, the population in Turkey is important, of course. becoming a financial center,” dynamic population and so young—there is an age The situation in pointing out what needs to geopolitical position in Phil- problem in such countries as investors’ countries be done to make Istanbul a lipCapital’s decision. Turkey’s Japan, and there are certain must recover” financial center. 26 Briefing

AVIATION Turkish Airlines Aims for World Leadership Turkish Airlines is planning to expand its flight network to 110 destinations in 2013.

BY HÜLYA KESKİN

t Is estImated that the obtaining, Turkish Airlines Africa: The Most Important I world’s aviation industry is pushing toward leader- Market lost approximately $5 billion ship beyond its place among Reaching a total of 218 desti- in 2008 and 2009 due to European airlines, trusting in nations in 2012, 36 domestic the global economic crisis. its quality of service. Turk- and 182 abroad, Turkish Many airline companies, ish Airlines, a sponsor to the Airlines will further expand its which are trying to increase world’s largest sports clubs, flight network this year. Turk- their competitive ability by whose commercials feature ish Airlines, which ranks fifth cutting costs, are in search of such stars as Lionel Messi worldwide in number of cities partnerships. The industry and Kobe Bryant, success- flown to, plans to increase is going through a time of fully caters to people from all its number of destinations to transformation—it seems countries with its advertising more than 250. For Turkish ish Airlines also plans to grow that mergers and buyouts strategy. Airlines, which is preparing to in Asia, with its first stop on will be par for course for the add destinations in America this path being the Philip- next few years. and Asia, Africa ranks as the pines (Manila). It was also A top contributor to market of foremost impor- decided that flights to Kuala Turkey’s success in recent tance. Currently competing Lumpur, the capital of Malay- years, Turkish Airlines has with Air France in Africa, sia, are to be resumed after a set for itself the goal of world Turkish Airlines plans to step hiatus. The planned addition leadership. Expanding its up from second place in the of new destinations in Eritrea flight network each passing continent to first place. (Asmara), Gabon (Libre- day and holding the title for ville), Sri Lanka (Colombo), airline that flies to the most New Countries Added to Flight Venezuela (Caracas), Cuban countries, Turkish Airlines Network (Havana), the Philippines plans to increase its number Turkish Airlines currently flies (Manila), Mexico (Mexico of destinations to 110. The to 96 countries. In 2013, the City), Burkina Faso (Oua- airline also plans to add 50 airline plans to increase this gadougou), and Colombia new routes with a vision to fly figure to 110. With the addi- (Bogota) will bring the total everywhere in Europe. tions of Luxembourg, Estonia figure to 110. Furthermore, Standing out with its (Tallinn), Lithuania (Vilnius), new routes are planned for investments in the past ten Turkish Airlines aims and Malta, the company’s goal certain countries that Turkish years and garnering praise to reach revenues of of flying to every country in Airlines already flies to. The with the growth figures it is $9.7 billion in 2013. Europe will be realized. Turk- company’s board of directors

MARCH-APRIL 2013 ISSUE 15 The Turkish Perspective 27

While Turkish Airlines prepares to increase its number of destinations in America and Asia, Africa ranks foremost among its most important markets.

110 In line with Turkish Airlines’ 2013 targets, the number of destination countries is expected to reach 110 250 the total number of destinations IS expected to SURPASS 250 46 mıllıon Turkish Airlines aims to carry A TOTAL OF 46 million passengers THIS YEAR

also views as a certainty the Massive Training Budget of 12 additional training with a fleet of 217 aircraft at launch of scheduled passenger Turkish Airlines invested aircrafts. minimum. flights to Bogota, the Colom- $50 billion in its training bian capital; Akabe, Jordan; center over the past three Simulators to Arrive at End Brand Recognition and Bamako, the capital of years. Its pilots are being of Year Turkish Airlines is continuing Mali, depending on aircraft given “type training,” and Turkish Airlines’ Flight intensive efforts to cultivate availability and permits. the airline has ordered Training Center currently recognition of its brand. To this three simulator machines in has six simulators—two for end, the airline has captured Targeted Revenues: $9.7 Billion addition to the six it already the Boeing 737-800, two for traveler attention with a globe Turkish Airlines aims to possesses. The training cen- the Airbus A320, one for the encircled by model planes that carry 46 million passengers in ter entered service 18 years Boeing 777, and one for the it erected in London Heath- 2013 and take $9.7 billion in ago with just one simulator. A330/340. Together with the row Airport. Installed in the revenues. Of these 46 million Today, it stands out as a aircraft that will be delivered at renewed Heathrow Airport’s passengers, 17.7 are expected to facility that boasts 14 train- the end of this year, the airline ICON SITE area, the 6.5-me- be flying domestically and 27.3 ing aircraft, six simulators, will also be adding one more ter-diameter Turkish Airlines are expected to be interna- and all necessary equip- simulator each for the 777 and Globe highlights the airline’s tional passengers. Calculations ment and tools for flight A330 to its range. Later on, more than 200 destinations show that the seat occupancy training. A total of 157 pilot announced Turkish Airlines, and the fact that it is one of rate will rise to 78.8% and that candidates graduated from one more A320 simulator will the world’s most distinguished a total of 3.99 million liters of its Flight Training Academy be purchased. With all of these airlines. It is made of 7.5 tons of fuel—costing $3.7 billion— last year. The company investments, Turkish Airlines steel, 300 tons of soil, and 150 will be consumed. has announced an order aims to end the year 2013 tons of concrete. 28 Briefing

INTERNATIONAL AFFAIRS collectively, these countries possess roughly 25% of the world’s oil reserves New Markets Critical for and 45% of its natural gas reserves. According to 2011 data from the World Bank, 2023 Goals the national incomes of China, Russia, Kazakhstan, For exporters to achieve the $500 billion export target for 2023, Kyrgyzstan, and Tajikistan they must attain sustainable growth in new markets spanning total around $9.6 trillion. from Africa to Central Asia and North America. Were Turkey to become a full member of the SCO, of which it became a dialogue By MERVE KARA partner last June, it could urkey exceeded its monwealth of Independent (SCO, previously known as be the third-largest power T 2012 target of $150 bil- States, 29% to Africa, and 26% the “Shanghai Five”), said after China, whose national lion in exports, with the year- to North America. If Turkey organization came to occupy income in 2011 was roughly end figure coming in as $152 had not focused on new mar- a significant place on the $7.3 trillion, and Russia, billion. The most important kets, difficulties in the EU—its Turkish and world agendas. which had $1.85 trillion. This factor that enabled Turkey to largest market—would have Regarded as a security orga- step by Turkey is critical for accomplish this despite the gravely affected its exports. nization to counter NATO growing closer to the world’s ongoing crisis was its export- Turkey’s strategic focus until now, SCO’s recent activ- new centers of commercial ers entering new markets. on new markets continued ity as an economic coopera- gravity, most of all China— Exports to the EU, Turkey’s full-throttle in 2013. A tion platform could allow Rona Yırcalı, Chair of the biggest market, fell by 7% short while ago, after Prime Turkey to grow its operations Foreign Economic Rela- last year. By contrast, exports Minister Recep Tayyip in the region. SCO has as tions Board (DEİK), said in AA over the first 11 months of the Erdoğan announced Turkey’s its members China, Russia, an interview conducted by BY

H year increased by 14% to the desire to join the Shanghai Kazakhstan, Kyrgyzstan, Anadolu Agency, “As the axis P Middle East, 14% to the Com- Cooperation Organization Tajikistan, and Uzbekistan; of the global economy shifts HOFOGRA P MARCH-APRIL 2013 ISSUE 15 The Turkish Perspective 29

from west to east, I think it engineering and labor costs Adding new centers to its direct flights to Cuba, which would be useful for Turkey still give Turkish compa- corpus in Turkey’s govern- made the news in Turkey to become a member of a nies significant competitive mental extensions abroad, last year when €25 million union that includes two large advantages. Additionally, the ministry launched efforts of export credit was provid- economic powers like China Turkish suppliers are able to open trade attachés’ offices ed to it via Türk Eximbank, and Russia.” to sell goods and equipment in 23 countries. A signifi- shows it is becoming a more The countries of the SCO for generally lower prices in cant number of these offices, useful market for Turk- do not constitute the only re- comparison to their rivals. which will play a determining ish exporters. The Foreign gion on Turkey’s radar—Af- The Prime Minister’s latest role in the path of Turk- Economic Relations Board’s rican countries, with which visit shows that Turkey wants ish exports in the coming agencies in such strategic Turkey recently cultivated to stand out in the continent term, were to be located in South American regions as relations, are among the through its advantages over Africa. The outcome of these Venezuela and Colombia government’s priorities as the competition. Another in- efforts is that trade attachés’ entered operations last year well. With Prime Minister dicator of increased interest offices were established in also. Recep Tayyip Erdoğan’s in Turkey toward the region ten African countries—Mali, Efforts to develop eco- early-2013 visit to Africa is Turkish Airlines’ growing the Democratic Republic of nomic relationships with with a delegation of around number of flights and des- Congo, Angola, South Sudan, Latin America started yield- 300 businesspersons and tinations. With flights to 24 Uganda, Zambia, Mozam- ing results within a short bureaucrats, which included cities in 20 African countries, bique, Mauritania, Mada- time. The volume of Turkey’s Gabon, Nigeria, and Senegal Turkish Airlines added 14 gascar, and Cameroon—as trade with the region more in its itinerary, all eyes were new destinations in Africa well as Colombia, Cuba, and than tripled from 2006— drawn to this continent. The to its flight network over the Boston in the US. when it was $2.5 billion—to Prime Minister’s African past three years. Flying with The office established in 2011, reaching $8 billion. visit not only yielded results a 74% occupancy rate to Cuba represents an impor- Visa-related conveniences in the form of cooperation Africa, Turkish Airlines ranks tant stage in the overture and free trade agreements and partnerships, but it second after Air France, toward Latin American had a great influence on also gave the message that which conducts the most markets, which picked up this. For instance, the lifting Turkey’s African overture, flights to the continent. speed in 2006. Last year’s of visas with Colombia and which picked up speed with The Ministry of Economy, launch of Turkish Airlines’ the free trade agreements the strategic partnership too, is showing determination resulted in a noticeable Turkey established with the to expand in new markets increase in the volume of African Union in 2008, is through the incentive pro- trade with the region, which continuing uninterrupted. grams it is running. Under Recep Tayyip Erdoğan’s rose from $271 million in When Turkey started seeking Zafer Çağlayan’s administra- visit to Africa with a 2010 to $720 million in alternative markets as soon tion, the Ministry of Economy 2011. Another strategic as signals of shrinking in rolled up its sleeves last year delegation of around hub is Mexico, which Zafer Europe—its primary export to establish more commercial 300 businesspersons Çağlayan described as an market—emerged, Africa consultancies and attaches’ and bureaucrats “important bridge between was one of the locations to offices, which serve exporters drew all eyes to the North and South America.” command focus. Turkey en- as gateways to new markets. continent. Exports to Mexico increased tered the continent right on 46.5% over the first eight time and gave momentum to months of 2012 relative to its commercial relationships. the same time frame in the According to data from the previous year. Turkish Exporters Assembly, New markets are of exports to the continent in considerable importance for February 2012 exhibited a Turkish exporters, whose 24.2% increase over that reach spans the entire world of February 2011, coming from Latin America to Africa in at $10.164 million. That and the Asia-Pacific region, exports to Northern Africa toward realizing their target exhibited a 24% increase for 2023. In addition to despite the chaotic environ- this, however, growth must ment in Egypt, Libya, Oman, continue in existing mar- and Tunisia showed that kets, said TIM Chairman local producers’ interest in Mehmet Büyükekşi, and he the region continued despite emphatically added that they H BY AA all the negative occurrences. are determined to reach this European companies’ high target. HOFOGRA P P 30 Cover /Turkey Sprints Toward The Gold

MARCH-APRIL 2013 ISSUE 15 The Turkish Perspective 31

Turkey sprınts t oward the gold Having hosted a great number of incredibly successful sporting events, Turkey now aims for the very top with its candidacy as a host for the 2020 Summer Olympics. Investing heavily in sports, Turkey is reigniting its athletic culture.

