Make It, Sell It


Rebounding well after the crisis, the “Made in Turkey" stamp is being seen on increasingly more sophisticated products around the world.

In 2010 Turkey’s industrial output index rose 16.9% year-on-year according to TurkStat. The manufacturing sector alone saw growth of 18.9%, with the highest year-on-year increase being in the production of capital goods, at 34.2%, followed by a 24.4% increase in the production of intermediate goods. There was also a 7.5% increase in the production of durable consumer goods and a 5% rise in non-durable goods.

TurkStat figures also showed impressive growth trends in industry sub-sectors, with the production of transportation vehicles up 100.3% in 2010, while wood products saw a rise of 40.3%, and electrical equipment production increased by 25.7%.

Industry and Trade Minister Nihat Ergün announced the roadmap for Turkish industry in early 2011, and its focus is on improving the investment and business environment. Both Turkish and foreign companies contribute to the country’s industrial output, and this is in turn driving exports, which reached $113.9 billion in 2010. Efforts to further increase this number are likely to have an impact on Turkey’s industrial base as the government outlined plans to develop the range and sophistication of the country’s export portfolio. In this context, Zafer Çağlayan, Turkish Minister of State for Foreign Trade, told TBY that, “Turkey has been developing itself in the defense, automotive, and machine industries sectors to become an export center.”


The Turkish steel market is experiencing increased levels of domestic demand while maintaining a substantial export level despite a slight fall over the crisis. In 2010, the export of steel products dropped by 6% to 40 million tons as a result of increased domestic demand, while production increased 15.2%, Dr. Veysel Yayan, General Secretary of the Iron and Steel Association, told TBY. Per capita consumption levels are returning to pre-crisis levels, and the 300-kilogram level is expected to be reached quickly, having dropped to 250 kilograms over 2008-09. In 2011 industry experts expect industry growth to hit 15%, and for exports to pick up to around 10% as a result of domestic demand and new capacity. New companies alone increased capacity by 4.5 million tons in 2010.

Global steel prices impacted the Turkish steel industry negatively over the crisis, with tonnage base prices dropping from $1,500 to $400. Although more balanced conditions have been achieved, profit margins have not returned to pre-crisis levels. However, Uğur Dalbeler, General Manager of Çolakoğlu Metalurji, told TBY, “2011 will be better than 2010… the automotive industry is picking up, not only in China and India, but also in Europe and the US. The flat steel consuming industries look to be very active.” Foreign investors are also presented with opportunities in that regard, with gaps in the industry for some types of automotive sector steel and stainless steel. Projections from the Turkish Iron and Steel Association also suggest that per capita consumption rates could reach 400 kilograms in the upcoming years.

In terms of exports, the EU market has partially given way to neighboring countries such as Iraq, Syria, Israel, and Iran. Turkish producers have also entered the US market.


The automotive sector is Turkey’s biggest exporter and is constituted of both Turkish and foreign firms. Five companies produce passenger cars: Fiat, through Tofaş in partnership with Koç Holding, Honda, Hyundai, Oyak-Renault, and Toyota. Nine companies make pick ups and light trucks, including Ford Otosan, Anadolu Isuzu, and Otokar, while a further nine companies make buses and minibuses, including Temsa, Mercedes-Benz, and BMC. The total production capacity in the sector is 1.56 million vehicles, and production in 2010 was 1.09 million—a record for Turkey. Of that capacity, 1.4 million, or 86%, is for light vehicles such as passenger cars, minibuses, and pickups.

A further five companies operate in the agriculture sector, with the main three companies—Turk Traktör, Tumosan, and Hattat Tarım—leading the way to a total sectoral production of 30,425 units in 2010. Tofaş-Fiat is the biggest manufacturer of passenger vehicles, with 312,245 units produced in 2010, second came Oyak-Renault, Ford Otosan was in third place, and Toyota fourth with 83,286 units produced. Exports rose 20% over 2009 to reach 769,158 units in 2010, with the export value of passenger cars, trucks, and buses hitting $6 billion, $3 billion, and $852 million, respectively. The main export markets are France, Italy, Germany, the UK, Spain, Russia, and Israel.

