March 2023

Economic & business news from Türkiye

Türkiye received 13 billion USD in FDI in 2022

Türkiye totaled an FDI flow of 13 billion USD in 2022. A figure which remains significant despite post-pandemic vulnerabilities and a fragile international context marked by the Ukraine-Russia war. This performance demonstrates the investment environment of the country considered as a refuge by foreign investors. Although Türkiye is recording a slowdown in its FDI inflows, this remains limited to 2% over the whole of 2022 compared to the previous year.

On the podium are European countries with:

• Spain in the lead: it is the country which has invested the most in Türkiye with 1.6 billion USD;
• The Netherlands took second place with an investment of USD 863 million;
• Switzerland is third with 737 million USD.

Concerning the sectoral distribution, finance and insurance activities attracted the most FDI, representing a share of 28%, while wholesale/retail trade came in second position (25%). Finally, the manufacturing industry ranked third with a share of 24%.

Source: Invest.gov, February 22, 2023

10% of the Turkish population is over 65 years old

The population aged 65 and over in Türkiye increased by 22.6% in 5 years to reach 8,451,669 people in 2022. The proportion of elderly people in the total population thus increased to 9.9% (compared to 8. 5% in 2017). According to demographic projections, this proportion will continue to increase during the 21st century, reaching 25.6% in 2080.

The proportion of the elderly population exceeding 10% of the total population is considered an indicator of population aging. The elderly population has grown at a higher rate than the population of other age groups. Türkiye thus ranks 66th (among 189 countries) among countries with the highest elderly population. Indeed, the age structure of the Turkish population is changing and becoming increasingly aging, a situation caused by several factors: the decline in fertility and mortality rates, developments in the field of health, the increase in standard of living, well-being and life expectancy at birth. But Türkiye currently remains one of the countries with the youngest population in Europe with an average age of 33.5 years.

Finally, 24.1% of households have at least one elderly person in their home (generally the grandfather or grandmother). 1.6 million people aged over 65 live alone.

Given the foreseeable increase in the number of seniors in the Turkish population, the silver economy is set for strong growth in the coming years through products and services adapted to their needs, particularly in the medical field.

Source: Ekonomim, March 17, 2023

National strategy: Türkiye inaugurates its first boron carbide factory

Türkiye has inaugurated its first boron carbide factory located in the province of Bandırma, south of the Sea of ​​Marmara. The factory will be able to produce 1,000 tonnes of boron carbide each year and will employ 279 people. The investment cost of the installation amounted to 80 million USD. The annual income that the factory will generate is estimated at 35-40 million USD. The two main properties of boron carbide are its very low density and a hardness comparable to that of diamond. In addition to very high mechanical properties, it also has good corrosion resistance and excellent heat resistance.

It will be used in many fields, including the defense industry, automotive, nuclear and metallurgy. It can be used to manufacture vehicles, helicopters, or reinforced military uniforms. Boron has become an important mineral in Türkiye, which holds 73% of the world's reserves. The country has made great efforts to transform it into a valuable ore. Thanks to this installation, the added value of boron will be multiplied by 300 or even 2000 depending on the areas of use (eg: 1 ton of boron ore will be worth 150 USD while 1 ton of boron carbide is worth 45,000 USD). Construction work on a second boron carbide plant continues in Kütahya province. The factory, which is expected to be operational in 2026, will have an annual production capacity of 5,000 tonnes.

Source: Ekonomim, January 19, 2023

The Turkish manufacturer TOGG launches the marketing of its first 100% electric SUV

The Turkish manufacturer TOGG has revealed the prices of its 100% electric compact SUV model, a model called the T10X, which will be available for pre-order from Thursday March 16, 2023:

• The standard version "V1 RWD" from 953,000 TL (47,650 EUR)
• The price of the standard range "V2 RWD" starts from 1,055,000 TL (52,750 EUR)
• The price of the long-range version "V2 RWD" starts from 1,215,000 TL (60,750 EUR)

Producing 160 kW / 218 horsepower, the T10X RWD (Rear Wheels Drive) will have ranges of 314 and 523 km depending on the capacity chosen. The 435-horsepower AWD (All Wheel Drive) dual-motor version, capable of reaching 100 km/h in 4.8 seconds, will be in circulation from October 29, 2023, the hundredth anniversary of the founding of the Republic of Türkiye.