By CAN GÜRSU

restling, the Olympic branch Turkey traditionally won the most medals in, will not be part of the 2020 Summer Olympics. Turkey has won a total of W 87 medals in the history of the Olympics, and 58 of these—28 gold and 16 silver—were in wrestling. Although the removal of wrestling may appear to pose a handicap to Turkey with regard to medals, the country—a candidate host for the 2020 Olympics with Istanbul—is preparing for future successes with investments in new facilities and the advantage of its young population. 32 Cover /Turkey Sprints Toward The Gold

etermined to World Women’s Tennis Championship make Turkey in 2011 by drawing twelve thousand a “country of spectators (on average) to the courts sports,” the every day, with a total of 70,824 spec- Ministry of tators showing up over the course of Youth and the event—further evidence of Turkey’s Sports is interest in sports. Both spectators and accelerating athletes exhibit strong participation in its nationwide investments to prepare events held in Turkey, due partly to the theD youth for a strong tomorrow, in line country’s strategic location. In 2012, with its aims for 2023, the centennial the World Indoor Championships in of the Republic of Turkey. The great- Athletics welcomed 683 athletes from est evidence for this is how the budget 172 countries. Successfully hosting for youth and sports was multiplied such events requires a considerable by a factor of more amount of hard than 15 over just ten work. years—in 2002, just TRY 63 million was A Giant Leap: set aside for invest- 405 Sports Facilities ments in this area; in Dozens of modern 2012, this figure rose sports facilities meet- to TRY 967 million. As ing international the world population Istanbul, which criteria are being es- sa, Çorum, Konya, Akhisar, and Turgulu ages, Turkey is focusing tablished in service of are being built in partnership between on raising its young has proven Turkish sport. Turkey the Ministry of Youth and Sports and population as best as itself by hosting built 152 new sports their respective municipalities. Besides possible. facilities from 2003 to stadiums, 28 provinces gained olympic- One way Turkey has countless 2012, and by perform- and semiolympic-sized indoor swim- been trying to cultivate international ing maintenance, ming pools over the past decade. Within interest in sports is repairs, and renewal the scope of the Ministry of Youth and by hosting large-scale events on 96 of its existing Sports’ plan for 2023, the aim is for international sport- previously, is facilities, it took charge every province in the country to have an ing events. The World of its older holdings. indoor swimming pool. The construc- Basketball Champion- already prepared Having initiated the tion of 42 more swimming pools is ship, World Wrestling construction of 405 planned to this end. Additionally, with Championship World for the very facilities in 2012, gymnasiums to be built in 99 districts Women’s Tennis Tour- biggest of events. Turkey aims to further and 28 province centers, the Ministry is nament, 23rd World increase these num- aiming to ensure that every province in Universiade Summer bers in the years ahead. Turkey has a gymnasium. Last year, 125 and Winter Games, 2010 World Rally With stadiums built in 24 provinces, synthetic-surface soccer fields were built Championship, and World Indoor sport is being brought to every province as well, and a further 125 will be opened Championships in Athletics were just in Turkey, and project designs are under for the use of Turkish soccer players a few of these. Turkey contributes way for provinces that lack facilities. in 2013. Tomorrow’s Turkey is being value to the events it hosts. It broke Local administrations deeply involved elevated to new heights today through the 12-year spectator record of the in these processes. The stadiums in Bur- such investments.

MARCH-APRIL 2013 ISSUE 15 The Turkish Perspective 33

With stadiums N acİ Arkan: By having held built in 24 provinces, very large events in the past, sports are being brought to every Istanbul hasshown the world province in Turkey. its conviction that it can host the Olympics.

I believe Turkey is the country that has the best chances at the moment for the 2020 Olympics, for which Madrid, Tokyo, and Istanbul are official candidates. Furthermore, by having held very large events in the past such as the 2005 UEFA Champions’ League Finals, the 2009 UEFA Cup Finals, the 2010 World Basketball Championships, the 2012 World Indoor Championship in Athletics, the 2012 World Short-Course Swimming Championships, the 2011–2013 WTA Tour Championships, and the 2012 Euroleague Final Four, Istanbul has shown the world its conviction that it can host the Olympics. It is for this reason that Istanbul, a city that emerged from all of these large events with success, has good chances for 2020. That our Prime Minister stated that the government would deploy all kinds of means and even act as the guarantor for every facility to be built is an indicator of how deeply we desire the Olympics to be brought to Istanbul. Istanbul is a city where one can go from one continent to another on one or two minutes and which enchants those who see it in the peerless view of the Bosphorus. Istanbul is ready for these Olympics. Whether in terms of facilities, actions to be taken, or the government, we are in a state of all-out mobilization.

Sport is a significant power that draws Bowman, who met with Minister of Youth society closer together. Turkey aims and Sports Suat Kılıç, will help Turkey to spread sport to every area possible assemble a technical panel in the field of in order to make it a part of daily life. swimming and contribute to cooperative Investments to facilitate both healthy efforts. Turkey, which has accelerated its living and societal motivation are set to infrastructural efforts starting from the multiply until the year 2023. Olympic young age groups, has achieved a signifi- Nacİ Arkan training centers are being established cant rise in its number of certified athletes. Chairman, Turkish Sports Writers’ Association in ten provinces that will host international events, with these provinces being turned into “Olympic towns,” as BUDGO ET GR WTH one of the Ministry of Youth and Sport’s The budget for youth and sports was multiplied by a factor of more than 15 over just ten most important projects. Set to house years. training areas for every branch of sports, these towns will bolster Turkey’s standing in its bids to participate in interna- MILLION TRY tional competitions in various branches. Besides its facility investments, Turkey 967 is speeding up its infrastructural and training efforts as well. After meeting with many famous technical directors and 6.3 panels, Turkey invited Michael Phelps’s trainer, Bob Bowman, to the country. 34 Cover /Turkey Sprints Toward The Gold

MeŞİT tİn ah n: urkey being given the Olympics would support the presence and development of the Olympic spirit.

Turkey exhibited its highest participation in its history at the 2012 London Olympics. By winning one gold and one silver medal in the field of taekwondo, leading the country to rank in the higher levels, we honored the Turkish nation. I would like to indicate my pride and happiness as the president of one of the federations that took some of the most medals back from the 2012 Olympic Games with two medals. As the taekwondo “family,” we plan to continue and increase our success at the 2016 Rio Olympics. Over the past ten decade, there has been a visible increase in the number of facilities and large-scale mobilization, and support for the participation of youth in sports has stood out as well. These efforts must also be taken as an indicator that our state is contributing greatly to sports. Turkish Sport Rises with Together with its bid to become an Accomplishments Olympic candidate, Turkey has increased its experience with the large, successful With the increase in the number of events it held over the past ten years, with events being held in Turkey and the 59 66 Sydney 2000 Athens 2004 the 2005 Universiade Summer Games, completion of new facilities, national 15 female/44 male 21 female/45 male the 2011 Universiade Winter Games, interest in sports is rising. Turkey had the European Youth Games, and the Mediterranean Games to be held in 2013 278,000 certified athletes in 2002. In being positive references for receiving just a decade, this figure was raised to the Olympics. Turkey being given the 3.72 million. A similar increase can Olympics would support the presence be observed in the number of sports and development of the Olympic spirit clubs—only 6,000 in 2002, they in Turkey and, by injecting awareness of sports into our youth and children, have increased to 11,694 in 2012. These positive effects on their development and quantitative successes are yielding re- consciousness. As a result, I am of the sults for Turkey in international events. thought that all the facilities being made Turkey took home ten medals from the and the attempts to host the Olympics will have significant contributions to 2012 London Paralympic Games, the Turkey from a sports perspective and most it has ever won in these games. reflect upon the development and future Playing a large role in this accomplish- of Turkish youth positively. ment was the increase in the number of Paralympic athletes from 2,763 in 2002 to 27,364. This trend of growth brings with it well-deserved successes. Turkey broke its own 88-year record in Olympic participation at the 2012 London Olympics. The country participated in the Olympic branches with 144 athletes and 69 in the Paralympic 250Total number of soccer fields; 125 were completed in By AA

Assoc. Prof. Metin Şahin, PhD branches, totaling 183. Turkey’s suc- PH 2012, and 125 more will be President, Turkey Taekwondo Federation; cesses multiplied correspondingly—

Board Member, WTU, ETU, BTU completed in 2013. OTOGRA

while Turkish athletes won a total of PH

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Suat Kılıç, the Minister of Youth and Sports:“Investments in Istanbul of the kind that a country that wins the Olympic bid would make have long been completed”.

Hasan Arat: this time we are Özkan Mutlugİl: through taking up Olympic candidacyas Turkey, sport activities a national campaign. in countries located in By presenting our Candidacy File to the International Olympic Committee (IOC) in the Middle East, Central Lausanne on January 7, we left behind yet Asia, and Northern Europe another important milestone and focused on the next step: the IOC Evaluation regions. Commission’s visit to Istanbul in March. The real challenge we will face here will I believe a decision favoring Turkey will be be to promote this extraordinary city as coming from the International Olympic it deserves to be in just four days. We are Committee (IOC). The investments made working with heart and soul to win the 2020 in sports in Turkey over the past seven– Summer Olympic and Paralympic Games eight years, Turkey’s location, and the for Istanbul. With the Ministry, National characteristics it possesses will influence Olympic Committee of Turkey, candidacy this decision in a positive direction for committee, sponsors, and other stakeholders, us. The situations of the rival countries we make up a large family. By contrast to also increase Turkey’s chances. The our previous experiences, this time we are IOC acts with the aim of cultivating taking up Olympic candidacy as a national sports in the world and spreading it to campaign. We see everyone—our Prime the masses, and through Turkey, it is Minister, Recep Tayyip Erdoğan, who placed increasing sport activities in countries the first signature—deploying all their means located in the Middle East, Central Asia, for Istanbul. We will do whatever it takes to 68 114 and Northern Europe regions. There are make Istanbul an Olympic city and spread Beijing 2008 London 2012 significant investments being realized in the Olympic spirit, philosophy, and values 20 female/48 male 66 female/48 male Turkey concerning the Olympics, and I all over the region, most of all in Turkey. The think a decision will be made with these most influential criterion on the International developments in mind. Olympic Committee’s decision is how In this respect, I regard Turkey’s much a country wants to have the games. chances as being quite high. In a global Here, it is very important that all involved comparison of countries, Turkey ranks exhibit a determined stance. Showing this toward the top. The state set aside a decisiveness is not possible with just the significant budget for the Olympics, guarantees provided by the public and high and I find the efforts so far to be quite public support—the promises offered by successful. I can say that our country sponsorship, one of the most important will be successful in the Olympics with institutions of our time, are a determining these professionally run efforts and element as well. The unconditional support investments. We, as the TVF, have made provided just in the candidacy stage by these a lesson of Olympics experiences. We are seven most respectable institutions, which aiming for medals in the coming term. We rank at the top of our country’s advertisers, want to utilize the four years ahead of us are undoubtedly the largest sign of our very well and win medals. national private sector’s resolve regarding this subject.