In the maritime sector, 84 civilian and three military shipyards contributed $2.5 billion to the Turkish economy, with $1.5 billion coming from new ship building, and $1 billion from repair and maintenance activities. Around 25,000 people are employed in the sector, and a further 100,000 people work in support industries. Turkey produces yachts, mega-yachts, and sailing boats, as well as chemical and petrol tankers and fishing boats. Exports realized $1.8 billion in 2009, a 31% decrease on 2008, with figures expected to pick up again following the global economic crisis. The main export product groups were cruise ships, excursion boats, ferry-boats, cargo ships, barges, and similar vessels for the transport of persons or goods, which totaled $1.3 billion. Major shipbuilding centers are located in Tuzla, Istanbul, the Marmara, Black Sea, and Mediterranean regions, and exports mainly go to Malta, the British Virgin Islands, Italy, Norway, Liberia, the Marshall Islands, and the Netherlands.


The Turkish defense industry grew 51% in 2010, reaching a turnover of $2.3 billion, with predictions putting the 2011 figure at $3 billion. Exports are also on the rise, amounting to over $1 billion in 2010, and there are an estimated 200 companies involved in the defense industry.

The sector has been transformed since 2007, when Turkey’s Undersecretariat for Defense Industries (SSM) decided to open up to smaller firms specializing in technical fields related to national defense. Larger companies in the sector, including Aselsan, TAI, Otokar, and Roketsan, are now obliged to choose smaller domestic partners for their outsourcing needs. The results of this were seen in 2010 when Turkish companies’ share in national defense reached 51%, up from 45% in 2009, and 25% in 2008. The SSM’s target is 75%, and smaller companies are getting a boost playing a supporting role in the development of some major projects including a national infantry rifle, the Altay main battle tank, Ada class corvettes, and TF-100 class light frigates under the National Ship program, unmanned reconnaissance and combat aerial vehicles, as well as reconnaissance satellites, a national torpedo, military simulators, and various other land, sea, and air platforms. In terms of defense expenditure, Turkey ranks fourth in the Middle East and fifth in Europe, spending around $10 billion a year and securing its role as the second largest military contributor to the NATO alliance.


The consumer electronics sector has geared itself toward exports recently, with Turkey affirming itself as a production base for Europe. Owing to companies including Vestel, Arçelik, and Beko, total exports reached $10 billion in 2010, $3 billion of which came from the export of TV sets, of which the largest producer in Europe is Vestel. The domestic consumer electronics market is also booming as a result of strong consumer appetite for durable goods—the market was projected to be worth around $8.2 billion in 2011. This figure is expected to increase at a CAGR of 9.5% to $12.6 billion by 2015, driven by rising incomes, lower prices, and the growing popularity of digital lifestyle devices. Computer hardware accounted for 61% of Turkey’s consumer electronics spending in 2010, and the other main sales figure drivers include AV devices, at 21%, and mobile handsets at 17%, all of which have growth predictions of around 10% over the 2011-15 period.

The white goods sub-sector is also performing well on a platform of post-sale services and exports. In the first seven months of 2010, exports exceeded 7 million products, with a total production rate of 10.2 million items according to the Association of White Goods Industrialists of Turkey (TÜRKBESD). Leading brands in the sector both Turkish and foreign include Arçelik, Beko, Profilo, Bosch, Vestel, Ariston, and Indesit. Although Turkish consumers generally favor local brands, foreign investor interest remains high due to Turkey’s unique location between a number of large and growing markets. In March 2011 Indesit announced plans to increase its market share in Turkey by investing ‚¬50 million in the country, including increased R&D expenditures.


