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A
GLOBAL / COUNTRY STUDY AND REPORT
ON
TURKEY
L.J.INSTITUTION OF MANAGEMENT STUDIES
IN PARTIAL FULFILLMENT OF THE
REQUIREMENT OF THE AWARD FOR THE DEGREE OF
MASTER OF BUSINESS ASMINISTRATION
In
Gujarat Technological University
Submitted by
SECTION A (NOON)
Batch: 2011-13,
MBA SEMESTER IV
L.J.INSTITUTE OF MANAGEMENT STUDIES
Affiliated to Gujarat Technological University
Ahmedabad
MAY, 2013
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Declaration
We Students of L.J Institute of management studies(SEC-AN), hereby declare
that the report for Global Country Report entitled “Micro analysis Of Different
Industries in TURKEY”. Are a result of our own work and our indebtedness to
other work publications, references, if any, have been duly acknowledged.
Place:
Date:
(Signature)
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PREFACE
One of the recurrent things in our report has been the Legal aspect of the country in the mind of
people. During the past few decades we have leaved in culture that is the evidence of changing
people’s preference in everything.
We have chosen to prepare a report on "GLOBAL COUNTRY REPORT ON TURKEY" because
of its importance for the people and for the Indian economy. At first when we were putting down
our efforts we have no idea what we would have to say through our report but however we put
aside all doubts and begun to examine the Law of a country. We examined how it works, their
demographic profile, general economic & industries overviews, general overview of trade &
commerce, overview of different economic sectors of turkey, legal aspects, present trade
relations with India, import-export, business volume of different products, investments, pestle
analysis and swot analysis.
Every country has struggled to achieve its goals. Generations have given their best to make life
better for their offspring. There is nothing mysterious or hidden about it an alternative to effort.
And yet we fail to follow the winning track. More than the problems outside – globalization,
recession, inflation, instability, and so on – we are concerned about the inertia that has gripped
the Country psyche, the mindset of defeat. We believe that when we believe in our goals that
what we dream of can become reality results will began to follow.
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ACKNOWLEDGEMENT
While we are of course solely responsible for the content in this report. We want to thank several
people for their assistance. From the practical study we have got the experience and improved
our knowledge and it provides us guidelines to perform work in actual situation.
We have thankful to director of our college Prof. P.K Mehta sir, to providing all the facilities to
make this report and for all encouragement. Firstly we are thankful to the faculty who reviewed
this report and provided us with rich guidance Prof. Priyanka Pathak.
We are thankful to all those respondents who actively engaged with our research given their
precious time to us. At home we want to acknowledge the support and patience of our parents
during the many hours we spent on working on the report.
We acknowledge our gratitude towards all those who directly or indirectly provided timely help
and encourage us throughout the course of this work.
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INDEX
Chapter : 1
TURKEY
CHAPTER NO
CHAPTER TITLE
Nos.
1 INTRODUCTION 7
2 DEMOGRAPHIC PROFILE 13
3 SUMMARY OF ALL ASPECTS OF TURKEY(SEM-III) 19
4 SUMMARY OF INDIVIDUAL TOPICS(SEM-IV) 39
5 CONCLUSIONS OF EACH INDUSTRY 163
6 BIBLIOGRAPHY 177
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PRESIDENT Abdullah Gul (2007)
PRIME MINISTER Recep Tayyip Erdogan (2003)
LAND AREA 297,591 sq mi (770,761 sq km)
TOTAL AREA 301,382 sq mi ( 780,580 sq km)
POPULATION (JULY 2011
est.)
78,785,548 ( Growth rate: 1.235 % ), Birth rate :17.93/1000, Infant
Mortality rate: 23.94/1000, Life Expectancy: 72.5
CAPITAL (2009 est.) Ankara, 3.846 million
LARGEST CITIES Istanbul, Izmir, Bursa, Adana
MONETARY UNITS Turkish Lira (YTL)
GEOGRAPHY
Turkey is at the northeast end of the Mediterranean Sea in southeast Europe and southwest Asia. To the
north is the Black Sea and to the west is the Aegean Sea. Its neighbors are Greece and Bulgaria to the
west, Russia, Ukraine, and Romania to the north and northwest (through the Black Sea), Georgia,
Armenia, Azerbaijan, and Iran to the east, and Syria and Iraq to the south. The Dardanelles, the Sea of
Marmara, and the Bosporus divide the country. Turkey in Europe comprises an area about equal to the
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state of Massachusetts. Turkey in Asia is about the size of Texas. Its center is a treeless plateau rimmed
by mountains.
HISTORY
Anatolia (Turkey in Asia) was occupied in about 1900 B.C. by the Indo-European Hittites and, after the
Hittite empire's collapse in 1200 B.C. , by Phrygians and Lydians. The Persian Empire occupied the area
in the 6th century B.C. , giving way to the Roman Empire, then later the Byzantine Empire. The Ottoman
Turks first appeared in the early 13th century, subjugating Turkish and Mongol bands pressing against the
eastern borders of Byzantium and making the Christian Balkan states their vassals. They gradually spread
through the Near East and Balkans, capturing Constantinople in 1453 and storming the gates of Vienna
two centuries later. At its height, the Ottoman Empire stretched from the Persian Gulf to western Algeria.
Lasting for 600 years, the Ottoman Empire was not only one of the most powerful empires in the history
of the Mediterranean region, but it generated a great cultural outpouring of Islamic art, architecture, and
literature
After the reign of Sultan Süleyman I the Magnificent (1494–1566), the Ottoman Empire began to decline
politically, administratively, and economically. By the 18th century, Russia was seeking to establish itself
as the protector of Christians in Turkey's Balkan territories. Russian ambitions were checked by Britain
and France in the Crimean War (1854–1856), but the Russo-Turkish War (1877–1878) gave Bulgaria
virtual independence and Romania and Serbia liberation from their nominal allegiance to the sultan.
Turkish weakness stimulated a revolt of young liberals known as the Young Turks in 1909. They forced
Sultan Abdul Hamid to grant a constitution and install a liberal government. However, reforms were no
barrier to further defeats in a war with Italy (1911–1912) and the Balkan Wars (1912–1913). Turkey sided
with Germany in World War I, and, as a result, lost territory at the conclusion of the war.
GOVERNMENT
Recep Tayyip Erdoğan has been elected three times as Prime Minister: In 2002 (with 34% of the popular
vote), in 2007 (with 47%) and in 2011 (with 49%). Turkey is a parliamentary representative democracy.
Since its foundation as a republic in 1923, Turkey has developed a strong tradition of secularism.
Turkey's constitution governs the legal framework of the country. It sets out the main principles of
government and establishes Turkey as a unitary centralized state. The President of the Republic is the
head of state and has a largely ceremonial role. The president is elected for a five-year term by direct
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elections. Abdullah Gul was elected as president on 28 August 2007, by a popular parliament round of
votes, succeeding Ahmet Necdet Sezer.
Executive power is exercised by the Prime Minister and the Council of Ministers which make up the
Executive power is exercised by the Prime Minister and the Council of Ministers which make up the
government, while the legislative power is vested in the unicameral parliament, the Grand National
Assembly of Turkey. The judiciary is independent of the executive and the legislature, and the
Constitutional Court is charged with ruling on the conformity of laws and decrees with the constitution.
The Council of State is the tribunal of last resort for administrative cases, and the High Court of Appeals
for all others.
The prime minister is elected by the parliament through a vote of confidence in the government and is
most often the head of the party having the most seats in parliament. The current prime minister is the
former mayor of Istanbul, Recep Tayyip Erdogan, whose conservative Justice and Development Party
won an absolute majority of parliamentary seats in the 2002 general elections, organized in the aftermath
of the economic crisis of 2001, with 34% of the suffrage.
The Grand National Assembly of Turkey in Ankara during a speech of U.S. President Barack Obama on 6
April 2009. In the 2007 general elections, the AKP received 46.6% of the votes and could defend its
majority in parliament. Although the ministers do not have to be members of the parliament, ministers
with parliament membership are common in Turkish politics. In 2007, a series of events regarding state
secularism and the role of the judiciary in the legislature occurred. These included the controversial
presidential election of Abdullah Gul, who in the past had been involved with Islamist parties; and the
government's proposal to lift the headscarf ban in universities, which was annulled by the Constitutional
Court, leading to a fine and a near ban of the ruling party. Universal suffrage for both sexes has been
applied throughout Turkey since 1933, and every Turkish citizen who has turned 18 years of age has the
right to vote. As of 2004, there were 50 registered political parties in the country. The Constitutional
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Court can strip the public financing of political parties that it deems anti-secular or separatist, or ban their
existence altogether.
There are 550 members of parliament who are elected for a four-year term by a party-list proportional
representation system from 85 electoral districts which represent the 81 administrative provinces of
Turkey (Istanbul is divided into three electoral districts, whereas Ankara and Izmir are divided into two
each because of their large populations). To avoid a hung parliament and its excessive political
fragmentation, only parties winning at least 10% of the votes cast in a national parliamentary election
gain the right to representation in the parliament. Because of this threshold, in the 2007 elections only
three parties formally entered the parliament (compared to two in 2002)
Human rights in Turkey have been the subject of much controversy and international condemnation.
Between 1998 and 2008 the European Court of Human Rights made more than 1,600 judgments against
Turkey for human rights violations, particularly the right to life and freedom from torture. Other issues
such as Kurdish rights, women's rights and press freedom have also attracted controversy. Turkey's
human rights record continues to be a significant obstacle to future membership of the EU. The Turkish
Journalists Association says that 58 of the country's journalists have been imprisoned. A former U.S.
State Department spokesman, Philip J. Crowley, said that the United States had "broad concerns about
trends involving intimidation of journalists in Turkey."
FOREIGN RELATION
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Main articles: Foreign relations of Turkey and Accession of Turkey to the European Union Turkey began
full membership negotiations with the European Union in 2005, having been an associate member of the
EEC since 1963, and having joined the EU Customs Union in 1995
Turkey is a founding member of the United Nations (1945), the OECD (1961), the OIC (1969), the
OSCE(1973), the ECO (1985), the BSEC (1992) and the G-20 major economies (1999). On 17 October
2008, Turkey was elected as a non-permanent member of the United Nations Security Council. Turkey's
membership of the council effectively began on 1 January 2009. Turkey had previously been a member of
the U.N. Security Council in 1951–1952, 1954–1955 and 1961. In line with its traditional Western
orientation, relations with Europe have always been a central part of Turkish foreign policy. Turkey
became a foundingmember of the Council of Europe in 1949, applied for associate membership of the
EEC (predecessor of the European Union) in 1959 and became an associate member in 1963. After
decades of political negotiations, Turkey applied for full membership of the EEC in 1987, became an
associate member of the Western European Union in 1992, joined the EU Customs Union in 1995 and has
been in formal accession negotiations with the EU since 2005.
Since 1974, Turkey has not recognized the Republic of Cyprus, but instead supports the Turkish Cypriot
community in the form of the de facto Turkish Republic of Northern Cyprus, which was established in
1983 and is recognized only by Turkey. The Cyprus dispute complicates Turkey's relations with both
NATO and the EU, and remains a major stumbling block to Turkey's EU accession bid. The other
defining aspect of Turkey's foreign relations has been its ties with the United States. Based on the
common threat posed by the Soviet Union, Turkey joined NATO in 1952, ensuring close bilateral
relations with Washington throughout the Cold War. In the post–Cold War environment, Turkey's
geostrategic importance shifted towards its proximity to the Middle East, the Caucasus and the Balkans.
In return, Turkey has benefited from the United States' political, economic and diplomatic support,
including in key issues such as the country's bid to join the European Union.
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The independence of the Turkic states of the Soviet Union in 1991, with which Turkey shares a common
cultural and linguistic heritage, allowed Turkey to extend its economic and political relations deep into
Central Asia, thus enabling the completion of a multi-billion-dollar oil and natural gas pipeline from Baku
in Azerbaijan to the port of Ceyhan in Turkey. The Baku–Tbilisi–Ceyhan pipeline forms part of Turkey's
foreign policy strategy to become an energy conduit to the West. However, Turkey's border with
Armenia, a state in the Caucasus, remains closed following Armenia's occupation of Azerbaijani territory
during the Nagorno-Karabakh War. Under the AK Party government, Turkey's influence has grown in the
Middle East based on the strategic depth doctrine, also called Neo-Ottomanis
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Chapter : 2
DEMOGRAPHIC STRUCTURE OF TURKEY
The last official census was in 2000 and recorded a total country population of 67,803,927
inhabitants. According to the Address-Based Population Recording System of Turkey, the country's
population was 74.7 million people in 2011, nearly three-quarters of whom lived in towns and cities .
According to the 2011 estimate, the population is increasing by 1.35% each year. Turkey has an average
population density of 97 people per km. People within the 15–64 age group constitute 67,4% of the total
population; the 0–14 age group corresponds to 25.3%; while senior citizens aged 65 years or older make
up 7.3%.
Life expectancy stands at 71.1 years for men and 75.3 years for women, with an overall average of 73.2
years for the populace as a whole. Education is compulsory and free from ages 6 to 15. The literacy rate is
97.79% for males and 90.13% for females as of the year 2010 Article 66 of the Turkish
Constitution defines a "Turk" as "anyone who is bound to the Turkish state through the bond of
citizenship"; therefore, the legal use of the term "Turkish" as a citizen of Turkey is different from
the ethnic definition. However, the majority of the Turkish populations are of Turkish ethnicity.
The three officially recognized major minorities ethnic groups are Armenians, Greeks and Jews. Signed
on 30 January 1923, a bilateral accord of population exchange between Greece and Turkey took effect in
the 1920s, with close to 1.1 million Greeks moving from Turkey and some 380,000 Turks coming from
Greece. Following decades of state-sponsored discrimination, the formerly 110,000-strong Greek
community of Istanbul has now shrunk to approximately 3,000. Other ethnic groups
include Abkhazians, Albanians, Arabs, Assyrians, Bosniaks, Pomaks , Roma. The Kurds, a distinct ethnic
group concentrated mainly in the southeastern provinces of the country, are the largest non-Turkic
ethnicity, variously estimated around 18%. Minorities besides the Kurds are though to make up an
estimated 7-12% of the population. Minorities other than the three officially recognized ones do not have
specific minority rights, while the term "minority" itself remains a sensitive issue in Turkey and the
Government of Turkey is frequently being criticized for its treatment of minorities, with Human Rights
Watch stating as of 2012 The government’s "democratic opening", announced in summer 2009 to address
the minority rights of Kurds in Turkey, did not progress.
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An estimated 71% of the population live in urban centers. In all, 18 provinces have populations that
exceed 1 million inhabitants, and 21 provinces have populations between 1 million and 500,000
inhabitants. Only two provinces have populations less than 100,000.
DEMOGRAPHIC PROFILE OF TURKEY
Population 79,749,461 (2010 est.)
Growth Rate 1.36 % (2011 est.)
Birth Rate 17.0 Births/1000 (2010)
Death Rate 6.0 Deaths/1000 (2008 est.)
Life Expectancy
Male
Female
73.7 years (2009 est.)
71.5 years (2009 est.)
76.1 years (2009 est.)
LANGUAGE
Official Turkish
Spoken Turkish, Kurdish, Albanian, Neo-Aramic Laz, Georgian, Serbian,
Bosnian, Bulgarian, Pontic, Zazaki, Arabic, Azerbaijani, Kabardian,
Armenian, Ladino.
AGE STRUCTURE
0-14 Years 26.6% ( Male 10,707,793/Female 10,226,999)
15-64 Years 67.7% (Male 24,218,277, Female 23,456,761)
65-over 6.8% (Male 2,198,073, Female 2,607,551) 2006 est.
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Infant mortality rate:
male: 24.13 deaths/1,000 live births
female: 21.96 deaths/1,000 live births (2011 est.)
Total: 23.07 deaths/1,000 live births
Life expectancy at birth:
male: 70.86 years
female: 74.78 years (2011 est.)
Total population: 79,749,461 (June 2011 est.)
Total fertility rate:2.13children born/woman (2011 est.)
HIV/AIDS - adult prevalence rate:less than 0.1 (2009 est.)
People living with HIV/AIDS:4,600 (2009 est.)
HIV/AIDS – deaths:fewer than 200 (2009 est.)
Ethnic groups:Turkish 70-75%, Kurdish 18%, other minorities 7-12% (2008)
Religions:Muslim 99.8%, other 0.2% (mostly Jews & Christians)
Literacy: male: 95.3%
female: 79.6% (2004 est.)
total population: 87.4%
Education expenditures:2.9% of GDP (2006)
Maternal mortality rate:23 deaths/100,000 live births (2008)
Health expenditures :6.7% of GDP (2009)
Physician density :1.451 physicians/1,000 population (2008)
Hospital bed density :2.41 beds/1,000 population (2008)
Obesity - adult prevalence rate :16.1% (2007)
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LANGUAGE
According to Turkish constitution, the word “Turk,” as a political term, includes all citizen of the
Republic of Turkey, without reference to race or distinction of or religion; ethnic minorities have no
authorized status. Linguistic data show that a greater part of the population claim Turkish as their mother
tongue; most of the remainder speak Kurdish and a small minority Arabic as their first language
RELIGION
Turkey is a secular state with no official state religion; the Turkish Constitution provides for freedom of
religion and conscience. Research firms suggest that actual- Muslim figure is around 98% or 97% and
Islam is the dominant religion of Turkey, it exceeds 99% if secular people of Muslim background are
included.
There are about 1,20,000 people of different Christian denominations, and then estimated 80,000 Oriental
Orthodox; 35,000 Roman Catholics; 5,000 Greek Orthodox. In the present days there are 236 churches
open for worship in Turkey. The Eastern Orthodox Church has been since 4th century headquarters in
Istanbul. Christians stand for less than 0.2% of Turkey's population, according to the CIA World Fact
book. There are 26,000 people who are Jewish, the vast majority of who are Sephardic.
Academics suggest the Alevi population may be from 15 to 20 million. According to Aksiyon magazine,
the number of Shiite Twelvers (excluding Alevis) is 3 million (4.2%), and they live in Istanbul, Kars,
Mugla, Agrı Ankara, Izmir, Manisa, Çorum and Aydın. There are also a little quantity of Sufi
practitioners. The highest Islamic religious power is the Presidency of Religious Affairs it interpret
the Hanafi school of law.
The role of religion has been a controversial debate over the years since the formation of Islamic parties,
specially in education. Turkey was found upon a strict spiritual foundation which forbids the influence of
any religion, including Islam. There are responsive issues, such as the fact that the wearing of the Hijab is
banned in universities and public or government buildings as some view it as a symbol of Islam – though
there have been efforts to lift the ban.
The public broadcaster TRT has a special TV channel for Kurdish that broadcasts on a 24 hour / 7day
basis called TRT 6 and other TV and Radio stations that broadcast programmes in the local languages and
dialects like Armenian, Arabic, Bosnian a few hours a week. Other special TV channel expected at the
Turkic world, TRT Avaz was launched on 21st March 2009 and broadcast in the Azeri, , Uzbek,
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Kazakh, Kyrgyz, and Turkmen languages; while the TRT Arabic television channel started broadcasting
on 4th April 2010.
There are no statistics of people's religious beliefs nor is it asked in the census. According to the
government, 99.8% of the Turkish population is Muslim, commonly Sunni, some 10 to 15 million are
Alevis The remaining 0.2% is other - mostly Christians and Jews. The Euro barometer census 2005
reported that in a poll 96% of Turkish citizens answered that "they believe there is a God", whereas 1%
respond that "they do not believe there is any kind of strength, God, or life force". In a Pew Research
Center survey, 53% of Turkey's Muslim said that "religion is very essential in their lives". Based on the
Gallup census 2006-08, Turkey was defined as More religious, in which over 63% of people believe
religion is essential. According to the Turkish Economic and Social Studies Foundation, 62% of women
wear the headscarf or hijab in Turkey. 33% of male Muslim citizens regularly attend Friday prayers.
Religious Groups according to estimates are as follows:
Muslims - 96.83% (80-85% Sunni, 15-20% Alevi)
Christian - 0.13% (60% Armenian Orthodox, 20% Syrian Orthodox, 10% Protestant,8 %
Chaldean Catholic, 2% Greek orthodox)
Jewish - 0.03% (96% Sephardi, 4% Ashkenazi)
Bahai Faith - 0.01%
Atheist - 3%
The vast majority of the present-day Turkish people are Muslim and the most popular party is the
Hanafite school of Sunni Islam, which is officially espous by the Ottoman Empire; according to the
KONDA Research and Consultancy survey carried out throughout Turkey on 2007:
40.8% defined themselves as "a religious person who strives to fulfill religious obligations"
(Religious)
42.3 % defined themselves as ""a believer who does not fulfill religious obligations" (Not
religious).
2.5% defined that as "a fully devout person fulfilling all religious obligations" (Fully devout).
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10.3% defined themselves as "someone who does not believe in religious obligations" (Non-
believer).
4.1% defined themselves as "someone with no religious conviction" (Atheist).
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CHAPTER: 3
SUMMARY OF ALL ASPECTS OF TURKEY
ECONOMIC OVERVIEW
CURRECY TURKISH LIRA
FISCAL YEAR CALENDER YEAR
TRADE ORGANIZATION G20 MAJOR ECONOMICS, OECD, EU
CUSTOM UNION, WTO, ECO & BSEC
GDP 1.232 TRILLION (2011)
GDP GROWTH RATE +8.49% (2011)
GDP PER CAPITA $10498 (NOMINAL 2011)
$16885 (PPP 2011)
GDP BY SECTOR AGRICULTURE 9.4%
INDUSTRY 25.9 %
SERVICE 64.7%
INFLATION CPI 9.07% (JULY)
LABOUR FORCE 25.3 MILLION, ABOUT 1.2 MILLION TURKS
WORK ABROAD
BY OCCUPATION AGRICULTURE 29.5%
INDUSTRY 24.7%
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SERVICES 45.8 %
UNEMPLOYMENT 8.8 % (DECEMBER 2011)
MAIN INDUSTRY TEXTILES, FOOD PROCESSING, AUTOS,
ELECTRONICS, TOURISM , MINING,
STEEL, PETROLEUM, PAPER
EXTERNAL
EXPORTS $143.93 BILLION (2010)
EXPORTS GOODS APPAREL, FOODSTUFF, TEXTILES, MEAL
MANUFACTURES, TRASPORT
EQUIPMENT
PARTNER GERMANY, FRANCE, UK, ITALY, IRAQ
IMPORT $235.49 BILLION (2010)
IMPORT GOODS MACHINERY, CHEMICALS,
SEMIFURNISHED GOODS, FUELS
IMPORT PARTNERS RUSSIA, GERMANY, CHINA, US, ITALY,
FRANCE.
PUBLIC DEBT 43 % OF GDP (2012)
REVENUE 145.3 BILLION (2009)
EXPENSES 180.6 BILLION (2009)
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MAIN ECONOMIC SECTORS
AGRICULTURE
INDUSTRIAL SECTOR
TEXTILES & CLOTHING
MOTOR VEHICLES & AUTOMOTIVE PRODUCTS
MULTIPLE UNIT TRAINS, LOCOMOTIVES & WAGONS
SHIPBUILDING
STEEL-IRON INDUSTR
SERVICE SECTOR
TOURISM SECTOR
FINANCIAL SECTOR
GENERAL OVERVIEW OF TRADE & COMMERCE
TRADING POLICIES
The objective of Turkey’s trade policies at all levels is to effectuate the principle of "free and fair
trade" in its relations. The World Trade Organization (WTO), which
regulates the course of the multilateral trade system, and the ongoing Doha Development Round
negotiations are considered as invaluable platforms by Turkey to voice its concerns and endorse
its interests.
The Customs Union established with the European Community (EC) in 1995, which came into
force in 1996 right after the completion of the Uruguay Round has also been a cornerstone in
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Turkey’s trade policies. The EC’s determining influence in Turkey’s trade relations has
intensified even more with the beginning of the full membership process. Turkey also makes
efforts to achieve a liberalized world trade and beginning from its region, works to enhance its
commercial and economic relations with its neighbours. Turkey expects its trade policy to
contribute to the economic and also political stability in its region. Towards that end, Turkey also
pursues ambitious trade agendas from a regional perspective in organizations such as Economic
Cooperation Organization (ECO), Black Sea Economic Cooperation (BSEC), Organization of
Islamic Conference (OIC) and Developing-8 as a member
NO OF RETAIL OUTLET IN TURKEY
AVAILABILITY OF THE VARIOUS MEDIA IN THE TURKEY MARKET
There are mainly five types of media are available in the Turkey
1. Newspaper
2. Television
3. Radio
4. Magazines
5. Journals
OVERVIEW OF DIFFERENT ECONOMIC SECTORS
2002 2003 2004 2005 2006 2007
467251 475747 481843 487919 496347 507339
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MAIN ECONOMIC SECTORS
AGRICULTURAL SECTOR
INDUSTRIAL SECTOR
Consumer electronics and home appliances.
Textiles and clothing
Motor vehicles and automotive products
Multiple unit trains, locomotives and wagons
Shipbuilding.
CONSTRUCTION & CONTRACTING SECTOR.
SERVICE SECTOR
TOURISM SECTOR
FINANCIAL SECTOR
NATURAL RESOURCES
MINERALS
PETROLEUM & NATURAL GAS
NUCLEAR ENERGY
GEOTHERMAL ENERGY
ENERGY SECURITY
ENVIRONMENT
LEGAL ASPECTS OF TRADE IN TURKEY
Different forms of legal persons are recognized in Turkey:
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Companies
Partnerships
Joint Ventures
Individuals/ Sole traders
Branch Companies
The rights, obligations, and liabilities vary depending on which form of entity is chose
Legal Aspects of Turkey
Trade Administration Regime and Its Development are there
Import Restrictions is tough for turkey
Import License is must.
Import Supervision is also there.
Registration of Imported Textile must be done by company.
Export Registration must be done by company
Trade Remedies also there for traders.
Export Prohibitions are there.
Investment Administration and Its Development
Trade and Investment Related Administration and Its Development
Turkey National Standards on Building Products is also there that must be follow by a company.
License Restriction is there also.
There are Technical Barriers to Trade.
PRESENT TRADE RELATIONS WITH INDIA\
INDIA-TURKEY RELATIONS
Bilateral relations are friendly and cordial and are steadily improving. Turkey is committed to
secularism and democratic principles. Indian economic progress and technological advancement
have been instrumental in the recent upsurge in Turkish interest towards India also given that
both are G-20 members with progressive economies. Recent high level visits were from President
K.R. Narayanan (1998), Vice- President Krishan Kant (1998), Prime Minister Atal Bihari
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Vajpayee (2003), VicePresident M.H. Ansari (2011), Turkish Prime Minister Recep Tayyip
Erdoğan(2008) and Turkish President Abdullah Gul (2010).
India’s exports to Turkey include petroleum products, vaccines, cotton yarn, synthetic yarn, organic
dyes, organic chemicals, denim, steel, granite, antibiotics, carpets, tobacco, cars, sesame seed, TV
CRTs, mobile handsets, clothing and apparel, tractors, aluminium, polypropylene.
Turkey’s exports to India include poppy seeds, auto components, marble, textile machinery, denim,
carpets, cumin seeds, copper ores and concentrates, flat rolled iron and steel and gold, silver,
inorganic chemicals, jewellery.
Indian companies in Turkey: More than 150 companies with Indian capital have registered
businesses in Turkey in the form of joint ventures, trade and representative offices. They include M/s
Polyplex, GMR Infrastructure, TATA Motors, Mahindra & Mahindra, Reliance, Ispat, Aditya Birla
Group, Tractors and Farm Equipment Ltd., Jain Irrigation, Wipro and Dabur. Turkish companies are
similarly interested in reaching out to India.
MAIN COMMODITIES TO TRADE
Turkish export products to India are iron and steel products, oil-seeds, crude fertilizers, textile yarn,
machinery, metal ores, road vehicles and mineral manufactures. Imports are dominated by textile yarn
and fabrics, organic chemicals, clothing accessories, medicinal and pharmaceutical products,
petroleum oils, motor vehicles, iron and steel, textile fibers, coloring materials.
Indian Community: Indian community in Turkey is small, and consists of nearly 200 persons mostly
working in business establishments and universities in Istanbul and Ankara. There are no Indian
news/media channels in Turkey. State Bank of India has a representative office in Istanbul. Turkish
Airlines (in a code sharing arrangement with Air India) operates daily flights from Istanbul to
Mumbai and Delhi.
TOURISM
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The number of Indian citizens visiting Turkey is on steady rise in recent years. The figure reached
from 35.000 in 2006, to 55.000 and 63.000 in 2009 and 2010, respectively.
Trade Relations Between India and Turkey Developing Fast
India and Turkey, two countries with emerging markets are on the way to developing their mutual
trade to a much better level. In this respect some Indian groups have acquired companies in Turkey,
recently and are seriously planning to enlarge their businesses in this country. Generally speaking,
India exports include cotton yarn, synthetic yarn, organic dyes, organic chemicals, denim, steel bars
and rods, granite, antibiotics, carpets, unwrought zinc, clothing and apparels to Turkey and imports
poppy seeds, auto components, marble, textile machinery, handlooms, denim, carpets, cumin seeds,
minerals and steel products from this country.
In the meantime one can observe that weddings held by very rich businessmen in Turkey (Istanbul
and Antalya mainly) have been occasions to improve mutual business relations and played a
significant role as such.
In fact Indian weddings which have taken place in Turkey recently, have paved the way to more deals
and more trade and investment between the two countries.
Istanbul and the southern province of Antalya for instance recently hosted two major Indian
weddings, which cost nearly 5 million euros in total. Vartika Mittal, the nephew of the Indian steel
magnate and owner of Arcelor Mittal, the world’s largest steelmaking company, married Utsav
Goenka in Istanbul. Some 500 guests attended the three-day ceremony, which cost 3 million euros.
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Last month, the Indian families of Bansal and Kanodia also spent 2 million euros on their children’s
wedding at the Mardan Palace Hotel in Turkey’s southern province of Antalya. For 450 guests, they
reserved 250 rooms in the hotel
IMPORT & EXPORT
Turkey is officially known as the Republic of Turkey is a Eurasian country located in Western
Asia (mostly in the Anatolian peninsula) and in East Thrace in South-eastern Europe. Turkey's
location at the crossroads of Europe and Asia makes it a country of significant geostrategic
importance.