Number of Paralympic Athletes

1992 Barcelona 1 2000 Sydney 1 2004 Athens 1 2008 Beijing 16 Özkan Mutlugil Hasan Arat 2012 London 69 President, Turkish Volleyball Federation (TVF) Chairman, Istanbul 2020 Candidacy Committee By AAPH OTOGRA PH 36 Cover /Turkey Sprints Toward The Gold

277 medals at world and European Olympics to try to sell them to other championships in 2002, it succeeded countries. Certified Athletes in raising this figure to 574 in 2012. All of the projects to be conducted Turkey is exhibiting exemplary suc- in Istanbul, as the city prepares for cess for the world especially with the 2020, will be opened to serve the 3 .72 million increase in its female athletes, and it interests of Turkey and to host many aims to raise this bar further in the years international events. Only the stadium 2012 ahead. Having given greater importance to be built before Istanbul’s historic to sports and its athletes since the early Haydarpaşa Train Station, where the 2000s, Turkey, after the many events it openings would be held, would later has hosted successfully, is preparing for be transported to another province to 278,000 the biggest event of all. serve there. Suat Kılıç, the Minister of 2002 Youth and Sports, says, “Investments in The Road to 2020 Istanbul of the kind that a country that Turkey is now a candidate for host- wins the Olympic bid would make have ing the 2020 Summer Olympic and long been completed,” highlighting the UğT ur Erdener: urkey’s Paralympic Games with Istanbul, which importance given to sports. One could National Sports Plan created a is one of the three cities—the others say with ease that Istanbul, which has boom for the sports industry. being Tokyo and Madrid—to pass the proven itself by hosting countless in- first round of eliminations. In June, ternational events previously, is already It is for the first time ever—relative to previous attempts—that Istanbul has such Turkey will show what it could do at prepared for the very biggest of events. a high chance to host the Olympic Games. the Olympics at the Mediterranean We have strong arguments. Istanbul’s Games, which it will be hosting for strengths are our young population, the the second time. For a ten-day period, heritage the Olympic Games would leave in the city, the importance given to sports the province of Mersin will be Turkey’s by the country, and the support of our showcase. The Mediterranean Games Prime Minister. Following four previous can be characterized as semi-Olympic Olympic training experiences, I can say Istanbul, which is in nature: with 4,500 athletes from 24 regarded as appreciating in value with countries set to compete in 32 branches, centers are being the country’s developing economy, speed of growth, and the increase in national it could be considered as rehearsal for established in ten income, is quite lucky this time. In every the Olympics. A budget of $400 mil- quarter over the past eight years, TOKİ has lion was set aside for Mersin, which provinces that will built 15,000 new homes, the equivalent was transformed over 18 months into of one Olympic village. On average, $1.2 host international billion has been spent annually since a “sports city.” The stadiums, tennis 2005 on efforts to improve transportation compounds, and gymnasiums will con- events, with these in Istanbul and on the most important tinue to serve the youth of Turkey after provinces being turned infrastructural efforts. All of the efforts the games. There is no talk in Turkey of characterized as the city’s most important disassembling the facilities built for the infrastructure projects—including the into “Olympic towns”. new, extended metro and railway lines, Bosphorus crossings, and the world’s largest airport project—are slated for completion before 2018. Thanks to these broad-scale investments, the average commute athletes will have between the Olympic village and the sports facilities will take just 16 minutes. Turkey’s National Sports Plan created a similar boom for the sports industry, too. On a national scale, $1.77 billion in investments will be made by 2014 for 415 sports facilities and 24 new stadiums. SUM P M I E Prof. Uğur Erdener, PhD

Chairman, National Olympic Committee of By LOR Turkey (TMOK); Chairman, World Archery P

Federation; Member, International Olympic OGRA t Committee (IOC) O PH H

MARCH-APRIL 2013 ISSUE 15 The Turkish Perspective 37

world unıversıade wınter games WTA (ERZURUM) champıonshıp (ISTANBUL) THREE-cushıon bıllıardS champıonshıp world (ANTALYA) wrestlING champıonshıp (ISTANBUL) fıba world champıonshıp (ISTANBUL) unıversıade summer games (İZMİR)

48th Presidential Cycling Tour WRC ( IStanbUL & ALANYA) (IStanbul) European Road Bike Championships (ankara) world weıghtlıftıng champıonshıp (antalya)

IAAF World Indoor Championships EYOF (ISTANBUL) (TRABZON)

FORMULA 1 (ISTANBUL) european judo champıonshıp (ıstanbul) By LOR E M I P SUM OGRA PH t O PH 38 In Depth / The Minister of Youth and Sports Suat Kılıç

MARCH-APRIL 2013 ISSUE 15 The Turkish Perspective 39 Turkey Gets ActiVE: From tennis to skiing, swimming, and golf, Turkey is hosting numerous sports tournaments on an international scale. With investments and its young population, Turkey is preparing for a strong future in sports. The architect of Turkey’s play in sports, Suat Kılıç, Minister of Youth and Sports, provided his views on Turkey’s active future to The Turkish Perspective. 40 In Depth / The Minister of Youth and Sports Suat Kılıç

Istanbul, together that have shores on the Mediterranean with Tokyo and Madrid, is will participate. While it is known as the one of the three candi- Mediterranean Games, it is semi-Olym- date cities for the 2020 pic in nature based on the numbers of Summer Olympics. The countries, branches, and athletes. We city is prepared to exploit therefore take it as a rehearsal for the all its advantages to host Olympics. Mersin will be one of the an Olympics that would most magnificent games in the his- be held in Asia and Europe simultane- tory of the Mediterranean Games. Its Iously. In recent years, Turkey, which is competitions will be held not in old regarded as being successful in inter- facilities but in halls and stadiums that national sporting events, aced such are almost entirely newly built. From competitions watched with great interest this perspective, it is quite an impor- worldwide as the WTA Championship tant event as a whole in terms of how Istanbul, the Turkish Airlines World it reflects Turkey’s organizational and Finals Golf Tournament in Antalya, the structural abilities. The games will end UEFA Cup Final in Istanbul, and the on June 30, and on September 7, 2013, Erzurum Winter Olympiade. With its a vote will be held for the three candi- role as a regional leader and a city that date cities [for the Summer Olympics]. spans two continents, Istanbul, Turkey In this respect, Turkey will have a great is planning to host yet another unique promotional opportunity two months event and prepare its young popula- before this takes place. It will be aired tion for an active future. on many televisions and Guiding Turkey’s vision reach more than a billion and investments in sports viewers. The broadcast- is Suat Kılıç, Minister of ing organization will be Youth and Sports. the Turkish Radio and Turkey’s participation in the London Television Corporation Summer Olympics was broad. Ahead Turkey will host the (TRT), and the event will of us is the 2016 Rio Olympics—how Mediterranean Games be aired on many world is Turkey preparing for it? What do in Mersin this summer, channels simultaneously. you expect Turkey to achieve in 2016? with the participation I believe we will make I can say already that Turkey will show of many countries. Regarding good use of this oppor- greater participation in the 2016 Rio How did Turkey pre- “ tunity before the vote on Olympics than it did in London. London pare for this important the size of the September 7. was a very important foundation for event? budget, the To speak of the size of us. It allowed us to see our deficiencies Only a short time the budget, the cost of the in various branches. The vast majority remains before the cost of the investments in Mersin of the Olympic medals won by Turkey Mediterranean Games. investments and the event is around in recent times were in wrestling and This will be a very great in Mersin and $300–400 million. weightlifting. The situation changed in launch opportunity for We are striving to be as London—although a single medal was us. Mersin will be the the event is thrifty as possible. And won in wrestling, branches where we world’s showcase for around $300 in terms of thriftiness, we were previously unable to win medals (or ten days from June 20 – place importance on the won few medals), such as athletics and to 30. With 24 coun- 400 Million.” necessary partnerships taekwondo, started to gain prominence. tries, 32 branches, and among institutions. As With regard to the Olympics, the impor- 4,500 athletes, it will I indicated before, the tance of athletics is obvious to all. We are be the most concentrated center of Mersin games will be semi-Olympic in striving to further develop these fields for athletic activity after the Olympics. Our terms of the number of participating both 2016 and 2020. slogan for Mersin is “Three continents, countries, branches, and athletes—there We are also placing emphasis in the one spirit.” It is an event in which 24 were 10,400 athletes in London, and coming period on branches where we countries from Asia, Europe, and Africa there will be 4,500 in Mersin. never even came close to winning medals

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Guiding Turkey’s vision and investments in sports is Suat Kılıç, Minister of Youth and Sports.

used to prepare national athletes both for European and world championships and for the Olympics, whether by clubs or by federations. And with confidence in our investments, we will have more groups to send in 2016, and we can say with ease that we will take more medals.

Turkey has been a candidate for the Olympic Games before, but it was unable to make it through the candidacy process successfully. In this candidacy process, however, it stands out as a favorite. What differences were there in how Istanbul was readied for candidacy for the year 2020? The 120-person task force—half of whom are foreign and the other half of which consists of local actors—that is preparing Turkey’s candidacy file has been conducting an intense, careful, and ardent effort in Istanbul for roughly a year and a half, under the coordination of our Ministry. The country comes prepared this time. Turkey was a candidate four times before, but it unfortunately lost in the pre-eliminations. It was un- before. After half a century, our volleyball Turkey. When are they slated for able to receive the necessary governmen- and basketball teams were once again able completion? How will they positively tal support in its previous candidacies, to participate in the Olympics in Lon- influencethe Olympics process? and when political support could not don. Additionally, our Paralympic teams What is the size of the budget? take form as expected, the Olympic participated in and won medals at the We were building 405 sports facilities community could not be sufficiently Paralympic Games in London for the first in 2011 and 2012. In 2013, we added motivated for candidacy efforts. This time in history. I can already say with ease 288 further new facilities. Twenty-five time, we took the first step in the correct that our group of athletes will be more separate stadiums will also be added to fashion. Our Prime Minister, HE Recep numerous in Rio. And the number of this figure. Nationwide, we are under Tayyip Erdoğan, placed his signature on medals will be such that it won’t even be way with the construction of 718 sports our application for candidacy in August comparable with London. It’s always good facilities. We plan to open 150 of these 2011. The facts that the Prime Minister to be ambitious. Toward this goal, we for service this year. The construction of placed the first signature and has been are establishing athlete training centers the facilities is not clustered in certain providing concentrated support during for the Olympics in ten provinces. I put provinces—we are distributing these the process, and that candidate city ef- forth this ambition with the preparations facilities all over Turkey in our plan of forts are being conducted on a coordi- we will do in mind also. We are working action. We will not have any province nated and broad foundation under the with various federations to bring over the without a semiolympic- or olympic- coordination of our Ministry and the world’s best coaches. We have efforts to size swimming pool and indoor pool. Organizing Committee (over which I increase the coverage of athlete scouting Regionally, we are constructing athletics preside), are our advantages. in Turkey, and we have efforts to discover fields and stadiums in Turkey. We are undiscovered talents immediately and building gymnasiums in provinces that How is Istanbul preparing for 2020? train them in the interim. So many efforts possess the infrastructure for gymnastics, Besides sports facilities, what kinds are sure to yield results. such as Bolu and İzmir. In Mersin, we are of investments are you planning to building the sole shooting facility in Tur- make in the city? A great number of projects and key, which will also be one of the world’s With a focus on the Olympics, we facilities are being constructed in few such facilities. All of these will be included the construction of a third 42 In Depth / The Minister of Youth and Sports Suat Kılıç

In 2012, the Ministry of Youth and Sports completed construction on and delivered the of numerous sport facilities.

Turkish Paralympic teams participated in and won medals at the Paralympic Games in London for the first time in history.

Turkey is preparing for the 2020 Olympics with full support from both the private and public sectors.

More than 4,500 young athletes will participate in the Mediteranean Games this June.

The Erzurum ski run built for the Universiade 2011 is the focal point of one of the world’s most exceptional skiing centers.

airport in Istanbul in the investment is initiating the process of building program, and the tender for it will be a 3,000-bed city hospital adjoining conducted soon. Later on, we will also the Olympic Village, thereby adding include in this project a detour that integrated health care facilities to the will bypass traffic and traffic lights be- Olympic Village. As the Ministry of tween the third airport, which will have Youth and Sports, we are starting con- a capacity of 150 million passengers struction in 2013 on a 5,000-bed set of per annum, and Istanbul’s Olympic We were building student dorms—constituting the first Village. Additionally, the third bridge 405 sports facilities in phase of the premises—in the Olympic and Marmaray project [an undersea Village. Even as the city’s status as just subway tunnel across the Bosphorus] 2011 and 2012. In 2013, a candidate continues, we are begin- to also be constructed in Istanbul we added 288 further ning the construction processes that will provide a great advantage for the need to be done in a city that wins the Olympics. The Ministry of Health new facilities. bid for the Olympics.