It will be able to reach a charge level of 20% to 80% in less than 28 minutes with fast charging. The TOGG T10X is intended to be highly technological, customer-oriented, intelligent, connected, autonomous, shared and 100% electric. The vehicle is no exception to digital with a fully digital cockpit and global mobility services. The cabin includes a 41.3-inch end-to-end screen. The vehicle includes an on-board social camera, high-speed mobile internet and a cockpit with wifi hot spot function.

TOGG's sales strategy is not based on a distribution network via dealers. Users will be able to order the vehicle from the Trumore mobile digital platform and the website www.TOGG.com.tr

Source: NTV, March 14, 2023

Chinese giant BYD prepares its entry into the Turkish market

Chinese giant BYD (Build Your Dreams), the world's leading manufacturer of electric batteries, has signed a letter of intent with ALJ Türkiye to distribute the Chinese brand's electric passenger cars and light commercial vehicles on the Turkish market.

Under this partnership, ALJ Türkiye will assume responsibility for sales and after-sales service and establish a dealer network to provide localized services to Turkish customers. There are also plans to open several stores showcasing BYD's EV technology models and advancements in key cities across Türkiye. Tesla's Chinese rival and the world's No. 2 electric car manufacturer, BYD is recognized globally for its groundbreaking innovations in battery technology and has an unwavering commitment to sustainable development.

Globally, BYD vehicles are present on 6 continents, more than 70 countries and 400 cities, saving the equivalent of 29 million tons of carbon emissions through 3.5 million new energy passenger cars in circulation.

Source: Ekonomim, March 1, 2023

Stellantis & Koç Holding strengthen the operations of their JV Tofaş in Türkiye

Koç Holding and Stellantis N.V. announce the strengthening of their existing joint venture Tofaş and the optimization of their activities in Türkiye. As part of this strategic agreement, Tofaş will acquire the entire capital of Stellantis Otomotiv Pazarlama A.S., the distribution company of Stellantis in Türkiye. Subsequently, all Stellantis brands available in Türkiye, namely Alfa Romeo, Fiat, Citroën, DS Automobiles, Jeep®, Maserati, Opel and Peugeot, will be distributed by Tofaş. As part of this agreement:

Stellantis will award Tofaş the production of the “K0” model, in the medium-sized light commercial vehicle and passenger car versions, marketed under the five brands (Peugeot, Citroën, Opel, Vauxhall, Fiat) with the aim of launching the production from the beginning of 2025;

Current production of the Doblo is expected to continue until work begins on the “K0” model production lines in July 2023;

The current Fiat Egea/Tipo project is extended until the end of 2025.

Bringing together all activities in Türkiye under a single entity will, on the one hand, generate synergies in commercial activities, production and R&D at a global level, and on the other hand, offer Turkish consumers a broader range of products and services that are more in line with their needs.

Source: Stellantis, March 1, 2023

Ford, LG Energy and Koç Holding team up to produce battery cells in Türkiye

Ford, LG Energy Solution (LGES) and Koç Holding have signed a non-binding memorandum of understanding to form a new Joint Venture to create one of the largest commercial electric vehicle battery cell facilities in Europe.

The new entity will be located in an ZIO in Başkent, near Ankara, the capital. The project is expected to start later this year and production is expected to begin in 2026. The parties are committing to at least 25 GWh of annual production capacity, which could potentially reach 45 GWh. This JV builds on two long-standing business relationships that Ford has with LGES and Koç Holding. Ford and LGES have worked together for more than a decade, with LGES most recently supplying batteries from its factory in Poland for the Ford Mustang Mach-E and E-Transit. Ford Motor Company and Koç Holding have a historic relationship dating back almost a century through the Ford Otosan JV, which is now over 60 years old.

This strategic training supports Ford's goal of producing more than 2 million electric vehicles globally by 2026. Ford also aims to offer a fleet of fully electric pickup trucks and passenger vehicles in Europe by 2035 as well as a new generation of zero-emission vehicles.

Source: Koç, February 21, 2023

EBRD grants Ülker EUR 75 million loan to support sustainability

The new loan will help the company reduce greenhouse gas emissions within its own operations and throughout its supply chain, as well as increase its water use efficiency and waste recycling rate. Ulker will also work to increase the representation of women and support their career development within the company.

Ulker is one of Türkiye's leading snack brands, with a diverse product portfolio including biscuits, cakes and chocolate. Listed on the stock exchange, its shares are majority owned by Pladis Foods Limited, which is owned by Yildiz Holding. The company already has solid experience in sustainable development. Its overall approach already involves the adoption of a zero-waste corporate culture, decarbonization targets and the transition to more circular business models.