In addition to its strategic location, Turkey's growing economy and diplomatic initiatives have led
to its recognition as a regional power in the Middle East.
According to the Organisation for Economic Co-operation and Development (OECD) , Turkey is
expected to be the fastest growing economy among OECD members between 2011 and 2017,
with an annual average growth rate of 6.7 percent. Although immigration from rural to urban
areas since 1990 has been high, 24.5% of the population still lives in rural areas. The major cities
and their populations are: Istanbul, the trade and finance centre, 12.9 million; Ankara, the capital,
4.7 million; Izmir a major player in the dairy, greenhouse and tourism sector, 3.9 million; Bursa,
the centre of automotive manufacturing and food processing, 2.6 million; Adana, the centre of
agricultural production,2.1 million; Konya, the canter of grain production, 2.0 million; and
Antalya, the centre of vegetable production and tourism sector, 1.9 million. The population of
Turkey is expected to reach 75.8 in 2013 and 77.6 million in 2015. Seventy-two percent of the
population is under the age of 35 and 26% is under the age of 15.
IMPORT REGULATION
Overall, Turkey has a relatively free market for trade in goods and services as a result of liberalization
measures introduced over the past two decades. Turkey follows basic WTO rules to regulate imports and
tariff structures and has adopted the European Union (EU)'s common customs tariff for imports from third
countries. Turkey signed a customs union with the EU in 1996, eliminating all duties and charges on
goods imported from EU member countries, excluding services, public procurement and unprocessed
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agricultural products. Turkey has signed free trade agreements with various countries and extends
preferential treatment for least developed countries and some developing countries.
EXPORT REGULATION
TRANSIT – 1
o Increased concern on the transit of dual-use items within Turkey as well as within
the international community.
o Relevant Turkish legislation – 1
o The related provisions of the under secretariat of Foreign Trade Communiqué
2003/12 on the Control of Exports of Dual-Use
o and Sensitive Items.
o The related provisions of the Customs Law no. 4458 dated 5 February 2000 which
conforms with EU Customs Code (Council Regulation 2913/92).
TRANSIT – 2
o Relevant Turkish legislation – 2
o Anti Smuggling Law no. 5607.
o Within this legislative framework, transits of items that are subject to export
controls are treated on a case-by-case basis within the scope of interagency
cooperation.
ENFORCEMENT -1
o Located in a sensitive geography where transit-trade and transit-shipment is
common, customs enforcement and ground interdiction in general is of prime
importance to Turkey.
o Customs authorities use an extensive database for enforcement purposes.
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o New security systems have also been developed and established to prevent illegal
trafficking of goods.
ENFORCEMENT- 2
o “Intelligence and Land Border Gates Vehicle Pursuit Program” has been
developed.
o System currently operates at strategically important land border gates and
seaports.
o All alerts and intelligence information about suspected vehicles, goods, firms,
brokers and other actors are introduced into this program and forwarded to all
regional units
BUSINESS VOLUME OF DIFFERENT PRODUCTS &
INVESTMENTS
MAIN PRODUCTS OF TURKEY:
STEEL
AUTOMOBILE
TOURISM
SHIP BUILDING
MINING
GENERAL ECONOMIC OUTLOOK OF TURKEY
With approximately 73 million of population and 16th largest economy in the world, being a
young, growing and EU candidate country, Turkey’s economic policies have shown significant
differences before and after 1980. Industrialization strategies based on an import substitution
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policy had been left and the reforms were designed to transform the structure of the economy in
the direction of an open, liberal and market-oriented since 1980’s. The main components of the
economic reform of Turkey are diminishing government intervention and liberalizing economic
sectors, implementing a floating exchange rate policy, loosening import and export regulations,
encouraging foreign investments, deregulating financial markets and privatizing public entities
Today, Turkey is far more integrated into the global economy and the Turkish economy has
experienced an average growth rate of almost 5 percent over the past 20 years (Figure 1). The
gross national product (GNP) increased by 100% since 2000 to $400 billion, and the per capita
GNP rose to $5,500 . The share of industrial product in GNP is 26% and agriculture is
approximately 10%
Turkey is a lucky country with her very diverse mineral resources and produces around 60
different metals and minerals (Table 1). The country has worldwide reserves of barite, boron,
clays, emery, feldspar, limestone, magnesite, marble, perlite, pumice, strontium, thorium, trona
and zeolite and a leading producer of antimony, boron minerals, chromite, feldspar, magnesite,
marble, meerschaum, perlite, pumice, sepiolite and strontium
Much of Turkey's mineral production is from a large number of small mines. There are38,320
licensed mines in Turkey and 7,220 of the mines are in operation. Turkey’s total mining
production was realized as approximately 250 million tons and about 50 percent of this figure
was cement raw material production (General Directorate of Mining Affairs).
Subsector Production (tons)
Energy raw materials (asphaltite, bituminous shale, lignite and hard
coal) 55,612,693
Metallic minerals 11,522,890
Natural stones (diabase, marble, onyx, travertine, andesite, basalt,
granite, sandstone, serpentine) 8,800,000
Cement raw materials (limestone, marl, clay, pyrophillite, trass,
schist) 122,116,677
Industrial minerals 51,689,002
Total 249,741,262
Due to its highly varied geology, Turkey has also several other minerals and metals. Gold and
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base metal exploration and development have been on the increase recent years. Iron and steel
industry in Turkey is fairly developed. Turkey produces large amount of chromite, some smaller
gold, base metal, bauxite and limited amount of antimony. The important mining exports of
Turkey are marble, boron minerals, copper, chromite, magnesite, zinc ores and feldspar. Recent
explorations have also showed increased amount of reserves of metallic minerals and coal. Best
known for its industrial minerals, Turkey has enormous amount of marble and natural stone
reserves. The country has also significant lignite deposits spreading all over the country. Richness
classification of mineral reserves of Turkey is given in Table 2 (State Planning Organization).
The mining industry in Turkey is very dynamic especially in recent years. Over 100,000 people
are employed in the mining and mineral processing sectors in Turkey. Approximately 1.4 percent
($5.2 billion) of Turkey’s GNP of 2005 was contributed by the mining and mineral processing
industries. Although it shows some variability in recent years, the growth rate of mining industry
has accelerated especially in the last few years . The growth of the sector in 2004 was 2.6 percent
and 12.9 percent
Very rich
Chromite, Mercury, Thorium, Lantan, Fluorite, Feldspar, Gypsum,
Bentonite, Boron, Magnesite,
Marble, Perlite, Limestone-Marl, Dolomite, Emery, Salt, Barite, Zeolite,
Pumice, Meerschaum
Rich
Gold, Silver, Scheelite, Antimony, Aluminium, Lignite, Silica, Asbestos,
Sodium sulphate,
Strontium, Huntite, Sepiolite, Calcite, Disten, Diatomite, Alunite,
Olivine, Vermiculite,
Phlogobite, Natural Stones, Pyrophillite, Sand-Gravel, Pyrite, Glaoconite,
Trass, Quarsite
Normal
Copper, Lead, Zinc, Cadmium, Iron, Manganese, Cobalt, Nickel,
Molybdenum, Titanium,
Titan, Arsenic, Uranium, Hard coal, Petroleum, Natural gas, Sulphur,
Clay, Kaolin, Graphite,
Phosphate, Vollastonite, Mica, Ornament Stones, Talc, Slate
None
Platinu
m, Tin,
Vanadiu
m,
Potash,
Zircon,
Rutil
e,
Sillimanite-Andaluzite,
Corondon,
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PESTLE ANALYSIS
POLITICAL
One of the current political strengths in Turkey is that their government have policies on liberalisation.
Turkey is supporters of liberal trade and investment policies which allow open trade between different
countries in the EU. Turkey forged a custom union agreement in 1996 to allow many Turkish firms to get
bigger and more successful in the global economy. Exports have been rising on average at a rate of 10%
every year and this will allow the fashion industry to flourish with the exports produced in the Turkish
plant.
One of the current political challenges in Turkey is the series of violent terrorist attacks that have
happened in the country due to Islamic extremist, Kurdish radicals, Turkish militants that may have link
with Al-Qaeda. This is a disadvantage for bringing the plant to Turkey as it may be targeted by these
terrorist.
ECONOMY
One of the current economic strengths in Turkey is that there is a high flow of foreign investment coming
from abroad. The investment plays apart in Turkey's speedy expansion and this has been driving the
country's economic growth. In Turkey there is a privatisation program planned to start from 2008 that will
allow the sale of major bridges, highways, electricity grids and a share in the partly commercial bank. The
money generated from foreign investment will be used for expanding the infrastructure of the country;
this will be an advantage for bringing the plant into Turkey as the Turkish economy will be in growth and
to bring the plant here will only benefit the company and the fashion industry.
One of the current economic challenges in Turkey is the current account deficit for Turkey. The declining
current account has been was delayed the economic stability. The import market has seen a quick rise as
an outcome of increased global commodity prices and a sturdy Turkish lira. Turkey is even more
Potassium nitrate, Lithium, Diamond, Brome-Iodine, Colombium
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vulnerable during times of global financial doubt. This will be a disadvantage for bringing in the plant
into Turkey as it the company may need to relocate if there is a financial crisis which may happen with
Turkey.
SOCIAL SYSTEM
One of the social system strengths in Turkey is that they have growing proportion of young population as
they have more than half the population being aged below 30. This will allow Turkey to increase their
employment rate by getting the most out of the young labour force. This is an advantage for the plant
being brought into Turkey as shows there is a healthy supply of young population willing to work so the
company could create jobs for these people.
One of the social system challenges in Turkey is that they have a high level of unemployment. Turkey
unemployment level rose by 38,000 in that year to 2.3 million in 2007 but then in 2008 it rose again by
737,000 from the previous year so this shows that there was a substantial increase from the previous year.
This is a disadvantage to bring in plant into Turkey due to the high level of unemployment as they may
not be skilled workers in the pool of unemployed people. There is another side to this where it can
become an advantage by hiring these unemployed and training them to work sufficiently for the company.
TECHNOLOGICAL
One of the technological strength's in Turkey is the significant development in the ICT sector. During
2001-2007, Turkey's ICT sector expanded so rapidly it expanded by double-digits so that shows that it
was a very successful growth. In 2007, Turkey's ICT market reached $24 billion and in the previous year
it reached $21 billion so this shows that in a space of one year the market grew by $3 billion which is a
very substantial amount of money. The reason for this sharp increase is due to the Turkish
telecommunications sector as they have been privatised by the government. This is an advantage for the
plant being brought into Turkey as this will attract more foreign investment project as well as creating
more jobs for the people of Turkey.
One of the current technological challenges in Turkey is the low expenditure cost on the research and
development. Turkey's research and development cost in 2006 was around 0.6% which is below the
average of the European countries which are at an average of 2.3%.This is an disadvantage for bringing in
the plant into Turkey as there is not that much investment being put into the Turkish research and
development, they will need investment from both the private and public sector because the country will
need to have a healthily amount of investment in order to grow into a country which is in the EU. In the
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future is the research and development cost are still low then this will erode and stop the competitiveness
of different industries in Turkey which will be bad for the long run.
*LEGAL
One of the legal strength's in Turkeys is the comprehensive legal structure they have. The judicial system
is made up of general courts which deal with domestic cases, heavy penal courts which deal with more
serious case, military courts which will deal with the military cases and the Constitutional Court which is
the highest level of courts that will deal with many different cases which is essential in the Turkish
government such as war crimes. This is an advantage for the plant being brought into Turkey as this
shows that the Turkish government are strict on the law and will enforce the law if need be, it will allow
the company to have a fair trial if any form of disruption were to come up such as trade union issues that
would cause the company any serious problems.
Another legal advantage in Turkey would be the robust framework for the business entities, as the
company who are looking to invest into Turkey will not need to go through a very long and lengthy
business registration process as there is a freedom to start, operate and close a business by the Turkish
regulatory environment. so for example in Turkey, it will take on average 6 day to starting up a business
compared to 43 days in the other world countries which is a much longer time and could be beneficial for
the type of market the company is involved with. As the fashion industry clothe range change very often
and will need to be able to adapt quickly if the plant is being brought over to Turkey.
One of the current legal challenges in Turkey is the judicial inefficiencies as there are some delays in the
Turkish judicial system which can cause some serious issues. There are also judges who are politically
biased and this has affected legal outcome. This is a disadvantage for bringing in the plant into Turkey as
there may be a decision made against the company if ever in a legal battle as the judges may not have an
unbiased view of the case but in fact have a biased view according to the political situation at the time.
ENVIRONMENTAL
One of the environmental strength's in Turkeys is the prosperous biodiversity they have. Turkey has a
very affluent natural resource base and has ranked ninth on biodiversity in the European countries.
Examples of the type of biodiversity they have are not only a range of wild species but important
domestic species such as wheat, lentils, chickpeas, pears, apple, chestnut and pistachios. The biodiversity
has a very great potential for the development for Turkey and this is an advantage for the plant being
brought into Turkey as this will materials such as cotton to be grown in Turkey and used in the plant so
35 | P a g e
the material will be home grown and will have a cheaper price and there will be more jobs created for the
company involved in cotton picking.
One of the current environmental challenges in Turkey is the high pollution levels and the global warming
being caused from the pollution levels. The water treatment facilities, wastewater treatment equipment
and solid waste management in Turkey needs urgent attention as there is high level of environmental
pollution as the is an increase in chemical and detergent overflow and this rises in the air and can cause
severe illness to people who inhale especially in urban areas. The air pollution has increased over the past
since 1990s and is the air pollution is quite severe in the capital of Turkey, Ankara and other city such as
Istanbul. Smog in these cities is due to the increasing number use of cars. Also there is a lot of industrial
air pollution from power plants and facilities used by the fertilizer, cement and sugar industries which
don't have the flirtation equipment needed to filter out the pollution. Turkey loses out on approximately
one billion tons of topsoil annually and this has an increasingly level of environmental pollution and that
could harm the people and economy of Turkey.
The air pollution is a disadvantage for bringing in the plant into Turkey as there many form of pollution in
Turkey which are harmful and could affect the environmental value our company holds and the ‘green'
credential which many of our customers may consider before doing business with our company. Also the
disadvantage is that the contribution to global warming where there are so many efforts to reduce the
green house gas but Turkish government should invest into becoming green so that it could become a
cleaner environment also it may need to cut down on the pollution level as they are in the EU and will
have to meet the pollution level they have planned to cut to.
SWOT ANALYSIS OF TURKEY
STREGNTHS:
The macro perspective created out of the diversity of activity areas;
Serving as a model for other public institutions thanks to the quality of its activities;
A strong technological infrastructure;
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A strong and reliable organizational structure in rural areas in communication with urban regions;
The effective participation of rural financial branches in the formation, application and
orientation of regulations;
An organizational structure that is suitable for fast and accurate decision-making;
The ministry’s position as an experienced, reliable and respectable institution;
Effective exploitation of international channels of cooperation; and
Specialized human resources.
WEAKNESS:
Failing to provide an uninterrupted flow of information between units;
Resistance to change;
An underdeveloped understanding and culture of teamwork;
Inadequate workplaces;
Unnecessary bureaucratic operations and excessive “red tape-ism”;
Lack of sufficient in-service training, experience abroad and foreign language skills;
Lack of performance assessment and award mechanisms;
Insufficient social benefits; and
Failure in long-term planning and policy making.
OPPORTUINITIES:
Steps to be taken on the way to EU membership;
Developments in supervisory techniques and standards;
An increase in the educational level of workers, translating into a higher quality of worker;
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Economic and political stability in the country;
Developing information technology and faster access to information resources;
An increase in the opportunities of international collaboration in the battle against unregistered
economic activity and the “economy of crime”;
A young and dynamic population; and
Increasing interest in the concept of strategic management.
THREATS
Diminishing trust in the EU and a declining belief in Turkey’s membership;
Negative perception on the part of taxpayers about supervision and inspection;
Lack of concern over the fragmentation of public financial management;
Low propensity to save; and
Lack of voluntary cooperation with tax regulations.
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CAPTER:4
SUMMARY OF AN INDIVIDUAL TOPICS (SEM-IV)
GROUP:1
INTRODUCTION OF TURKISH TEXTILE INDUSTRY
This industry plays an important role in generating employment and help to ease the pressure
of high population growth rate.
This industry was also the engine of the export boom Turkey experienced in the first half of
the 1980s.
Although Textile industry has a very significant share in manufacturing employment and
exports, their shares are much lower in manufacturing value added because of low labour
productivity.
TEXTILE INDUSTRY IN TURKEY: AN OVERVIEW
The Textile industry produces one of the most essential consumer products.
The Textile industry has played a significant role in the early industrialization process of
almost all countries since the Industrial Revolution.
As other developing countries, the Textile industry has played an important role in the
process of industrialization of Turkey.
Sumer bank was established in 1933 to develop a number of industries, including the Textile
industry of Turkey.
The share of state-owned establishments in textiles employment declined sharply from 18%
in the early 1980s to 2% in 2000.
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As a labour-intensive industry, employment shares of Textile industry show significant
increases since 1980.
The share of textiles fluctuated around 20% since the mid 1990s, and then jumped to 24-
25% in the second half of 1990s.
Textile industry was behind the export boom in the 1980s.
The share of Textile industry in total export revenue doubled from 1980 to 1995.
As a result of rapid increase in imports from Turkey, the EU started to impose quantitative
restrictions on Turkish exports in 1984.
These restrictions were eliminated after the customs union in 1996.
Although the share of Textile industry in total imports is still very low, it had a sharp increase
from 1981 to 1995.
TURKEY REMAINS AN IMPORTANT TEXTILE MANUFACTURING
COUNTRY
The Republic of Turkey - located at the crossroads of south-eastern Europe and western
Asia - has a textile manufacturing history dating back to the 16th century.
Today, Turkey's textile industry is a generator of economic activity and simultaneously
ranks among the leading exporters globally.
Turkey is a vibrant emerging economy with a rich cultural heritage located at the
Crossroads of Europe and Asia.
Turkey, a large country which has served as a key regional trade hub for centuries given
its strategic location and maritime control of key waterways between the Black and
Aegean Seas.
Though lacking in natural resources, Turkey benefits from large tracts of rare able land,
miles of coastline, and a young and growing population.
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SECTORS OF TEXTILES
Technical Textiles and Nonwovens Industry in Turkey
Textile and Clothing Supplies in Turkey
Textile Machinery and Equipment Industry in Turkey
Turkey's Cotton Textile Industry
PERIODIC ANALYSIS OF TURKISH TEXTILE INDUSTRY
From Past to Today :1923-1933
From Ottoman Empire, 8 cotton 4 woollen spinning mills (80 000 spindle, 762 weaving
frame).
Main Investment by the State: 1933-1952
Sumer bank: The state owned factories all over the country.
Sumer bank is the core factor in development of today’s Turkish textile industry.
In 1952, 59% of spinning and 63%of Weaving was belonging to Sumer bank factories.
Private Sector Period: 1953-1962
Shift from state to private sector
In 1962, 60% of spinning and 62% of weaving belong to the Private Sector
1963-1972
I and II. State Development Plans
Aim: Turkish textile industry to stay alive by its own national suppliers so that it can get
stronger
Increase in spinning capacity by 79%, weaving capacity by 75%
In 1972, 51 million USD textile product Export
Creation of a Textile Industry Based on Exports: 1973-1982
Incentives for new factories
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In 1976, 160million USD textile products export (25% of six EEC countries’ import)
First significant export in apparel products
Boom in Production and Export: 1983—1988
Golden period
Approx. 35% increase each year in apparel Exports
Stable Period: 1989—1993
Production and export in textiles: Stable
Increase in apparel industry
Increase in yarn and fabric import
Tendency for more value-added products in apparel
GROWTH OF TURKISH TEXTILE INDUSTRY FOR LAST DECADE
The industrialization hard work of the 60's and 70's gave birth to the modern textile industry
in Turkey.
At the beginning, this sector was operating as small workshops.
But the segment showed speedy progress and during the 1970's began exporting.
nowadays, Turkey is one of the vital textile and clothing producers and exporters in the
world.
Turkey's textile and clothing manufacturers began relocating production in Eastern Europe
and Central Asia.
In the last 3 years, Turkish textile and apparel companies faced raising difficulties, after
having substantially succeeded in the eighties and the first part of the nineties.
The textile and apparel sector has been the stamina of the Turkish economy with a vital
role to play in the industrialization process and market orientation of the economy in the
last two decades.
In the 1980s, it was the leading sector related to the global economy and the export
revenues of this hard currency earning sector contributed substantially to the overall
economy.
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The textile sector continued to be one of the major contributors to the Turkish economy,
being one of the fastest growing segments in the 1990s with an average 12.2% annual
growth, while the Turkish economy had an average growth of 5.2% per year.
Total investment in the segment exceeded US$ 150 billion, of which more than US$ 50
billion was invested in the last 5-10 years.
Textile industry started out in the 1960s in small workshops, have rapidly developed and
transformed Turkey into a global competitor.
The total number of firms in the sector, dominated (95%) by the private sector, number
around 44,000 and 25% of them are active exporters.
The apparel industry is constituted mainly (80%) of small and medium sized firms
whereas the technology-intensive textile production has been undertaken by large-scale
companies.
Today, around 20% of Turkey's 500 largest companies are involved in the textiles and
apparel sector.
Little labour expenditure, a capable workforce, comparatively cheap raw materials have
played an important role in the significant growth of the sector; as well as a liberalized
economic environment and export-led policies in the last two decades.
The production value of the sector is over US$ 20 billion. Employment in the segment is
anticipated to be about 4 million people (2.5 million employed directly and an additional
1.5 million not directly through the sub-segments).
Official figures also reveal that approximately 500,000 employees in the sector due to
unregistered labour force.
The apparel sector exports approximately 60% of its production.
Capacity utilization rates are approximately 75% especially among exporting
manufacturers.
Turkey ranks also among the top ten global producers of wool cloth, carpets, synthetic
filament and fibber, polyester & polyamide filament.
While Europe's 3rd largest polyester producer is a Turkish-US joint venture, Turkey's
synthetics production mounts to 15% of Western Europe's capacity.
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Textiles and clothing are among the most important sectors of the Turkish economy and
foreign trade.
Accounting for about 6-7% of the GDP together, these two sectors are the Core of
Turkish economy in terms of GDP contribution; share in manufacturing, Employment,
investments and macroeconomic indicators.
These sectors had an 18.5% Share in total export volume in 2011.
There are more than 40,000 textile and clothing Companies in Turkey with an estimated
labour force of 750,000 human resources.
Turkey is one of the main actor in the global clothing industry.
Turkey ranks 8th
in world cotton production and 4 in world cotton consumption.
Turkey also ranks 3rd
in organic cotton production after India and Syria.
The Turkish clothing industry is the 6th
largest supplier in the world, and the 2nd
biggest
contributor to the EU.
It has a share of 4% in knitted and clothing exports and it ranks 5 among the exporting
countries.
With a share of 2, 6%, Turkey ranks 10 among the woven clothing exporters in the
world.
The Turkish textile industry, which is listed in the world’s top 10 exporters, is also the 2nd
major supplier to the EU. The Turkish textile and clothing manufacturing has a
significant role in world trade with the capability to meet far above the ground standards,
and can fight in international markets in terms of high quality and a wide range of
products.
The established capacity of woven production in Turkey is estimated to be around
1.350.000 tons while that of knitted products is approximately 2.250.000 tons. In current
years, pantyhose, tights, stockings, socks and other hosiery production in Turkey shows a
faster growth and with the new investments it is estimated to have reached a production
capacity of 200 million dozens per annum.
Textile factories are 42% of all in the region
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COMPETITIVENESS OF THE TURKISH TEXTILE & CLOTHING
INDUSTRIES
COMPETATIVE POSITION OF TURKEY IN THE WORLD
It is necessary to explore the competitive position of Turkish producers in the EU and the
US markets, as they are major markets for Turkish textile products.
Turkish textile firms have also succeeded in increasing their market share by 1% from
2% in 1991 to in 2000.
It is interesting to observe that there is no break in market share trend around 1996 when
Turkey joined the customs union with the EU.
Outward processing trade is quite important in explaining textile trade flows between the
EU and the East European and the Mediterranean Basin countries.
The EU firms started to relocate their labour-intensive (assembly) operations towards
those countries to reduce production costs.
Turkish producers have substantially increased their markets shares in the last decades.
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Turkish producers tend to gain ground in most of the rapidly growing markets and they
charge relatively higher prices for main product categories.
Textile imports from Turkey have grown at a very high rate 19.0% for textiles (the 1990-
2001 periods).
The price effect in the case of textile products is, on average, negative in the last five
years, i.e., Turkish textile products are getting relatively cheaper.
On the other hand, the market share effect is quite substantial except the last year, 2001,
that merely reflects rapid penetration of Turkish textile products into the US market.
The market share effect alone explains on average 13.7% annual growth in textile exports
to the US.
As in the case of Turkish Textiles exports to the EU, there is a strong negative correlation
between relative price effect and market share effect for Turkish Textiles exports to the
US whereas the correlation is much lower for Chinese imports.
Turkey has a higher and growing market share in textiles.
A COMPARISON BETWEEN TURKEY AND MAJOR PRODUCERS
This section identified a number of global competitors for Turkish textile producers that
have increased their market shares in the last decade: in the EU market, some Asian
countries (India, China and Bangladesh), East European countries (Poland, Romania and
Czech Republic), and Mediterranean countries (Tunisia and Morocco); in the US market,
Latin American countries (Mexico, Honduras and Dominican Republic), and Asian
countries (China, Thailand, Indonesia, India and Bangladesh). Domestic producers (EU
and US producers) should also be added to this list of competitors.
The share of textile in manufacturing value added is inversely related with the level of
economic development (as measured by output per capita).
The value added share has remained constant in a few countries (Indonesia, Italy and
Turkey) or declined in most of them.
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The only exception here is Pakistan where the share of textile has increased to some
extent.
Turkey's competitors, China, South Asian countries, Poland and Hungary, and Morocco
have very low and declining relative productivity levels (on average, 2-10% of the US
level). Tunisia performs better (36% in textile and 17% in clothing in the late 1990s).
East Asian countries (Japan, Korea and Hong Kong) are the only countries that have
substantially improved their relative productivity levels.
China and South Asian countries have quite low wage rates (2-10% of the US level).
Wages are relatively higher in Tunisia and Morocco (35% and 15%, respectively, in the
second half of the 1990s).
The relative wage level for Turkey fluctuates within the 15-30% range with the mean
around 20% of the US level.
The relative productivity level in Turkey is substantially higher than the relative wage
rate level especially in clothing (The ratio of relative productivity/relative wage is more
than 1.5 in the late 1990s).
Turkey has a strong competitive position as the wages are relatively low in Turkey.
Among all other competitors, only South Asian countries have such a high ratio in the
textile production.
Although it is less productive than major EU countries and the US, the wage differential
compensates for low productivity and makes Turkish producers competitive.
Moreover, the wage differential between Turkey and the EU countries tend to widen
over time.
With the exception of Korea, who is not one of the main competitors for Turkey, there
seems to be no significant change vis-a-vis other developing countries in terms of labour
productivity and wages.
The historical data on productivity and wages suggest that Turkish exporters are likely to
be competitive in major markets in the near future on the basis of very low wages.
The failure in improving relative labour productivity deters increases in relative wages as
well, and prevents structural transformation in the economy
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LIST OF TEXTILE COMPANIES IN TURKEY
Anka Textile
Erdem Tekstil
Beymen
Network
Kiğilı
Mavi Jeans
Sarar
Oztas
Vakko
OZRA Textile Ltd
Karaca
Damat
Beymen
Bisse
Altınyazı Gomlek
Rodi
LCW
Colins'
De Facto
X-Side
Seven Hills
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INNOVATION & INITIATIVES
Although Textile industry are regarded “traditional” sectors using “mature” product and
process technologies, product innovations have become an significant factor for
competitiveness.
New product characteristics (inflammable, flexible, wrinkle-proof materials, etc.), and
new products (technical textiles, eco-textiles, etc.) have become increasingly more vital.
The industry could defend its competitive position in the near future
i) by adopting new marketing strategies (developing their own brands, establishing
new promotion channels, combine with their strategies with the EU and US
companies),
ii) by specializing in niche markets, and
iii) By being innovative in generating and adapting new products (/technical textiles,
eco-textiles, etc.) and processes (non-woven fabrics, et cetera.).
These strategies would be successful only if they are complemented with a supportive
technological and legal infrastructure.
So, the community policy could aim at providing incentives for R&D activities,
encouraging the development of supplier industries and developing a system of standards
and accreditation.
Macroeconomic policies falling, for instance, exchange rate uncertainty are also
important in supporting the Textiles industry.
The public policy should also aim at changing the structure of the industry.
The productivity of textile industry should certainly be increased, but this process needs
to be accompanied by the reallocation of resources towards more productive sectors of
the economy so that wages, per capita income, and living standards could be improved in
the long run.
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RECENT INITIATIVES FOR COMMON RESEARCH CENTERS FOR
TEXTILES&APPAREL COMPANIES İSTANBUL TEXTILE AND APPAREL R&D
CENTRE (ITA)
The Fashion and Textile Cluster (FTC) project represented by Istanbul Textile and
Apparel Exporter’s Union
ISTANBUL TEXTILE AND APPAREL R&D
New support programs
Tax incentives R&D departments of companies
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Incentives for companies for market seeking, exhibitions, opening overseas stores,
branding activities, machinery modernization
Focusing on R&D and Innovation activities more and more
Alternative markets for Turkish exporters to diversify the risks
Branding and creative design issues are hot topics in the agenda
Istanbul has becoming Fashion Centre of the region
Textile doesn’t have to be the sector only for poor and developing countries Innovation
and new value-added products including technical textiles: The buzz words
Productivity remain as one of the key issues for Turkish textile & apparel industry
Competitiveness will continue: Analysis of changing customer attitudes Active marketing
Needs re-shape its position from being supplier only to creator of own market
RESTRUCTURING
The industry is undergoing a major restructuring because of increased competition from
low cost products from China in the European Union and the U.S., Turkey’s major
markets for textiles.
Particularly hard hit have been Turkish ready-wear manufacturers, who are seeing their
profits decrease and markets shrink.