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During the Olympics bidding pro- nies and houses of worship of different young population; this young population cess, you received support from the faiths together in peace and fraternity; will supply the source of young athletes private sector and from economic and an Istanbul that can, in this sense, that a host country needs to put forth. A actors. How many large corpora- contribute the very best to the alliance of city that will host the Olympics must be tions are supporting your efforts at civilizations and embody the promise for able to deploy hundreds of thousands of the moment? Are you thinking of the future of the Olympic spirit’s peace- volunteers. Turkey is a dynamic country expanding this effort in the coming minded message of fraternity. Our big- that possesses the power to deploy these term? gest card to play, really, is that Istanbul is volunteers. The Olympics is an event What is important in this process isn’t a Turkish city, that it is located in Turkey, with a high cost sheet. Therefore, the the money collected; it is the energy we and that it is our candidate. economy of a country that will host the collect. There was a sense of loneli- Olympics must have attained stability, ness in the process until large capital Spain has previous Olympic experi- and its sources of financing must be rock groups voluntarily provided us with ence, as you well know. What advan- solid. Turkey is a country that can com- contributions. There was a feeling of tages does Istanbul hold against its mit to these. loneliness among five such actors as the rivals, Madrid and Tokyo? Government of Turkey, the Ministry of There were six candidate cities at the With regard to the matters of ensur- Youth and Sports, the National Olympic start. In this process, we have never bad- ing safety criteria in transportation Committee of Turkey, the National mouthed the other precandidate cities. and the traffic problem, the provi- Paralympic Committee of Turkey, and We never mentioned their deficiencies. sion of health-related necessities, the Istanbul Metropolitan Municipal- There has been no room in our discourse and exhibiting the experience in ity. When the private sector and capital for a stratagem of making Istanbul look construction as promised in the groups said, “We’re in,” and became part better by badmouthing Madrid or Tokyo. candidacy booklet, Istanbul is a city of this, the sense of loneliness disap- Istanbul has so many pluses that to leave that can offer guarantees that no peared. The support provided by such them aside and conduct propaganda other place would be able to. I don’t leading private-sector companies as based on the rivals’ deficiencies just isn’t know—is there any other city in Doğuş Holding, Sabancı Holding, Koç our business. And we will continue to act the world that can provide so many Holding, Turkcell, Ülker, and Digiturk this way later on, too. advantages, so many pluses, and so is truly quite important to us. I would We have focused on Istanbul’s pluses; many opportunities? once again like to highlight that what these are pluses that are enough to keep Turkey has hosted and is hosting is important here is not the economic Istanbul a few steps above. We have a many, many successful non-Olympic aspect—the state could definitely find events. What projects do you plan to the financing for these investments in apply for as a candidate or under- some way or another, but it is of great take in the coming term? significance that they are putting their NATIONWIDE, we are Besides the European Football Cham- names down for the Olympics in a way pionships and the Olympics, there is no that says they are part of it both materi- under way with the international event that Turkey has not ally and with their energy. construction of 718 hosted. There was a promise to Tur- key concerning the European Football What advantages does Istanbul sports facilities. Championships for 2016, but the col- hold over cities that have hosted the locutors involved were unfortunately Olympics before? Could you discuss unable to fulfill it. Turkey has one target the significance of the Olympics tak- now—the Olympics. In the 2020 Sum- ing place in Istanbul? mer Olympic and Paralympic Games, we Istanbul is the only city that promises an aim to unify Turkey with Europe, and Olympics on two continents, such that Asia, and the Middle East, and Africa in we plan to perform its opening ceremony Istanbul. Our region needs the Olympic on the continent of Asia. We have the spirit, the Olympic philosophy, and the only city where fireworks can be seen values and principles represented by from Europe as the opening ceremony the Olympics. It needs it in the name of takes place in Haydarpaşa Harbor in peace—in the name of civilization. We Asia, where the Maiden’s Tower can promise to conduct one of history’s most be seen in the strait between Asia and magnificent Olympics and an Olympics Europe, and where the silhouette of the that will have the broadest participation historic city across can appear on screens ever. We invite the Olympics to broadcast around the world. There is an Istanbul its message over a broader territory that that is the cradle of civilizations, the cra- it has so far been unable to have its voice dle of different faith cultures; an Istanbul be heard clearly and to bear its values. We that has a past of thousands of years; an are of the opinion that this invitation will Istanbul that is able to keep the epipha- receive a response. 44 Exclusive Interview / Hüsnü Akhan

MARCH-APRIL 2013 ISSUE 15 The Turkish Perspective 45 Master of the

FollowingSea on the heels of its acquisition ofs marinas in Croatia, D-Marin, Doğuş Group’s marina-industry brand, has partnered with the largest marina chain in Greece. Having doubled its capacity in a short time, D-Marin today possesses the largest international marina chain of the Eastern Mediterranean Basin and Adriatic Sea.

BY CAN GÜRSU

oğuş Group has been stand- gains they provide to several areas. Compared to ing out in recent years especially other Mediterranean countries, were sufficient with its acquisitions in the restau- support and importance is given to seafaring-re- rant industry. A similar picture has lated areas in our country, which is surrounded materializedD in the marina industry, which on three sides by the sea, it would then have the it entered in 2003 with the brand D-Marin. chance to become the number-one yachting area Having bought numerous marinas in Greece in the world marine tourism industry. Looking and Croatia within a year and partnering with at the value our country possesses and quantita- renowned companies in the field, D-Marin tive data on our yachts and marinas, we could doubled its yacht docking capacity within a very say that the Turkish marine tourism industry short time. D-Marin now flies the Turkish flag will develop much more in the years ahead. in the Eastern Mediterranean and Adriatic with pride. Hüsnü Akhan, the CEO of Doğuş Group, The yacht-building industry, having been shared D-Marin’s plans and strategies for the dealt a blow by the financial crisis felt espe- future with The Turkish Perspective. cially in Europe, is shifting from Italy toward Turkey. How will this situation affect the ma- What is your assessment of the current state rina industry in Turkey? Do you think Turkey of the marina industry in Turkey, which is has the infrastructure to handle the rapidly located at the edge of the Mediterranean Basis rising demand? and possesses incredible natural wealth? A significant worldwide increase in interest to- What do you see in the cards for Turkey in the ward the seafaring and yachting industries is at fields of yachting and marinas, where it has hand today. Economic and social developments so far not received the attention it deserves in our time have offered wider masses the means despite the beautiful coves it possesses? to travel. Meanwhile, increased vacation times The activities of yachting and marina manage- and higher levels of prosperity cause interest in ment, which are in a close relationship with the yachting to multiply and, in connection to this, tourism, seafaring, and transport industries, are demand for marinas to increase. Each passing a field of interest for all coastal countries. The day, yacht owners have started spending less fundamental reason for this is the economic time at their own docking harbors, and this situ- 46 Exclusive Interview / Hüsnü Akhan

ation has brought with it a search for marinas that are able to satisfy the needs of traveling yachters. Today, looking at docking capacity in Europe, Italy still ranks first, together with France and Spain. In the recent term, besides Turkey, such Medi- terranean countries as Tu- nisia, Egypt, Morocco, and Lebanon have emphasized marina investments and begun capacity increases as well. Montenegro, which has a coast on the Adriatic Sea, can also be counted as one of the countries where With latest investments, D-Marin has become the marina investments have largest marina chain of the exhibited increases in the Eastern Mediterranean Basin and Adriatic Sea. recent term. The Mediterranean area, which includes our country, The fact that the areas where taking over the management partnership agreement possesses great potential our marinas are located have of Mandalina Marina in Si- with Latsis Group—one of in terms of yacht tourism been home to many different benic, Croatia following our Greece’s leading groups—for by virtue of its geographic touristic investments over partnership agreement in Flisvos Marina, our first ma- position. However, the time is the most important 2009 with Nautical Center rina investment in Greece. sustainability of the prog- indicator of this. In the com- Prgin (NCP). Since we be- Most recently, by signing a ress of the marina industry ing days, with new invest- came the main shareholder 51% partnership agreement in our country requires ments whether domestically of the marina in September with Kiriacoulis Group for long-term, strong invest- or abroad, we aim to carry 2011, with a 76% major- MedMarinas SA, Greece’s ments. Our country needs D-Marin Marinas Group to ity stake, the marina has largest marina chain, we to establish facilities that a point where it could serve operations under the name increased our total yacht ca- conform to international as an example globally by D-Marin Mandalina. And pacity in the three countries standards and reach a ca- showing the high standard in the final quarter of 2010, where we have invested in pacity that would enable it we have achieved in the we took over Port Göcek marinas to 8,461, with the to take a larger slice of the marina industry. (Muğla), adding it to D- addition to our portfolio pie within a short time. Marin Marinas Group with of the marinas of Gouvia, In regard to this, as Could we say that Doğuş the name D-Marin Göcek. Lefkas, and Zea. D-Marin Marinas Group, Group, which sped up its In 2012, we continued The Mediterranean area, we want to utilize the exist- investments abroad with our investments in Croatia which includes our country, ing demand in the region those it made in Croatia with D-Marin Dalmacija possesses great potential as best as possible, increas- and Greece, turned the and Borik. We bought the re- in terms of yacht tourism ing our marina capacity so crisis into an opportunity? maining shares of D-Marin by virtue of its geographic as to serve a wider segment. What other countries are Mandalina as well, becom- position. Our aim is to create We, as D-Marin Marinas you considering for investing the full owner of the a network that will span Group, strive to conform ment in the coming term? three marinas in Croatia. In Greece, Albania, Montene- to a framework based Operationally, we took our December 2012, we bought gro, and Croatia, starting on international qual- first step into the marina 6.92% of Adriatic Croatia from the Aegean. In relation ity standards, and we are industry with D-Marin Tur- International Group (ACI), to this, we are interested expending the necessary gutreis (in Muğla Province) becoming a shareholder in in investment opportuni- effort to ensure sustained in 2003. In 2009, after the Mediterranean’s largest ties in the main countries business. All marinas D-Marin Didim (Aydın) marina chain. With this in- that shape yacht traffic in within our group possess went into service, we quickly vestment, our total docking the Eastern Mediterranean; qualities that will make the increased our investments in capacity in Croatia—exclud- so far, we have focused on regions in which they are the marina industry in line ing ACI’s capacity—reached Greece and Croatia espe- located more alluring to with our aim to become a 2,397. Also in December cially, as we could say that tourists local and foreign. regional power in this field, 2012, we signed a 50-50% Greece and Croatia are

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important markets in the 1992 in the international reaucratic matters must be owns marinas both domes- marina field. With D-Marin competitive environment improved for marina invest- tically and abroad, what Marinas Group, in order created by the Tourism ments in Turkey to develop. are your thoughts on this to turn existing demand in Incentive Act that came into Though the shores of our matter? the Mediterranean region force in 1983, which led to country are very suitable for We can say with ease that to productive potential, we the formation of the marine yachting and marina invest- D-Marin Marinas Group, as are evaluating investment tourism industry in Turkey. ments, due to such reasons a world brand, has earned its opportunities especially in Later, marinas—considered as the unclear distribution position in Europe. Our most these two countries. infrastructure for yacht tour- of authority among the min- important business principle ism—were included in the istries and the inadequacy is quality of service, which is Are you considering con- Second Five-Year Devel- of regulatory arrangements the keystone of a marina— tinuing to build marinas in opment Plan due to their regarding these matters all other offerings can only Turkey following D-Marin importance to the industry. today, problems can emerge be parts of service. Yachts Dalaman, or will you focus This was followed by devel- in investment and opera- coming from different socio- your investments abroad? opments in world and Medi- tion. A marina investor must economic circles of various Are you considering acqui- terranean tourism that led to obtain permission from at countries and regions wish to sitions or partnerships in the formation of a significant least 12 official institutions have their general expecta- Turkey? potential for demand in to complete a marina project tions and the services they Our permit process for D- Turkish marine tourism. We, and open it to service. The desire fulfilled at all ,aromas; Marin Dalaman, which is the as Doğuş Group, started to bureaucratic and financial here, our job is to offer them closest marina in Turkey to direct our attention to this responsibilities one must quality service that satisfies an airport by virtue of its lo- industry starting in 1990, tackle before even launching their expectations. All of cation, is ongoing. After this in line with the demand we the investment prolong the Doğuş Group’s facilities are process, we plan to start the predicted. process excessively. capable of providing yacht marina construction in 2013. Marinas are the heart of By utilizing the success docking, on-land services, When D-Marin Dalaman marine tourism; they are we have attained in yachting and social means at the level is completed, it will be one facilities that symbolize and marina management of international standards. of Turkey’s largest marinas, civilization on the shores. well, if we can create new with a capacity of roughly With its success in the yacht fields of investment that 1,000 yachts. construction and mainte- are freed of bureaucratic With our latest invest- nance industries, the profes- difficulties, we can provide ments, we have become sional service approach at its momentum to investments the largest marina chain of marinas, and the diversity in our country and enable the Eastern Mediterranean and quality of its services, sustainable development in Basin and Adriatic Sea. As Turkey has proven that it this area. D-Marin Marinas Group, we is worthy of its ambition in aim to show the standards the Mediterranean. This has It is said that the standard and quality of D-Marin to put our country’s shores on of service offered at mari- the world and spread it to the itineraries of yachters, nas in Turkey is higher than a more expansive area in revealing a need to add that offered by marinas the Mediterranean as an more docking capacity and abroad. As a company that exemplary brand. For this marinas that provide qual- reason, we are interested in ity service. We believe that new investment opportuni- public organization and bu- ties domestically as we are abroad, too.