The EBRD is a major investor in Türkiye. To date, the Bank has invested more than EUR 17.2 billion, including EUR 1.6 billion in 2022.

Source: EBRD, March 14, 2023

Xometry launches in Türkiye with the acquisition of Tridi

Xometry, the global marketplace that connects buyers and suppliers of manufacturing services, announced the acquisition of Türkiye’s Tridi.

Xometry thus expands its already significant presence in the European region by adding a significant marketplace in a strategic area capable of serving customer needs across Europe. In addition to this acquisition, Xometry launched a localized marketplace for Turkish customers, xometry.com.tr. Xometry is a company specializing in the production of custom parts which relies on a network of more than 2000 partners in Europe. CNC machining, plastic injection molding, production of sheet metal parts or even online 3D printing services, Xometry offers a wide selection of manufacturing technologies, materials and surface treatments. Customers can also benefit from an instant online quote service available 24/7 directly in local currency, an AI-powered service for both rapid prototyping and mass production.

Türkiye's Tridi offers CNC machining, 3D printing, sheet metal fabrication, injection molding and urethane casting services through its network of approved suppliers. Tridi's customers come from a variety of industries, including aerospace and aviation, automotive, consumer electronics and plastics. The company will continue operations under the Xometry Türkiye brand and will be a subsidiary of Xometry Europe.

Source: Globe News Wire, March 3, 2023

Portuguese Smartex acquires Turkish Tuvis

Smartex, a Portuguese textile technology startup, has acquired Turkish Tuvis, a technology startup that develops artificial intelligence solutions for visual quality control on textile production lines.

This acquisition is expected to strengthen Smartex's global presence and product capabilities and improve customer experience as part of its goal to reduce textile waste. It is in fact the second most polluting industry in the world. Smartex and Tuvis share the same objective of digitalizing the textile industry using cutting-edge technologies and intend to unite their strength to develop new products and services.

Türkiye indeed represents a significant part of the global textile industry and is one of Smartex's largest markets with an established local distributor (ERKO). Smartex has also opened an Engineering Tech Center in Istanbul in Maslak (European side), one of the main business districts of Istanbul, which will provide space for the team to create unique technologies for the textile industry. Smartex also plans to hire more than ten employees with engineering expertise.

Source: Apparel Resources, March 16, 2023

AD Ports signs memorandum of understanding with Tosyalı Holding

AD Ports, Abu Dhabi's port operator, has signed a memorandum of understanding (MoU) with Tosyalı Holding, one of Türkiye's largest steel producers. The MoU aims to establish collaboration with Tosyalı on a wide range of shipping, logistics, ports and cargo forwarding services, including jointly investing in new port facilities to support the operations of export of Tosyalı.

With 30 manufacturing plants spread across several countries, Tosyalı has an annual manufacturing capacity of over 10 million tonnes of steel, with significant volumes shipped to markets around the world. The company operates an industrial site at the port of Iskenderun, Türkiye, and is participating in the development of the new port of Erzin in Antioch.

AD Ports Group has expanded its vessel fleet and logistics operations in 2022 through a series of strategic acquisitions and JVs, positioning the company as an ideal partner for the steel producer. The leaders are confident that the collaboration will contribute to the development of trade relations between the UAE and Türkiye, which saw non-oil trade between the two countries increase by 54% year-on-year in 2021.

Source: AD Ports Group, January 25, 2023

Türkiye ranks 6th country in Europe in terms of installed wind energy capacity

Türkiye is strengthening its position as a major player in wind energy and ranks 6th country in Europe in terms of installed capacity. Türkiye added 867 MW of wind power capacity in 2022, bringing its total installed capacity to 11,969 MW. The average capacity of wind turbines added to the system last year was 4.1 MW for onshore wind farms and 8 MW for offshore wind farms.

Türkiye ranks behind Germany which has the largest wind energy capacity (66,322 MW) in Europe, followed by Spain (29,798 MW), Great Britain (28,499 MW), France (21,135 MW) and Sweden (14,585 MW).

Wind energy represents 11% of Türkiye's total installed electricity capacity. A figure that remains behind the head of the pack dominated by Denmark which has the highest share of wind energy in all electricity production at 55%, followed by Ireland at 34% and Great Britain at 28%.

Source: Daily Sabah, March 2, 2023