The strong Turkish Lira alongside the U.S. dollar and the euro and rising domestic labour
and energy costs are also making many ready-wear producers uncompetitive.
Nevertheless, Turkey's vast clothing and apparel industry is changing its image from a
mass producer of ready wear for manufacturers, fashion houses and department
provisions in western Europe and the United States to a creator and retailer of new
designs, fashions and superiority labels, turning out higher end and higher priced
products for upper income families.
This is reflected in Turkey’s trade figures. even though the industry contracted by a total
18 percent in 2006 and 2007, according to the Istanbul Chamber of Commerce, textile
exports increased 17.31 percent in the same period over 2006.
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Scores of leading Turkish clothing manufacturers are beginning to open their own fashion
stores, building sales networks abroad, forming joint ventures with foreign distributors
and acquiring retail chains to sell their own brands, and even buying popular Western
labels.
Turkish clothing manufacturers say that they must create and market their own brands,
produce higher value-added apparel abroad and focus more on technical textiles, based
on synthetic fibbers and non woven’s rather than on cotton, to survive the Chinese and
Indian onslaughts.
The industry is expected to lose 30 percent of its market share in the European Union
(EU) as low cost products from China flood the market in wake of the lifting of EU
quotas on all textiles from the Asian country, according to one study.
“The expected decline in the market share of Turkey in the EU’s net textile and clothing
imports will result in a net damage of $2.5 billion. Such a loss accounts for 3.5 percent of
Turkey’s projected export figures,” Özgür Altuğ, chief economist of Raymond James
Securities, wrote in a report on the Turkish textile industry.
Altuğ also warned that Turkey could lose as much as 10 percent market share in its
textiles (cotton yarn, fabrics, home textiles, synthetic fibers, yarns and fabrics) in the
United States, a major market for textile products, as China and India raise their market
share.
To preserve their foreign markets and find new ones, some 50 Turkish ready-wear
manufacturers have invested in factories in the low labor cost countries of Tunisia,
Bulgaria, Egypt, Uzbekistan, Jordan, Moldova, China, Russia, Pakistan, Sudan and the
Czech Republic and the Gaza Strip. Another 100 Turkish firms -- mainly ready-wear
companies -- are planning to invest a total $4 billion in a special industrial zone in Egypt.
Turkey’s ready-wear manufacturer Söktaş and the International Finance Corporation are
planning to invest $80 million together in a shirt fabrics manufacturing plant in India.
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GROUP:2
OVERVIEW OF THE STEEL INDUSTRY IN TURKEY
Turkey was Europ’s third largest producer of steel and ranked 11th
in the world. The Turkish iron
and steel sector is in existence since 1930.
Turkey is a major player in world steel production and exportation with the record of producing
quality products to meet the market needs.
Initial Time:
In 1966 Turkey agreed with European Coal and Steel Commission to abolish customs duties on
bilateral steel trade. The agreement allowed Turkey to trade its iron and steel products freely
with all EU member states.
The Turkish steel industry saw considerable growth and innovation over last 20 years. Which
reflect a commitment to respond to the evolution in world steel market. The turkey has expanded
exponentially over the past 5 years in response to strong world demand for quality steel
products.
The liberalization of economy of Turkey during 1980s was a turning point for the development
of the Turkish economy as well as for the iron and steel industry in particular.
That period was a period of great progress for the Turkish iron and steel industry. Which began
with the establishment of electric arc furnacemills. Progress has continued unabated. And today
turkey has 18 electric arc furnaces with a capacity range from 500,000 to 2.5 million tones(mt).
and its integrated parts have capacities ranging from 1.1 to 3 million tones.
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Current Performance:
Today all the steel producing companies in Turkey are privately held, and Turkish steel makers
continue to pursue technological developments to enhance long term viability of the industry in
the global marketplace.
The Iron and Steel industry has became one of the most developed sectors in Turkey and today it
count as the third largest contributor to the Turkish economy.
According to a report by Turkish Iron and Steel Producers Association (TISPA), Turkey has
shown stable growth in steel between 2000 to 2008. But in 2009 turkey’s steel production
capacity reached around 38.5 mt which is 94% from 19.8 mt in 2000.
Despite of financial crisis Turkey’s steel industry continued its investments and steel production
capacity rose around 4.4 mt compared to 2008.
Electric furnace based steel production capacity of Turkey grew by 120 percent from 13.6 mt to
29.9 mt and BOF based production by 37 percent to 8.5 mt during the same period.
The new level of crude steel is 78 percent higher than it was in 2001, touching 25.3 mt
representing a huge boon for the industry.
Turkey showed the best performance after China in 2009 among the top 15 streel making
countries. At that time Turkey moved up to 10th
place in the world and 2nd
in Europe.
Turkey has become one of the largest traders of steel and steel articles.
Iron and steel exports accounted for US $15.2 billion in 2007 including crude and all kinds of
finished goods. The sector now boasts of over 1,000 foundries and 20,000
Employees nationwide, making it a vital component of the Turkish economy.
Steel production in Turkey has increased significantly year-on year since 2001, growing from
14.9 mt in 2001 to 26.8 mt in 2008.
After entirely compensating the losses of the crisis period by growing 15 %, production growth in
the world steel industry slowed down to 6.8 % in 2011.
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Compared to the previous years, it is observed that Chinese effect in the world steel industry
growth continued to ease. Chinese steel production growth leveled off to 9-10 % levels during
the last 2 years after growing consistently by 20 % in 2000’s.
In comparison to 2010, production of Japan and Spain dropped and growth rate of the USA,
India, Russia, Germany, Ukraine, Brazil and France, stayed below the world average.
While world crude steel production growth dropped from 15 % to 6.8 % in 2011, Turkey
achieved 2 percentage points higher growth rate of 17 % compared to 2010.
With this growth rate of around 2 times higher than the Turkish economy growth, Turkey
became the top growing country among the 30 largest steel producers.
In fact, Turkey is the third fastest growing steel producer in the world.
The Domestic Demand:
Turkey has also proven to be a good consumer of iron and steel, with consumption up to 18.5 mt
.a 110 percent increase since 2001.
Growth of the industry in Turkey has been driven in part by strong domestic consumption.
In the three years from 2005 to 2008 per capita crude steel consumption in Turkey has increased
considerably.
The recent years have witnessed a strong international demand for steel and Turkey is well
placed to meet future increases in international demand for steel.
Capacity
Increasing by 10% in 2011, Turkey’s crude steel production capacity reached around 47 million
tons level, up from 42.7 million tons in 2010.
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Steel Production in Turkey
Turkey’s crude steel production reached a record high of 34.1 million tons in 2011 up by 17 %
yoy. Owing to the high production growth performance, this is also the highest among the top
steel producers of the world.
Turkey’s crude steel production surpassed the pre-crisis production of 2007 by 32.2 %. In this
respect, Turkey has been the 4th producer in terms of carrying its production beyond the pre-
crisis level after China, India and South Korea.
However, it is observed that the production of Spain, France, Ukraine, USA, Japan, Germany,
Italy and Russia has not caught the pre-crisis levels yet.
Turkey’s billet production grew by 11.8 % to 24.4 million tons in 2011. With the support of new
capacities came on stream, slab production continued its sharp rise by 33 % to 9.7 million tons
after growing by 53 % in 2010.
As new steel production facility investments are all focused on EAF route, EAF mills accounted
for 88 % of the total crude steel production upsurge of 4.96 million tons. While total crude steel
production of EAF mills rose by 20.9 % to 25.28 million tons, expansion in the crude steel
production of BOF route stayed at 7.2 % to 8.83 million tons.
Turkey’s Steel Export:
The Iron and Steel Industry is the third largest exporting sector in the Turkish economy and is
becoming one of the major forces driving Turkish exports.
Turkey is the world's leading exporter of Rebar (reinforced bars), and international demand for
Turkish steel products is high.
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In 2008 the country exported $19.36bn worth of steel products, such as semi products(billet),
long-flat, pipe, construction products and appliances, etc. for 19.64 million tones, an increase of
70 percent and 21 percent respectively on 2007 figures.
The biggest markets for Turkish steel exports were the Middle East and the Gulf region (37
percent), North Africa (26 percent), SU-27 (15 percent) and Far East (9 percent).
Turkey’s total iron and steel exports, including the articles of steel and steel pipes, reached 18.54
billion USD up by 5.3 % in terms of tonnage, and by 25.2 % to 16.63 billion USD in terms of
value.
Turkey’s semi finished steel export dropped sharply by 34.3 % to 2.45 million tons in 2011.
Most remarkable export growth was seen in flat products due to the increasing capacity and
production, which grew by 51 % to 2.3 million tons in terms of tonnage and by 65 % to 1.94
billion USD in terms of value.
Long products export, which is the largest product group that Turkish steel industry traditionally
exports, rose by 14 % to 10.5 million tons and 38 % to 7.36 billion USD.
In this respect, while share of semi finished products in Turkey’s total steel export declined from
21 % to 13 %, share of flat steel products stepped up from 9 % to 12 % and share of long
products from 52 % to 57 %.
In terms of regions, because of the social and political instabilities, largest export drops in
Turkey’s total steel products export excluding articles of steel and steel pipes, is seen in Middle
East and North Africa Regions.
Turkey’s steel products exports to Middle East and Gulf Region, which is the biggest export
market of Turkish steel fell by 13.6 % to 6.36 million tons.
Exports to North Africa Region, which had been the second biggest export market for Turkish
steel products declined by 27.5 % to 1.56 million tons, moving the region to the third place
among the biggest export markets.
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In 2011 EU became the 2nd largest export market for Turkish steel products, with the help of the
first half strong performance. Export to the EU rose by 59 % to 2.28 million tons.
List of Major Players in Steel Industry of Turkey:
Five companies have been named among the world’s biggest steel producers in the list of World
Bulletin’s Annual List.
Erdemir Group
Habas Steels
Icdas steels
Diler Group
Colakoglu Metalurji
These Turkish companies were included in the world’s leading steel & metal markets publication
metal Bulletin’s “Biggest steel producer” list.
OVERVIEW OF STEEL INDUSTRY IN INDIA
After independence, successive governments placed great emphasis on the development of an
Indian steel industry. In Financial Year 1991, the six major plants, of which five were in the
public sector, produced 10 million tons. The rest of India steel production, 4.7 million tons, came
from 180 small 29 plants, almost all of which were in the private sector.
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Initial Time:
At the time of Independence in 1947 India's steel production was only 1.25 Mt of crude steel.
Following independence and the commencement of five year plans, the Government of India
decided to set up four integrated steel plants at Rourkela, Durgapur, Bhilai and Bokaro.
The Bokaro plant was commissioned in 1972. The most recent addition is a 3 Mt integrated steel
plant with modern technology at Visakhapatnam.
Steel Authority of India (SAIL) accounts for over 40% of India's crude steel production. SAIL
comprises of nine plants, including five integrated and four special steel plants. Of these one was
nationalized and two were acquired; several were set up in collaboration with foreign companies.
SAIL also owns mines and subsidiary companies.
In conclusion, it can be said with a certain measure of confidence that India’s iron and steel
industry which had a glorious past and has an uncertain present may now look forward to a
bright future.
Current Scenario:
Immense growth potential in Indian Steel Sector
Domestic crude steel production grew at a compounded annual growth rate of 8.4% in the last
few years.
Crude steel production capacity of the country is projected to be around 110 million tonne by
2012-13.
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Increase in the demand of steel in India is expected to be 14% against the global average of 5-6%
due to its strong domestic economy, massive infrastructure needs and expansion of industrial
production.
Demand of steel in the major industries like infrastructure, construction, housing, automotive,
steel tubes and pipes, consumer durables, packaging and ground transportation.Target for $ 1
trillion of investments in infrastructure during the 12th Five Year Plan. Infrastructure projects
(like Golden Quadrilateral and Dedicated Freight Corridor) will give boost to the demand in the
steel sector in near future.
China remained the world’s largest crude steel producer in 2011 (684 mt) followed by Japan
(108 mt), the USA (86.4 mt) and India (72.2 mt; prov) at the 4th position.
As per The WSA, global apparent steel use increased by 3.6% to 1422 Mt in 2012, following
growth of 5.6% in 2011.
In 2013, it is forecast that world steel demand will grow further by 4.5% to around 1486 Mt.
China’s apparent steel use in 2012 and 2013 is expected to increase by 4% in both the years.For
India, growth in apparent steel use is grown by 6.9% in 2012 and it is expected to grow by 9.4%
in 2013
Steel Production and Consumption in India
The Indian steel industry witnessed a period of strong growth in the period of 2003-07, with
production and consumption increasing at CAGR of 13% and 11% respectively.
But after the global financial crisis and liquidity crunch, domestic production and consumption
remained flat in 2009. However, demand has picked up recently, stimulated by a huge thrust in
infrastructure development and robust growth in automobiles.
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DEMAND OF STEEL IN INDIA:
Driven a booming economy and concomitant demand levels, consumption of steel has grown by
12.5 per cent during the last three years, well above the 6.9 percent envisaged in the National
Steel Policy.
Steel consumption amounted to 58.45 mt in 2006-07 compared to 50.27 mt in 2005-06,
recording a growth rate of 16.3 per cent, which is higher than the world average.
During the first half of the current year, steel consumption has grown by 16 per cent. A study
done by the Credit Suisse Group says that India's steel consumption will continue to
grow by 17 per cent annually till 2014, fuelled by demand for construction projects worth US$ 1
trillion. The scope for raising the total consumption of steel in the country is huge, as the per
capita steel consumption is only 35 kgs compared to 150 kg in the world and 250 kg in China.
With this surge in demand level, steel producers have been reporting encouraging results. For
example, the top six companies, which account for 70 percent of the total production capacity,
have recorded a year-on-year growth rate of 13.4 per cent, 15.7 per cent and 11.7 per cent in net
sales, operating profit and net profit, respectively, during the second quarter of 2007-08 We
expect strong demand growth in India over the next five years, driven by a boom in construction
(60%-plus of steel demand in India).
Soaring demand by sectors like infrastructure, real estate and automobiles, at home and abroad,
has put India's steel industry on the world steel map.
Demand-Availability Projection
Demand – Availability of iron and steel in the country is projected by Ministry of Steel in its
Five Yearly Plan documents.
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Gaps in availability are met mostly through imports. Interface with consumers by way of a Steel
Consumers’ Council exists, which is conducted on regular basis. Interface helps in redressing
availability problems, complaints related to quality
EXPORT AND IMPORT OF STEEL BY INDIA
Iron & steel are freely exportable. Advance Licensing Scheme allows duty free import of raw
materials for exports.
The steel exports of India over the decade have the compounded annual growth rate (CAGR) of
22.27% against CAGR of imports of steel, which accounted 14.20% in the respective period.
In 1991-92, very inception of the Liberalization, the steel exports amounted to 368
thousand tons, which increased year-by-year and reached to 5221 thousand tonnes in 2003-04. It
accounted for thirteen-fold increase over the period.
The Annual growth rates of exports of steel for the period showed the fluctuating trend, which
ranged between –14.41% in 1994-95 and 101.36 in 1992-93. In 2003-04, the growth rate was
15.87 %.
Last five year’s export of total finished steel (alloy + non alloy) is given below:-
Indian steel industry : Exports (in million tonnes)
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Category 2007-08 2008-09 2009-10 2010-11 2011-12*
Total Finished Steel (alloy + non alloy) 5.08 4.44 3.25 3.64 4.04
Imports:
Iron & steel are freely importable as per the extant policy.
The imports are also growing. In 1991-92, the imports of steel amounted to 1043 tonnes. But in
1999-2000, it touched 2200 tonnes, which is the highest import of steel
in India, and then the imports went down and reached 1650 tonnes in 2003-04.
In 1991-92, the year of liberalization, the imports of steel in India exceeded over the exports of
steel. But in the following years the trend changed. From 1997-98, India exported steel and steel
products which was more than its imports of steel and steel products.
Last five year’s import of total finished steel (alloy + non alloy) is given below:-
Indian steel industry : Imports (in million tonnes)
Category 2007-08 2008-09 2009-10 2010-11 2011-12*
Total Finished Steel (alloy + non alloy) 7.03 5.84 7.38 6.66 6.83
Source: Joint Plant Committee; *provisional
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Major Players in Steel Industry of India
Among these top companies there are some Public Players there like SAIL, RNIL etc.
While TISCO, ESSAR, ISPAT, JSWL etc are Private Players.
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GROUP:3
OVERVIEW OF PHARACEUTICALS INDUSTRY
INTRODUCTION
Today pharmaceuticals have become an indispensable part of health care system around the
globe. Historically pharmaceuticals have played a vital role in the human development by
improving the quality of life and reducing the time spent in the hospitals. Thanks to innovative
pharmaceutical industry that almost all epidemics and chronic diseases are curable today. Due to
its direct link with the welfare and wellbeing of human beings pharmaceutical industry is of
strategic importance for the development of a healthy and productive nation. Today,
pharmaceutical industry is considered to be one of the largest and rapidly growing global
industries. It is a major source of employment generation and foreign exchange earnings for
many countries around the globe.
However, despite all these extraordinary achievements it’s a harsh reality that every year
millions of people die across the world, mostly in low income developing countries, due to
unavailability and inaccessibility of necessary medicines. According to the World Health
Organization (WHO), on average, 30% of the world population lacks access to life-saving
medicines; whereas, in some countries in Asia and Africa, the number may be as high as 50%
(Roger Bate, 2008). Many developing countries, including some OIC member countries, has
insufficient or no manufacturing capacities in the pharmaceutical industry. Local industry covers
a tiny fraction of domestic pharmaceutical demand and they rely heavily on imports and
medicinal aid. In addition, the share of medicines in “Out-of-pocket” health payments (i.e. paid
by the patient) is ranging between 40 to 60% in these countries. Consequently, medicines are
neither available nor accessible to a large fraction of population and hundreds and thousands of
people die of preventable and treatable diseases.
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PHARMACEUTICAL PRODUCTION AND CONSUMPTION:
WORLDWIDE TRENDS
The global pharmaceutical industry has shown rapid growth over the years and emerged as one
of the fastest growing industries in the world. However, world pharmaceutical production and
consumption is still unevenly dispersed around the world with the developed countries as the
leading producers and consumers of pharmaceuticals. According to IMS Health (an international
consulting and data services company), in 2010, world pharmaceutical market was valued at US$
875 billion with a growth rate of 4.1% over the previous year at the constant exchange rate. The
volume of pharmaceutical industry has surged from US $ 647 billion in 2005 to US$ 875 billion
in 2010, corresponding to an increase of 35.2%. During this period, the industry’s growth rate
has witnessed a declining trend from 7.2% in 2005 to 4.1% in 2010. This decline is mainly
associated with the slowdown in economic activity, especially in the developed countries which
consume a large chunk of global pharmaceutical products. In 2008, economic slowdown in
developed countries culminated into one of the worst global financial and economic crisis since
the Great Depression. The negative effects of this meltdown of historic magnitude were felt
across the globe and all sectors were hard hit. The pharmaceutical industry was not an exception
and it has witnessed one of the lowest year-on-year growth rates of 6.1% in 2008. In 2009,
however, the negative effects of the crisis subsided and global economy has started to recover.
These positive developments helped the global pharmaceutical industry to rebound to its pre-
crisis level and its growth rate climbed to 7.1% in 2009 (Figure 1). Global pharmaceutical
market, both in terms of production and consumption, is highly concentrated in the developed
regions. In 2010, North America (38%), Europe (29%) and Japan (12%) accounted for nearly
79% of global market. On the other hand, developing regions with a share of nearly 85% of
world population, accounted for only 21% of global pharmaceutical consumption in 2010
(Figure 2). A breakdown of pharmaceutical market in developing world reveals that Asia,
Australia and Africa represent nearly 15% whereas Latin America accounts for 6% of the global
pharmaceutical market.
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MAJOR PHARMACEUTICAL COMPANIES OF THE WORLD
Company HQ location
Revenue of
pharmaceutical
segment, mln
USD
Total sales,
mln USD
Share of
pharmaceutical
segment, %
Pfizer NY, U.S. 46,133 52,516 87.85%
GlaxoSmithKline UK 31,434 37,324 84.22%
Johnson &
Johnson NJ, U.S. 22,190 47,348 46.87%
Merck NJ, U.S. 21,494 22,939 93.70%
AstraZeneca UK 21,426 21,426 100.00%
Novartis Switzerland 18,497 28,247 65.48%
Sanofi-Aventis France 17,861 18,711 95.46%
Roche Switzerland 17,460 25,168 69.37%
Bristol-Myers
Squibb NY, U.S. 15,482 19,380 79.89%
Wyeth NJ, U.S. 13,964 17,358 80.45%
Abbott IL, U.S. 13,600 19,680 69.11%
Eli Lilly IN, U.S. 13,059 13,858 94.23%
Takeda Japan 8,648 10,046 86.09%
Schering-Plough NJ, U.S. 6,417 8,272 77.57%
Bayer Germany 5,458 37,013 14.75%
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TURKEY’S PHARMACEUTICAL OVERVIEW
In the Central Asian region, Turkey emerged as a promising pharmaceutical market. Today,
Turkey is the largest pharmaceuticals producer in the OIC and is ranked 16th among the world’s
35 leading producers. There are 134 pharmaceutical companies operating in Turkey and
domestic industry meets 90% of local demand. In 2006, Turkey produced US$ 3947 million
worth of medicines compared to US$ 1932 million in 2000 (Export Promotion Centre of
Turkey). Turkish pharmaceutical industry and market has great growth potential and is placed in
a group of countries called “Pharmerging Markets” which represents fastest growing
pharmaceutical markets in the world.
Turkey, being the sixth largest pharmaceuticals market in Europe and largest pharma market in
the Middle East, has seen significant changes in health policies and social security during the
past years, paving the way for a solid growth in the pharmaceutical market. The sector faced
fundamental regulatory reforms in the last five years aligned with that of the EU and is one of the
few industrial sectors in Turkey where the government has strict control over prices. The
introduction of a new Research & Development law in 2008 aims at a boosting of local R&D as
well as increasing the R&D investments of global corporations into Turkey by primarily offering
tax incentives for R&D expenditure
3.2 MARKET STRUCTURE
There are two types of production companies on the pharmaceutics market in Turkey:Original
drug producing companies: these companies produce and distribute under patent protection.
They incur the costs of drug discovery, bear the burden of safety and efficacy of the drugs
through clinical trials, and make marketing efforts. For as long as a drug patent lasts, a brand
name company enjoys a period of market exclusivity in which the company is able to set the
price of the drug at a level which maximizes profitability. This price often greatly exceeds the
production costs of the drug, which can enable the drug company to make a significant profit on
their investment in R&D, thus enabling them to fund the research and development of new
medicines.
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Equivalent Generic drug producing companies: these companies produce and distribute drugs
without patent protection and generatly operate on small regional level. Companies incur fewer
costs in creating the generic drug and therefore are able to maintain profitability at a lower cost
to consumers. When these generic products become available, the market competition often leads
to substantially lower prices for both the original brand name product and the generic forms. The
market for generics in Turkey is strong, with a high domestic production. Most of them are
branded and supported by intensive promotion activities. Government policies supporting the
growth of the generic industry increase the export potential of Turkey.
3.3 MARKET SALES & CONSUMPTION
The Turkish prescribed pharmaceutical market has reached 14,1 billion Turkish Lira (9,1$ bn)
and 1,4billion units by volume in 2009. The growth rate of the market in terms of lira is 3,1%
and 3,9% by 2volume. The prescribed pharmaceutical market, including both original and
generics drugs, accounts for 90% of the whole Turkish pharmaceutical market. In 2000, officials
passed the law regarding nonprescription drug regultions in order to take control of the market.
However, despite the newregultion non-prescribed drugs still have a 10,2% (1,2$ bn) market
share in Turkey. The per capita pharmaceuticals consumption was 132 dollar. Turkey’s large and
growing population with a rise in life expectancy and increasing older population together with a
relative low pharmaceutical consumption per capita offer high growth for potential.
In 2009, there are 7,413 pharmaceutical products in the market. 4,928 of these are prescribed
products. The share of imported products in the Turkish pharmaceutical market was around
21,7% by volume in 2009, where the majority of imports comprised original products. On the
other hand, local production was around 78,3%, with generic products accounting for 72% of
total
3.4 PRODUCTION
Turkey has a developed pharmaceutical industry in terms of production standards, technology
andcapacity. The production facilities have been inspected continuously by the Ministry of
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Health, and accredited internationally by International Accreditation Authorities.Turkey does not
participate in the Pharmaceutical Inspection Convention and Pharmaceutical Inspection
Cooperation Scheme (PIC/S). However, after the application of Good Manufacturing
Practices (GMP) in 1984, the Turkish Pharmaceuticals Industry today reaches a technological
level, which can almost be compared to European Union countries except in biotechnology and a
few brand new pharmaceuticals production technologies. Pharmaceuticals groups, which are not
locally produced, are restricted with some high-tech or biotechnology products.
Pharmaceutical industry is mainly concentrated in the Marmara Region especially in provinces
of İstanbul, Kocaeli and Tekirdağ. Better infrastructure, easy supply of packaging materials and
technical personnel, telecommunication and transportation facilities and the existence of a high
number of health institutions in the region are the main reasons for the concentration.
The industry has a production structure which has high level of technology and automation.
Approximately 25.000 people are employed in the sector, of which 50% have a university degree
MAIN PHARMACEUTICAL MANUFACTURERS
Nowadays there are approximately 300 entities operating in Turkey; there are 43 manufacturing
facilities and 14 of them are multinational firms. The leading 10 companies account for less than
50% of the market, the first 20 companies account for over 70%. This fragmented structure
coupled with intense competition will necessitate further consolidation in the Turkish market.
The leading Turkish manufacturers are EIS Eczacıbaşı (Zentiva), Abdi İbrahim, Fako (Activis),
Deva (Eastpharma), İlsan İltaş, Mustafa Nevzat, İbrahim Ethem Ulugay and Bilim. The
following international pharmaceutical companies have subsidiary manufacturing operations in
Turkey: Bayer (Germany), GlaxoSmithKline (UK), Pfizer (US), Roche (Switzerland), Sanofi-
Aventis (France), Novartis (Switzerland) and Baxter (US). The market has attracted substantial
interest from international strategic and financial investors in the past three years; the total
number of deals reached 39 in this period. Especially Western Europe continues to be the most
active region in pharmaceutical deals in Turkey. Most of the foreign transactions’ show that
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foreign players prefer to acquire a significant majority (usually over 85% and 100% in most
cases) of the target companies.
IMPORT OF TURKEY PHARMACEUTICALS
The Value of Imported Raw Material and Finished Pharmaceutical Products in Turkey by Years (US
$ in million)
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EXPORT OF PHARMACEUTICALS
The Value of Exported Raw Material and Finished Pharmaceutical Products in Turkey by Years (US
$ in million)
Source
OUTLOOK FOR THE FUTURE OF TURKEY’S PHARMACEUTICAL INDUSTRY
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Turkey’s geographical position plays a central role in its aspirations to become a pharmaceutical
production hub for the region. Its proximity to Europe, CIS and MENA, combined with its
competitive cost structure and developed production capabilities, will support Turkey’s
ambitions described above. Not but least the accession process with EU will improve Turkey’s
institutional and business capabilities.
As of today the industry do export to more than 100 countries including EU member states as
well as the US. This demonstrates Turkey’s developed installed capacity and the fullfilment of
the strictest quality and production standards. In this context, the challenge for Turkey and
ISPAT is to further increase FDI to ensure long term sustainability of national healthcare
provision with new investments to manufacturing of drugs and R&D.
In order to maximize growth and efficiency within the healthcare industry ISPAT work with
relevant bodies such as the Ministry of Health, Scientific and Technological Research Council of
Turkey (TUBITAK), research institutes, and universities as well as private stakeholders
including both international and domestic firms. As a recent example of a joint effort in
promotion of investment opportunities in Turkish pharmaceutical, healthcare and biotechnology
industries, ISPAT has organized Turkey’s participation in the 2012 Bio International
Convention. In addition to the Ministries of Health and Science, Technology and Industry as well
as TUBITAK, industry representatives such as the Association of Research-based
Pharmaceutical Companies (AIFD), the Pharmaceutical Manufacturers Association of Turkey
(IEIS) and several firms were presented with the opportunity to inform international business and
science communities about the potential of Turkey.
Despite certain market access issues in the short run, we would highly recommend it to
international investors to take into account the opportunities in Turkey provided by a growing
market. It is important to make investment decisions by looking at the opportunities within a
longer term perspective taking into account favourable long-term macroeconomic conditions and
prospects for growth due to demographic and welfare dynamics.
Turkey has a favourable long-term macroeconomic outlook, reflected in BMI’s ten-year forecast
which predicts improved access to medical care through the extension of state-funded health
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insurance towards European-style universal coverage. This positive outlook is further enhanced
by various factors, such as increased life expectancy and strong population growth, which
combine to give the market’s long-term promise.
INDIA and Turkey trade relations
Introduction
India and Turkey are both emerging economies who are also developing
economic and strategic interests outside their immediate region.
Ind ia , a l ong t e rm p roponen t o f non alignment and who pushed a foreign
policy based on moral precepts, is moving to a foreign policy more focused on pursuing
tangible interests. Turkey, a NATO member, that for decades saw its future as a European
state embedded in the Western political structure, is now positioning itself as an
important player in West and Central Asia as well.
India has undergone major structural changes to its economies going back to
the mid-1980s that have rolled back regulatory barriers on its private corporate sector and
opened up its economy to foreign capital and investment.