Are the necessary importance and support being “Looking at the value given today to marina in- our country possesses vestments in Turkey, which and quantitative data started in the ‘80s through on our yachts and the public sector? What is needed for the development marinas, we could of the marina industry? say that the Turkish The cruises that started in marine tourism the 1970s under the name industry will develop of “Blue Voyages” developed much more in the years rapidly between 1983 and ahead.” 48 Exclusive Interview / Carl D. Hughes

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“THE NEXT GAME CHANGER MAY BE ENERGY STORAGE TECHNOLOGY” Carl D. Hughes has been the Global Industry Leader for Energy and Resources at Deloitte Touche Tohmatsu Limited (DTTL) since 2011. After leading Deloitte UK’s Energy and Resources practice for ten years, Mr. Hughes now works with established and emerging companies delivering market-leading projects, across all of Deloitte’s services including auditing, tax work, finance, risk management, and consulting.

BY MERVE KARA

HE GLobal energy Given the continued media attention and industry’s outlook has been going global focus, climate change and sustain- T through a rapid transformation ability will remain of significant impor- for over a decade. According to the 2013 tance for the foreseeable future. This has World Energy Issues Monitor, continued given rise to an increased focus on renew- uncertainty in the future direction of able energy, clean technologies in fossil climate frameworks, political instabil- fuels, carbon capture and storage, and ity in the Middle East and North Africa the political and environmental desire to (MENA) region, energy price volatility, increase investment in renewable energy. and the global economic recession are Thus, the investment landscape is shift- what energy leaders consider as the top ing and some of the money set aside for “insomnia-inducing” issues driving the investment in fossil-fuel-based technolo- world energy agenda this year. Mr Hughes gies has been directed toward renewable provided his assessment of recent develop- energy investments. This is evidenced ments in Turkey and upcoming global in the 2011 figures: $233 billion was challenges for The Turkish Perspective. invested in renewables, while investment in fossil fuel technologies totaled $219 How are climate change concerns al- billion. Thirty-four percent of the addi- tering the landscape of global energy tional capacity and 30% of the additional industry today? generation originated from renewables. Perhaps one of the most pressing chal- This shows that investors are concerned lenges that the energy industry is facing about climate change, see opportunities is climate change. Climate change is a key in renewables, and are reshaping the factor in energy investment decisions. generation mix accordingly. 50 Exclusive Interview / Carl D. Hughes

How did the global tendency toward investment in renewable resources change in the last decade? Climate change concerns have affected power generation since Kyoto. The summits of Bali, Copenhagen, Cancun, and lastly Rio have drawn the public’s attention to climate change concerns. For the last decade and maybe longer, this public attention has resulted in massive investment in renewable energy: the investment level rose from $33 billion in 2004 to $211 billion in 2010. Installed capacity rose from nearly marginal levels to 8% of total capacity and 5% of generated electricity. Of course, this remarkable investment has been supported by considerable public sector involvement and renewable energy tries showing that the renewable energy policies and incentives, especially as new “Local banks have healthy sector is less affected than others. While renewable technologies need support to financials and continue to many countries experienced negative or survive commercially in the early stages of marginal growth around the world, the investment. As of 2011, 119 countries have support the Turkish energy renewable energy industry grew by around renewable energy policies that include industry in addition to 17% in 2011. This is quite remarkable. several forms of incentives. There has multinational financial In the previous question, we men- been a boom in solar generation in some tioned over $200 billion of investment in European countries such as Germany, the institutions. However, more renewables. Developing countries made Czech Republic, and Spain, rising from contribution from the global up 35% of this total investment, and nearly zero to several gigawatts in the China alone made over $50 billion of the course of a few years, such that the govern- banks is needed.” investment. Fifty percent of all transac- ments decided to cut or lower the incen- tions occurred in developing world. We tives. Although there are ongoing debates attribute these high figures especially to about the level of incentives, governments considerable government support both that support development of renewables been shortened etc. However, transactions financially and politically. Further, China typically create a considerable renewable continue to be completed. Local banks and India enjoy low cost generation and capacity. have healthy financials and continue to are now massive exporters of solar and support the Turkish energy industry in wind equipment. These massive produc- To what extent are the current global addition to multinational financial institution and reduced technology costs caused financial crisis and sovereign debt tions. However, more contribution from photovoltaic module prices to fall by close crisis in Europe affecting this invest- the global banks is needed. Globally, I can to 50% and onshore wind turbine prices ment tendency at public and private say that CFOs see the unpredictable eco- by around 10%, bringing them closer to levels in Turkey? nomic and financial environment as the being competitive with fossil fuels. There Let’s firstly look at the Turkish economy to single largest factor constraining invest- are also certain funds that are available see the impact of the crisis. Debt markets ment. Corporates are reacting to the fog of for emerging countries, to be utilized in remain very challenging and this is borne economic uncertainty by adopting more renewable energy investments, which out by the current low levels of lending defensive strategies than at any time in the enable a certain degree of investment. But in greenfield power projects as well as last two years. again, the project must show it has the po- energy privatizations versus recent years. tential to create cash and that it is efficient Many privatizations in the energy industry Are other emerging countries—such in market terms. Some of the develop- including regional electricity distribution as China, a leading investor in renew- ing countries, including China, have also and Başkent Natural Gas Distribution Inc. able resources—being influenced by benefited from the Clean Development have been canceled due to financing chal- the crisis? Mechanism projects. lenges. Moreover, terms have changed and In fact, all investors are feeling the pressure banks are more conservative now: lenders of the crisis, in emerging countries as well. Turkey kicked off its nuclear power ask for more sponsor support: the margins However, there are some interesting fig- plant projects in recent years with have been increased; and the terms have ures regarding China and emerging coun- the expectation to improve its foreign

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trade balance. How do you see Tur- How do you see the future of the en- key’s efforts in this regard? ergy industry over the next ten years? Turkey has concerns over security of sup- This is a very broad question—there are ply, as the energy sector is highly depen- many issues to consider, but I’ll try to dent on imported fossil fuels, especially +250 mention a few of the most critical ones. mıllıon tons natural gas. This naturally encourages a The future of energy industry will be focus on exploiting local resources. It is a shaped by several factors with technology This is how much municipal solid rather controversial issue as to whether waste the US generates every year. at the forefront. Everybody felt the trans- nuclear technology can be regarded as formative power of technology when the a local resource given the high amount US, which was importing large volumes D ata: US Environmental Protection Agency of imported technology, equipment of natural gas, started to utilize unconven- and material that is required. Further, it tional ways of extracting natural gas and, brings other complexities in terms of risk as a result, became nearly self-sufficient management, public opposition, financial yet there is still room for development in with over a hundred years of reserves. The concerns, disposal of nuclear waste and terms of regulatory revisions to pave the next game changer may be energy storage plant decommissioning in the longer- way for the necessary investments to take technology. This would bring forth a new term. However, the inclusion of nuclear this step. world, especially for electricity generation power is a way of diversifying the genera- and renewables. tion mix, and it will definitely decrease Production of shale gas, a type of Energy management, covering energy the level of imported natural gas. Whilst natural gas, has been soaring in the efficiency and demand management issues nuclear power is a controversial issue all United States. What is your opinion is increasingly a hot topic. Sustainability, over the world, especially after Fukushima, about the impact of this new under- security of supply and safety remain key decisions on whether to build nuclear ground resource on global energy energy considerations for most countries. power plants or not have to be made after politics? All in all, technology will make more careful thought and analysis, with the The advent of shale gas production at scale and more energy resources available to a related governance structures being clearly in the United States, and the consequent greater number of people than ever before. and transparently established. shift in US energy supply toward energy *Source for quantitative data: UNEP report and independence, are likely to change the dy- Jane Allen’s presentation on questions related to Do you think Turkey could be an en- namics of global gas markets fundamen- renewables. ergy hub geographically surrounded tally. This market impact will be further by oil- and gas-rich countries?? increased if unconventional gas deposits Considering that the richest resources in central and Eastern Europe, China, and of oil and natural gas are located in the Australia are also brought to commercial nearby geography of Turkey, it can be production. I believe that the implications argued that Turkey is in the best position of these changes are sustained lower gas to become an energy hub in the region. prices in the US, with gas projects in Rus- Potential natural gas resources in the sia and Africa, previously focused on LNG countries with which Turkey shares its supply into the eastern seaboard of the US, borders, amounting to some 80,000 bcm, needing to find a new market in Europe will in part be needed to meet European or Asia. demand for many decades to come. In the meantime, trans-Turkey routes are the most favorable for pipeline transmission of natural gas from Caspian and Middle East countries to the European Union. Also, the EU is trying to reduce depen- “While many countries dency on Russian gas, thus strengthening the potential role for Turkey as a hub experienced negative or between the Caspian and Middle Eastern marginal growth around the gas producers and European customers. However, becoming an energy hub cannot world, the renewable energy be realized without strong political will industry grew by around and a structured plan. Turkey has already achieved considerable progress in terms 17% in 2011, A REMARKABLE of developing its regulatory framework, ACHIEVEMENT.” 52 In Depth / Franchising

Turkish Food Chains Go Worldwide with Franchising

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The dozens of Turkish food chains that have grown through franchising have set their eyes abroad. Having established franchises in the surrounding region, these companies now have the Middle East, Europe, and America in their sights.

By GÖZDE ŞEKER By ABDULKADİR DEMİR 54 In Depth / Franchising

he franchise system, causing franchising to grow ing shopping centers first in Central Asia, but there is more T which emerged in the exponentially. Istanbul and then in Anatolia to come. Food brands account US, is becoming more and As Turkey becomes a center are no longer contained by for a significant number of more popular for brands in of attraction for international the country’s borders: they these, and this means alluring Turkey for the advantages it brands with its increasing now seek opportunities in the business opportunities in the brings. The growth attained allure, Turkish brands have set markets abroad. These brands food industry for investors by companies using the their sights on the rest of the initially opened branches by both local and foreign. franchise system is attracting world. Brands that became franchising in nearby coun- more investors by the day, franchised in mushroom- tries and the Turkic nations of

1,876 24 % 74 % 50 ,000 Number of chains in Turkey Proportion of foreign brands Proportion of Turkish brands Number of branches connected to chains Komagene and Dönergene Komagene, one of Turkey’s leading vegetarian çiğ köfte—patties made of bulgur with a mixture of spices, herbs, and other ingredients—chains, was one of the first brands in Turkey to present an opportunity to investors via franchising. Launching in 2003, Komagene grew to more than 100 branches by 2008. The company is aiming to increase its influence in both the domestic and international markets with its new döner kebab brand, Dönergene.

ship, they must enter a franchise Turkic republics, and countries with system. The benefit of the franchise well-established spice customs and system to small-scale investors will be habits of consuming spicy foods, such understood more clearly in the com- as India and Pakistan. And with ing term. Presenting turnkey brand our new brand, Dönergene, the entire power, accessibility, and awareness; world is our target market. the strength of chain stores; and When granting a franchise, we tried-and-true business models, the take care to see that the potential in- franchise system is sure to grow more vestor believes in this business, loves quickly in the coming term. the business, has the means to invest, As Komagene, we currently serve and follows franchise rules. Until out of 390 branches, 385 of which the end of the first year in which the Çetin Tekdemir—General Manager, are in Turkey and five of which are franchise is granted, we do not take Komagene Çiğ Köfte abroad. In our sights are Europe, the trademark fees from the investor.