Turkey is the world’s seventh largest cotton-lint producer, with almost 1 million tons of annual production. More than 40,000 companies operate in the textile and clothing sectors, with production volumes in excess of $30 billion. On the back of a historical involvement with the industry, the Turkish textile industry is undergoing a transformation, with events such as Istanbul Fashion Week helping to introduce the country’s brands to international markets. The Chairman of the Turkish Textile and Apparel Exporter’s Union (ITKIB), Hikmet Tanrıverdi, underlined the progress made, stating “Turkey used to be a contract manufacturer, but in the last 10 years it has drastically changed its position”. This transformation is a result of the need to create value-added in order for the Turkish textiles sector to compete with Eastern markets such as China.

While such Turkish brands as Mavi, Sarar, Beymen, and Vakko are present in the international arena, Minister Çağlayan has added that while Turkey is already “an address for good quality clothing”, it needs to develop strong brands with wider recognition. Currently, the majority of apparel is destined for markets in the Middle East and Russia. The increasing sophistication of the workforce in that regard has also led to major international brands establishing and expanding production facilities in Turkey, with Hugo Boss enlarging its Izmir menswear factory in 2010, and German brand Roy Robson opening a factory nearby.

The country is also seeing a return to form following the global economic crisis, with clothing exports growing 11% to reach $9.5 billion in 2010, following a decrease of 23% in 2009, and textile exports reaching $4.1 billion, up 23% on 2009. Turkish success stories in the non-clothing textiles sector include Merinos, a carpet and floor covering company that exports to over 60 countries, with its President, İbrahim Erdemoğlu, telling TBY that “between 20% and 30% of worldwide carpet production takes place in Turkey”.


In line with global consumption trends, production in Turkey’s food and beverages industry rose to TL8.8 billion in 2009, constituting around 20% of the country’s total production. The sector is largely dependent on the agriculture sector, and significant sub-sectors include meat and meat products, baked products, fruits and vegetables, oils, confectionery, alcoholic and non-alcoholic drinks, ready made food, and baby food.

The beverage sector is one of the leading industries in Turkey, with bottled water ranking in first place with regards to production capacity, accounting for 50% of the total beverage industry production capacity of 13,236 million liters. Alcoholic beverage exports also increased to 104 million liters in 2009, with beer accounting for 95%; however, Turkish wine is fast making a name for itself on the international scene under the “Wines of Turkey” campaign. Major beverage producers include Coca-Cola İçecek and Anadolu Efes, and the biggest producers of food products include TürkÅžeker, Ak Gıda, Konya Åžeker, Ülker Çikolata, and Eti.


A growing population and increasing living standards, as well as growing exports have contributed to a steady 8% growth rate in the consumer-packaging sector over the last few years. Turkey’s annual consumption is 4.5 million tons, and there are 3,000 companies in the sector, with 50 consumer-packaging companies among Turkey’s top 1,000 companies according to IGEME. Paper, carton, and corrugated board packaging accounts for 40% of the sector, with an annual 1.9 million ton production capacity. Steel and aluminum packaging represents 7% of the industry, and has a 600,000 ton production capacity, while the plastic packaging sector has a production capacity of 1.5 million tons per year. Glass packaging is also a well-developed sub-sector, and Åžişecam dominates with a 95% market share. Out of Turkey’s total 2.2 million ton glass production capacity, 750,000 tons alone is for packaging. Wooden packaging, used for fruit and vegetables, as well as for various warehouse functions, is another significant sub-sector, and its capacity is 600,000 tons per year.

Total exports in the consumer-packaging sector were worth $2.5 billion in 2010, with plastic packaging representing 69% of total exports. Bell Holding is a major player in this sector, supplying Unilever in around 30 countries. Paper packaging represented 19% of exports, and metal around 9%. Turkey is also the world’s second largest exporter of sacks and bags, or flexible intermediate bulk containers (FIBC), with a 19% global share in 2009. The country’s main export partners for consumer packaging in general are Germany, the UK, France, Iraq, and Iran.

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