India-Turkey Relations: A Snapshot View
Turkey India
GDP Total USD 1.073 trillion USD 1.9 trillion
GDP /Capita Income USD 9,500 USD 1,340
Population 73.6 million 1.2 billion
Major Trading Partners
EU (46.3%), Iraq (5.3%),
Russia (4.1%), USA (3.4%)
UAE (13.6%), China (12%),
USA (10.1%)
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5.2 BILATERAL TRADE BETWEEN INDIA AND TURKEY
Bilateral Trade
Volume: USD 6.6 billion (Jan-Nov 2011)
India’s exports: petroleum products, clothing and apparel,
aluminum, cars, mobile handsets
Turkey’s exports: marble, textile, machinery, copper ores,
inorganic chemicals, jewelry
Investments
Indian investments in Turkey: railway construction, pipelines,
hydrocarbons, IT services
Turkish investments: tourism, textile products, construction
Recent High level Visits
Prime Minister Erdogan (2008)
President Gül (2010)
Vice President Ansari (2011)
Key Agreements
Bilateral Investment Promotion and Protection Agreement 1998
(BIPA)
Avoidance of Double Taxation and the Prevention of Fiscal
Evasion 1997 (DTAA)
Institutional Arrangements
Joint Commission for Economic and Technical Cooperation
Joint Business Council
Joint Study Group for Free Trade Agreement feasibility
Education and Culture
25 slots offered to Turkish students under Indian Technical and
Economic Cooperation (ITEC)
MOU signed between Ankara University and JNU and Bogazici
University and Shantiniketan
Language professors are on deputation through the Indian
Council for Cultural Relations
Defense
High level visits: Chairman of Chiefs of Staff Committee and Chief of
Army Staff Air Chief Marshall V. P. Naik (2011)
Chief of Naval Staff Admiral Nirmal Verma (2011)
Diaspora
A small group of working professionals are found in each country.
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GROUP:4
An overview of Automobile Industry of Turkey
The automotive industry in Turkey plays a significant role in the manufacturing sector of
the Turkish economy. Companies operating in the Turkish automotive sector are mostly located
at Marmara Region.
Turkey produced up to 1.2 MN motor vehicles annually, ranking as the sixth largest producer in
Europe and the 17th largest producer globally. With a group of car manufacturers and suppliers,
the Turkish automotive sector has become an essential part of the global network of production
bases, exporting over $22,944,000,000 worth of motor vehicles & components.
Turkey is one of the most noticeable export oriented automobile markets in the world. The
country is driven by high production volumes and a very high ratio of exports to production.
Domestic market is categorised by great demand potential, low permeation and inspiring
regulatory strategies. Supported by all these factors, the production growth of automobile
production again improved in 2010 and sales grew faster than the preceding year. It is expected
that the sales of vehicles in terms of volume will increase at a CAGR of around 13.5%
throughout years 2011-2014.
PRODUCTION
In first 8 months of 2012, the total automotive production gathered as 694,357 units, which
represents 11% decrease compared with a year ago. CUR was 66% in 8M12, down from last
year’s 74%. Oyak Renault maintained its superior position in automotive production with
191,079 units, followed by Ford Otosan and Tofaş
2009 2010 2011 2012
Production 869,605 1,094,557 1,189,131 36,812
Retail Sales 575,869 793,172 538,532 60,871
Domestic Factory Sales 255,176 341,636 379,092 14,591
Exports 628,970 754,469 790,966 26,296
CUR 57% 72% 75% 27%
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Major Producers of Automobile Industry
Maruti Udyog Ltd., G.M India, Ford Ind Ltd., Eicher Motors, Bajaj Auto, Daewoo Motors India,
Hero, Hindustan, Hyundai Ind Ltd., Royal Enfield Motors, Telco, TVS Motors, DC Designs etc.
Automotive Manufacturers in Turkey
Indian Producers in Turkey Market
Indian Tractor Industry Leader Tafe Makes a Greenfield Investment in Manisa Industrial Zone
Istanbul on October 13, 2008. An Investment Support & Promotion Agency of Turkey &
India's leading tractor manufacturer Tractors and Farm Equipment Limited (TAFE), today
jointly announced TAFE's decision to invest in a tractor assembly/manufacturing facility at
Manisa Organized Industrial Zone, with plans to manufacture 15,000 tractors/year. While an
investment plans are being confirmed, in order to launch a full range of tractors for the Turkish
market at the earliest, production will start primarily with the support of aggregates from TAFE's
plants in India, while production is expected to start in the 1st quarter of 2012.
TAFE, an Indian JV based at Chennai is the world's 2nd
largest producer of tractors in the
sub 100 horse power series with an annual production & sales of 80,000 units in India, South
Asia, and Africa & North America. With a history of designing, manufacturing & marketing
tractors around 50 yrs. & nearly a MN satisfied tractor clients, TAFE has huge experience in
manufacturing tractors to suit every possible type of agro-climatic condition & operation in the
small and medium horse power range. TAFE is the first Indian manufacturer to set up a
manufacturing base in Turkey. The company has selected to locate its new plant at
Manisa, which in addition to its strategic location & has exceptional infrastructure.
Commenting on the issue, Mallika Srinivasan, TAFE's officials said, the tractor market in
Turkey is of great significance to us as its composition is well within our experience &
manufacturing range. Turkey is an investor friendly country & we have been welcomed
and assisted in our investment proposals by the authorities at the Manisa Organized Industrial
Zone as well as directly by the Prime Minister's office at Ankara. With ISPAT's support, we
are confident in beginning manufacturing operations by the first quarter of 2009. Manisa is
well located in terms of proximity to the well-developed automotive component manufacturing
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base in Turkey & TAFE is expected to leverage this for its local as well as global
requirements. It is noticeable that over 2,000 TAFE tractors are already in operation in Turkey
& negotiations for sales and distribution of tractors from new plant are in progress with a
world leader in agricultural equipment, while final arrangements are expected to be announced
soon.
Main Producers
India-Turkey Relations India’s Exports to Turkey
India’s exports to Turkey include petroleum products, vaccines, cotton yarn, synthetic yarn,
organic dyes, organic chemicals, denim, steel, and granite, antibiotics, carpets, tobacco, cars,
sesame seed, TV CRTs, mobile handsets, clothing & apparel.
Turkey’s exports to India include poppy seeds, auto components, marble, textile machinery,
denim, carpets, cumin seeds, copper ores and concentrates, flat rolled iron and steel & gold.
Turkish Investments in India
Turkey grades 40th overall in terms of FDI Inflows to India with cumulative direct investment
into India amounting to US $ 45 MN accounting for 0.03% of total FDI inflows.
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Indian Investments in Turkey
More than 150 companies with Indian capital have listed businesses in Turkey in the form of
JVs, trade & representative offices. They include M/s Polyplex, GMR Infra, TATA Motors, M &
M, Reliance, Ispat, Aditya Birla Group, Tractors & Farm Equipment Ltd., Jain Irrigation, and
Wipro & Dabur.
VARIOUS INDUSTRY ANALYSIS
SWOT ANALYSIS OF AUTOMOBILE INDUSTRY OF TURKEY
Strengths
Turkey has an advantages of being a production center cheers to both amplitude of
demand in domestic market & also its geographical status & nearness to developing
potential markets. Such advantages become more evident in new centers of automotive
production compared to East-European Countries.
Conventional quality understanding.
Technical qualification.
High quality production compatible to international standards & know-how.
Competence of producing for multi-branded vehicles.
Lesser labor pays than in particular West European Countries.
Adequacy of long working hours.
Ability of fast feedback to development, evolution and demands.
Expertise of crisis management.
Young, trained, dynamic, enthusiastic and skilled labor potential.
Weaknesses
The weak points in competition are comparatively high costs of energy, raw material &
labour.
Weak protection of intellectual property rights.
Due to the absenteeism of the certainty & certainty of the law & transparency catching
investors depends on providing high yield & tax incentives.
Prejudiced application of the law & Poor business ethics.
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Business Opportunities
Bearing in mind developments during the last period, one can suggest that Turkey has
become an authoritative base for automotive main as well as subcontracting sectors.
Turkey has succeeded to be a significant production base in Europe for key
manufacturers especially in commercial vehicle production and vehicles produced in
Turkey are exported at high volumes.
It’s possible to mention a similar successful tendency for automotive delegating
companies. Those companies, which at the very beginning are engaged uniquely in
domestic main contractors, today produces for important manufacturers and after market
throughout Europe. Export figures in sector also support such findings. Merely the above
examples appropriately define present accomplishment of sector.
Threats
One of the major threat for Turkey is increased global competition. Increased exports to European countries from Asian countries due low cost. New auto competitors are also trying to establish themselves in the region.
Competition arises on many fronts within the broader region of Africa and the Middle
East.
Developing auto industries in Egypt, the UAE, and South Africa are likewise trying to
become players in the world car market.
PORTER’S FIVE FORCE ANALYSIS FOR AN AUTO INDUSTRY
Porter's Five Forces, also known as P5F, is a technique of examining the attractiveness of an
industry. It does so by looking at five forces which act on that industry. These forces are bases of
that industry's profitability.
1. The threat of new entrants
In the auto manufacturing industry, there is generally very low threat. Factors to observe for this
threat include all obstacles to entry such as upfront capital requirements, brand equity, regulation
and government policy, ability to distribute the product
As Turkey has an agreement with European Union & permanent member leads to less threat of
new entrants. Another reason for less threat of new entrants is its government policies labor laws
which are in favor of country’s own.
2. The bargaining power of buyers/customers In 2009 especially, Turkey dealers were giving great deals to buyers to get the industry moving.
While quantity a buyer purchases is usually a good factor in defining this force, even in the
automotive industry when buyers only usually purchase one car at a time.
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However, this may be different in other markets. But in Turkey’s competitive countries it sure is
lower than in the Turkey, creating a more satisfactory situation for industry.
Generally, however, it is safe to say that customers have some buying power, but after all it
depends on the market the country is serving for its products of a particular industry to survive in
the competitive world.
3. The threat of substitute products If buyers can look to the competition or other comparable products, and switch easily there may
be a high threat of this force. With new cars, the switching cost is high because you can't sell
brand new car for the same price you paid for it. Porter five force analysis of car industry covers
new market, not used.
But what about the threat of substitute products before the buyer makes the purchase? You need
to know whether the market you are analyzing has many good alternatives to new cars. A vibrant
used car market perhaps? Used cars threaten the new market. Product differentiation is important
too. In Turkey’s car industry, typically there are many cars that are similar - just look at any mid-
range Toyota & you can easily find a very similar Nissan, Honda, or Mazda. However, if you are
looking at amphibious cars, there may be possibility of little threat of substitute products for an
existing one.
4. The amount of bargaining power suppliers have In the car industry this refers to all the suppliers of parts, tires as well as components, electronics
and even the assembly line workers. We know in the Turkey the auto unions are tremendously
powerful. But we also know that some suppliers are small firms who rely on the carmakers, and
may only have one carmaker as a client. So this force can be tricky to evaluate.
5. The intensity of the competitive rivalry We know that in most countries all carmakers are engaged in fierce competition. Tit-for tat price
slashes, ad campaigns, and product developments keep them on the edge of innovation and
profitability. Margins are low & pressure between competitors is high. All major car
manufacturing countries experience this strong rivalry. This includes US, Japan, Italy, France,
UK, Germany, China, India and other more. A P5F analysis should always be done in
conjunction with other assessments, and should not be regarded as being absolute. It should only
serve as an indicator, not absolutely accuracy. There are many critical assumptions that should be
made and explained in one's P5F analysis. The market must be described, the competition must
be explained & defined product. Another example is the type of automotive industry. A P5F
analysis of the electric car industry would be entirely different than one of the conventional car
industry.
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Porter-Diamond Model
Factor Conditions
As Turkey is highly populated country leads to significant amount of human resource as
well as Highly Skilled workers & advanced technological know-how shows high
knowledge resources.
As there are so many world-wide companies have set up their plant & manufacturing
units in Turkey tends to show higher amount of infrastructure facilities.
Turkey invests 1/4th
of its nations income which leads to high amount of capital inflows
from domestic and other capital inflows flow from FIs
Demand Conditions
Higher domestic production and domestic sales data shows higher demand of domestic
market & higher exports almost 70% shows higher demand of global market.
Related & supporting industries
Efficient supplier & dealer network tend to raise I/Ps and higher production leads to low
costs as well as globally increased competition forces to invention.
Firm strategy, structure and rivalry
Turkey’s main strategies for an automobile industry are effective production, lower cost,
higher investment of income and higher exports to European countries leads to more
inflow of money.
Turkey’s Automobile associations predictions for future & set its goals accordingly by
taking global economic scenario in to consideration.
As well as highly planned & intensive goal & investments keep managing liquidity and
other aspects.
Government
Turkey’s government policies play key role in the development of its domestic market &
stopping it from competitors entrants by putting high taxes & incentives, complex, long
& favorable legal system for its own as well favorable labor legislations and laws for
employees.
As well as urban trade relations with European countries & become member of European
Union leads to increase its exports to Europe.
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Chance
This factor affects Turkey’s automobile industry lesser due to highly regulate &
controlled markets and its regulations
BEFORE INVESTING IN TURKEY
Business Environment
Due to the absences of the certainty and predictability of the law &
transparency catching investors depends on providing high yield & tax
incentives.
Selective application of the law. Deprived business ethics. The concept of a
written "contract" is not mainstreamed. Turkey will always have great potential.
I wonder if they will ever reach that potential.
The fact that intellectual property isn’t adopted prevents every kind of
intellectual capital investment
Macro economics Taxes are very high. Public entities with strong macroeconomic function
such as sgk and teias delaying payments. Continuing populist
applications at municipal levels drawing on resources.
Trade deficit is unsustainable .linkages to neighboring emerging markets
will bring the biggest gains.
Determined and disciplined application of fiscal policy in coordination with the
monetary policy will pay off in the longer term. It seems that the fiscal side
is quite weak and is lacking an anchor.
Still risks to inflation/interest rates from government spending policies and lack
of IMF program.
Taxation
Tax system: there are hidden taxes. There is always an additional fee etc. which
increases overall tax burden & complicates the business transactions. For example,
stamp tax levied on business contracts.
International investors and corporations are punished by higher rates of tax that are not
viable with lower tax countries like Singapore or Ireland. The reduction in corporate
taxation was a good start but an organized, corporate sector is subsidizing the informal
sector efforts to address tax evasion in the informal sector is welcomed, but we
should also be asking if taxing production, capital and investment is better than taxing
consumption, in terms of encouraging economic growth
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Turkey is an underdeveloped country & do not have a structure which can bear
heavy taxes. Since taxes are not collected from the revenues generally,
consumption taxes are very high. Besides, institutions who pays the taxes via
revenues and people pay taxes 2t
Legal System
It is better to settle down differences outside of the courts if possible. Courts
are too slow to react.in the matters of technical issues, the courts are
ineffectual. Certain courts are unfair in their decisions.
Principles of trademark protection has to be strengthen & delays in the
juridical processes & discr iminat ion of local vs. Foreign in minds are
important problems as well as Implementations about the copyrights and patents
should be elaborated in an international level.
Reasons to Invest in Turkey SUCCESSFUL ECONOMY
Flourishing economy
Sustainable economic growth.
Favourable economy with an optimistic future as it is projected to be the fastest growing
economy among the OECD members during 2011-2017 with an annual avg real GDP
growth rate of 6.7 percent.
16th largest economy in the world & 6th largest economy compared to the European
Union area.
Established economy fuelled by over USD 83 BN FDI in the last 7 years
& ranked as the fifteenth most attractive FDI destination.
POPULATION
A population of 73 MN people.
Largest young population compared with the European Union,
Median age is of 28.8 years.
60 % of the population is under the age of 35.
Young, dynamic, well-educated and multi-cultural population,
QUALIFIED LABOR FORCE
Over 24.7 MN young, well-educated & motivated professionals, 5th largest labour force
compared with the European Union, Consumer base & motivated work force, Project
International Marketing Automotive Industry and approx. 450,000 graduates from circa
150 universities.
Around 550,000 high school graduates, including one third from vocational and technical
high schools.
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LIBERAL AND REFORMIST INVESTMENT ENVIRONMENT
A vibrant and established private sector with $ 102 billion worth of exports & an increase
of 183 % between 2002 and 2009.
Highly modest investment conditions, Strong industrial and service culture equal conduct
for all investors & More than 23,000 companies with international capital.
INFRASTRUCTURE
New & highly settled technological infrastructure in transportation,
telecommunications and energy, well-developed and low-cost sea transport facilities &
railway transport advantage to Central and Eastern Europe.
CENTRALLY LOCATED
A natural connection between both East-West and North-South axes, thus creating an
efficient and cost effective outlet to major markets.
Easy access to 1.5 BN customers in Europe, Eurasia, the Middle East and North Africa.
ENERGY CORRIDOR AND TERMINAL OF EUROPE
Domineering energy terminal and corridor in Europe connecting the East & West.
As an energy transit country, Turkey presently has the capacity to transport 121 MN tons
of oil to the world markets per annum. Once the continuing projects are completed, the
annual transit capacity will rise to 221 MN tons of oil and 43 BN m³ of natural gas.
LOW TAXES & INCENTIVES
Corporate IT reduced from 30 to 20%.
Individual Income Tax fluctuates from 15 to 35 %.
Tax benefits and incentives in Tech Development Zones, Industrial Zones and Free
Zones could include total or partial exemption from Corp IT, up to 80 % grant on
employer’s social security share, as well as land allocation.
New R&D and Innovation Support Law.
Region and sector based incentive system.
CUSTOMS UNION WITH THE EUROPEAN UNION SINCE 1996
Customs Union with the European Union since 1996, and Free Trade Agreements with
16 countries.
More FTAs underway.
Accession negotiations with the European Union since so many years.
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GROUP :5
MINING INDUSTRY
INTRODUCTION OF MINNER INDUSTRY
At first, Istanbul seems to have changed very little since the time of Ara Güler’s black and white
photographs. Its streets are still crammed full and confused, and its wooden houses as neglected as the
camera of Güler, “the eye of Istanbul,” captured them 50 years ago. Despite the appearance, however,
things have changed dramatically. Istanbul has become a 17 million people megalopolis with a brandnew
metro system, two bridges stretching between Europe and Asia, a vibrant service sector, real estate
developments springing up on every available piece of land, shopping boulevards packed with the
glittering windows of international boutiques and 35 billionaires living in its yalis (waterfront villas)
along the Bosphorus. Over the last 20 years, meanwhile, Turkish cities such as Balıkesir, Bursa, Denizli,
Gaziantep, Kahramanmaraş, Kayseri and Konya have become important business and industrial centers.
Ankara is no more the provincial town that was despised by international diplomats in the 1920s,
but a dynamic political capital with a population of 4 million. Since Turgut Özal opened up the country to
private and international investment in the 1980s, Turkey has been growing at impressive rates. Neither
the domestic financial crisis of 2001, nor the more recent global financial crisis managed to invert this
trend, even if they did take some toll. The country ranks 17th in the world in terms of nominal GDP and
Prime Minister Tayyip Erdoğan has vowed to make it one of the 10 biggest economies by 2023, the 100th
anniversary of the Turkish republic. Turkey’s mining industry has gone through the same dramatic
changes. Only 15 years ago, 85% of the mining operations were controlled by the state; today the ratio is
reversed.
In gold mining alone, three new mines have opened in the last couple of years and several
projects are due to be fully developed in the coming years. International investors showed their interest in
the recent developments in Turkey’s gold mining by subscribing 40% of the initial public offering (IPO)
of Koza Gold, the sole local gold producer on the Istanbul Stock Exchange. Overall, investors laid down a
total of $436 million to subscribe 30% of Koza’s capital, giving the company, which at the time was
producing around 230,000 oz/y of gold with further resources for 8.1 million oz, a market value of $1.45
billion. Meanwhile, the Turkish government paved the way for new investments by amending the mining
code in 2010.
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Turkish mining sector achieved a remarkable CAGR of 32.1 percent between 2002 and
2008, with revenues that rose from USD 1.9 billion in 2002 to USD 10.2 billion in 2008. There
was a modest decline to USD 9.2 billion in 2009. The sector’s share in Turkey’s GDP ranged
between 1 and 1.5 percent, reaching a 4.2 – 4.9 percent1 share in the total industry during the
past five years. These figures are low compared with the sector’s importance; however, with the
recovering economy and the increasing capacity of the manufacturing industry, together with the
implementation of advanced mining technologies, the sector is likely to grow further.
Turkey holds 2.5 percent of the global industrial minerals reserves, 72 percent of global
boron reserves, 33 percent of global marble reserves, 20 percent of global bentonite reserves and
more than half of the global pearlite reserves. Boron is the richest reserve found in Turkey: the
866 million tons of reserves of B2O3 comprise approximately 72 percent of the total global
reserves of 1,201 million tons in 2009. Apart from Turkey, boron reserves are mainly found in
Russia and the US. Eti Maden supplied 37 percent of global boron demand in 2009, followed by
RT Borax with 35 percent.3 Boron reserves in Turkey are mainly found near Eskisehir, Balikesir
and Kutahya1, all in Western Anatolia.
As part of the EU membership accession negotiations, the government started intense
studies for liberalization and privatization in several industries, mining being one of them. With
the regulatory changes, incentives offered, and reduced bureaucratic processes for obtaining
mining licenses, both local and foreign investments have increased each passing year, reaching
TRY 2.78 billion in 2008, and are expected to continue growing in the coming years.
Major Mining Commodities
Natural Stones
Boron Minerals
Chromium – Ferrochrome
Feldspar
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Pumice
Iron ore
Gold
Coal
Lignite
Boron
Aluminum
Copper
MINING INDUSTRY IN TURKEY
PRODUCTION
The minerals sector is one of the leading sectors supplying raw materials to domestic industry.
Turkey possesses the largest resources of most minerals in the world and is one of the world’s
richest countries in terms of minerals. Excluding petroleum and coal, there are 53 exploitable
minerals and metals and 4,500 mineral deposits in Turkey. Turkey’s geology is extremely
complex and this complexity is reflected in the diversity of its mineral deposits. Best known for
its industrial minerals, Turkey is a major producer of boron minerals, feldspar, marble, baryte,
celestite (strontium), emery, limestone,magnesite, perlite and pumice.In recent years, mining
activities and the search and production of mainly silver, gold, manganese, copper and chrome
ore have increased considerably in Turkey as in the rest of the worldChromite:.Turkey has a 6%
share in world chromite mining and possesses 25 million tons of reserves. Ferrochromium is the
most important product in production and exports. The majority of Turkey’s chromite production
has been utilized by the ferrochromium industry.
In 2007, Turkey ranked 3rd in chromite exports in the world with a share of 12.8%. Themost
important chromite reserves are located in the Guleman district of Elazig, the Kopdag district of
Erzincan, the Fethiye district of Koycegiz, Mugla, Eskisehir, and the Pozanti district of Adana,
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Harmancik, the Orhaneli district of Bursa and the Pinarbaşı district of Kayseri.Turkey’s total
export of chromite was US$465,3 million with a 3,4% decrease in 2011.Major markets were
China (%82), Russia (%5), Sweden (%2) and India (%2). The most important ferrochromium
markets for Turkey were the Netherlands, Italy and Belgium.
Copper:
The recognized copper reserves of Turkey are about 3.7 million tons of metal copper;
nevertheless, total reserves amount to 15.8 million tons. Turkey has three important copper
reserves: the East Black Sea, Southeast Anatolia and Thrace. Rods, profiles and cables are the
most important export products in the sector. Turkey’s copper ore exports were US$ 364,8
million in 2011. The main buyers were China, India, Sweden and Finland.
Zinc and Lead:
Turkey’s zinc reserves are about 2.7 million tons. Although Turkey has 2.07 % of world zinc
reserves, ore production accounts for only 0.28% of world production. Zinc oxide ore reserves
are located in the Zamanti (Kayseri/Nigde/Adana) district of Middle Taurus. In addition, some
small reserves are found in Konya, Malatya, Bingol and Bitlis.
Turkey annually produces about 40 thousand tons of zinc metal. Half of the production is
consumed in the domestic market and the rest is exported. Exports have increased in parallel
with the increase in production. In 2011, approximately US$ 202,8 million worth of zinc ore and
concentrate was exported mainly to Belgium, China and Bulgaria.
Feldspar:
Turkey possesses 10% of total world feldspar reserves. Turkey’s feldspar reserves are estimated
to be 239 million tons (visible+potential). Important feldspar reserves are located in
Manisa/Demirci, Kutahya/Simav, Aydın/Cine and Mugla/Milas. The rise in world production of
white body tile and granite tile has increased the demand for feldspar.
Turkish producers are now competing in the domestic and international markets to supply
this material. Most of the feldspar is produced by the private sector and 90% of the production is
exported. Feldspar exports started in 1990 and it reached US$ 130,8 million in 2011. Italy, Spain,
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Russia and Poland were the most important markets for Turkish feldspar. In 2011, Turkey ranked
first in feldspar exports in the world with a share of 32%.
Magnesite:
Turkey’s magnesite reserves are about 168.4 million tons. Most of these reserves are
concentrated in the Konya-Kutahya-Eskisehir triangle. In addition, some reserves are located in
Erzincan and Canakkale. Raw magnesite, dead burned and caustic calcined magnesite are
produced in Turkey. Several small companies also produce raw magnesite.
Magnesite is exported as raw magnesite, calcined, sintered and burned. Magnesite is also
exported as bricks that are used in the iron and steel industry. In 2011, magnesite exports were
about US$ 90 million, and Austria, Ireland and Germany were the major markets for Turkish
magnesite. In 2011, Turkey ranked second in magnesite exports in the world with a share of
32%.
Bentonite and Kaolin:
Turkey’s bentonite reserves are 370 million tons. The production of ground bentonite has been
rising steadily during the last 20 years. At present, Turkey is a net exporter of bentonite. Known
bentonite deposits are found in Edirne-Enez, Çankırı, Tokat-Resadiye, Ankara-Kalecik and
Giresun-Tirebolu. Bentonite production and exports have increased in the 1990’s and reached
US$39,2 million with a 21% increase in 2011.
Bentonite exports were mainly directed to Germany, the Netherlands, Italy and France.Known
kaolin reserves are found in some villages of Balıkesir, Nevsehir, Nigde, Bolu, Canakkale, and in
the East Black Sea region. Turkey’s probable kaolin reserves are about 100 million tons. In 2011,
the total export value of kaolin was US$2,9 million. Tunisia, Lebanon, Italy, England and Syria
ranked as top markets for Turkish exports in 2011.
Baryte:
Turkey possesses 26 million tons of baryte which is about 2.1 % of the total world reserves.
These reserves are composed of good quality baryte for all types including ground, crude or
micronized.
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The largest share of Turkish baryte production is sold to oil drillers. Important barite deposits are
located in Konya, Maras, Muş, Antalya and Kutahya. Being located near the most important
consumers of barytes, Turkey has advantage in exporting baryte products.
The total export value of baryte was US$17,1 million in 2011 and the major markets for Turkish
barytes were Iraq, Ukraine and Finland.
Other Important Minerals and Their Exports:
Turkey has a wealth of industrial minerals. The other important commercially produced minerals
are plaster, sepiolite, diatomite, zeolite, sulphur, lead, silver, antimony, alumina ore, gypsum,
phosphate, salt, sodium, sulphate, quartz, industrial sand, dolomite, talc, wollastonite, kyanite,
calcite, emery rock and calcium fluorite .
Turkish mining exports reached US$2 billion in 2011. Turkey’s mineral exports have a share of
1.56% in Turkey’s total exports in 2011. Chrome, copper , natural borates and zinc are the major
metallic minerals which are exported. Natural stones, borates, feldspar, magnesite, pumice stone,
baryte, kaolin, clays and calcite are the most important industrial minerals. In 2011, China and
the European Union were the main
markets in Turkey’s mineral exports.
INDIA-TURKEY ECONOMIC AND COMMERCIAL RELATIONS
During the Turkish War of Independence, the people of India contributed funds for the Turkish
cause – which was partly used to train and assist the Turkish Army and partly for establishing the
first Turkish bank (Isbank). Diplomatic relations between India and Turkey were established in
1948.
Political Relations: Bilateral relations are characterized by warmth and cordiality. The two
countries share common values including commitment to secularism and democratic principles.
Indian economic progress and technological advancement have been instrumental in recent
upsurge in interest towards India in Turkey.
The major items of India’s exports to Turkey include cotton yarn, synthetic yarn, organic dyes,
organic chemicals, denim, steel (bars and rods), granite, antibiotics, carpets, unwrought zinc,
sesame seed, TV CRTs, mobile handsets, clothing and apparel.
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Turkey’s exports to India includes poppy seed, auto components, marble, textile machinery,
denim, carpets, cumin seeds, minerals (vermiculite, perlite and chlorites) and fittings and steel
products.
Introduction
1. India and Turkey are both emerging economies who are also developing
economic and strategic interests outside their immediate region.
2. Ind ia , a l ong t e rm p roponen t o f non alignment and who pushed a foreign
policy based on moral precepts, is moving to a foreign policy more focused on pursuing
tangible interests. Turkey, a NATO member, that for decades saw its future as a European
state embedded in the Western political structure, is now positioning itself as an
important player in West and Central Asia as well.
3. India has undergone major structural changes to its economies going back to the
mid-1980s that have rolled back regulatory barriers on its private corporate sector and opened
up its economy to foreign capital and investment.
India-Turkey Relation
(Joint Declaration on Scientific and Technological Cooperation)
India and Turkey on February 9, 2010 desired to develop and expand cooperation in science and
technology and in other areas of common interest and launched an Advanced Science and
Technology Dialogue, besides offering to actively study the possibilities of working together in
mutually identified projects in areas such as telecommunications, computerization, non-
technology space research, bio-technology and environmental technology and convene a joint
workshop in 2010.
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Considering the importance of science and technology for the economic and social development
of both the countries have desired to develop and expand cooperation in the field of science and
technology in areas of common interest besides noting that together with economic and
commercial relations, cooperation in science and technology offer great potential as a driver of
bilateral relations.
The joint statement has recognized that cooperation in science and technology will not only
advance the state of science and technology to the benefit of both countries but also strengthen
the bonds of friendship and understanding between people of both countries.
The statement also reaffirmed the Agreement on Cooperation in the field of Science and
Technology between the Government of the Republic of Turkey and the Government of the
Republic of India signed on 17 September 2003,
Advanced Science and Technology Dialogue will also encourage cooperation through exchange
of ideas, information, skills and technologies; exchange of scientists and technical experts; the
convening of joint seminars, scientific conferences, and meetings; training and enhancing the
skills of scientists and technical experts; the conduct of joint research projects and studies and
other forms of scientific and technological cooperation as may be mutually agreed upon, India
and Turkey will actively study the possibilities of working together in mutually identified
projects in areas such as telecommunication, computerization, information technology, space
research, biotechnology and environmental technology.