Used by many companies, the franchise system is one that has been especially successful in the West. This system makes rapid growth possible. When it is set up and managed correctly, it brings success. Individu- ally owned and small businesses are affected negatively by global movements, trends, and difficulties with communication and accessibility. For businesses to hold competitive power against large corporations and continue to maintain owner-

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the operations/control mechanism very ef- How is interest in Turkish food brands fectively. The most important factor in the that grant franchises abroad? Is it most- development of franchise chains is man- ly local investors who buy franchises or agement. A poorly managed chain cannot are they foreign? grow or turn into a brand; in fact, as its Interest in our brands abroad is increas- rivals grow, it will shrink. A well-managed ing each passing day. As UFRAD, we chain will become a brand even when start- have always encouraged and supported ing from scratch. Shopping center space for our brands in branching out abroad. brands is one of the most important factors There is interest from investors local and in the development of franchise chains foreign alike. At first, local investors were as well. Errors and neglect committed more interested; now, however, foreign Mustafa Aydın, PhD, constantly by independent retailers are investors are also buying franchises, Chairman of the Turkish Franchising another important factor in why consum- believing in the strength and quality of Association ers prefer franchise chains and in how they Turkish brands. develop. A factor that can cause franchise We asked Mustafa Aydın, chains to fall behind in certain industries, Could you discuss the curriculum of the PhD, Chairman of the Turkish on the other hand, is the emergence of giant Franchise Academy run by UFRAD? chains that open their own branches. These How did the need to establish such an Franchising Association, about do not emerge in service-intensive indus- academy in this field arise? the franchising industry, which tries; but in segments where the product As UFRAD, in order to ensure that is growing in parallel with the and price are at the forefront, because they franchise-granting chains provide last- growth of the services sector are able to operate on low profit margins, ing benefit to our country’s economy, we neither independent stores nor franchise see it as necessary for them to set up their worldwide, and the position of chains can stand up against them. franchising systems in full and correctly Turkish food brands within the operate these. For this reason, we support industry. In terms of the number of franchise them with our training and check up chains, how do you regard Turkey’s posi- on them via system evaluations. With tion in the world? UFRAD Franchise Academy, a joint What is the secret to success in franchising? The Turkish market and economy constitute effort at Istanbul Aydın University with Brands that grand franchises must first an important location with their stabil- the consultancy of Franchise&more, we cement their concepts properly and develop ity, young population, and position as a provide fundamental training to entre- their brands according to the desires and gateway to the Middle Eastern and Asian preneurs who will establish a franchise needs of their customers. For the franchise markets. All countries and brands from system, the managers who will implement system to be successful, it is also necessary America to Canada and from Spain to India the system, and the people who will sell to keep quality standards high and use are planning to enter our country’s market. the product.

Turkish Food Brands EXPANDING Abroad via Franchising

in Iraq is Pizza Pizza. most chain by number On the heels of the of locations by the opening of its branch year 2020. The com- • Sampi Gıda took its • In 2011, Baydöner in Azerbaijan, the assorted toppings—to pany’s yearly revenue first step abroad into opened its first branch company has now set Spain. target is TRY 5 billion. Germany. The com- in Erbil, the rapidly de- its eyes on the Iranian • Simit Sarayı is deter- Besides America and pany opened its first veloping city in North- market. mined to feed Turkish the Middle East, it branch under Sampi ern Iraq. Expanding its simit—a superficially is planning to open GmbH, its business franchise in the Middle • Park Kumpir, which bagel-like sesame branches in China, entity in Germany, in East and Europe is opened its first branch roll—to the world. India, and Pakistan the city of Düsseldorf, foremost among the in Switzerland, intends Simit Sarayı (“Palace as well. The brand’s and its second in Co- company’s goals. to bring the tasty of Simit” in Turkish), goals are not limited logne. Sampi aims to kumpir—a which introduced a to opening branches, grow to 100 branches popular fresh approach to the either—Simit Sarayı in Europe within street food doughy snack that is will establish seven five years, starting in consisting traditionally sold on production facilities France, the Nether- • Another food brand of baked the streets, aims to in the US, China, and lands, and Belgium. that opened a branch potato with become the world’s India. 56 In Depth / Franchising

sİmİt sarayı Simit Sarayı is continuing to expand not only in every city in Turkey, but also all around the world. The company always makes sure to conduct the opening of the first location in a country by itself. With its export-based strategy for growth, it is aiming to establish manufacturing hubs around the world.

half of these requests come from abroad. is under way in the food and beverage From these applications, which come industry, as is the case in every part from every part of the world, more or of life. Companies with a high degree less, we are in close contact as of 2013 of mobility are moving toward the with Benelux countries and Germany franchise system in order to adapt to in particular, as well as investors this change. We think it will be better in the USA, Australia, UAE, Qatar, for companies to progress while also Saudi Arabia, and Kuwait. Especially maintaining their local values in the abroad, we are conducting our efforts human and cultural sense. As Simit regarding this matter under two main Sarayı, investors are watching us with headings. As we conduct this effort, rapt attention due especially to the we aim firstly to possess sufficient growth and development we realized Caner Yazar information on consumer preferences over the past few years. As we are one Simit Sarayı Franchise Direktörü and prices. Under the second heading, of the brands that use the franchise the investor’s background, operational system most effectively in the world, we By attaining a figure of 280 stores capacity, and financial situation come stand out more than other brands do. at minimum by the end of 2013, we into the fore as a determining factor The way to success in the franchising aim to surpass in 2016 the 550-store for us. Abroad, we take 6% of monthly system goes through happy franchisees target we set for that year. We receive revenue for trademark fees, and 3%— that adopt the brand’s standards and 450–500 franchise applications on also of monthly revenue—domestically. values in their work and thereby attain average every month, and more than In the process of globalization, change profitability.

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Why Franchising? The franchising system ily. This security and trust potential friction and prob- grants a specific individual minimizes the time, energy, provided to the entrepreneur lems are minimized as well. or company in a country and—to a significant de- brings high motivation with If you are interested in com- or region the authority to gree—the money one would it. Entrepreneurs are able to panies that offer franchising grant further franchises in spend upon deciding to exchange ideas with other abroad, it bears mention- its name instead of doing so establish a business. As the investors in the franchise ing that they generally do on its own. The contracts in brand has already gained with ease and learn of global this by granting a master which this authority is speci- recognition and acceptance, developments quickly. Ad- franchise for an entire fied, the master license, may entrepreneurs are able to ditionally, as one deals with country to a single investor. grant this authority for more market their services eas- professionals the whole time, In other words, a franchisor than one country.

KITCHENETTE Kitchenette—the flagship brand of Istanbul Doors Group, a local giant in the dining, nightlife, and entertainment business with more than 20 brands under its umbrella—offers entrepreneurs the opportunity to establish their own businesses via franchising.

the second branch that opened in Mos- ity of the business. As for the technical cow, our total number of restaurants terms, those are discussed and decided has reached 24. In the years ahead, we upon once all other terms have been predict that this number will multiply, approved. especially with branches to be opened We believe the franchise method pos- abroad. With franchises, we aim to sesses significant potential. The demand reach 60 restaurants within five years. we have seen for branches of Kitchenette When it comes to the Kitchenette abroad prove this, anyway. Our top branches we open abroad, we opt to priority is Baku and Moscow, where work with local partners who know the our concept has gained acceptance. Fur- region in question and its conditions. thermore, London, as a city where we As Doors Group, the foremost concern already have restaurants, is a location Osman Cenk Akın—CEO, we have when granting franchises is where we are strong. We aim to grow Istanbul Doors Group that our business partner will repre- in the UK, foremost in London. There sent our brand as best as possible, not is significant demand for Kitchenette Kitchenette, the locomotive brand of compromising on the brand percep- from many other different places in the Istanbul Doors Group, currently has tion, quality of service, and all other world; we are evaluating all of them, one branch in Baku and two in Moscow. principles so as to ensure the continu- our target regions most of all. In both locations, it has been met with great interest from day one. The success of the first branch in Moscow facilitated the launch of a second branch within a short time. And in Baku, our efforts to open a second branch are ongoing. Additionally, in a very short time, our St. Petersburg, Russia branch will enter service. After that, we plan to open our London branch. The success of our existing restaurants abroad further rallied us with respect to our plans for abroad. Kitchenette will continue to grow domestically and abroad. Now, with 58 Content: The Unstoppable Rise of Parex P56 A Voyage Leading from the Grand Bazaar to the World P58 The 40-Year Story of a Cup of Coffee: Kahve Dünyası P61 Editor: Can Gürsu

Brands textıleS, cleanıng products, COPPER WIRE, coFfee...

Sarar holds four textile companies in the US, Germany, Israel, and China.

he journey BEGUN by CCS Sarar, and the home tex- Sarar Gets T family patriarch Abdur- tile brand Sarev. At present, rahman Sarar in a 12-square- Sarar provides employment meter tailor’s shop led to to nearly 5,000 people. Ready to Surprise the establishment of what is today a textile giant. Born on BRANCHING OUT TO THE WORLD Founded in 1944, Sarar was passed down April 19, 1944, Sarar Group For Sarar, which accelerated from grandfather to grandson. Now is active in a wide range of its growth in recent years, the representing the third generation in the industries, from apparel 2000s began with a flurry company’s administration, CEO Emre production to big-box retail, of activity. In 2000, Sarar home textiles, automotive established the company Sarar spoke about this nearly century- trade, insurance, and IT. Sarar Europe GmbH, which long journey and its milestones. Among the members of this conducts its European opera- group are Sarar Men’s, Sarar tions and aims to develop the By aynur şenol altun Women’s, Sartoria, Interview, brand, as well as sales and

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marketing, in EU countries. Emre Sarar, CEO: Emre Sarar says Sarar is In 2001, with similar goals, “The textile industry one of the world’s leading the group established Sarar in Turkey will companies in terms of ready- USA to conduct and manage always maintain to-wear production capacity. its US operations. In China, its importance and The company’s total exports the group is active via Sarar can be broken down by coun- Trading Co. value”. try into Germany with 49%, Aiming to increase Tur- the UK and Egypt with 8% key’s recognition in the world each, the US with 4%, and market for home textiles and Russia with 3%, with the re- to gain even more power in maining 28% going to other Half of Exports the field, Sarar established a countries. Sarar’s top export new brand to this end, Sarev. products are suits, shirts, and Germany-Bound In October of 2005, the coats/overcoats. Sarar exports to Sarar Home Textile Factory Sarar’s largest foreign 49 countries. The company’s was established and put into markets are Europe, the export figures can be broken operation in the Turkish US, Russia, and the United down as follows: province of Eskişehir. Arab Emirates. However, the With so many brands brand is continuing research under one umbrella, the to branch out to new markets principles of branding are of as well. great importance. According to Sarar CEO Emre Sarar, locations in Central Europe “It Takes Time to Become Ac- 49% a brand must globalize to and the Middle East to 100 quainted with the Market” GERMANY truly become a brand. “Since by 2023. According to Emre Sarar, we entered the process of Sarar holds four textile there exist both advan- becoming a brand, awareness companies in the US, Ger- tages and disadvantages to of our brands increased even many, Israel, and China. It is entering a new market. He more,” says Sarar, and he present in 13 EU metropo- summarizes these as follows: 8% continues, “We are growing lises, five US states, and in “It takes time to become more by the day.” Tel Aviv with its retail Sarar acquainted with and under- UK concept stores. Sarar also stand the market; products, 49 Countries, 5 Continents has distributorships and fabrics, and patterns that fit Sarar, whose retail expan- franchisees in Russia, India, the market have to be cre- sion efforts in Europe and Iran, Azerbaijan, Turkmeni- ated. But we could say that America are ongoing, is stan, Kazakhstan, Lebanon, producing designs that suit 8% active in 49 countries on five Dubai, and Egypt. every body type and taste is EGYTP continents at present. Sarar foremost out of what makes aims to further increase Sarar ‘Sarar.’” this figure in 2013. Having Sarar stands out in its in- raised its number of stores in dustry with both its designs the US to 12 with locations and the quality of its fabrics opened in 2012 and early and workmanship. To deter- 4% in 2013, Sarar meanwhile mine these standards, Sarar’s USA continued to grow in Europe design team follows industry and Middle East, too. The Emre Sarar developments and trends company opened a store on closely. Based on trend analy- Königsallee, the boulevard CEO, Sarar Group ses, themes for collections regarded as the heart of “There exist both advantages are set to match the brand’s fashion in Germany; and in and disadvantages to entering positioning and target 3% the Middle East, it estab- a new market. It takes time audience. Once the theme is RUSSIA to become acquainted with lished a partnership with and understand the market; established, the materials are world-famous franchise firm products, fabrics, and patterns chosen and the products are Alshaya, says Emre Sarar. As that fit the market have to be created. a result of said partnership, created. But we could say that Emre Sarar says the great- producing designs that suit a new store was opened at est quality of Sarar products every body type and taste is 28% the Avenue Mall in Kuwait. foremost out of what makes is that products can be found OTHER With Alshaya, Sarar aims to Sarar ‘Sarar.’” to suit every body type. He increase its number of retail continues, “Because we are 60 Brands / Cleaning Products

present not only in the Turk- believes that the textile in- ish market but also in many dustry in Turkey will always markets abroad, we develop maintain its importance and and diversify our products value. according to the changing In 2013, Sarar aims to re- needs of the market of every new its existing stores, open country.” new stores, and continue to The company has no conduct plans to grant new qualms about the future distributorships, says the of the domestic market in company CEO. “By perform- Turkey, said the CEO, who ing the right cost calculations in the right locations, we are turning toward prof- itable investments, thereby taking cautious steps in our domestic-market investments.” He adds that additional budgets have been set aside for R&D investments and that innovation has been given priority. Sarar’s creations for men and women are well established. With its Interview brand, it is aiming for the With Alshaya, Sarar youth. This raises the question of whether Sarar will The Unstoppable aims to increase its introduce new things to cater number of retail to this target audience. Al- locations in Central though Emre Sarar provides Rise of Parex Europe and the no hints on the matter, it Founded two years ago as a marketing Middle East to 100 by seems likely that 2013 could 2023. yield surprises. company, Parex is continuing to grow rapidly following its partnership with Digicom. As the company’s market share grows constantly every month, it stands head-to-head with global players on supermarket shelves.