Both sides will actively explore the possibilities for joint research and development activities
making use of best practices in this field and encourage, facilitate and support the development
of direct contacts and cooperation between government agencies and organizations, universities,
science and research centers, institutes and institutions, private sector firms and other entities of
the two countries.
The joint statement stated “We also agree, therefore, that Turkey and India convene a joint
workshop in 2010 among designated representatives to elaborate and bring into being the
Advanced Scie
nce and Technology Dialogue in accordance with this Joint Declaration.”
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IMPORT EXPORT OF MINNING INDUSTRY IN TURKEY
GENERAL
ICD Research's "Mining in Turkey to 2015 - Market Sizing and Forecasts: Market Profile" is an
essential source of information covering the industry dynamics of the mining industry in Turkey.
The report offers insights into market opportunities and entry strategies adopted to gain market
share in the Turkish mining industry. In particular, it offers in-depth analysis of the following:
Market opportunity and attractiveness: Detailed analysis of current market size and
growth expectations during 2011–15. It highlights key drivers to help understand growth
dynamics. It also benchmarks the sector against key global markets and provides detailed
understanding of emerging opportunities in specific areas.
Procurement dynamics: Trend analysis of exports and imports, along with their
implications and impact on the Turkish mining industry.
Market entry strategy: Analysis of possible ways to enter the market along with an
understanding of how existing operators have achieved this, including key contracts,
alliances, and strategic initiatives.
Business environment and country risk: a range of drivers at country level, assessing
business environment and country risk. It covers historical and forecast values for a range
of indicators, evaluating business confidence, economic performance, infrastructure
quality and availability, labor force, demographics, and political and social risk.
Scope
Analysis of Mining industry production from 2004 through 2009 and forecasts till 2015
Analysis of market size and production trend analysis by coal, metallic and non-metallic
segments
o Mining Equipment market size and forecast
o End use market dynamics
o Benchmarking with key global markets
o Market opportunities
o Mining import and export dynamics
o Market entry strategy
o Business environment and country risk
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Investments in Turkey
Turkey is an attractive country for foreign investors with a business-friendly regulatory
environment. It has a large dynamic market with a relatively high quality labour force and
location advantage, with easy access to regional markets. It is a member of EU Customs
Union, providing access to the large European market. The net foreign direct investment in
Turkey was $ 10.03 billion in 2005, 19.92 billion in 2006 and 21.97 billion in 2007. The main
beneficiaries of FDI have been hotels, tourism and leisure, textile and auto component sectors
and the main sources of investment are USA, UK and Germany.
Indian companies in Turkey
More than 60 Indian companies have registered businesses in Turkey in the form of joint
ventures, trade and representative offices.
IRCON undertook railway projects in nineties. Kalpataru, in association with Barmek, a Turkish
company undertook electricity transmission projects in Turkey in 2003.
An Indian company Polyplex set up a polyplex film manufacturing factory in Chorlu, Turkey in
2005 with a total capital investment of US $ 60 million.
Indo-Rama Group started a production unit for polyester fibre. TATA Motors have an existing
tie-up with Mesin Limited of Isotlar Group for marketing and after sale service for TATA
vehicles in Turkey.
Limak Constructions, a consortium of GMR Infrastructure Ltd and Malaysia Airport Holding
won a BOT contract of Euro 1.932 bn for building a new international passenger terminal at the
Sabiha Gokcen Airport in Istanbul.
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Industrial houses such as Reliance, Ispat, Aditya Birla Group etc have established their trading
offices in Turkey to look for opportunities in the market here.
The Indian Oil Corporation Limited (IOCL), in collaboration with Çalik Enerji of Turkey, was
granted license for establishing an oil refinery with a capacity of 15 million tons a year in
Ceyhan, envisaging a total investment of approx. US$ 5 billion. The project would primarily
focus on exports to the European markets and the USA
India and Turkey, two countries with emerging markets are on the way to developing their
mutual trade to a much better level.
In this respect some Indian groups have acquired companies in Turkey, recently and are
seriously planning to enlarge their businesses in this country.
Turkish company called STANDART PROFIL was acquired by RUIA Group of India in May.
It is reported that this group has also interest ,n Turkish mining, energy and metals sectors and
plans to acquire more companies.
Vandanaa, an Indian energy group,on the other hand has recently acquired Ser Mining, (Turkish
mining firm).
Then again, India’s Oil and Natural Gas Corp. (ONGC) is interested in investing in oil
exploration in the country of Turkey.
It has also been reported that negotiations between India and Turkey to establish a free trade
agreement are ongoing. Many experts believe that this cooperation would definitely be to the
benefit of both countries and Turkey especially would add to its enormous potential having
India’s support. August 2011
With the objective of rediscovering historic linkages between Turkey and India, a joint
Symposium on Indo-Turkish Relations from Ancient to Modern Times was held in Ankara in
October 2002 under the auspices of Turkish Culture Ministry and Indian Council of Historical
Research. On 27 June 2007, a symposium on “Turkish-Indian Relations in History” jointly
organized by Turkish Historical Society (TTK) and the Indian Council of Historical Research
(ICHR) was held in Ankara.
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GROUP:6
AGRICULTURE IN TURKEY
Turkey is the world’s 7th largest agricultural producer and one of the biggest producers of large
range of agricultural commodities, such as hazelnuts, apricots, lentils, cherries, figs, olives,
tobacco and tea. About one third of Turkey’s total land area is devoted to agriculture. There are
approximately 3 million agricultural farms in Turkey most of which are family farms employing
family labour, nearly two thirds of Turkish farms are less than 5 hectares. Subsistence and semi-
subsistence farming is an important characteristic of Turkish agriculture. Although the share of
agriculture in the economy has declined significantly, it is still important in both social and
economic terms. In 2011 it represented 7.9 percent of GDP, 25.5 percent of employment. The most of the problems in Turkish agriculture are market related and to result from small size
and lack of strong and well functioning farmer organisations and need for proper measurement
to support them for their integration, beside the threats such as natural disasters affects to
agriculture, instability in feed prices and pressure on the state to reduce agricultural subsidies.
Turkey has been trying to overcome those challenges through implementing different support
schemes for small farmers at the policy level and should also implement more measures that
support research and development, skills training and help to improve productivity.
Agriculture plays an important role in Turkey, both in social and economic terms, even though
its share in the economy has decreased significantly during the last few decades in line with the
global trend, declining in importance relative to the rapidly growing industry and services
sectors. This reflects the sector’s inadequate productivity levels, which are largely the result of
poor mechanisation, small farm size, and uncoordinated and unplanned agricultural production.
The agricultural sector made up about 22 percent of GDP at the beginning of the 1980 and it has
declined to around 10 percent in recent years. Annual growth rate in agricultural sector was 3.6
percent in 2009, 2.4 percent in 2010 and 5.3 percent in 2011.
Agriculture is still an important buffer against urban unemployment. Nearly 30 percent of the
economically active population lives in rural areas, while agricultural employment accounted for
26 percent in 2007, 24.6 percent in 2009 and 24.0 percent of employment in 2010 according to
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the participation in the workforce. Agriculture is the largest employer in Turkey, representing 25
percent of the workforce and contributes 8 percent of the country’s economic activity.
It is noticed that real production growth in agricultural sector remained quite lower than the
growth rates of GDP, industry and service sectors other than the crisis periods. Whereas the
agricultural sector has grown up at an annual average rate of 1.8% in 5 years duration in 2000-
2004 and 1.9% in 2005-2009, GDP has grown up at an annual average rate of 4.4% in the first
period and 3.2% in the second period. As for the industry, it has grown up at an annual average
rate of 4.2% in the first period and 3.2% in the second period. Even though the decrease of share
of agriculture in total GDP is often encountered during the development of the countries in the
long term, it would not be incorrect that the slight growth of the agricultural production in real
terms constitutes a problem for the agricultural sector itself. One of the reasons is that the
productivity in agriculture is considered quite lower as to be mentioned in the following sections.
About 4 percent of import and 7-9 percent of export come from agricultural products according
to the Standards of International Trade Classification (SITC, Rev.3) while it has about 10 percent
of share in both import and export according to the International Standards of Industry
Classification (ISIC Rev.3). Changes in consumption patterns, increases in education and income
levels have grown the agricultural import and Turkey is recently becoming an agricultural
importer from an agricultural exporter. The most important agricultural products Turkey needs to
import are wheat, rice, oil seeds, cotton and livestock while hazelnuts, dried figs, Sultana,
pistachio, dried apricot, tobacco, olive oil, cotton, legume and fresh F&V are exported.
Economic importance of agriculture in Turkey (2011)
Indicators Value Total area ( ha) 78,356,200
Total agriculture area (ha) 39,032,000
Proportion of total area (%) 49.81
Total arable land (ha) 21,375,000
Total sown area (ha) 17,657,000
Proportion of arable land (%) 54.76 Employment in agriculture (number of labour) 6,143,000 Share of agricultural labour in total labour (%) 25.50
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Share of GDP (%) 7.90 Source: Turkish Statistical Institute (TUIK), 2012.
AGRICULTURE SECTOR
Agriculture has invariably been one in all the foremost capable sectors for Turkey, each for the
domestic economy and in terms of international trade.
Around 40.5 % of Turkey’s acreage is cultivable and offers an outsized vary of product like
grains, oil seeds, pulses, fruits and vegetables, poultry, dairy farm product, cut flowers, seafood,
and tobacco. Grain production, placental mammal and fisheries/forestry account for sixty seven
%, twenty six % and seven % of the entire agricultural production, severally.
Turkey’s agricultural imports in 2010 and 2011, excluding processed food, reached USD half
dozen.495 billion (3.49% of the entire imports) and USD eight.945 (3.7% of the entire imports),
severally. Export were USD five.091 billion (4% of total exports) in 2010 and USD five.350
(3.9% of total exports) in 2011. The highest Turkish exports area unit dried apricots, dried figs,
sultana raisins, hazelnuts and hazelnut product. Turkey’s high imports area unit cotton hides and
skins, soybeans, feed ingredients, paddy rice and live animals.
SHARE OF AGRICULTURE IN PRODUCTION: RECENT UPDATES AND TRENDS
Share of agricultural sector, which constitutes approximately 25% of the Turkey’s employment,
in nominal Gross Domestic Product (GDP) being around 8% in 2009, remains quite lower than
the employment rate.1 Under the light of the recent GDP Data, it is noticed that the share of
agricultural sector in total production did not rise up other than crisis periods and unlike that it
fell down.2 Sharp falls particularly encountered in industrial sectors during crisis result in
temporary increase of the share of agriculture in total production. The share of agriculture, being
12.5% in nominal GDP, recessed to 9.5% in 2004 and 8.2% in 2009. Rapid growth rates of the
service sector and rapid increase in price deflectors in recent years have become important
developments limiting the share of agriculture in total production.
It is noticed that real production growth in agricultural sector remained quite lower than the
growth rates of GDP, industry and service sectors other than the crisis periods. Whereas the
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agricultural sector has grown up at an annual average rate of 1.8% in 5 years duration in 2000-
2004 and 1.9% in 2005-2009, GDP has grown up at an annual average rate of 4.4% in the first
period and 3.2% in the second period. As for the industry, it has grown up at an annual average
rate of 4.2% in the first period and 3.2% in the second period. Even though the decrease of share
of agriculture in total GDP is often encountered during the development of the countries in the
long term, it would not be incorrect that the slight growth of the agricultural production in real
terms constitutes a problem for the agricultural sector itself. One of the reasons is that the
productivity in agriculture is considered quite lower as to be mentioned in the following sections.
Nevertheless, the other reasons may include inadequacy of agricultural support program, failure
in adaptation to the changing global circumstances and quite lower investments in the
agriculture.
PRODUCTIVITY IN AGRICULTURE Structural problems of Turkey’s agriculture result in lower rates of productivity in agriculture.
Upon consideration that the productivity is the production per capita working in the relevant
sector, it is reported that the agricultural sector is relatively larger given either total economy or
the industry and services. It is reported that a person working in the agricultural sector in 2009
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generated TRL 1,860 (in 1998 prices) and this figure is TRL 4,563 for GDP and TRL 6,133 for
industry.
LABOR FORCE AND LAND USED FOR AGRICULTURE
Turkey’s economy uses an important source in terms of labor force in agriculture. With 5.254
million persons, the agricultural sector covers 24.7% of the total employment as of 2009.
Regular decrease in the employees of the agricultural sector as of 1923 is directly related to the
increasing mechanization in the sector and decreasing average land sizes. However, in Turkey,
there are other reasons for migration from rural areas to the urban, one of the most important
pushing factors of the social demography. Comparisons made with the western countries put
forth that Turkey has still a crowded population in the rural areas and the migrations to urban
would continue in the following years. Even if the rural population is held down by social
measures, the dynamics of the growth would progress towards the cities. In this perspective, it
would be correct that the one of the most important problems in our economy is on-site
employment of the rural population efficiently.
Even if Turkey is a rich country in respect of agricultural areas, the constitution of the majority
of the lands from small sections in terms of property ownership makes it difficult to benefit from
the economy of scale particularly in annual arable crops and livestock. In Turkey, there is
cultivated agricultural land (including long life crops such as fruit trees) of 24.5 million hectares
as of 20084. 21.5 million hectares of these cultivated lands consist of the agricultural lands
where grains, vegetables are cultivated excluding long-life crops.
FOOD BUYING BEHAVIOUR
The Turkish food sector is taking additional advanced thanks to merchandiser demands for
higher standards and investments by food manufactures. Through the widespread presence of
contemporary international and domestic grocery stores like railway line, Tesco, crossroad and
Migros further as rising incomes, the consumption patterns of Turkish shoppers have shifted
faraway from mass and raw foods towards packaged and processed foods, together with ready-
to-eat meals and cold foods. Associate raise within the quantity of females operating full-time
and better levels of throwaway financial gain has supported this trend. This can be
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preponderantly the case in urban centres. The foremost vital food consumption patterns haven't
modified the maximum amount within the rural area unites and are still supported wheat and
grain product and a spread of meat product. Shoppers within the south east of Turkey principally
consume lamb, however in Central peninsula and also the West additional shoppers like beef.
Milk consumption has not enhanced as quickly as milk production, that enhanced from eight
million MT in 2003 to 12.5 million MT in 2011, however the variability of milk product like
food and cheese enhanced. There are a unit still a bundle of opportunities for nest egg within the
dairy farm product sector however product ought to be adjusted to native tastes.
Turkey ought to be thought-about an entrance to geographical area market. Thanks to united
history and faith further as general cultures, Turkish agriculture and food export to the centre
east bigger than before perceptibly within the past decade. The Halal and organic food
subsectors area unit areas that may well be prepared for investments or partnerships within the
region.Manufacture within the food and drinkable sector reached 8,852 million in 2009, which
constitutes 18-20.5% of the country’s production as a whole.
The Turkish diet contains a large share of food. Hence, the workplace subsector forms the bulk
(65%) of the entire variety of food and drinkable firms in Turkey. In 2011 Turkey consumed
11,486,000 MT of bread and solely 33,600 MT of packaged bread. Turkish shoppers tend obtain
to shop for} bread from little bakeries once it's hot and customarily don’t buy packaged sliced
bread. Another essential workplace product is that the Simit (type of bagel) further as salty
cookie-like product. Fashionable workplace outlets have begun to unharnessed, particularly in
city, however that's not widespread throughout Turkey. Moreover, thanks to the chunky quality
of flour out there in Turkey, pocket bread vogue bread is in style in East and South East
peninsula. Therefore, the workplace sector normally offers lots of opportunities for enlargement
and spreading out.
AGRICULTURE RESOURCES
Turkey has a vast agricultural resource base with significant potential to expand output,
particularly through increased crop yields. About one third of Turkey’s total land area is devoted
to agriculture.
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Turkey has average annual renewable water potential of 205 Gm, or about 3150 m /person per
year, which is far below the 10,000 m parameter needed to classify a country as water rich.
Taking into consideration the economically usable water potential of the country (110 Gm), the
available annual per capita water goes down to about 1700 m3, which would make Turkey a
water-stressed country. Furthermore, rapid population growth, industrialization, and rising
standards of living are decreasing the annual per capita renewable water potential year by year.
LABOR FORCE FOR AGRICULTURE
Turkey’s economy uses an important source in terms of labor force in agriculture. With 5.254
million persons, the agricultural sector covers 24.7% of the total employment as of 2009.
Regular decrease in the employees of the agricultural sector as of 1923 is directly related to the
increasing mechanization in the sector and decreasing average land sizes. However, in Turkey,
there are other reasons for migration from rural areas to the urban, one of the most important
pushing factors of the social demography. Comparisons made with the western countries put
forth that Turkey has still a crowded population in the rural areas and the migrations to urban
would continue in the following years. Even if the rural population is held down by social
measures, the dynamics of the growth would progress towards the cities. In this perspective, it
would be correct that the one of the most important problems in our economy is on-site
employment of the rural population efficiently. However, the combined series which we formed
by using the new and former employment series published by the Turkish Statistics Institute
(“TUİK”) indicates a significant fall in the agricultural employment after 2001. As for 2008-
2009, being the crisis years, it was noticed that the agricultural employment increased.
DISTRIBUTION OF LANDS
One of the most important problems encountered in transition from extensive agriculture in
vegetable production to intensive agriculture by which highly efficient production is made as a
result of use of intensive technology and input is fragmentary and piecemeal nature of the land
ownerships.
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According to the legal status in Turkey, 3,076,650 farms hold total area of 184.3 million decares.
Average land size for these farms is 59.9 decares; this size is quite lower than the average farm
size of Europe and USA, being successively 174 and 180 decares. Besides, whereas the number
of the farms holding lands of below 100 decares constitutes 83.7% of total number of farms, the
share of the lands held by these farms is 42%. While the share of number of farms holding lands
larger than 500 decares in total number of farms is 0.7%, these farms farm hold 11.3% of the
total area.
Legal arrangements have been maintained since the date of establishment of the Republic of
Turkey to overcome such hindrance to the productivity in agriculture. In this road, Land Reform
Acts were enforced several times; however, these could not help optimized the status of the
landless villagers. Upon enforcement of the draft law, evaluated at the Prime Ministry during
preparation of our report and aiming at preventing the land division for heritage, it becomes
possible that the average size of farm increase. Another development in this respect is the
commencement of preparations for a new structuring under the title of “Agricultural Land
Acquisition Office” of the Ministry of Agriculture and Rural Affairs. This study aims at
gathering the agricultural lands by acquisition, sale and lease of the agricultural lands by the way
of tender
USE OF TECHNOLOGY, MECHANIZATION AND INFORMATION
Outdated technology is used in majority of the farms in Turkey. Although use of technologies
and know-how increases in number in the farms, that the average size of farm is limited; that the
breeders are hybridized in cattle breeding; and that the cattle races could not be protected are
considered the factors slowing down the transition to the intensive agriculture.
In Turkey, there are 1,070,746 tractors and 13,804 harvesters as of 2008. Whereas the number of
tractors regularly increased by 1% each year as of 1989, the number of harvesters increased by
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2.2% in a five years period in 2004- 2008. Even though the increase in the number of harvesters
is positive, 58.5% of these harvesters being over the age of 10 as of 2008 is considered a
disadvantage. Furthermore, use of 25% plows - used to plough the lands by benefiting from
animal power - indicates that the use of technology has still not been widespread adequately in
small-sized farms(Ministry of Agriculture and Rural Affairs, 2007).
The average size of the farms is 60 decares in Turkey it is a fact that the abundance of the small-
sized landed farms prevents efficient use of the tractors owned. Though the grain production has
a major role in Turkey.
Besides use of machineries, use of fertilizers, resulting in high rate increases in productivity of
vegetable production, is fluctuating in Turkey. Particularly during crisis, use of chemical
fertilizers recesses significantly; and another reason why the use of fertilizers fails to reach the
desired levels is dependency of the higher fertilizer prices on the energy prices.
According to data of Directorate General of Production Development (TUGEM), physical
fertilizer consumption was 5,276 thousand tons by an increase of approximately 28% in 2009.
The relevant consumption was 4,129 thousand tons in 2008 after a recession by approximately
20% compared to the previous year. On the other hand, in 2004-2008, it was reported that share
of phosphoric fertilizers in the total consumption, being 32% before, recessed down to 4.7% and
share of nitrogenous fertilizers, being 66% before, increased up to 93.4% in 2009. It is noticed
that annual average consumption, being 10.1 million tons in 2003-2007, was 7.5 million tons in
2008 and 7.2 million tons in 2009. There is a decrease of the share of phosphoric fertilizers has a
deep impact on this decrease occurred in recent years.
According to IPARD 2007-2013 Report, the consumption amount of fertilizer per hectare in
agricultural lands in Turkey as of 1999 is 67.8 kg Nitrogen, 28.9 kg Phosphor (P2O5) and 3.7 kg.
Potassium (K2O). In Turkey, below the world average in consumption of fertilizer per hectare;
use of alternative fertilizers as a reaction to the increasing prices and several farmers‟ tending to
crops not requiring fertilizers caused a noteworthy decrease in fertilizer consumption. Besides
the lower fertilizer consumption, unconscious use of fertilizers by the farmers constitutes an
important obstacle for achievement of the desired productivity. It was determined that the
farmers do not have adequate information and background on the soil-product types and use of
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correct amount and timing for the fertilizers and apply the same according to the advises from
hearsay instead of scientific methods.
ARABLE LANDS
In Turkey while the land, exposed to water erosion, is about to be 67 million hectares (85% of
the total lands), the land, exposed to wind erosion, is only 0.3 million hectares. 36.4% of the total
lands are exposed to serious erosion (abrasion of 25% of the surface and soffit of the land) and
22.3% of the total lands are exposed to severe erosion with the abrasion of 22.3 of the surface of
the land and %25-75 of the so fit of the land. Rough and hilly nature of Turkish lands, irregular
and fluctuated rainfalls and intensity of the rainfalls, superficial soil profile depth, lower rate of
organic substances in the soil and natural disasters such as forest fires are the major reasons for
the erosion in Turkey. On the other hand, misuse of the lands also causes problems. These are
unconscious annihilation of the forests, excessive pasturage and mismanagement of the arable
lands .
That water resources in several lands become unusable any longer due to instability of the
rainfalls appears as a factor, which may cause drought and adversely affect the arable nature of
the land by the way so.
INTEGRATION OF AGRICULTURAL LANDS
One of the factors causing the size of the farms to be as such limited is the Heritage Act. Sharing the
inherited lands between inheritors results in fragmentation of the lands and constitutes one of the
obstacles for transition to the intensive agriculture enabling higher productivity. Access in only 85% of
the lands by cadastral works, limited coverage during the title deed renewal process creates significant
ambiguities on land ownership. This deficiency might - perhaps - become a factor deferring arise of large-
scaled farms created by free market mechanisms in time besides prevention of effective operation of the
agricultural land market. Ownership problem causes use of the agricultural lands as guarantee and makes
it difficult to access in the credit market and keeps many agricultural fixed capital investments below the
optimal level.
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DRY AND IRRIGATED FARMING
In Turkey, as of 2007, 5.2 million hectares (24%) of 21.9 million hectares arable lands are irrigated
agricultural lands. According to the data of Turkish Statistics Institute, while this rate is 72.7% for
vegetable and flower growing, the rate for the fruits and other long life plants is 25.8%. Availability and
stability of water resource in the agricultural land gain importance in respect of selection of products and
irrigation method applicable in the agriculture. In Turkey, in 1995-2005, higher increase of 33% in use of
underground and aboveground waters indicates that in the following years, problem of satisfaction of the
water demand would arise together with the population increase. Diminishing of water resources in
several regions due to global climate change and intensification of the water utilization in agriculture are
considered other factors increasing the pressures on the water resources. In Turkey, the land that can
economically be irrigated is 8.5 million hectares.
The irrigated land was extended up to 4.9 million hectares as of January 2005; 762 thousand hectares of
which could not be irrigated adequately. According to IPARD 2007-2013 report, whereas there is no
definite data regarding water consumption per product and for total irrigation, given that the average
consumption is 5000 m3/ha, it is estimated that annual water consumption is roughly 24.5 billion
m3.Konya is on the top of the list with its irrigated lands of more than 400 thousand hectares in Turkey.
Adana and Sanlıurfa follow Konya with their irrigated lands of larger than 200 thousand hectares. Bingol
(67.3%), Igdır (59%), Hatay (53.5%), Osmaniye (51.6%) and Hakkari (50.7%) are on the 31 top of the list
in respect of the rate of irrigated lands in the total agricultural lands (Ministry of Agriculture and Rural
Affairs, 2007).
Modern irrigation systems - particularly drip irrigation and sprinkling - ensure 50% saving and 20%
efficiency increase in agriculture. In Turkey, only 6% of the agricultural land around 8.5 million hectares,
which is able to be irrigated, is irrigated by dripping system.
FARMS TYPES
According to the 2001 census, The average farm size is 6 hectares. Nearly 70 percent of the agricultural
farms have less than 5 hectares of land. The land and livestock owned are also distributed unequally. 2.5
percent of the farmers do not own any land. Small farmers (<5 ha), which constitute 70 percent of the
farmers, own little over 20 percent of the land, less than 45 percent of the sheep and little over 50 percent
of the cattle. The larger farmers (> 20 ha) constitute 5 percent of the farms, own 35 percent of the land,
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17 percent of the sheep and 10 percent of the cattle 5 .
Most of the agricultural production in Turkey originates from the coastal regions, with a certain
importance of the Aegean and Mediterranean regions. Output in these two coastal regions is dominated by
fruit and vegetable production, which corresponds well to the climatic conditions. The proximity of these
regions to the main Turkish towns as well as export markets contributes to a higher share of market
oriented and intensive farms. In the northern and eastern parts of Turkey the importance of livestock
production is quite evident. The relatively low agricultural production potential of eastern regions is
conditioned by the natural conditions such as lower rainfall, lower temperature and higher altitudes. It
also corresponds to the socio-economic conditions in rural areas as expressed by small-scale farming and
subsistence production.
According to the typology classification, farms are mostly specialised on field crop production, 25.7
percent; mix crop and livestock production, 21.8 percent; fruits and vineyard (long life crops), 19.8 .
IMPORT AND EXPORT
According to the classification of operations of the foreign trade, whereas the share of the agricultural
export in the total production is 4.4 – 4.5 billion dollars as of 2009, the share of importation is 3.3% with
4.6 billion dollars. While the rate of the agricultural export to meet the import is fluctuated agricultural
export and import interact in a balanced manner in 2009. When the years 2001 and 2009 are compared, it
is reported that the rate of export of the agricultural products in the total exportation recessed considerably
(from 6.4% down to 4.4%); however, there is no significant change in importation. Annual increase rates
of agricultural import and export are similar. In both items, annual average rate of increase is 1.1% in
2005-2009. On the other hand, when we include in this analysis the food and beverage, tobacco and
tobacco products and animal fats and vegetable oils produced in the production industry, it is noticed that
this second group contributed to the exportation considerably.
Upon examination by the way so, it is reported that the share of agriculture/food industry export in total
exportation was 10.3% and in importation was 3.7% as of 2009. These figures may be enough to maintain
the opinion that Turkey is one of the few self-supporting countries; however, given that Brazil realized
exportation of 72 billion dollars and Poland realized exportation of 16 billion dollars in 2008; it should be
asked whether Turkey could achieve a much more better performance and it should be stated that there
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exists an important unrealized potential in exportation.
Even though both the export and import generate higher sales on annual basis, the increase of the weight
of the other sectors on import and export results in recession (from 12.7% down to 10.3%) of the weight
of the agriculture/food in import and export compared to the year 2000, whereas the weight in import has
no considerable change (from 3.5% up to 3.7%). In 2009, Turkey realized agriculture/food export of 2
dollars value, however realized import of agriculture/food of 1 dollar.
On product basis, Turkey exports hazelnut, dried fig, seedless dried grapes, pistachio, dried apricot,
tobacco, olive oil, cotton, leguminous seeds and fresh vegetables-fruits to many countries particularly
European Union countries, Russian Federation and the FARMUSA. The imported agricultural products
are particularly wheat, corn, rice, oily seeds and cotton. (The Ministry of Agriculture and Rural Affairs,
2005).
SWOT ANALYSIS
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Challenges of Turkish agriculture and support schemes for farmers
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GROUP : 7
SHIPIBUILDING IN TURKEY
Ship building may be a 600 years old tradition in Turkey. the primary workplace
was established in 1390. By the sixteenth century Turkish shipyards were already largest within
the world. Ancient building skills combined with fashionable techniques associate degreed
education has enabled the Turkish shipbuilding business industry to grow to be an internationally
renowned trademark since the first 1990’s Turkish ship and yacht building industry has
fashionable, technological developed and quality certified shipyards beside well older workforce.
In Turkey’s shipyards current ships, Yachts, mega Yachts, and sailing boats area unit being
factory-made. Additionally to those, repair and maintenance services area unit provided for
vessels.
In the beginning, mostly wooden ships and yachts were being manufactured. Later
started the manufacturing of ships/yachts made of sheet iron. With its 600 years of history,
shipbuilding today is in compliance with the international standards, thanks to efforts of the
young entrepreneurs. The beginning objective of the sector was merely to meet the needs of the
Turkish Naval Commerce Fleet. However, having confirmed its technological competency
outside Turkey, and especially to the European countries, today this sector has gained a
considerable export potential.
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SNAPSHOT OF THE TURKISH SHIPPING INDUSTRY
The shipbuilding and repair industry is considered to be one of the most promising
industrial sectors in Turkey, and there have been important developments in recent years. At
present, there are 70 active shipyards in Turkey, while another 56 are reported to be in the
process of being built, although this number may be affected by the reduced demand for
shipbuilding following the 2008 world economic slowdown. The economic slowdown also
affected exports, which peaked at USD 2.7 billion in 2008, but had declined to just over USD 1
billion in 2010.
While Turkish yards have traditionally specialized in yachts and smaller commercial
vessels, in recent years they have significantly increased their capabilities and competitiveness in
the construction of larger ships. As a consequence, there are now yards that are capable of
building a wide range of commercial vessels, such as petroleum and product tankers, heavy
freighters and multipurpose container ships. In addition the yards can produce other niche market
vessels, such as fishing boats, research vessels, tugs, mega yachts, supply vessels and offshore
boats.
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The specialization of the industry is also evident in recent production statistics. Turkish
shipyards are considered to be highly ranked in the world in the production of small tonnage
chemical/oil tankers, and this is certainly supported by the order book held by Turkish yards,
which in January 2011 showed 62 orders for this class of vessel, second only to the 74 orders
held by yards in China. Turkish yards are also quite highly regarded in the production of mega
yachts.
A domestic ship owner is strong supporters of the Turkish shipyards, and for a long time
new building output was largely directed at the domestic market. In some cases, ship owners
own the yards and build vessels for their own fleets, as well as building vessels for other buyers.
This focus is understandable as the Turkish shipyards, in their early stages of
development, specialize in the types of vessels, and the tonnage ranges, that most suit the freight
tasks in the Mediterranean, Black, Marmara and Aegean seas.
“As a consequence, most of the clients of the Turkish shipyards are ship-owners that
operate in these areas, where Turkish and Russian flagged ships are strongly represented in the
merchant shipping trade globally, and are ranked as first (16%) and second (13%) respectively.
In particular, Turkish owned ships account for a 32% share of the associated shipping tasks”.
Connectivity with Railways
The total length of the Turkish railway network is 10,984 kilometers. Majority of the ports are
connected with the railway track and 440 kilometers of these railways are dual tracks with ports.
The share of railways in multimodal transport is only 4%. A few train connections in the larger
suburbs are commercially viable. The government also plans to improve the rail connectivity to
ports. In Istanbul, the Marmaray-project, a railway tunnel under the Bosporus, has been
revitalized.
Turkey has also initiated direct flights between India and Turkey.This steps also encourage
indian investors to establish their business in Turkey also. Investors will have to keep in the mind
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that competitons are so less at this stage,so if they initiate to invest their money in various
business,then there would definitely be rooted in short span of period in coming years
SHIPBUILDING AND THE TURKISH ECONOMY
In 2005, 86% of the foreign trade was carried via water.
There are 185 ports, the most important of which are: Samsun, Haydarpasa (Istanbul), Derince,
Bandirma, Izmir, Mersin and Iskenderun. The ports in Turkey can be divided into three groups:
under management of the government, the municipal council and private ports.
In parallel with experience around the world, the Turkish economy enjoyed an
exceptional period of growth between 2002 and 2007. An abundance of liquidity in the Turkish
financial system encouraged investments, which in turn drove significant economic growth in all
sectors of the economy. However, the latter half of 2007 heralded a very significant and
protracted global recession, from which the global economy is still emerging.
The effects of the decline in shipbuilding activity are quite significant, as this is a sector
that has been identified by the Turkish government as having the potential for considerable
growth, and which makes a very significant contribution to the Turkish economy. According to
figures from the Turkish Shipbuilders Association in 2008 the Turkish shipbuilding industry
contributed around USD 3.7 billion to Turkish exports, while repair and maintenance operations
added around USD 1.5 billion.
While this represents a relatively small proportion of the overall Turkish GDP, its
importance should not be underestimated, because it represents the output of an industry sector
that not only employs a large number of workers, but also contributes to the country’s industrial
capacity and technological know-how. In addition, the growing export performance of the
shipbuilding sector means that it also makes a significant contribution to Turkey’s balance of
payments and foreign currency reserves.
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The role of shipbuilding in a broad economic context was examined as part of a 2007
study that looked at factors that affected the structure of the world shipbuilding industry. That
study looked at how governments perceived their shipbuilding industries, especially given that
most business is fully privatized by their shipbuilding sectors, even though, one way or another,
most governments continue to provide support measures of some kind to shipbuilding.
“The Turkish shipbuilding industry is also helped by massive support from the
Turkish Government, which is making a big effort in defense shipbuilding. It has, for example,
placed an order for six submarines of a new type, and this is likewise intended to boost the
business of Turkish suppliers. It is also having a number of surface defense ships built at Turkish
shipyards. The Under secretariat for Defense Industries is driving these projects forward, and is
now also showing increased commitment to merchant shipbuilding. All of this gives a bright
outlook for the shipbuilding market in Turkey.”
This point is recorded simply here to emphasize the importance of the shipbuilding
sector to the Turkish economy, whether engaged in commercial or naval construction. This point
was also recognized by the Istanbul Trade Fair, where the theme for one of its Conference
sessions was “Our Future - Joint Forces, Defence Shipbuilding and Commercial Shipbuilding”.
Focusing again on commercial shipbuilding, the Under secretariat for Maritime Affairs
of Turkey noted that development plans initiated by the Turkish government over the last four
years, aimed at increasing the capacity and efficiency of the country’s shipyards, have started to
bear significant fruit. UMA noted that the sector has made significant investments over the last
few years to modernize facilities and improving their technological capabilities.
The Turkish government is also taking into consideration the possibility of boosting the
domestic production of basic materials used in ship and yacht building, in order to reduce
dependence on imported components and increase the flexibility and capability of domestic
support industries. Such a symbiotic relationship, if it can be fostered to develop complementary
capabilities, would certainly strengthen the ability of the Turkish shipbuilding sector to compete
effectively on the open market.
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While outside the mainstream commercial shipbuilding activity, leisure yachts have been
a particular niche market that has developed significantly over the last 20 years, and which has
now become a promising activity for Turkey. Turkish yards have recognized the significant
potential market for yachts built to a high standard, and a number of those yards have
reorganized their facilities in order to tap into this potentially very lucrative export market.
A well respected boating magazine recently ranked Turkey in 3rd place in the world, with
respect to orders received for yachts over 25 meters 69 projects. Like naval construction, this
niche activity will also have wider ramifications for the broader shipbuilding sector, especially
with the continuing blurring of construction techniques and materials used for very large yachts
and smaller passenger vehicles such as fast ferries.
OBSTACLES
MAJOR PROBLEMS AFFECTED BY TURKISH SHIPPING INDUSTRY
The Turkish maritime shipping industry has seen better days. Pirates holding Turkish
Ships hostage on the Somali coast and deranged Turkish captains stabbing cooks on abandoned
ships drifting without electricity and food in the Indian Ocean are but some of the trials and
tribulations damaging the Turkish maritime trade sector at present.
There is lack of credit is given by the government in a global crisis pummeling global
trade are arguably more serious challenges and are but some of the issues discussed by
participants at the annual Turkish Shipping Summit 2008, aptly named Turkish Growth at the
Crossroads: Seeking Growth in a Volatile Market
Challenges/Problem of shipping Industry of Turkey
Constantly increasing requirements to address environmental and sustainability issues as
we go about managing the shipment of cargoes around the globe.
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The consequences of significant flexibility of Customs procedure throughout the
European Union.
Facing up to overly complex European countries legislation those impacts negatively on
forwarders' business.
Instability of European countries economic condition which may be leads to business
losses.
The greatest challenge facing the Turkish shipping industry within the current downturn
is that of economic survival.
The reduction in European trade has led to a loss in industry resulting in idle ships or rise
carrying cost for the business.
The Navy needs to be equipped to ensure the safety of the sea lanes on which TURKISH
trade depend due to Somalian problem.
Constantly increasing requirements to address environmental and sustainability issues as
we go about managing the shipment of cargoes around the globe.
The consequences of significant flexibility of Customs procedure throughout the
European Union.
Facing up to overly complex European countries legislation those impacts negatively on
forwarders' business.
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Instability of European countries economic condition which may be leads to business
losses.
The greatest challenge facing the Turkish shipping industry within the current downturn
is that of economic survival.
The reduction in European trade has led to a loss in industry resulting in idle ships or rise
carrying cost for the business.
The Navy needs to be equipped to ensure the safety of the sea lanes on which TURKISH
trade depend due to Somalian problem.
Constantly increasing requirements to address environmental and sustainability issues as
we go about managing the shipment of cargoes around the globe.
The consequences of significant flexibility of Customs procedure throughout the
European Union.
FUTURE ASPECT OF SHIPPING SECOR IN TURKEY
From a general perspective, in recent years the Turkish shipbuilding industry has shown
itself capable of being quite competitive in the world market While in 2002 its share of
world output had dropped to a low point of 0.51%, this gradually reversed as the yards
became more competitive and capable of attracting orders from both domestic and
foreign buyers, so that it share of world output had quadrupled by 2008 to reach 1.83%. It
is a highest record for Turkey. On this basis, there was some justification for the very
optimistic outlook forecast by both the Turkish government which mapped out a very
significant growth by 2013.
On the basis of its 2010 production performance, when Turkey delivered 0.47 Million of
new ships to the world. Its output accounted for 0.90% of the world output for the year
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2010. This made Turkey the eighth largest producer in the world in the year 2010. But
there are some important issues associated with the decline in production in Turkey in
both 2009 and 2010 which may carry future repercussions for the industry in Turkey over
the short to medium term.
With full order books, and a contractual obligation to deliver the new vessels at specific
dates, yards around the world continued production at record levels, even though ship
buyers were frequently struggling to finance the new ships as capital markets around the
world dried up. While some orders were cancelled and the delivery of other orders
postponed, the majority of orders were completed, and continue to be completed.
These market conditions affected shipbuilders in various ways, with some shipbuilding
Economies apparently grasping the opportunity to increase their share of world
production; while others saw outputs fall, virtually in contradiction of the rapidly
growing global production. Turkey’s yards were part of the latter group, and the impact
on them seemed to be greater than shipyards in other parts of the world.
The second issue is that the world’s economic downturn also fostered a significant
structural change in world shipbuilding, as shipbuilding economies with formerly modest
outputs greatly increased their participation in the industry, and appear to have positioned
themselves to make further inroads into the shipbuilding activities of established
shipbuilding economies.
SHIPPING TRADE WITH INDIA & TURKEY
As the financial year draws to an end, the Union shipping ministry has managed to award 14
Public Private Partnership port projects with turkey, which will bring in an additional capacity of
80 million tons per annum at an investment of Rs 5,600 crore & all these things will be taken
coming10years.
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Overall, 26 projects have been awarded bringing in a capacity augmentation 14 projects
have finally been selected by the two countries, which will helpful to India to make stronger
relations with the turkey & on the other side, turkey wants to make distance from Pakistan.
Ultimately, it would helpful to sustain warmness between INDIA & TURKEY. In addition to
this government has also awarded a Rs 785 crore project for development of ship repair facility
at Cochin Port, So it can be helpful to export the goods in turkey within a short span
Time.
Last year, the government could award only three projects which included the Rs 8,000
crore fourth container terminal at Jawaharlal Nehru Port but the project will be up for re-bid in
the next financial year .For the next financial year, the shipping ministry plans to add a capacity
of 250 million tone through public and private investment & On the other side, Turkey has also
supported its flgship companies in shipping industry such as Dentas Denizcilik ve Ticaret,
Aygaz, Gemek Denizcilik, Anadolu Anonim Turk-Istan etc. to expand their business relations
with india.
GROUP : 8
INTRODUCTION OF TOURISM INDUSTRY OF TURKEY
Turkey, a country of nearly 80 million, has been home to countless cultures and empires
over the millennia. Due in large part to its rich past, today Turkey is one of the top ten countries
in terms of tourist arrivals and revenues. According to the Ministry of Culture and Tourism, 28.6
million people visited Turkey in 2010, an increase of nearly 6% over 2009. Its goal is to be
among the top five tourism-driven countries, a big challenge given the priority that tourism is
receiving from governments worldwide. Turkey’s focus on the sector is driven in part by the
significant impact that tourism has on its economy—contributing approximately $22 billion to
GDP in 2010. In fact, tourism is so important that the government provides subsidies to local
authorities to boost their tourism offerings. Over the past year, this support increased eightfold.
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Tourism is one of the largest and fastest growing industries and animportant source of
employment in Turkey as well all other countries. Tourism, in Turkey, has generated 5.2 percent
of Gross Domestic Product and 618.000 jobs and it is also a major producer of government
revenue, accounting for US$ 3.5 billion of taxes in 2001(MOT, 2002). Since the 1980s, tourism
has also been the focus of successive governments’ policies to achieve export-led
industrialization. The Tourism Encouragement Law of 1982, that gave generous incentives to
tourism investment, has resulted in exceptionally rapid growth in tourism in terms of volume,
value, and physical infrastructure (Sahin, 1990). The main policy problem of Turkey, since the
inception of the Republic, was the development of the economy. Tourism, after 1960, is
increasingly being recognized by both governments and the public as the main driver of
economic prosperity and development. Using Anderson’s (1994:5) definition of policy as “a
purposive course of action followed by an actor or set of actors in dealing with a problem”,
tourism policies, in Turkey, as in other developing countries, have rooted in to remedy
macroeconomic problems. The main purpose of the chosen tourism policies, since 1960s, has
been to provide desperately needed foreign exchange and employment. In other words, like
many governments in the developing world, successive Turkish governments, as actors which
define the problem, design, formulate, adopt and implement policies, have seen tourism as a
relatively cheap and easy means of securingforeign currency earning and of creating job
opportunities for an increasingnumber of unemployed people. This is needed simply tofinance
imported investment goods required for industrialization, repayment offoreign debts and interest,
and to give hope to the large number of unemployed young people (Tosun, 1999). Moreover, in
line with new right philosophy and neo-liberal policies of 1980s, Turkey has also accepted
tourism as one of the new “growth sectors” and means of demonstrating the implementation of
the “outward-oriented, export-promotion” growth policy designed and recommended by
international lending agencies such as the International Monetary Fund (IMF) and the World
Bank (WB) (Brohman, 1996:49). That is to say, under pressure from macroeconomic
imperatives, crippling debts, low export potential and the loss of revenue from Turkish workers
living abroad, Turkish government prioritized the development of the tourism industry since the
1980s (TYD, 1992) without the benefits of a proper cost-benefit analysis and without taking into
account the risks associated with international tourism (Tosun& Jenkins, 1996).
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MAJOR ATTRACTIONS
Sailing
Turkey has 8,333 km of coastline to the north, south and west. The sailing industry has grown
over the past 40 years and is popular with residents as well as foreign visitors. The number of
licensed yacht companies has remained stable, at nearly 100, since 1995, offering a bed capacity
of about 6,000. An additional nine foreign sailing companies offer 2,500 beds. A large number of
marinas now dot the coastline between Istanbul and Antalya and more are scheduled for
development. The harbours are well equipped and the most established marinas are easily
accessible from airports at Antalya, Dlanman, Izmir and Istanbul.
Outdoor Recreation, Culture and Heritage
Turkey’s natural and cultural resources offer almost unlimited possibilities for the tourist. Apart
from sailing products, which have been widely developed in recent years, interest is also growing
in scuba diving, mountaineering, skiing and golf, with a view to extending the season and
diversifying the market. The government is particularly keen to develop golf tourism and has
designated ten sites for potential international level courses.
Employment in tourism industry
A total 1.5 million jobs (direct and indirect) are expected to be generated across the broader
spectrum of the Travel & Tourism Economy including:
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• Travel company employment;
• Government agency employment; and
• Supplier company employment
Capital investment in tourism industry
The largest component of capital investment originates from the private sector, which is expected
to invest US$ 3.2 billion in new plant and equipment, while the public sector is expected to
invest US$ 1.0 billion in new Travel & Tourism infrastructure in 2001.
This represents a small loss on year 2000 results, due mainly to the uncertainty of Turkey’s
overall economy this year, and follows a major drawback and recovery in capital investment
(1999/2000) which followed Turkey’s overall economic situation. Over the next ten years (2001-
2010), the average contribution of Travel & Tourism to Turkey’s capital investment account is
expected to grow at a strong rate of 5.3% per year in real terms. The cumulative investment
(2001-2010) is expected to total US$ 15.8 billion (public sector) and US$ 51.1 billion (private
sector)
Tourism statistics
Foreign tourist arrivals increased substantially in Turkey between 2002 and 2005, from 12.8
million to 21.2 million, which made Turkey a top-10 destination in the world for foreign visitors.
2005 revenues were US$17.5 billion which also made Turkey one of the top-10 biggest revenue
owners in the world. In 2011, Turkey ranked as the 6th most popular tourist destination in the
world and 4th in Europe.
Structure, Function, Business Activities
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Turkey as a travel destination offers the traveller culture, art, sports and a good value for the
dollar. It is one of the ten top travel destinations in the world. With such a long coastline along
the sea Turkey offers swimming, boating, water rafting, yachting, hiking, biking, and hot air
ballooning. These are just a few of the many fun activities you will experience when visiting
Turkey.
Explore the many exciting air sports such as paragliding, delta wings, ballooning, and
parachuting. Turkey has approximately 40,000 caves and caverns to explore. For active
explorers the from the Caverns of Antalya to the Caves of Zongulduk there is ample opportunity
in Turkey to explore the interesting geological formations. This sport is known as spelunking.
1. Air Sports in Turkey
The air sports that people participate in are hang gliding, parachuting, plane gliding, and Para
gliding. Para gliding is an exciting sport that was first done in Turkey mostly by university air
sports clubs. Mount Baba, in the territory of Fisheye is near oluDeniz or the Blue Lagoon is a
popular paragliding spot. It takes about forty minutes from the lagoon to get to the mount. It is a
good place for paragliding from April to October. Oludeniz is the original place where Para
gliding was undertaken in turkey.
Camping in Turkey ranges from $3.00 to $10.00 a night for each tent. Some of the camping sites
are rugged, while others are equipped with camping gear for you to use and some of the
campsites also have A-frame bungalows. The price for bungalows is different for each campsite.
A
2. Cruising Blue Seas
If you are interested in romance, history, adventure, or even business, Turkey's blue seas have
everything you could want and more. With the Turkish Lira fetching 1.167 to 1 American dollar
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chartering a yacht is affordable and with the plethora of companies vying for your patronage, it's
also easy!
Comparative Position of Tourism industry with India and Gujarat
INDIAN TOURISM
Domestic tourism is very huge in the country, promoted by various intents. Pilgrim and leisure
tourism are two very important sectors. A lot of scope is available for new businesses to enter
and tap the segment. With the rising economic status of the middle class and affluent population,
outbound travel is on the rise. Though Thailand, Malaysia, and Singapore circuit the most
favored destinations among the tourists, interest for off-track destinations are also increasing.
Foreign tourist arrivals in the country have increased substantially during the past decade
motivated by both, business and leisure needs and are further expected to grow at a CAGR of
around 8% during 2010-2014, as per our new research report “Indian Tourism Industry
Analysis”.
Tourism sector in turkey:
1) Attention turns to Turkey:
The political situation in North African countries, as well as the struggle of EU countries such as
Greece, led tourists to consider Turkey as an alternative destination in the review period.
Turkey’s affordable unit prices (especially for package tours and early reservation), long coastal
line and other natural features made the country a good holiday destination.
2) Tour operators start to focus on domestic tourists
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Discounts for early reservation and low unit prices used to be applied to foreign tourists in
Turkey, and many tour operators neglected domestic tourists. However, after the effects of
economic stagnation in 2009 faded away, many tour operators started strong marketing and
promotional activities to attract domestic tourists in Turkey.
3) Greece becomes a summer holiday destination for Turks
Even though Turkey and Greece are neighbouring countries, it was not until recently that Greece
became a summer holiday destination for Turks. The main reasons were unit prices (Turkish lira-
euro exchange rate), as well as the similar natural environment of both countries. However,
economic stagnation in Greece led the unit prices of package tours to decline
4) Internet transactions are increasingly popular amongst the younger population
Due to increasing internet, computer and Smartphone penetration in Turkey, the younger
population (which accounts for the majority of the total Turkish population) increasingly
preferred online purchases in the review period. In addition, travel retailers such as airline
companies, bus/coach companies, hotels and tour operators started to use social media tools
more effectively for marketing and promotion, and offered more affordable prices when
purchasing online.
5) Recession in EU may affect Turkey
Since EU countries are the main export markets for Turkey, possible economic stagnation in EU
countries could affect the Turkish economy in the short term, which would decrease GDP,
consumer expenditure and consumer confidence in Turkey. During times of crisis, consumers
mainly postpone their holiday plans. A possible economic crisis in the EU and its effect on
Turkey may hamper the growth of tourism over the forecast period. Consumers will look for
affordable options such as package tours and early reservation discounts
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Comparison of Sahara tours and travels from India and “TURKEY
HOLYDAY EXPERTS” of turkey
SHARA TRAVELS AND TOURS:
Sahara Travels & Tours is a travel company based in Mumbai which has excelled in providing
travel related services to outbound, inbound and corporate clients. We specialize in servicing the
corporate sector and can take care of total management. We are an established company that has
an excellent reputation for customer care and professionalism. We are known for going out of
our way to ensure that the travel packages provided by us make for a pleasurable and trouble free
experience.
“TURKEY HOLIDAY EXPERTS”
About turkey holyday experts
Travel for Travelers.
From the East Coast to Eastern turkey and Little Italy to the Italian countryside, Turkey holyday
experts help travelers travel more often.
Turkey holyday experts’ designs tours for Travelers with a capital T: Those people who love to
get out and get away … People who want to see and experience the world. Our goal – a pledge –
to them is to make their favorite pastime an affordable reality.
Choice and Personalization; Inclusion and Value.
Turkey holyday experts: "A complete, orderly and harmonious system." Traveling with Turkey
holyday experts is far easier – and more "harmonious, complete and orderly" than going it alone.
And, best of all, our travelers can personalize their getaway thanks to well-designed itineraries
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that combine "must-see" sights with significant time (40 percent) to explore interests and
passions on their own.
Since inventing the budget vacation more than 40 years ago, Turkey holyday experts has refined
the concept of low-cost travel packages. Today, we offer travelers more than 100 vacation
packages, to nearly every corner of the world, at the best value. And, nine in 10 travelers think
we’re doing worldwide getaways right, saying we’ve met or exceeded their expectations.
Present Position and Trend of Business (import / export) with India / Gujarat
during last 3 to 5 years
1) TRADE OF BUSINESS (EXPORT AND IMPORT) IN TURKEY:-
(A)SHARE OF TOURISM SECTOR IN TOTAL EXPORTS OF TURKEY:-
International tourism, receipts (% of total exports) in Turkey was 15.92 as of 2010. Its highest
value over the past 15 years was 21.73 in 2002, while its lowest value was 11.44 in 1999.
Definition: International tourism receipts are expenditures by international inbound visitors,
including payments to national carriers for international transport. These receipts include any
other prepayment made for goods or services received in the destination country. They also may
include receipts from same-day visitors, except when these are important enough to justify
separate classification. For some countries they do not include receipts for passenger transport
items. Their share in exports is calculated as a ratio to exports of goods and services, which
comprise all transactions between residents of a country and the rest of the world involving a
change of ownership from residents to nonresidents of general merchandise, goods sent for
processing and repairs, nonmonetary gold, and services.
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(B)SHARE OF TOURISM SECTOR IN TOTAL IMPORTS OF TURKEY:-
International tourism, expenditures (% of total imports) in Turkey was 2.77 as of 2010. Its
highest value over the past 15 years was 3.93 in 2001, while its lowest value was 1.98 in 2008.
Definition: International tourism expenditures are expenditures of international outbound visitors
in other countries, including payments to foreign carriers for international transport. These
expenditures may include those by residents traveling abroad as same-day visitors, except in
cases where these are important enough to justify separate classification. For some countries they
do not include expenditures for passenger transport items. Their share in imports is calculated as
a ratio to imports of goods and services, which comprise all transactions between residents of a
country and the rest of the world involving a change of ownership from nonresidents to residents
of general merchandise, goods sent for processing and repairs, nonmonetary gold, and services.
CONTRIBUTION OF TOURISM SECTOR IN TOTAL GDP OF TURKEY:-
DIRECT CONTRIBUTION:-
The direct contribution of Travel & Tourism to GDP reflects the ‘internal’ spending on Travel &
Tourism (total spending within a particular country on Travel & Tourism by residents and non-
residents for business and leisure purposes) as well as government 'individual' spending -
spending by government on Travel & Tourism services directly linked to visitors, such as
cultural (eg. museums) or recreational (eg. national parks).
TOTAL CONTRIBUTION:-
The total contribution of Travel & Tourism includes its ‘wider impacts’ (ie the indirect and
induced impacts) on the economy.
The ‘indirect’ contribution includes the GDP and jobs supported by:
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Travel & Tourism investment spending – an important aspect of both current and future activity
that includes investment activity such as the purchase of new aircraft and construction of new
hotels; Government 'collective' spending, which helps Travel & Tourism activity in many
different ways as it is made on behalf of the ‘community at large’ – eg tourism marketing and
promotion, aviation, administration, security services, resort area security services, resort area
sanitation services, etc.
CONTRIBUTION OF TOURISM SECTOR IN TOTAL GDP
The economic contribution of Travel & Tourism: Nominal prices
TURKEY
TRY bn ,nominal prices 2006 2007 2008 2009 2010 2011 2012E
1) Visitor exports 26.3 26.7 32.2 37.7 36.8 46.2 48.4
2)domestic Expenditure 30.6 35.2 37.7 38.6 44 52.2 58.5
3)Internal tourism consumption
(=1+2+individual spending) 57 62 70 76.4 80.9 98.5 107
4) Purchase by tourism providers
including imported goods ( supply chain) -25.4 -27.6 -31.5 -33.6 -36.1 -45.2 -49.3
5) Direct contribution of travel and
tourism to GDP
(3+4)
31.6 34.4 38.6 42.8 44.8 55.1 59.7
6) other final impacts( indirect and
induced)
22.8 24.8 27.9 31 32.4 39.8 43.1
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Domestic supply chain
7) capital investment 13.5 10.9 14.6 17.2 19.4 23.9 26.7
8) government collective spending 0.5 0.6 0.6 0.7 0.8 0.9 0.9
9) imported goods from indirect
spending -3.7 -2.5 -3.6 -2.5 -4.2 -6.1 -7
10) induced 16.7 17.6 20 23.6 24.3 28.2 30.4
11)Total contribution of travel and
tourism to GDP 81.4 85.8 98 112.8 117.4 141.8 154
12)employment impacts (‘000)
Direct contribution of travel and tourism
to employment
495.4 441.4 461.1 458.7 472.5 509.6 532.2
13) Total contribution of
Travel and tourism to employment 1716 1714 1759 1862 1840 1939 2004
14) other indicators (expenditure on
outbound travel ) 4.3 4.6 5 6.6 7.1 7.9 8.5
Trade barriers between India and turkey in tourism sector
1) Import Licensing:
One of the most common non-tariff barriers is the prohibition or restrictions on imports
maintained through import licensing requirements. Though India has eliminated its import
licensing requirements for most consumer goods, certain products face licensing related trade
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barriers. For example, the Indian government requires a special import license for motorcycles
and vehicles that is very restrictive
1) Standards, testing, labeling & certification:
The Indian government has identified 109 commodities that must be certified by its National
Standards body, the Bureau of Indian Standards (BIS). The idea behind these certifications is to
ensure the quality of goods seeking access into the market, but many countries use them as
protectionist measures.
1) Anti-dumping and countervailing measures:
Anti-dumping and countervailing measures are permitted by the WTO Agreements in specified
situations to protect the domestic industry from serious injury arising from dumped or subsidized
imports. India imposes these from time-to-time to protect domestic manufacturers from
dumping. India's implementation of its antidumping policy has, in some cases, raised concerns
regarding transparency and due process.
1) Export subsidies and domestic support:
Several export subsidies and other domestic support is provided to several industries to make
them competitive internationally. Export earnings are exempt from taxes and exporters are not
subject to local manufacturing tax. While export subsidies tend to displace exports from other
countries into third country markets, the domestic support acts as a direct barrier against access
to the domestic market.
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2) Procurement:
The Indian government allows a price preference for local suppliers in government contracts and
generally discriminates against foreign suppliers. In international purchases and International
Competitive Bids (ICB's) domestic companies gets a price preference in government contract
and purchases.
3) Service barriers:
Services in which there are restrictions include: insurance, banking, securities, motion pictures,
accounting, construction, architecture and engineering, retailing, legal services, express delivery
services and telecommunication.
7) Other barriers:
Equity restrictions and other trade-related investment measures are in place to give an unfair
advantage to domestic companies. The GOI continues to limit or prohibit FDI in sensitive sectors
such as retail trade and agriculture. Additionally there is an unpublished policy that favors
counter trade. Several Indian companies, both government-owned and private, conduct a small
amount of counter trade.
(a) IMPORT POLICIES
Tariffs and Quantitative Restrictions
Turkey applies the EU’s common external customs tariff to third-country nonagricultural imports
(including from the United States) and does not impose duties on nonagricultural items from EU
andEuropean Free Trade Association (EFTA) countries. Turkey continues to maintain high tariff
rates on many food and agricultural product imports. Tariffs on fresh fruits range from 15.4
percent to 145.8 percent. Tariffs on processed fruit, fruit juice, and vegetables range between
19.5 percent and 130 percent.
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Import Licenses and Other Restrictions
Import licenses are required for products that need after-sales service (e.g., photocopiers,
advanced data processing equipment, and diesel generators), distilled spirits, and agricultural
products. U.S. firms complain that lack of transparency in Turkey’s import licensing system
results in costly delays, demurrage charges, and other uncertainties that inhibit trade. U.S.
FOREIGN TRADE BARRIERS
WTO’s rulings and recommendations expired at the end of April 2008. Turkish authorities have
taken no recent actions to impede rice imports, and rice exports in 2010 reached record levels.
The Turkish government has taken a number of steps to liberalize the spirits and tobacco markets
including completing the privatization of the state-owned alcoholic beverage company and the
state owned tobacco company, as well as some opening to private firms of the ability to import
wine and alcoholic beverages.
(B) SERVICES BARRIERS
Telecommunications Services
The Telecommunications Authority (TK) is responsible for enforcing bans on Internet content
that the courts have determined to be offensive. This has on many occasions led to TK blocking
access for all consumers to various Internet-based service providers, such as the weblog hosting
site www.wordpress.com, social networking sites like MySpace, and the video-sharing website
YouTube.
Other Services Barriers
There are some restrictions on establishment in the financial services, legal services,
broadcasting, and petroleum sectors. Turkish citizenship is required to practice as an accountant
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or certified public accountant, or to represent clients in Turkish courts. Legislation awaiting final
approval by Parliament would permit foreign doctors to work in Turkey.