By NESRİN KOÇARSLAN

fter working for them—he thought for a few A Unilever and Doğuş weeks, analyzed his target in- Group for a long period, Fer- dustry for a month, and after hat Sucu, the founder of Prov- concluding that it could work el, realized one day that he just out, he rolled up his sleeves wanted to quit his job. Neither for the task. He informed his a plan to form a new business social and professional circle, nor one to transfer to another and he assembled his “dream company were in his mind— team” of people he wanted all he wanted was some time to work with. He didn’t leave to rest his head. But he was the office for three months. also cognizant of the fact that “Everything was planned, but his years of experience would because I did not know what open new doors for him. With would happen in the end, everyone he knew advising the days were very hard and him to set up his own busi- tiring—until I held the first ness, he was unable to ignore packaged product in my hand.

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on their radar as well, he states Parex General “To grow and become Manager an important brand in Parex Sets emphatically. About Parex’s Ferhat Sucu international strategy, Sucu aims have sales the world, we first need Its Sights in 30 countries to be a strong brand says the follows: “We don’t by the end of want to enter new countries 2013 in Turkey. For this beyond just to sell products. By work- reason, we first aimed Turkey’s ing with the right business to become stronger in Borders partners, we entrust our brand Turkey.” to our business partner in a As it aims to become certain location. Its distribu- a global brand, in tion capabilities, infrastruc- Parex’s sights for 2015 ture, financial stability, and are plans for new relationship with retailers countries. there are highly important to us.” Sucu is therefore quite particular when choosing a country to enter. It is of strategic importance that the 17, 400 retailers with which they work Number of invoiced trust them, too, he says. Also retailers in Turkey important for their business partners are the company’s rapid growth in the Turkish market, its broad distribution network, and its rapid spread, I don’t remember ever being plished all of these things.” % notes Sucu, emphasizing that that happy in my life,” says In the two years that Sucu 16 the company highly values the Sucu of those days. Everything explained so clearly and suc- Market share in Turkish market and grow- afterward appeared to come cinctly, the company took Turkey ing in it. Though Parex may naturally. What Sucu said several significant steps in be exporting to 15 countries allured Digicom CEO Sabri its market. The aforemen- currently, the domestic Yiğit, too. Although Parex had tioned factory was built on market still accounts for 95% no partnership in its short- land that they owned and it of its revenues. Sucu aims to term plan, it entered one with operates today at full capacity. 15 increase the share of exports Digicom. The business plan Parex started on its journey Number of export in revenues to 15% this year. that designated the company with 81 products; today, it countries In time, exports and domestic as only a marketing company continues with more than sales will be at roughly equiva- had its goals altered and ex- 200 innovative products in lent levels, he states. panded with this partnership. its portfolio. In an industry As a result, it was decided that is quite open to competi- 30 “We Want to Be a Global that the targets Sucu aimed tion, an industry where both Number of export Brand” to achieve within five years powerful global giants and countries planned Sucu emphasizes that Parex’s would be achieved within two generic brands weigh heavily, for 2013 success lies in what they years. it managed to attain a 16% imagined for it. Parex is the market share in just two years. only brand that is active in the Growth VIA Partnership More importantly, it is rapidly cleaning aids, garbage bags, Roughly two years have now increasing its activity in the 15% and kitchen aids categories at passed since the partnership international market—export- Proportion of exports once, he says. The company within revenues in began. We asked Sucu to ing to 15 countries at present, 2013 has specialized in each one of explain in summary what took the company plans to export these categories, says Sucu, place over these two years, to to 30 countries by the end of and he adds that the com- which he replied, “When we 2013 and 50 by 2015. pany’s efforts both in R&D decided on the partnership, and to follow and develop we planned for a factory and Export Strategy 50 world trends are very suc- to reduce our time frame for Parex General Manager Ferhat Number of export cessful. Parex, which aims to countries planned what we would accomplish in Sucu thus plans to go beyond for 2015 become a global brand, has five years to a shorter period, the markets in which they are growth in its home country two years. Standing where we active at present. The Euro- first as its priority goal. Sucu are today, we have accom- pean and African markets are believes the first step to Parex 62 Brands / Copper Wire

becoming a global brand will “We set out to expand be to become strong in Turkey, the market. Today, we because “…in the countries to are both expanding the which we export, the buyers market and taking a are generally large distribu- share from it.” tors. That is to say, they are that country’s strong players, and before they start working with you, they look at how much you have invested in this dynamics of the market thanks business in your own country, to his past business experience, and at how successful you have Sucu managed to bring Parex been in your country. For this to where it is today thanks to reason, in order to be success- the brand perception they were ful in exports, you must first be able to have the consumer ac- successful in your own country, cept. Sucu says they grew both in any case,” he explains, high- the market and their own mar- lighting the importance they ket share. “Actually, we set out give to the Turkish market. to grow the market, because to gain a share in the exist- Challenging Global Players ing market means competing Sucu notes that Parex is the to an abnormal degree with only brand to increase its somebody, losing money, and market share constantly every taking a slice from their pie. month. His achievements with Growing the market, however, the Parex crew add up to a rare brings with it a contribution breed of success story—the to the market by taking shares A Voyage Leading from reason for this is hidden in from both the growing market the dynamics of the FMCG and from rivals,” says Sucu, market in Turkey. Besides the explaining the strategy behind the Grand Bazaar fact that the market contains their growth. considerably powerful players Founded two years ago by both domestically and globally, Ferhat Sucu based on a dream, to the World the no-name brands possess a today, Parex has 17,000 retail- By aynur şenol deadly weapon in price compe- ers in 81 provinces in Turkey tition. Adding to these the fact and exports to 15 countries. that consumer habits have not For Sucu, who accomplished in yet become clearly established just two years much that many arkuYSan was manufacturing industries; in Turkey, it seems almost im- entrepreneurs could not even S founded in 1972 by Bemka and Bektaş, which possible to grow in the market imagine, the dream of “becom- gold dealers and jewelers in produce enameled wire; here. But with sound knowl- ing a global brand” seems likely the Grand Bazaar, which is and Sarda, a marketing and edge on how to best exploit the to turn into reality. one of the most important sales company. In Italy and centers of Turkish commerce the US, Sark-USA serves to Parex reaches and especially of Istanbul. market the export prod- its customers Its name is derived from the ucts of Sarkuysan, which through 17,000 retailers today first few letters of the names is a heavy exporter. In late in 81 provinces. of the professions of its 2009, Sark-Wire, a manu- founders. facturing company, became Sarkuysan operates as operational in Albany, NY. a group of companies; With all these investments namely Sarmankina, which and its production capabili- is active in the fields of ties in the US, Sarkuysan spare-parts manufactur- became a pioneering ing for machinery and Turkish company. Back in environmental protection Turkey, Sarkuysan pro- technologies; Demisaş, duces export-bound high which produces pig and value-added products at its nodular cast iron for the facilities in the Aegean Free automotive and machinery Zone in Turkey.

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Present in Every Aspect of cially due to the crisis that cial place in the history of Industry erupted in the euro zone a industrialization in Turkey. Producing electrolytic cop- few years ago, it is striving to All of Sarkuysan’s shares per products, which are compensate for export losses are publicly traded, and it basic infrastructural and in this region by entering is estimated that there are investment goods that serve the markets of developing some 4,000–5,000 share- as inputs to fundamental countries. Sarkuysan’s 2012 holders. Sarkuysan, which industries, Sarkuysan satis- exports totaled roughly $474 has distributed dividends fies an important demand. million. In 2013, it aims to to its shareholders almost Sarkuysan’s wares are increase production and every year since it entered standard inputs to the cable, sales by around 10%. operations, exhibits a steady, electrotechnical, electron- Sarkuysan is a publicly rising performance. ics, engine, communication, traded company. Sarkuysan electricity generation and General Manager Hayret- Forty Years of Experience transmission, solar power, tin Çaycı, expressing his According to Hayrettin home appliances, measuring views on this matter, said Sarkuysan Çaycı, the key characteris- devices, defense, automo- Sarkuysan was the first manufactures parts tics of the industry are the tive, chemical, construction, successful corporation to be of the machinery and fact that the vast majority HVAC, and plumbing indus- entirely publicly traded and of raw copper—the basic tries. The group exports to ruled by a multiple-partner, facilities it uses on material for the electrolytic around 50 countries located professional management license or with its own copper industry—is im- on five continents. Espe- team, granting it a spe- know-how. ported, the price of copper 6664 Brands /Lorem/ Copper Ipsum Wire

(as a strategic metal) being set on international metal exchanges, and the neces- sity to use external sources in purchases due to its high price. For this reason, managing this industry requires personnel with great experience, knowledge, and Hayrettin Çaycı skills. With forty years of General Manager, Sarkuysan experience and know-how in this field, Sarkuysan is Sarkuysan wire is used in an estimated half of passenger steady and successful in its and commercial vehicles operations. produced in Europe. Since Çaycı explains Sarkuysan’s 1980, wire made from oxygen- primary aims as follows: “To free copper and nickel- plated copper wire have maintain our position as been supplied to NASA—the the industry leader, increase US Aeronautics and Space the recognition we have in Administration—and, in world markets, engage in recent years, to the suppliers production abroad when of the aircraft industries. necessary (as we do in the USA), and expand our product range with an emphasis environmental management on high value-added wares.” system, and the importance it gives to health and safety Three Different Casting in the workplace with the Technologies OHSAS 18001 occupational Sarkuysan engages in health and safety manage- production in indoor space ment system. totaling more than 77,000 Sarkuysan also has physics square meters, located on the company also gener- and chemistry labs fitted 180,000 square meters ates a significant portion of with cutting-edge equip- of land it owns in Gebze the electricity and steam it ment. These labs hold TSE and Darıca, Kocaeli. Their consumes at its cogenera- (Turkish Standards Insti- initial production capacity tion facility. tute) Contract Laboratory of 10,000 tons per annum The company conducts all Certification, which signifies has risen to a world-class All of Sarkuysan’s its activities in accordance the technical proficiency and 220,000 tons today, says shares are publicly with the ISO-EN 9001 authority to conduct experi- Çaycı. The company uses and ISO/TS 16949 qual- ments on behalf of the TSE. the latest technologies in traded. It is esti- ity management systems. Having started in the production, he adds, and he mated that it has Additionally, it documents Grand Bazaar, the heart of emphasizes that Sarkuysan some 4,000–5,000 its care for the environment trade in Istanbul since the is the only company in the shareholders. through the ISO 14001 Ottoman era, Sarkuysan’s world to have three different journey now leads it to the continuous-casting tech- rest of the world. In the past nologies under one roof. F IGURes three years, Sarkuysan has Sarkuysan’s R&D Sarkuysan has been increasing its production and sales continually continually increased its department, which is in over the past three years. production and sales. The intensive efforts to develop company supplies wares and improve its tech- Year Production (tons) Revenue (million TRY) to Europe’s auto giants nologies, contributes to the and to NASA. Sarkuysan, company’s international 2010 145,725 1.51 million which became an impor- competitiveness through tant economic power with patents and industrial ap- 2011 151,425 2.18 million its thousands of partners, plications. Manufacturing appears poised to expand parts of the machinery and 2012 thanks to the market re- facilities it uses on license 157,763 2.27 million search and R&D efforts it is or with its own know-how, conducting.