(c) INVESTMENT BARRIERS
Energy Sector
Turkish law calls for a liberalized energy market in which private firms are able to develop
projects with a license obtained from the Energy Market Regulatory Authority, an independent
regulatory body. The state electricity utility has been unbundled into power generation,
transmission, distribution, and trading companies. As of December 2010, ten of the 21 regional
distribution companies have been fully transferred to the private sector, eight have been tendered
are in the process of being transferred, and threeare in the tender process. The government plans
to finalize privatization of all distribution regions and start privatization of the generation
facilities in 2011. Liberalization in the natural gas sector has also faced delays. The state pipeline
company, BOTAS, remains dominant in gas importation, despite legislation requiring a phased
transfer of 80 percent of its gas purchase contracts to the private sector by the end of 2009.
Except for a small scale contract transfer tender in 2005, BOTAS has failed to reach its targets
and still has an 86 percent share in the gas market.
Work Permits:
Many foreign (and reportedly many Turkish) employers perceive the difficulty in obtaining
Turkish work permits for professional or highly skilled foreign workers as a pervasive problem.
Companies complainthat the application process is time-consuming and requires extensive
documentation, the adjudicationprocess is lengthy (often exceeding the time for which the permit
is requested), and the chances ofapproval are low.
Corruption:
Turkey is a party to the OECD anti-bribery convention and passed implementing legislation that
makes bribery of foreign officials illegal and no longer tax-deductible. Turkey is also a State
Party to the United Nations Convention Against Corruption, which requires State Parties to
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criminalize domestic and foreign bribery and other corruption offenses as well. Despite this,
many foreign firms doing business in Turkey perceive corruption to be a problem.
Taxes
Turkey assesses a special consumption tax between 27 and 50 percent on all motor vehicles
based on engine size, which has a disproportionate adverse effect on automobiles imported from
the United States.
Pharmaceuticals:
The pharmaceutical industry reports that its sales have been severely affected by government
price controls and an awkward, burdensome reimbursement system. In 2008, Turkey
implemented changes in its reimbursement scheme that increased the cost borne by
pharmaceutical manufacturers. In September 2009, faced with a growing health care budget
deficit, the Turkish government decreed additional mandatory discounts totaling over $2.3
billion. A large majority of the burden of these discounts fall on foreign manufacturers of
pharmaceuticals. In December 2009, the government and pharmaceutical industry agreed on a
compromise pricing deal that will require U.S. firms to provide extra discounts of approximately
$800 million per year.
GROUP:9
TELECOMMUNICATION INDUSTRY OVERVIEW
The telecommunications business of Turkey, with a history of 170 years constitutes one
of the central systems of the planet. Sultan Abdulmecit laid the fundamentals of today's
present day telecommunications foundation in Turkey under the name "Postahane-I
Amirane".
On October 23, 1840.0 ITU the most elevated standardisation power of the states in the
field of telecommunications on the planet, has more than 700 parts from 191 nations, the
imperativeness of an establishing part could be grasped effectively.
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First and foremost regulations of the telecommunications business were made after the
statement of the Republic, with the Telegram and Telephone Law issued in 1924.
So as to empower an autonomous power to manage the telecommunications business
halfway, a further change was made and presented in the radio law on April 5, 1983, with
the goal that the Telecommunications Authority was built and started.
A further law was issued on November 10, 2008 with the end goal of gathering essential
regulations identified with the electronic correspondence industry to guarantee the
consistence with the regulations of the EU under a specific law.
Consistent with this law, the approvals and obligations of the Telecommunications
Industry were improved and the name of the conglomeration was modified to Information
and Communication Technologies Authority.
While dissecting the foundations in the telecommunications base of Turkey sequentially,
first telegram was sent on August 9, 1847 the first phone line was laid in July 1881 and
the first trade with 50 lines was introduced on May 3, 1909.
Turkey began its multi-line universal telecommunications fixes given over the undersea
coaxial link laid between Antalya and Catania started on April 6, 1976, and its satellite
correspondence by utilizing the base station giving the conveyance the satellite
INTELSAT on April 23, 1979.
On December 18, 1984, the first computerized phone trade was utilized as a part of
Ankara to supplant previous trades with transfers, with those trades, which were simpler
to fix, had less foot shaped impression and higher limit.
After a short period, in 1989, the Package Switching Data Network was started, with the
goal that a different foundation was laid for the industry identified with the advanced
information transmission.
On December 21, 1990, Turkey finished up a concurrence with France for the handling of
its national satellite, Turksat. On August 11, 1994, Turksat 1A was started and put into
space.
On March 27, 1991, only 3 years after the first business and standard computerized cell
telephone dialogue over the GSM engineering utilized within Finland, Turkey started its
GSM framework on February 23, 1994.
Liberalization in the Turkish Telecommunications Industry
Turkey's telecommunications systems and aids were improved and offered straight by the
national government through Posts, Telegraph and Telephone which was a state imposing
business model made dependent upon the contention that the area was a characteristic
imposing business model.
This administration proceeded until 1995 and the "Telegraph and Telephone Law 406" of
21 February 1924 had as far back as anyone can remember gave lawful groundwork to it.
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Major administrative and structural updates at the worldwide level, around others those
of the European nations, towards the liberalisation of telecommunications business
sectors influenced Turkey also.
In Turkey, a major structural change to liberalisation began with authorization of Law
4000 in June 1994 to strip telecommunications fixes from the straight inclusion of the
legislature by creating Turkish Telecommunications Inc. as a state budgetary venture.
With this law, it was made plausible to privatise 49% of the association.
In the meantime the versatile telecommunications business was opened to constrained
rivalry when the two portable specialists of GSM 900 began business under income
imparting assertions to Turk Telecom
Additionally, Internet utility suppliers began to seem under aid contracts with Turk
Telekom.
Further steps towards liberalisation were taken by altering certain parts of Law 40007 to
liberalise part of the business of worth included telecommunications fixes.
The change this time presented a licence arrangement of such aids incorporating versatile
phone aids.
The power to issue the licences was endowed to the Ministry of Transport yet it could do
so just upon the proposal of Turk Telekom. Under this framework, the two GSM 900
specialists were allowed a licence with a 25-year term in 1998.
The following colossal change went in January 2000 with the authorization of an altering
law called Law 45028, which disconnected arrangement making and administrative
capacities of the legislature by making a free telecommunications administrative figure,
the Telecommunications Authority, as the first division particular controller in Turkey.
Thus, administrative capacities of the Ministry of Transport were exchanged to the
Authority in guideline, and the General Directorate of Radio conveyance, an
administration figure accountable for radio recurrence administration under the Wireless
Law was annulled and all of its capacities were exchanged to the Telecommunications
Authority.
Moreover, the new correction discharged Turk Telekom further from the state control by
updating its status as state venture and agreeing it with freedom ready to go operations.
This change of Turk Telekom's status was settled on together with a choice to end its
imposing business model in settled voice telephony four years after the fact and to let the
association get ready for rivalry thereafter.
This revision law of January 2000 additionally indicated liberalisation of
telecommunications utilities outside the extent of Turk Telekom's restraining
infrastructure under a licence framework by the Ministry of Transport.
A further improvement went in May 2001 with an additional altering law 11,
substantially therefore of force from the International Monetary Fund who had
incorporated quickened and finish privatisation of Turk Telekom in its preconditions for
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discharging its suspended money related support, having confronted two unsuccessful
endeavors to pitch Turk Telekom's offers to global key accomplices.
An additional change identified with the privatisation of Turk Telekom.
This new law 4673 permitted 100% privatisation of the association with the exception of
a purported "brilliant impart" saved for the legislature to address security and open
investment concerns.
The point of the brilliant impart is to give the State to privileges of approbation in the
choice making of the Board so as to ensure national investment concerning the economy
and security.
It too incorporates a voting right and a regard right on imperative choice making of Turk
Telekom, for example altering the articles of affiliation, station of new associations,
being a gathering to worldwide assentions, and exchange of certain imparts, from the
viewpoint of securing national investment.
The Under secretariat of Treasury, which is a part of the Board of Directors of Turk
Telekom wields the resplendent allotment.
Innovation in the telecommunication industry of turkey
Increasing competition in telecommunications market has resulted in lower prices,
diffusion of telecommunications services, greater variety of services and speedier
innovation processes.
In other words, increasing competition forced telecommunications operators to innovate
in order to provide more developed and differentiated services to consumers.
According to Henten innovations in telecommunications have been made in products,
processes, billing and marketing and it is possible to differentiate between network and
service innovation in the telecommunications industry.
Innovations in the telecommunications industry have increased the importance of flexible
IP-based technologies, because IP-based technologies stimulate innovation by reducing
the cost and increasing the flexibility of making innovations.
As a result, competition opportunities may increase in IP-based environments. With the
development of low-cost IP-based technologies, traditional circuit switched
telecommunications networks are being replaced by next generation packet switched and
flexible networks which substantially decrease communication costs.
NGN are multi-service communication platforms over which audio, video, TV and data
services can be provided to consumers. In addition, NGN allows innovations at the non
consumer service and infrastructure levels.
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NGN decreases the costs of current telecommunications services as well as making
provision of new services which are not available on PSTN networks and public Internet
possible.
Service innovation is facilitated because NGN has a more flexible architecture compared
with that of circuit switched networks like Public Switched Telephone Network.
Advantages of NGN, such as low communication costs and flexible architecture, make its
rapid and effective deployment or implementation important for telecommunications
operators and for regulatory authorities.
Such IP-based networks are being deployed in core and access networks and have
technical, economic and regulatory dimensions.
Since the NGN has different properties than that of traditional networks, it seems
essential to reconsider telecommunications regulations, competition and innovation in the
context of NGN deployment.
Competition in telecommunications market is crucial for increasing consumer satisfaction
and for promoting innovations.
Telecommunications technologies are rapidly evolving and this evolution results in new
opportunities for competition.
Hence, competition models in telecommunications market and in new competition
concepts for the NGN environment will be addressed in this dissertation.
Facility Based Competition and Service Based Competition will be considered within the
scope of NGN deployment in Turkey.
In order to identify best competition model for an NGN environment in Turkey, current
competitiveness of the Turkish fixed voice market will be studied.
With the increasing importance of IP-based technologies and flexible NGN networks,
telecommunications operators are investing in IP-based technologies.
In this respect, IP-based services provided by telecommunications operators can be
considered as an intermediate step between traditional networks and NGN. In this
chapter, technical differences between current networks and NGN networks will be
introduced concisely in order to understand which architectural and functional differences
necessitate the changes in interconnection charging methods.
Second, the implications of the moves towards NGN and the innovations, which drive the
change towards NGN, will be introduced.
Finally, current innovations in telecommunications in Turkey will be identified and their
viability in the near and longer term future in Turkey will be examined based on
interview results.
With the increasing use of IP-based networks for voice communications, alternative
operators are also using IP-based networks for providing voice services.
In such cases, any call originated or terminated at the incumbent’s network can be carried
over IP-based networks for decreasing transmission costs.
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Similarly, alternative operators can offer point to point IP-based voice communications to
their customers.
In other words, while competition opportunities of the current alternative operators are
generally restricted by the capabilities of the incumbents‟ network, IP-based networks
and services can be used by alternative operators to differentiate their services and to
decrease communication costs.
The Current Status of Telecommunications Deployment in Turkey
Taking a snapshot of where Turkey stands as of mid-2005 in deploying telecommunications
technology is hampered by the lack of timely data, an accelerating program of regulatory
liberalization, and substantial uncertainties regarding the privatization of the incumbent
monopoly fixed line carrier, Turk Telekom. However, based on a review of the available data
and a series of interviews and discussions with industry participants, customers, and regulators,
the following tentative conclusions have been drawn:
1. The basic physical framework for the principal competing infrastructure “pipelines” is present,
although not fully developed, especially in terms of its ability to deliver broadband services.
Infrastructure in the eastern part of the country is of uneven type. Satellite-based services are
available. Cable companies operate in the principal cities of the country. While personal
computer penetration is low, an increasing percentage of mobile phones have some internet
access.
2. At present, the development and deployment of new services and additional infrastructure is
being severely hampered by lengthy regulatory delays, difficulties associated with the policies of
TTK and issues arising out of its privatization and loss of monopoly over fixed line telephony.
3. Despite, the liberalization program has attracted some new entrepreneurial investment and
management into the telecommunication sector. More is probable if uncertainties regarding the
regulatory regime and TTK’s privatization are promptly resolved.
4. The advent of limited competition in Turkey has helped to reduce the cost of many
telecommunications services, although they still remain high compared to most other OECD
countries. This is particularly the case when taxes on the sector and its customers are factored in.
5. A problem that affects most economic sectors in Turkey, but which has particular relevance
for telecommunications, is an investment climate that 6 poses special hurdles for “outsiders” –
large or small, domestic or foreign. Such hurdles include the lack of a well-functioning capital
market, a banking system with limited expertise in working with technologically-oriented firms,
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and a relatively opaque regulatory process that tends to favour existing enterprises, particularly if
they are part of a major family-controlled holding company.
Mobile Operators in Turkey
1. Turkcell
GSM-based mobile communication started in Turkey when Turkcell started its operations in
February 1994. Turkcell signed a 25-year GSM license contract on April 27, 1998 with the
Ministry of Transportation of Turkey. As of December 31, 2010, Turkcell has made 9.1 billion
US dollars worth of investment (including 2G and 3G licenses) in Turkey. Again as of December
31, 2010, with its 33.5 million subscribers (54.19% market share), Turkcell is not only the
leading operator in Turkey, but is also the third biggest GSM operator in Europe in terms of
subscriber numbers.
As of December 31, 2010, Turkcell has covered 86.97% of the entire geography of Turkey which
amounts to 99.07% of entire Turkey population; it covers 100% of the settlements with a
population 1000 or more. Turkcell has the best and widest service quality with 24.250 base
stations throughout Turkey.
Turkcell’s vision is “To ease and enrich the lives of our customers with communication and
technology solutions.”
2. Vodafone
Telsim started its operation in 1994 in order to provide services in GSM industry. Telsim signed
a 25-year GSM license contract on April 27, 1998 with the Ministry of Transportation of Turkey.
Telsim has been the number two mobile operator and the only alternative to Turkcell until 2000.
It has reached a maximum market share of 31.5 percent in 1998. However, it was seized by the
Savings Deposit Insurance Fund in February 2004 and it was put up for sale in August 2005, and
an auction was held for Telsim on December 13, 2005 with Vodafone submitting the winning bid
of $4.55 billion.The sale process was 21 completed on May 24, 2006 and Telsim joined to
Vodafone Group as Vodafone Telekomunikasyon.
Vodafone is the first GSM operator in England and made the first mobile call on 1 January 1985.
Vodafone Group has a significant role in Europe, in USA and in Far East with its subsidiaries,
partners and investments ad world’s greatest mobile communications company. As of December
31, 2010, with its 16.68 million subscribers (27.01% market share) Vodafone is the second
biggest mobile operator in Turkey. Vodafone Turkey made 2.1 billion TL investments to the
technological infrastructure within last 2 years. The total investment since the acquisition of
Telsim has reached a total of 10.2 billion TL with 17.400 base stations throughout Turkey.
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TT&TİM was officially established in February 19th, 2004 as a consequence of the merger
between Aycell, Türk Telekom's GSM Operator and İş-TİM which has been established through
the partnership of İş Bankası Group with a share of 51% and TİM with a share of 49%.
Following the merger, for a period Aria and Aycell brands existed under TT&TİM. A totally
new brand "Avea", reflecting the synergy from the merger was introduced into the market on
June 23rd, 2004. The business name "TT&TİM İletişim Hizmetleri A.Ş" was replaced with
"Avea İletişim Hizmetleri A.Ş." as of October 15th, 2004.
3. Avea
Avea is the youngest operator of Turkey and has a nationwide customer base of 11.62 million as
of December 2010. Avea is the third number mobile operator with a market share of 18.8% and
it is competing with Vodafone for the second place. Avea is offering services to 96.61% of
Turkey's population through its next generation network with more than 2,700 employees. 67%
of the Avea‟s customers are also 3G mobile subscriber. This means that Avea has a potential to
increase its ARPU by delivering value added services via 3G technology.
License Requirements In Turkish Telecommunications Market
Turkey telecommunication services had been conducted by the Government. However in
2005 the provision of these services was privatized which brought chance for the other actors to
enter into the telecommunications market for the provision of services forming part of the
telecommunication market. However, Turkish Telecommunications Incorporation which was
found after the privatization of the market, is still the sole actor of the market in relation to the
land line services. The Article 47 of the Constitution provides that the State sets which public
services are to be provided by private sector by enacting relevant Codes. In this respect the main
legislation regarding telecommunication services to be provided in Turkey is The Telegraph and
Telephone Law no. 406 (hereinafter it refers to "The Law No:406) per the provision of Article 47
of the Constitution. According to Law no. 406 the operation of telecommunication services and
foundation of the telecommunication infrastructure are subjected to Law no.406.
As per the law no. 406 which provides general principles of the telecommunication services,
trading in Turkish telecommunications market is regulated mainly by "Authorization Regulation
on Telecommunications Services and Infrastructure" based on "The Law no. 406". The article 6
of the Authorization Regulation provides that the installation and operation of a
telecommunication infrastructure is subject to obtaining a license from the Telecommunications
Authority. The type of the license to be issued by the Telecommunications Authority depends on
the activity to be conducted in the market. In this respect, there are four types of permissions
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provided under the Authorization Regulation namely: "Authorization Agreement", "Concession
Agreement", "Telecommunication License" and "General Authorization".
Authorization Agreement means the agreement to be concluded by and between the Turkish
Telecommunications Incorporation and the Telecommunications Authority with a view to
regulating any rights, entitlements and obligations relevant to provision of all kinds of
telecommunications services, including value-added services and operation of
telecommunications infrastructure, as valid for a certain period of time to be justified by the
Authority with regard to the current circumstances.
Concession Agreement means the agreement to be concluded by and between the Authority
and the operator for provision of the telecommunications services and/or operation of
telecommunications infrastructure laid down in the concession agreement. Telecommunications
services to be provided and/or telecommunications infrastructures to be built up or operated by a
limited number of operators on a national level are governed under a concession agreement to be
signed with the Authority. The important thing which has to be paid attention is that according to
Telecommunication Authority's decisions if there is a concession agreement between the
Telecommunication Authority and the operator, after the termination of the agreement for any
reason, the operator should assign the facility to the Telecommunication Authority or a company
which is indicated by the Authority.
Telecommunication License differs in two types. If the services or the infrastructures are built
up or operated by a limited number of operators on a regional or local level then the 1st Type
Telecommunication License is to be granted. However if these services or infrastructures are the
ones which need not be executed by a limited number of operators and falling under the Article
18 of the The Telegraph and Telephone Law no. 406 then the 2nd Type of Telecommunication
License is required. These are the services such as mobile telephone, pager, data network, cable
TV as counted in the Article 18 of the law.
General authorization means the overall regulatory procedure that authorizes operators,
through the agency of the Authority, for provision of a certain telecommunications service,
subject to general stipulations and a registration requirement at the Authority.
Telecommunications services and/or telecommunications infrastructures to be built up and
operated, which need not be executed by a limited number of operators and do not fall under
Article 18 of the Telegraph and Telephone Law no. 406 are performed via registration under
General authorization at the Authority.
When the Telecommunication Authority agrees to grant a license to one of the applicants, it
issues a decision and publishes the decision on its website. Hence the telecommunication market
is provided to be transparent and every actor may have the sufficient tools to monitor the other
players of the market. The Telecommunication Authority also announces the companies which
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leave the market. Due to this strict regulation of the Telecommunication Authority which is open
to the audit of the interested parties, Turkish Telecommunication market despite having rather a
short history after the privatization, it is one of well functioning areas of Turkish economy
Common player of India and Turkey
Vodafone is the only company which is common between India and Turkey.
Telsim is the previous brand name of Vodafone group in Turkey. On 26th
May 2006
telsim changed its name.
Vodafone and turkey merged because to provide better service to the customers. Turkish
people are very conscious about the services.
In the beginning of the contract Vodafone was not performing better than Turkcell they
were not satisfying the need of customers.
But now it is the second largest company of turkey with 18.352 million users as on 30th
June 2012. Turkey is the fastest growing country for Vodafone as compare to the other
countries.
Vodafone is on the second position both the countries. In turkey the it is planning to
increase their market share and compete turkcell and avea in Turkish market.
Growth of Vodafone in Turkey and India
Vodafone reported solid fiscal 2011 results. Revenue has increased 3.2% from the year
2010 ahead of the 2.4% we expected thanks to acquisitions and currency movements.
Service revenue on a comparable basis increased 2.1%. The Africa, Middle East, and
Asia Pacific region provided the majority of the firm's growth, with sales improving
11.8%. The two major businesses in the region, India and Vodacom, increased revenue
16.2% and 5.8%, respectively.
Vodafone's Indian subscriber base continued to show strong growth, jumping 39% during
the year to 136.9 million, but average revenue per user declined as many of these new
customers have lower incomes and use their phones less.
Vodafone's strongest revenue growth by country was in Turkey, in the firm's European
division. The Turkish unit's revenue jumped 28.9% year over year, continuing the strong
rebound that has followed a rebranding and significant network upgrade.
Operations in much of the rest of Europe struggled because of mobile termination rate
cuts, increased competition and weak economies in peripheral countries.
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As a result of higher government interest rates and lower cash flows, Vodafone wrote
down the value of its stakes in Spain, Italy, Ireland, Greece, and Portugal by a total of
£6.15 billion.
Vodafone also increased its dividend 7.1%, in line with its goal of increasing dividends at
least 7% annually through fiscal 2013. With the asset sales Vodafone has completed and
the stock it is buying back, we think the firm will be able to continue to increase its
dividend.
Growth prospectus of Turkish telecommunication industry
Turkish growth will be determined by the following factors
With the increase in the technology and the competition in the market there is rapid
growth in the telecommunication industry of turkey.
The service providers focuses on the quality of the service than the charges of providing
that service.
Turkey is one of Europe's quickest developing economies, and has a generally sound
foundation.
Among the major players in the industry turkcell has the better growth opportunities than
other players.
Turkcell have more representative with the help of those they can satisfy their customer
better than other company.
They nearly have 23 million prepaid and 11.7 million postpaid subscriber with them.
By offering the promotional offers they can increase their market in turkey.
Vodafone also have the better growth opportunities as they are present in the different
countries, by changing their strategies to serve customer they can also become the king of
the market.
The subscribers for 3G services will increase in the near future as the companies are
reducing their charges.
Avea is planning to launch PTT cell in May 2013 to provide the customers prepaid
services by providing them services at low charges.
Vodafone is predicted to increase its share from 25.2% to 28.9% in 2013, with Avea
going from 19.1% to 24.5%.
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GROUP:10
Aviation Industry Overview
General aviation include all non-scheduled civil flying, both of them commercial and
private.
General aviation may include business private aviation, flight training, flights, air
charter, gliding , charter flights and forest fire fighting , ballooning, hang gliding,
parachuting, crop dusting, air ambulance, foot-launched powered hang gliders, traffic
reporting, police air patrols, aerial photography.
Each and every country regulate aviation in a different way, but general aviation
generally falls under different system depending up on whether it is commercial or
private and on the which type of tools occupied.
Several small aircraft manufacturer provide general aviation market, with a focal point on
flight training and private aviation.
The most significant new development for small aircraft (which form the bulk of the GA
fleet) have been the beginning of advanced avionics (counting GPS) found only in large
airliners and the introduction of composite material to make small aircraft faster and
lighter.
Ultralight and homebuilt aircraft have become more and more popular for entertaining
use, since in most of countries that allow private aviation, they are very much less costly
and less heavily synchronized than certified aircraft.
The largest aircraft to be built,up to date, is the Antonov An-225. This aircraft come from
the Ukraine, and it was built back in the 1980's. This aircraft include 6 engines, mounted
on the wing. wingspan is 88 metres {290 inches} and 84 metres long {276 inches}.
Types of Aviation
Civil aviation
General aviation
Ballooning
Soaring
Private aviation
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Military aviation
helicopter
GROWTH OF GLOBAL AIRLINE INDUSTRY
Lucintel, a top global management consulting and market research firm, has analyze the
global airline industry and presents its conclusion in ‘Global Airline Industry 2013-2020:
Forecast Analysis, Trend, and Profit.’
As per the lucintel’s report enlargement of global airline industry income is predictable
to reach 832.8 billion $ in 2020.
The global airlines industry experienced very high increase during the past 5 years and is
expected to achieve an estimated of 832.8 billion $ in 2020 with a CAGR of 3.7 percent
over the next 7 years (2013-2020).
Rising demand from promising economies, constant demand for new low-cost carrier,
deregulation and increasing middle class are factor motivating increase in markets like
Middle East and Asia.
Asian development is motivated by rising per capita GDP in promising economies such
as India ,China, and countries in the Middle East such as Saudi Arabia and UAE.
Government policy, irregular oil prices, increasing security concerns, and constant
expansion in high-speed trains in a lot of countries are some of the challenge ahead of the
industry.
The information consists of two segment: Cargo and Passenger for 4 regions; thus, it
track 8 segment This details provides 5 year tendency and forecast study with
development opportunity in the 4 regions.
TURKISH AVIATION OVERVIEW
Since 1983 Turkish civil aviation sector has progress at a rapid pace. Privatization,
attached with globalization and economic development in Turkey, have direct to a
considerable growth in country’s aviation sector.
In end of 2009, the total flight traffic in Turkey was more than 1.1 mn (millions) and total
passenger traffic was 85.5 mn (million). This translate into compound annual growth rate
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(CAGR) of 10.94percent for flight traffic and 14.16percent for passenger traffic over the
last 7 years.
Government own Turkish Airlines is still the top carrier in Turkish skies with a market
share of 64percent of both domestic and international traffic.
Other players in the sector contain Pegasus, Sun Express, Onur Air and Atlasjet. Ministry
of Transportation manage the air transport sector through the Directorate General of Civil
Aviation {DGCA} and Directorate General of State Airports Administration {DHMI}.
Aviation’s economic footprint
Contribution to Turkish GDP
The aviation sector contributes TL 10.4 billion (1.1%) to Turkish GDP. This total
comprises:
TL 4.9 billion directly contributed through the output of the aviation sector (airlines,
airports and ground services);
TL 3.7 billion indirectly contributed through the aviation sector’s supply chain; and
TL 1.7 billion contributed through the spending by the employees of the aviation
sector and its supply chain.
In addition there are TL 31.6 billion in ‘catalytic’ benefits through tourism.
Major employer
The aviation sector supports 204,000 jobs in Turkey. This total comprises:
83,000 jobs indirectly supported through the aviation sector’s supply chain; and
38,000 jobs supported through the spending by the employees of the aviation sector
and its supply chain.
In addition there are a further 566,000 people employed through the catalytic
(tourism) effects of aviation.
Indian Aviation Industry Evolution
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Exhibit 1: Industry Evolution
Year
Major Milestones
1953 Nine Airlines existed including Indian Airlines & Air
India
1953 Nationalization of all private airlines through Air
Corporations Act;
1986 Private players permitted to operate as air taxi
operators
1994 Air Corporation act repealed; Private players can
operate schedule services
1995 Jet, Sahara, Modiluft, Damania, East West granted
scheduled carrier status
1997 4 out of 6 operators shut down; Jet & Sahara continue
2001 Aviation Turbine Fuel (ATF) prices decontrolled
2003 Air Deccan starts operations as India’s first LCC
2005 Kingfisher, SpiceJet, Indigo, Go Air, Paramount start
operations
2007 Industry consolidates; Jet acquired Sahara; Kingfisher
acquired Air Deccan
2010 SpiceJet starts international operations
2011 Indigo starts international operations, Kingfisher exits
LCC segment
2012 Government allows direct ATF imports, FDI proposal
for allowing foreign carriers to pick up to 49% stake
under consideration
Introduction of aviation in India
India is the 9th chief aviation market in the world, as per the RNCOS research report,
titled "Indian Aerospace Industry Analysis". It is anticipated that the civil aviation market
will recorded supplementary than 16 % compound annual growth rate (CAGR) during
2010-2013 on back of strong market essentials.
The rapidly growing aviation sector in India handle about 2.5 bn passenger all the world
in a year, moves 45mn( million) tonnes (MT) of cargo through 920 airlines, using 4,200
airports and deploying 27,000 aircraft. Currently, 87 foreign airlines fly to and from India
and 5 Indian carriers fly to and fro from 40 countries. India is expected to be amongst the
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top 5 nations in the world in the subsequently 10 yrs. An competent civil aviation sector
is important for India as it is inter-linked with other sector in the economy and produce
employment and income during global trade and tourism, as per a National Council of
Applied Economic Research (NCAER) study titled “Emirates in India - Assessment of
Regional profit and Economic Impact.”
Current Developments
India released its 1st ever complete Aviation Carbon Footprint study for the year 2011;
on October 9; 2012, which states that carbon dioxide {CO2} secretion from Indian
scheduled airline operations plus from foreign airlines to international destinations
signify less than 1 percent of the country's total CO2 emission, which is significantly
lower than the global avg contribution of airlines.
A 10-member delegation led by Mr S R Rao; Commerce Secretary at Ministry of
Commerce and Industry, the Government of India, will visit Pakistan for 2 days. The visit
aims at boosting trade relations growing air connectivity and starting trade in petroleum
product. Two-way trade between Pakistan and India is estimated to boost to 6 bn US$ by
2013-14.
Government Initiatives
In a key step aimed to improve the Indian civil aviation sector; the Cabinet Committee of
Economic Affairs (CCEA) has relaxed the FDI norms in aviation; which will allow
foreign aviation companies to spend in Indian aviation companies. The foreign carriers
can now pick up to 49 percent stake in domestic Indian aviation firms.
The twelfth Five Year Plan from 2012 to 2017 estimate the domestic and international
cargo to raise at the rate of 12 percent and 10percent; correspondingly; with the total
traffic projected to touch 5.9 mn(million) tonne (MT) by 2020. The Government has
planned to invest 30 bn US$in next 10 ys, as per Mr S N A Zaidi; a Secretary of Civil
Aviation.
The Government has taken different steps towards structural policy reform and has come
out with new policies which are liberal and will push public and private partnerships
(PPP).
The Government of India allows 100 % foreign direct investment (FDI) for green
field airports; via the automatic route. Moreover; foreign investment up to 74 % is
permissible through direct approvals while special permissions are required for 100 %
investment.
About 49 % FDI is allowed for investment in domestic scheduled passenger airlines
and investment up to 100 % by non-resident Indians (NRI) via the automatic route.
FDI up to 74 % is allowed for non-scheduled and cargo airlines.
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The Indian aviation sector can be generally separated into the following key categories:
1. Scheduled air transport service includes international and domestic airlines.
2. Non-scheduled air transport service consists of air taxi operators and charter operators.
3. Air cargo service; which include air transportation of mail and cargo.
Market share of key players in the Indian aviation sector
Name of the players Market
Share
Kingfisher Airlines and Kingfisher Red (previously Air
Deccan)
28percent
Jet Airways and Jet Lite (previously Air Sahara) 25percent
Air India and Indian (previously Indian Airlines) 16percent
IndiGo 14percent
SpiceJet 12percent
GoAir 3percent
Paramount Airways 2percent
MDLR Airlines 0.004percent
Factor Inputs
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SWOT Analysis
PEST Analysis
Political Factors are Trade relations, Licensing
Economic factors are Recession, prosperity phase
Social Factors are Religions, Income factor and castes
Technological Factors are Usage of internet.
India-Turkey Relations: A Snapshot View
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Turkey India
GDP Total US$1.073 tn US$ 1.9 tn
GDP /Capita Income US$9,500 US$ 1,340
Population
73.6 mn
1.2 bn
main Trading Partners
EU (46.3percent), Iraq
(5.3percent),
Russia (4.1percent), USA
(3.4percent)
UAE (13.6percent), China
(12percent),
USA (10.1percent)
Bilateral Trade Volume: US$ 6.6 bn (Jan-Nov 2011)
India’s exports: petroleum products, aluminum, cars, mobile
handsets & clothing and apparel
Turkey’s exports: marble, textile, machinery, copper ores,
inorganic chemicals,
Investments
India’s investments in Turkey: railway construction,
hydrocarbons, pipelines & IT services
Turkey’s investments: tourism, textile products, construction
Current High level Visits
Prime Minister Erdogan in the
year 2008 President Gül in the year
2010
Vice President Ansari (2011)
Key Agreements
Bilateral Investment Promotion and Protection Agreement in the
year1998
(BIPA)
Avoidance of Double Taxation and the prevention of Fiscal
Evasion 1997 (DTAA)
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ECONOMIC & COMMERCIAL RELATION AMONG TURKEY
AND INDIA
Offered Agreements between Turkey and India
Agreement of Prevention of Double Taxation
Bilateral Agreement for Promotion and Protection of Investments
TURKEY’S IMPORTS TO INDIA
BY PRODUCT GROUP in 2010
Million US$
Mineral fuels, minerals oils and
product of their distillation
644,5
Organic chemicals 366,5
Cotton, cotton yarn and cotton textiles 271,6
Institutional Arrangements
Joint payment for Economic and Technical Cooperation
Joint Business Council
Joint Study Group for Free Trade Agreement possibility
Education and Culture
India offered 25 slots to Turkish students under Indian Technical
and
Economic Cooperation (ITEC)
MOU signed among Ankara University and JNU and Bogazici
University and Shantiniketan
Council for Cultural Relations
Defense
High level visits: Chairman of Chiefs of Staff Committee and Chief of
Army Staff Air Chief Marshall V. P. Naik (2011)
Chief of Naval Staff Admiral Nirmal Verma (2011)
Diaspora
Small groups of working professionals are found in each country.
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Man-made filament 232,7
Vehicle other than railway or
tramway rolling-stock, parts thereof
190,6
Plastic and articles thereof 183,0
Boilers, machinery and mechanical
appliances: parts thereof
157,6
Electrical machinery and equipment:
parts thereof
133,2
Man-made filament 128,6
Iron and steel 112,7
Tanning and dyeing extracts: fillers
and stoppings: inks
101,9
Knitted and crocheted goods and
articles thereof
98,4
Articles of stone, plaster, cement,
asbestos & mica
68,5
Carpets, mats matting and tapestries 54,1
Pharmaceutical products 49,4
TOTAL 3.490
India’s Import and Export Relation
Year (in US $ million) percentage Change(YoY)
India’s
Export
India’s
Import
Total Trade India’s
Export
India’s
Import
Total Trade
1998 276.3 73.3 349.6 -8.18 20.56 -3.35
1999 243 120.5 363.5 -12.05 64.39 3.98
2000 437.2 56 493.2 79.92 -53.53 35.68
2001 353.2 74.6 427.8 -19.21 33.21 -13.26
2002 564 69.5 633.5 59.68 -6.84 48.08
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2003 718.8 71.4 790.2 27.45 2.73 24.74
2004 1,043.40 136.2 1179.6 45.16 90.76 49.28
2006 1557.41 222.24 1779.72 2.21 1.17 19.10
2007 2299.52 347.21 2646.73 45.59 56.23 46.91
2008 2457.48 542.92 3000.40 6.87 56.37 13.36
2009 1890.63 411.19 2301.82 -23.07 -24.26 -23.28
2010 3409.82 606.84 4016.66 80.35 47.58 74.49
Action plan for India
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Ensuring collaboration between the Ministry of Civil Aviation, other related ministries,
regulators, and the industry.
Promoting other sectors that can support and benefit the aviation sector
Reducing sales tax on fuel. The long-term benefits in terms of higher economic activity
and employment generation would more than reimburse for the national loss of tax
revenue in the short run
Implementing recent policy decisions such as the 49percent Foreign Direct Investment
limit, and establish safeguards to prevent excessive and predatory ticket pricing
Establishing a world-class National Aviation University and promote private sector
investments in training academies to produce highly-skilled employees.
Export Policy of Turkey
What are types of Exports in Turkey?
Types of exports are as follows:
a) Exports having no special nature
b) Exports on registration
c) Exports on credit
d) Export by means of consignment
e) Exportation of imported goods
f) Exportation to free zones
g) Exports through leasing
h) Transit trade
i) Exports without returns
What is the Export Promotion System in Turkey?
Due to WTO regulations and Customs Union with the EU, Turkey now apply measures
indirectly assist exporters such as;
export finance and insurance,
promotion and marketing assistance.
Overall, Turkey has reshaped incentives provided to exporters, eliminate subsidies in order to
harmonize foreign trade policies and increased transparency of export subsidy programs.
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What is the current Import Regime?
The Import Regime of 2001 is transparent, explicit and easy to understand for the
importers. It is base on the structure of the the World Trade Organization (WTO) and the
Customs Union Agreement with European Union.
Customs duties contain rearranged according to product groups (industrial,
agricultural, processed agricultural, fish and fishery products) and country of origin of
the products in order to be more transparent and simple.
What documents are required for importing?
In order to be an importer, having a tax number is sufficient. For importation of
agricultural products and some specific items for public security, preservation of the
human, animal and plant health, the security of the environment and consumer rights,
additional papers may be required by relevant authorities.
What are the procedures to set up a business in Turkey?
Please take the following steps to establish a limited or joint stock company in Turkey.
First step:
Please submit the following papers to the General Directorate of Foreign Investments
1- For legal entities residing abroad,
Certificate of Activity (certified by the related Turkish Consulate or in accordance with
the provisions of the Abolition of the Requirement for Approval of Foreign Official
Documents Agreement)
Previous year Activity Report
2- For real persons residing abroad
Copy of passport
Detailed commercial and industrial environment and verifying documents
3- Letter of intent stating that each foreign partner will bring atleast 50,000 USD to Turkey
as company capital.
4- Draft articles of the company to be established.
5- Power of attorney given by shareholders to the person who will be the contact person in
course of the application procedure.
6- Application form prepared in accordance with the attached sample.
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Second Step,
For publishing the establishment of the company, kindly apply to the Ministry of Industry
and Trade
Third Step,
For endorsing permission certificate , apply the GDFI with the following documents:
1- Original of the permission certificate
2- Trade Registry Gazette in which the organization of the company is published
3- If the foreign exchanges brought as foreign capital is converted in to Turkish Liras,
Foreign Exchange Purchase Receipt and if they are kept in foreign exchange deposit
account, linked bank document should be submitted.
Time framework to obtain the following permits:
- Land use permits 1-15 days
- Planning permits 1-15 days
- Building permits 1-15 days
The cost of getting the above permits is negligible.
Employment opportunities
Today India Aviation Industry requires approximately 7,500-8,000 pilots and same digit or more
air cabin crew by 2010. Higher pay packages are awaiting pilots with a commercial pilot license
. An amateur pilot can begin his career with a salary of Rs 2.5-3 lakhs a month with a
professional airline. With the hasty increase in the amount of airlines, pilots are in great demand.
Aviation sector provide the following types of opportunities:
Commercial pilot
Co-pilot
Air cargo pilot
Expert cabin crew
Air traffic controller
Cabin safety instructor
In-flight managers
In-flight base managers
Cabin services instructor
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Cabin crew
Training instructor
Maintenance controllers
Licensed aircraft safeguarding engineering
Modernization of Airports
Airports Authority of India (AAI) manages the development and modernization of all 35
non-metro airports in the country simultaneously and work is due to be completed by the
year end of 2010.
Wholly owned subsidiary of AAI are being formed for betterment of these airports.
Reasons for Growth
Foreign Equity Allowed
Low Entry Barriers
Attraction of Foreign Shores
Rising income levels and Demographic profile
Untapped Potential of India’s tourism
Glamour of the Airlines
Government initiative driving this sector’s growth
Government’s collective investment on tourism and hospitality sector has risen at a
CAGR of 15.4 percent through 2005-11.
Ministry of Tourism set up a Hospitality improvement and Promotion Board to monitor
and facilitate hotel project clearances/approvals.
Government of India (GOI) continue its focus on airport infrastructure development as
part of the 11th Five Year Plan (2007-12).
Liberalisation and Open Sky Policy has led to increased traffic rights under bilateral
agreements with foreign countries.
percent FDI in aviation.
Tax exception for airport projects for a period of ten years.
Policy maintain and demand growth is increasing investment potential.
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Industry Recommendations
Reduce labor costs
All major carriers need to win significant concessions from their employees. Low labor outlays
would consist of a mix of reduced salary, more flexible work rules and trimmed profit including
pension.
Simplify flight operations
Low-cost carriers use just a few types of aircraft, a approach that cut training and maintenance
expenses. Larger airlines that fly internationally, to more distant destinations require diverse
fleets of large and small aircrafts. However, they can and should work toward streamlining the
types of planes they fly.
Offer more transparent pricing
The legacy carriers have long had an exotic, almost beyond your understanding pricing system.
However, these days, with the Internet allowing travelers to shop for the cheapest tickets
effortlessly, and low-cost airlines offering simple set prices, conventional carriers have to go
after suit or risk losing more and more passengers.
Get smart on fuel
With oil near $50 a barrel, airlines must be smarter about how they incorporate its price into their
expenses. Discount carriers such as Southwest hedge as much as 80% of their jet-fuel
expenditure. Basically, that means that they lock in prices on future fuel when the price drop.
Small wonder Southwest is one of the few success stories in the airline business.
Stop chasing market share
Airlines need to be savvier about capability. At the start of 2004, many designed to add more
flights amid signs of an enhanced economy. When it became clear that demand wasn't as strong
as initially predicted, most carriers still wouldn't economize from their plans for fear of losing
out if the market snapped back.
A new model for premium pricing
Most of the industry's improvement efforts have focused on whittling down costs. However,
increasing revenues also needs to be a main concern. After all, people are eager to pay more if
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they believe they're getting more value. Legacy carriers still offer assured advantages,
particularly to the business traveler including airport lounges and more comfortable seating.
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CHAPTER:5
CONCLUSION OF EACH INDUSTRY
GROUP:1
TEXTILE Industry:
Macro policy:
Turkey needs to diversify the foreign investment as capital inflows to Turkey.
To that aim, Turkey needs to establish tighter controls to address fiscal and
current account deficits, which would help lower inflation and stabilize the lira.
Finally, policies that encourage businesses to use more long-term equity capital
denominated in domestic currency should be implemented.
Social and political infrastructure:
Turkey needs to invest more aggressively to improve its social infrastructure to
deliver on the potential of its large and young population.
Policies that target quality of its education and access to higher education need to
be put in place.
At that time, the government needs to continue with constitutional reforms that
address civil liberties and judicial independence.
Factor conditions:
Turkey has to improve the technical and vocational education programs and
establish public-private partnerships in education to link curriculum of
universities with industry needs.
To grow on innovation and improve productivity, the government should
encourage combined R&D initiatives across all sectors and introduce incentives
such as tax deductions and loan guarantees for R&D related projects.
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Context for strategy and rivalry:
The government needs to create one-stop shops to streamline the procedures and
registration requirements for starting a business. Anti-corruption and good
governance initiatives should be bolstered to reduce costs of doing business in
Turkey.
Related and supporting industries:
Turkey needs to develop an integrated national cluster strategy that provides a
common vision and framework.
A national competitiveness planning agency should be established to coordinate
the implementation of the integrated national cluster strategy.
POLICY OPTIONS
This industry has played a very important role in generating employment opportunities
and generating export revenue.
However, the Textiles industry also is characterized by their low productivity and wages.
The Textiles industry will continue to play an important role in the near future as well.
Therefore, the public policy towards the Textiles industry in Turkey should pursue two
aims simultaneously:
To enhance competitiveness of textile producers in foreign markets through
improvements in productivity and specialization towards high value added
products and
To transform the structure of the economy by diversifying towards other sectors.
The first aim is based on the fact that the Turkish Textiles industry producers are in a
strong position against their competitors and have achieved to raise their market shares in
the last decade.
The industry could protect its competitive position in the future:
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By adopting new marketing strategies (Establishing new marketing channels,
developing their own brands, coupling their strategies with the EU and US
companies),
By specializing in niche markets and
By being innovative in generating and adapting new products (Technical textiles,
eco-textiles, etc.) and processes (non-woven fabric).
These strategies would be successful only if they are complemented with a supportive
technological and legal infrastructure.
Therefore, the public policy could aim at providing incentives for R&D activities,
encouraging the development of supplier industries and developing a system of standards
and accreditation.
The public policy should also aim at changing the structure of the industry.
The productivity of textile industry should certainly be increased, but this process needs
to be accompanied by the reallocation of resources towards more productive sectors of
the economy so that wages, per capita income and living standards could be improved in
the long run.
GROUP:2
STEEL Industry
From all the analysis done by us we have found following things:
India is 4th
largest producer of steel in the world.
According to our analysis on Indian steel that even though India is the 4th
largest producer of
steel. Indian steel companies cannot satisfy the domestic demand of steel in India.
The reasons behind the increasing demand of steel are:
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The initiative taken by Indian Government to grow the Infrastructure Sector. The
infrastructure sector in India is growing very well.
Along with that the Automobile products and the consumer durables are produced
largely in India.
All these industries require Steel as a main raw material for the production. All most 60%
of total steel produced are used by Infrastructure sector. 14% is used by automobile
industry. 10% is used by consumer durables.
According to one report India imports 3-5 mt. of steel from other countries. And because
of the growth of infrastructure and automobile industry, at the end of 2015 India will
require 50 mt. more steel than produced.
While turkey is also in the top ten steel producing countries. Since last few years the
production of the steel has been increased drastically.
Turkey was the second biggest producer of steel in Europe and 8th
biggest steel producer
in the world in 2012 with 34.1 mt. Turkey produced 7.9 mt. in the first 2 months of this
year which is 13.4% higher than the same period of last year.
While the production of steel has been grown drastically, the consumption of steel in
Turkey is lower. That means the steel produced in Turkey is much higher than consumed
by them.
That means Turkey has got huge amount of slack steel with them. Which is proved by the
figure shown above of the Turkey’s net export of steels.
When it comes to the quality of steel Turkey is among the top quality steel producing
companies along with Brazil, Netherland, U.S.A.
Turkey has got natural resources necessary to produce good quality steel. Along with that
with the use of methods such as BOF and EAF Turkey made it possible to produce a
good quality steel.
When the question arise regarding the price, our analysis suggest that the price of the
Turkish steel are lower than the price of the Indian Steel.
Because of certain reasons Indian steel companies are charging much higher prices than
other countries.
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Along with that both the country have got transportation facilities and ports near to
markets. So there won’t be any problem related to import and export.
Thus, we can conclude that there are golden chances for Indian companies to import steel
from Turkey and to start business with the Turkish Steel companies.
GROUP:3
PHARMA Industry:
• The pharmaceutical industry in Turkey is quite advanced and diverse, with high quality,
generic pharmaceutical products being manufactured as well as poor quality copies that
have not been appropriately tested in terms of bioequivalence and bioavailability. The
country faces a low level of drug consumption due to economic and cultural constraints
compared with Western countries. Governmental control and regulations are key issues
because the majority of drug purchases (70-80 percent) throughout the country are
currently reimbursable through public sector agencies such as the Pension Fund and the
Social Insurance Organization. • In addition, per capita drug consumption levels are
quite low compared with the Organization for Economic Co-operation and Development
and European Union countries. Major international players in the medical equipment and
pharmaceutical products sector have also been opening offices in Turkey to reap the
benefits of this rapidly evolving market.
• Turkey pharmaceutical industry has the growth potential as the extended lifespan , aging
population , socio economic changes around the world will increase the need for health
services in coming years.
• The awareness of patients about the contribution of innovative drugs to
public health is increasing, which increases the demand for new
treatment methods
• Effects of many chronic diseases have been brought under control by new drugs
and treatment methods developed so far
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• Turkey should increase its pharmaceutical export and decrease its imports. Turkey has a
major opportunity to become a key services and pharma products supplier for
neighboring regions with its geographical location.
•The E.U accession process will continue to be an important driver of economic reform in
turkey. The Turkish government has indicated that reform will continue, irrespective of
the speed with which progress is made on the accession process.
• The Turkish government and private sector interests are increasingly focussed on
developing economic and commercial linkages with the Asia-Pacific region.
• India also has good growth prospects. The Indian market is very open, and New
Zealandscores highly in international surveys measuring the ease of doing business
(consistently second in the World Bank’s ‘ease of doing business’ survey). With its well-
developed economic linkages in the Asia-Pacific region (underpinned by an expanding
network of free trade and economic partnership agreements) New Zealand can be a
stepping-off point for Turkish companies wishing to do business in the Asia-Pacific
region.
• INDIA-Turkey bilateral trade is under-developed. India exports a narrow range of goods
to Turkey. By comparison the range of Turkish exports to India is wider, and Turkish
exports have grown strongly in recent years.
• Realising the potential for increasing the economic linkages between Turkey and India
will require persistent efforts by the private sector in both countries. Turkey can be
perceived as a hard market for Indian companies to penetrate. Although Turkey’s
performance in the World Bank’s ‘ease of doing business' survey continues to improve,
its ranking of 57 in 2008 reflects the fact that local bureaucratic procedures are a
complication for those unfamiliar with the market. Combined with language barriers, this
would suggest that working with a well-qualified local partner may be the best approach
to developing and sustaining a market presence.
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• Strategic partnerships between India and Turkish companies (including marketing
alliances, and arrangements for manufacturing) would support growth in bilateral trade,
and trade with countries in surrounding regions.
GROUP:4
AUTOMOBILE Industry
Turkey is a growth oriented country & has a potential for the better growth in automobile
sector.
There are only two companies of India from the automobile sector in the Turkey. So
other Indian company have better opportunity for investment & business in Turkey due
to lesser competition.
Another key aspect is that Turkey’s manufacturers are exporting more to European
Union countries so if Indian companies will invest in the automobile sector then they
have the opportunity to export to Asian countries as well as European countries.
As Turkey has qualified labor force which leads to efficient production. Turkey’s large
domestic market is one of the best opportunities.
Low taxes and incentives makes Turkey eye-catching to foreign investors.
Turkey’s infrastructure facilities & centrally located geographic position is one of the
purposes for an investment.
Turkey wants political constancy to strengthen its economy & get enough interest of
foreign investors for better growth prospects.
Turkey almost invest 1/4th
of its income for growth & controlling inflation &
unemployment as well as preserving liquidity.
Turkey has high production sizes & a very high ratio of exports to production.
Domestic market is characterized by tremendous demand potential, low dispersion, and
favorable regulatory policies.
The automobile trade market in Turkey is immensely developed.
Turkish automobile industry has one of the prominent developing market in globally
170 | P a g e
Turkey has decent amount of foreign capital inflow as well as efficient domestic &
global market.
57% of domestic consumption comes from imports.
Around 70% of domestic production is exported primarily to European countries, &
today Turkey is Europe’s leading bus producer, 3rd
LCV producer, 6th‐largest truck
manufacturer, and 3rd largest truck market and 7th‐largest car manufacturer.
Turkey’s automotive industry exports to 170 nations which shows high global reputation.
Turkey is India's 40th major trading partner globally & the 40th largest investor in India.
Over 150 companies with Indian capital have registered businesses in Turkey in the form
of JVs, trade & representative offices. They include Polyplex, GMR Infra, TATA ,
M&M, Reliance, Ispat, Birla Group, Tractors & Farm Equipment , JI, Wipro ind and
Dabur ltd.
Export growth rates have been high for motorcycles & scooters.
However, mopeds have registered low or negative growth.
Turkish Auto- motive Manufacturers Association General Secretary, Ercan Tezer,
summarized the effects of the Customs Union agreement by saying that “focus shifted
to international markets & Turkey became an extraordinarily attractive option for
whoever wanted to produce for the European Markets.”
GROUP:5
MINING Industry:
The mining industry in Turkey is quite advanced and diverse, with high quality, generic
mining products being manufactured.
In addition, per capita mining consumption levels are quite low compared with the
Organization for Economic Co-operation and Development and European Union countries..
Turkey should increase its mining export and decrease its imports. Turkey has a major
opportunity to become a key services and mining products supplier for neighboring regions
with its geographical location.
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The E.U accession process will continue to be an important driver of economic reform in
turkey. The Turkish government has indicated that reform will continue, irrespective of the
speed with which progress is made on the accession process.
The Turkish government and private sector interests are increasingly focussed on developing
economic and commercial linkages with the Asia-Pacific region.
India also has good growth prospects. The Indian market is very open, and New
Zealandscores highly in international surveys measuring the ease of doing business
(consistently second in the World Bank’s ‘ease of doing business’ survey). With its well-
developed economic linkages in the Asia-Pacific region (underpinned by an expanding
network of free trade and economic partnership agreements) New Zealand can be a
stepping-off point for Turkish companies wishing to do business in the Asia-Pacific region.
INDIA-Turkey bilateral trade is under-developed. India exports a narrow range of goods to
Turkey. By comparison the range of Turkish exports to India is wider, and Turkish exports
have grown strongly in recent years
Realising the potential for increasing the economic linkages between Turkey and India will
require persistent efforts by the private sector in both countries. Turkey can be perceived as
a hard market for Indian companies to penetrate. Although Turkey’s performance in the
World Bank’s ‘ease of doing business' survey continues to improve, its ranking of 57 in
2008 reflects the fact that local bureaucratic procedures are a complication for those
unfamiliar with the market. Combined with language barriers, this would suggest that
working with a well-qualified local partner may be the best approach to developing and
sustaining a market presence.
Strategic partnerships between India and Turkish companies (including marketing alliances,
and arrangements for manufacturing) would support growth in bilateral trade, and trade
with countries in surrounding regions.
GROUP:6
AGRICULTURE Industry:
Turkey is one of the largest agricultural producers of the world and agriculture
contributes 7.9 percent of the country’s economic activity. Despite the significant
declines in the share of agriculture in the economy, it is still an important buffer against
urban unemployment as it is the
largest employer and nearly 30 percent of the economically active population lives in
rural areas in Turkey.
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Due to external (EU Accession and WTO Reform Process) and internal (efficiency,
taxpayer and
consumer concerns) reasons, policy changes and updates have been occurred in Turkish
agriculture bringing forward food safety, environment and rural development and paying
more attention to improve registration and control system towards market orientation and
competitiveness. Current agricultural policies in Turkey aim at a better organisation,
sustainability and competitiveness through increasing production based on quality
considering sustainability principles to provide food security and safety, competitiveness
power of agriculture enterprises, income and quality of life in rural areas, strengthening
agricultural marketing infrastructure, and establishing and integration between agriculture
and industry. However, to reach these targets the sector needs to challenge with low
efficiency and quality in production, small size of enterprises with less developed
infrastructure, lack of well functioning mechanism for village-based investment,
difficulties to access to markets for small farmers, low education level and inadequate
public services in rural areas. One can see that the most important problems in Turkish
agriculture are structural and market related as a result of small size enterprises and lack
of strong and well functioning organisations among farmers. The policy tools and support
schemes have been determined to overcome these challenges and compile with EU
policies are direct income support, deficiency payments, livestock supports, rural
development supports, compensatory payments, and support for environmental protection
of agricultural lands.
Although the disadvantages regarding agriculture sector in Turkey such as high
proportion of small farms with highly fragmented structure which are strongly depended
on state subsidies, ongoing problems of livestock export to the EU countries, high cost of
agricultural mechanisation for small farms which prevent small-scale farms from
increasing their production efficiency, instability in feed prices and it negative effects to
livestock sector, pressure on the state to reduce agricultural subsidies, the country has an
important capacity and potential thanks to suitable ecological condition and climate for
agriculture, state support for investment in agriculture, export facilities, increased interest
in agriculture by foreign investors, increase in production efficiency through advanced
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technologies, trade opportunities offered by strategic geographical position of the
country, new export possibilities by Turkey’s likely membership to EU, competitive
labour fees, increased demand for organic agriculture through increase in awareness of
health and food.
GROUP:7
SHIPPING Industry
Customs duty is exempted on vessels used in international commercial transportation
business.
Road and Railway are connected with ports so Infrastructure facilities available in
turkey.
Seafarer's tax is abolished to promote the private sector by the Turkish government.
The geographic location is fit for shipping industry because it situated western Asia
and beside the Europe so as a location wise it is middle on earth for trade.
Where such a ship carries passenger, live stock and goods is taxed at the rate of 7.5%
+12.5% corporate taxes where in turkey it is only 6% so if we look as a tax benefit it
is better than India.
Ship breaking yards promoted by the Turkish government by 8 years tax exemption.
The Government of turkey also promoting shipping sector and majorly building of
ship are more encouraged like tax saving and credit facility.
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GROUP:8
TOURISM Industry:
Turkey, a secular and democratic country, is passing through difficult times. Currently,
the country is suffering its worst economic crisis since the 1940s. The crisis began in
February 2001. However, despite high inflation and other hardships, its economy has
started showing strong signs of recovery after an agreement last year with the
International Monetary Fund. The agreement will provide Turkey with a total of $17
billion in the next three years, of which more than half has already been transferred. It
should be noted that Washington had been the key advocate of the IMF loans to help
Turkey overcome its financial crisis
However, impact of some unexpected externalities has sometimes hindered its further
development. Turkey’s geopolitical location has provided it many advantages, but also
caused numerous problems, such as living in a not- so- friendly neighbourhood or
standing on a major fault line. As previously stressed, the tourism sector suffered an
important slow down after the Gulf War of 1991 and a serious setback with the
earthquake of 1999. The effects of the terrorist attacks of September 11 have been felt all
over the world, including Turkey
Since a war against Iraq is getting closer and there is apparently no escape from it,
Turkey might start developing an “interim” tourism strategy that could be implemented at
least until the beginning of a new “era” in the region. The aim of this strategy more than
anything should include innovations to attract tourists to Turkey, despite an ongoing
conflict in a country bordering Turkey. Incentives could be offered to the international
tour operators. Prices could be reduced drastically. Advertisements could be placed on
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major media outlets. However, this is not an easy undertaking. To modify a strategy,
which has been painstakingly developed in the last two decades could be frustrating and
might not work. But thinking of alternatives could be better than inaction.
GROUP:9
TELECOMMUNICATION Industry:
Turkey needs to improve their pipelines which delivers the facility of Broadband so that
they can make their service better than they are giving.
To be a developed country they should develop their infrastructure in an even manner in
all the area of the turkey.
They should resolve the uncertainties regarding the regime of the regulator of the
telecommunication industry.
To get better opportunities they should increase their focuses on FDI.
They should remove hurdles for investment to the outsiders and should improve the
functioning of capital market and banking system.
Policies that target quality of its education and access to higher education need to be put
in place.
At that time, the government needs to continue with constitutional reforms that address
civil liberties and judicial independence.
GROUP:10
AVIATION Industry:
The global airlines industry experienced very high increase during the past 5 years and is
expected to achieve an estimated of 832.8 billion $ in 2020 with a CAGR of 3.7 percent
over the next 7 years (2013-2020).
Rising demand from promising economies, constant demand for new low-cost carrier,
deregulation and increasing middle class are factor motivating increase in markets like
Middle East and Asia.
As the study indicate the European market expansion is motivated by growth of air
transport in Eastern Europe and intracontinental travel inside the European Union.
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Asian development is motivated by rising per capita GDP in promising economies such
as India ,China, and countries in the Middle East such as Saudi Arabia and UAE.
The airline industry in Turkey was first construct as a monopolistic market.The key and
the only company was the government-owned THY. This situation has changed in the EU
privatization and standardization process.
The airlines business is growing at 27 per cent per annum in India. During the year 2007,
domestic airline passenger traffic has shown a growth of 32.51 per cent. Besides, India's
new international status as IT and manufacturing hub has led to the growth of
international air traffic.
Having achieved all their targets set for 2012, Turkish Airlines is now leaping forward
into the new year with a very positive outlook for the Indian marketplace. Mehmet Akay,
General Manager, Western & Southern India, Turkish Airlines said, “We are staking
money in India and that just proves how important the market is to us. 2012 has been a
very fruitful year for Turkish Airlines.
With the addition of planned new routes, Turkish Airlines will become the world’s
seventh biggest international network. Nineteen new aircraft (for which contracts had
previously been entered into) will be added to the fleet in 2012.
For2012, Turkish Airlines has set targets of 38 million passengers and TL 14.6 billion in
turnover. By becoming a member of Star Alliance, the world’s biggest and most
important airline alliance, Turkish Airlines took a major step forward in its strategy of
making Turkey the most important junction between Europe and Asia.
Passengers from all over the world make their connections conveniently by flying on
Turkish Airlines. Such undertakings are landmarks on Turkey’s long-term roadmap
which has been collectively dubbed the “2023 Strategic Vision”.They, and others like
them, boost Turkish Airlines towards its goal of being a
global giant.
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