MARCH-APRIL 2013 ISSUE 15 Brands / Coffee The Turkish Perspective 65

The precondition to success abroad is to differentiate the brand in a way that reflects its essence.

he coffee chain Kahve T Dünyası entered may The 40-Year Story of a Cup of have entered consumer consciousness relatively recently, but its history Coffee: Kahve Dünyası actually dates back to the 1970s. After being present After opening its first branch in London, Kahve Dünyası started in the market as a producer seeking new markets. Today, it is planning to open branches in for roughly 40 years, under New York, Boston, Vienna, the Gulf countries, and the Turkic the name Kahve Dünyası republics. (“Coffee World”), it started to grow rapidly after opening its first branch in 2004. By Nesrin KOÇASLAN By şeref yılmaz Bringing a fresh take on 66 Brands / Coffee

coffee culture for the past five years, the brand is carrying its flavor to the rest of the world with the cafés it is opening abroad. After opening its first branch in London, Kahve Dünyası started seeking new markets. Today, it is planning to open branches in New York, Boston, Vienna, the Gulf countries, and the Turkic republics.

A Unique Coffee Retail Experience Entering the industry with the importation of coffee seeds roughly 40 years ago, Kahve Dünyası—then Altınkılıç—later became an important producer with the foundation of the Altınkılıç Coffee Fac- tory and Altınmarka Cocoa and Industrial Chocolate Factories. After opening its 100 first retail branch in 2004, Number of stores Kahve Kahve Dünyası drew the Dünyası plans to reach in 2013 attention of customers with Continued Growth its unique concept. Eda Focused on growth since Terçin, Marketing Manager 2004, Kahve Dünyası aims for Kahve Dünyası, ascribes to have reached close to 100 the quick development of 12 sales locations as of February appreciation for the brand Number of subway 2013. Of these, 12 are kiosks to its customer-focused kiosks at subway stations, 13 are approach, genial person- corners in supermarkets, nel who reflect Turkish and others are branches, hospitality, table service, says Terçin. Among Kahve and especially to the culture 13 Dünyası’s 2013 strategies, of complimentary treats Number of corner she adds, is growing by unique to Turkey. She adds, kiosks at supermarket opening stores in provinces “Thanks to this, the brand chains where it did not have stores became one that people before. learned about from word of The company opens its own mouth.” Terçin, the spread of Kahve Among Kahve stores and manages these Dünyası brought with it an Dünyası’s 2013 from its headquarters, says Competing with Global increase in coffee consump- strategies is growth Terçin, and she confirms Brands tion habits in Turkey, and by opening stores in that their strategy will con- Kahve Dünyası’s ambi- people started choosing provinces where it did tinue as such in the coming tious entry into a market such venues to spend time not have stores before. term. “In order to offer a dominated by global players and socialize outside of the standard quality of products caused quite a stir. With home more frequently. In and services in all our stores, its complimentary treats, fact, a significant base of we prefer to open and man- widespread and accessible customers who sampled age our stores ourselves.” cafés, and a concept that several varieties of coffee at reflects Turkish culture, it Kahve Dünyası and went on Activities Abroad PERK UP was quickly adopted by cus- to become repeat consumers Besides being the first tomers. According to Eda emerged. Turkish coffee chain to

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The spread of Kahve Dünyası brought with Donec consectetur it an increase in coffee varius nisi eget aliquet. consumption habits in Vivamus fermentum Turkey. auctor imperdiet. Phasellus gravida.

become a brand and chain, it also stands out as the first Turkish coffee brand to go international. Outside of Turkey, it currently has one store in London, says Terçin. says they will also add the “Our store is on Piccadilly, The Journey of Besides being the first Gulf countries and Turkish where tourists who come to Turkish coffee chain republics to this list, as they London from all over the Kahve Dünyası’s to become a brand show special interest toward world stop by the most. For Kahve Dünyası’s product this reason, it is visited fre- Products and chain, Kahve range and concept. quently by both the English Dünyası also stands and tourists. Thanks to this, “We have four main product out as the first Turkish Amid Global Players we have the opportunity to groups as Kahve Dünyası: coffee brand to go The absolute precondition to coffee, chocolate, ice cream, have visitors who come from and bakery products. We international. success abroad is to differen- various parts of the world produce the products in tiate the brand in a way that sample our products and to all of these groups at our reflects its essence, states Ter- get their feedback.” own factories; we prepare brand by rapidly opening çin. Kahve Dünyası’s culture The company sees great them using the finest of raw stores abroad, as we did in of complimentary treats, its materials and deliver it to the potential in London, ac- customer at their freshest, Turkey. We were taken into hospitable approach, and its cording to Terçin, who says never compromising on the Turquality program this unique products are world they plan to expand with product quality. We have year; with the support we class, she says. The London more stores in London in very strong R&D teams at get from it, our foreign op- store offered all guests who our factories; they follow all the coming term. Also in the the fairs, developments, and erations will pick up speed.” revisited it one-and-a-half coming term, they want to new product trends in the With this decision, Kahve months later Turkish coffee take steps toward opening world. We are able to adapt Dünyası will first grow and Turkish delight, which stores abroad in further these to suit the Turkish in the UK and then open they were very pleased by, locations, says Terçin: “Our palate, allowing us to present new stores in such global turning them into repeat new flavors to our customers aim is to take serious steps constantly.” metropolises as New York, customers of the chain, she toward becoming a world Boston, and Vienna. Terçin said. 68 The Turkish Perspective

Agenda FAIRS, EXHIBITIONS, SUMMITS, AND MEETINGS IN THE NEXT TWO MONTHS

Texbridge Istanbul Textile and Accessories Fair Among the companies registered to March 13–15 participate in Texbridge Istanbul from CNR EXPO Istanbul abroad are Lenzing AG, A-H Floros Co., US Denim Mills, Raccagni Group SRL, Bottonificio Bap, Picchi SPA, Texapel SPA, Northern Linen, and Gafforelli SRL. A unique setup through which the participating companies’ products will be displayed is being installed at the fair in the “Trend Area” for visitors to see.

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01 02 March 7–9 April 11–14 Automechanika Istanbul Eurasia Rail: Rolling Stock, Infrastructure, and Logistics Exhibition 03 Istanbul Expo Center TÜYAP Fair and Congress Center Automechanika Istanbul is among Europe’s leading auto The third Eurasia Rail Exhibition will cover the effects of 04 OEM and after-sales events. Besides bringing together all reorganization in the Turkish railroad system upon the auto manufacturing and maintenance professionals in the industry and transportation in general, rapid cargo transport 05 region, it also offers SMEs the opportunity to enter the via railway, transportation in Istanbul and rail transport after market. This year, more than 1,000 automotive companies the completion of the Marmaray submarine railway tunnel 06 from Turkey, Europe, and surrounding countries will exhibit across the Bosphorus, and developments in vehicle technolo- their products and services over a usable area of 25,000 gies. Eurasia Rail aims to bring all institutions 07 square meters. and companies in the industry together at the exhibition, where it will offer new 08 business development and April 13–15 investment opportunities 09 ArkiPARC Real Estate Fair to participants. Haliç Congress Center The direction to be taken by the real estate sector, one 10 of the economy’s locomotive sectors, is of critical impor- 11 tance to Turkey’s vision for the future. As cities continue March 7–9 to develop, the need for infrastructure and transportation Sirha Istanbul 2013 investments, new residential areas, and facilities for health Istanbul Congress Center 12 care and education is increasing. ArkiPARC 2013 will bring Sirha is aimed to fulfill in one unique place all the needs to the agenda the progress of the real estate sector and the for the hotel, restaurant, and catering industries in Turkey 13 role of the public sector in spearheading advances in real and the countries that surround it. Its purpose is to enable estate for Turkey in the year 2023. visitors to discover new products, equipment, and services 14 in the industry, both domestic and from abroad, and more 15 April 17–18 importantly to give them the opportunity to experience Local Chains Meet 2013 Conference & Fair new technologies in practice and take inspiration from in- 16 Haliç Congress Center ternationally renowned chefs. The event aims to satisfy the The fifth edition of “Yerel Zincirler Buluşuyor” (Local Chains expectations of all actors in the professional field in Turkey. Meet), which aims to strengthen channels of cooperation The fair awaits participants to discover the innovations on 17 by bringing together suppliers of products and services to offer in the industry, network and exchange ideas with in- organized food retail with local grocery chains, will once dustry professionals, learn about the latest global trends in 18 again exhibit the difference it brings to fair and congress restaurant and hotel management to develop new projects, management as a visual spectacle in which Turkey’s leading and trade views with the world’s greatest chefs. 19 brands will appear with modern stands and take to the stage with special shows. Within the scope of the fair, exhibitions 20 will take place in all the foyers of the Haliç Congress Center, March 13–15 Exposhipping—EUROPORT ISTANBUL 12th International while the open exhibition area will be used as a space for ac- Maritime Exhibition 21 tivities in a manner that suits the event’s prestigious nature . Istanbul Expo Center 22 Europort Istanbul is again hosting the Mare Forum April 24–26 Conference, which will take place on the second day of the ICCI—19th International Energy & Environment exhibition. Leading maritime industry actors will come 23 Fair and Conference together discuss Turkey’s place in the seafaring world and Istanbul Expo Center what advantages and privileges cooperation with 24 Held in Turkey regularly since 1994, ICCI is the Turkey could bring to global companies. country’s most sustainable, environmentally sensitive, carbon- 25 neutral fair and conference in the country, featuring record participation of more than 300 companies. The conference is 26 also the only international platform where bilateral business meetings and fair activities are run simultaneously. ICCI 27 invites all professionals in the field to this meeting place where the sector’s leading suppliers are able to present the technolo- 28 gies they develop to the energy sector and to industry. 29 30 31 70

Figures EXPORTS 132.0 Exports End 2012 with 152.5 134.9 Yet another 107.3 BILLION USD Historic Record 36.06 47.3 Turkey’s total export 113.9 102.1 85.5 in 2012, $152.5 73.5 63.2 billion, broke yet another record in the history of the Republic of Turkey. Overall, exports increased 12.7% over the previous year.

Data: Turkey’s Annual Export, 2002–2012 2002 2003 2004 2005 2006 2007 2008 Automotive 2009 RETAINS LEADERSHIP 2010 According to Turkish Exporters 2011 Assembly data, automotive was the 2012 leading export industry of 2012, bringing in $19 billion. Although automotive exports fell 5.5% compared to the previous year, the industry retained its title. 2011 2012 BILLION USD BILLION USD Automotive 20.12 19.06 C hemicals & CHEMICAL PRODUCTS 15.76 17.56 $$$ R areADY-to-We and Apparel 16.15 16.09

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*Turkey’s Adge 0–14 population % 75,627,384 * December 31, 2012 24,9 mıllıon The percentage of the population aged 18.9 The working-age population 0–14 fell to 24.9% (≈ 18.9 million), while (aged 15–64) in Turkey grew by 0,2 % the 65-and-up population grew to 7.5% 0.2% over 2011 (from 67.4%) to mıllıon (≈ 5.69 million). 7,5 % reach 67.6% (≈51 million). 51 65-ndpa -u mıllıon population 5.69

The working-age population The population living in Turkey increased by grew 1.5% over the previous year 1,5 % 903,115 roughly 903,115 in 2012 over the previous year. Increased confidence in the services, retail, and construction sectors The services sector trust index rose from 92.9 points in the previous month to 94.9. Likewise, the confidence index for retail increased from 89.5 to 95, and for construction from 71.8 to 80.6.

index 120 110 100 90 80 SERCESVI RETAIL c onstrUCtioN 70 60 01 02 03 04 05 06 07 08 09 10 11 12 01 2012 2013

EXPORT-TO-IMPORT RATIO BY YEAR (%) 72.5 69.9 70 68.1 64.5 65 64.8 62.9 61.3 65.4 61.4 63.1 60 T he export-to-import ratio of 56% in 2011 rose to 64.5% in 2012—its highest value in three years—due to the attainment 55 of the $148.5 billion export target for 2012, the increase in exports, and the reduction in imports based on reduced IMPORT EXPORT domestic demand.. 56 50 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 72 Figures

NERLAETH NDS BELGIUM 2.31 1.70 FRA NCE 4.52 uk 5.77 ILYTA USA 4.61 3.98 SPAIN 2.72 The 20 countries to which Turkey exports the most (bıllıon USD)

UAIKR NE RUSıa s 1.35 4.90

germa ny RAOM NIA 9.39 AZERBAIjAa N-N khichevan 1.85 1.89

china ıra q 2.09 7.81 IRAN saudı 2.47 arabıa 2.73 LIBYA EGYPT 1.55 2.69 ISRAEL UAE 1.70 2.22

Data:TIM

MARCH-APRIL 2013 ISSUE 15