October 2023

Economic & business news from Türkiye

Austrian Prinzhorn invests 400 million EUR in Türkiye

The Austrian Prinzhorn Group, one of the European market leaders in the corrugated packaging, paper and waste management sectors, has announced a significant investment of EUR 400 million to build a new manufacturing plant. paper in Türkiye.

With this investment, the group is targeting a turnover of 200 million EUR by producing 500,000 tonnes of recycled paper per year. The site, which will be located in the city of Kütahya, will employ 1,500 people.

Prinzhorn is a major player in Türkiye. Present since 2013, the group has invested a total of EUR 170 million there over the past 10 years: it owns 4 corrugated cardboard packaging factories, 2 paper factories and 4 waste management facilities. The group also invested EUR 19 million in three business units (Dunapack Packaging: corrugated packaging solutions, Hamburger Containerboard: high-quality paper production and Hamburger Recycling: collection of secondary raw materials and waste management) and increased the number of employees from 850 to 1,500. Today Türkiye is a market which represents 15% of the group's turnover.

The recycling rate in Türkiye is currently 60%. It was 50% 10 years ago and is expected to increase to 70% in the next 10 years.

Source: Dünya, September 29, 2023

JYSK opens its 3rd store in Istanbul

The Danish JYSK, a chain of stores specializing in furniture and home goods, will inaugurate the opening of its 3rd store on December 14, 2023 in Istanbul in the Tepe Nautilus shopping center in Kadıköy (Asian side).

With a surface area of ​​1,421 m2, the store will offer a hygge-type experience: a Danish art of living with a philosophy of life that advocates a return to the essentials, a concept that has been developing in Türkiye for several years now.

JYSK arrived in Türkiye last May by opening two stores simultaneously in Istanbul on the European side of the city. The brand quickly became a success and pushed the group to make this additional investment in less than a year. JYSK plans to expand the number of its stores to other Turkish cities.

International in scope, JYSK has more than 3,300 stores in 45 countries. Its 2020/21 turnover reached EUR 4.87 billion with a total workforce of around 30,000 employees.

Source: Ekonomim, October 23, 2023

Yanmar inaugurates its new factory in Izmir

The Turkish subsidiary of Japanese Yanmar, manufacturer of agricultural machinery and equipment, energy systems, industrial engines and construction equipment, has just inaugurated a new tractor factory in Türkiye.

This new 25,000 m2 site will be used for the manufacturing and assembly of tractors, a spare parts warehouse and a logistics center. 35 tractors/day are planned to be assembled there.

By multiplying its production capacity by 3.5, the Japanese firm intends to increase its export volume while increasing its market share by double digits in a country which is the 4th largest tractor market in the world. The vehicles will primarily target markets in Europe, the Middle East and Africa.

Yanmar Türkiye Makine A.Ş. has been active in Türkiye since 2016, when the company established a representative office. It then established a local subsidiary in 2017 to further expand its operations in Türkiye and surrounding regions. In 2020, it bought the Turkish Solis Traktor Türkiye and has since continued to manufacture Solis brand tractors while also manufacturing its own Yanmar brand tractors.

Source: BNN Network, October 4, 2023

Coca-Cola inaugurates a digital center in Istanbul

This center will serve a vast geographic area, 25 countries in this case located in Eurasia and the Middle East. This is the first center of its kind to become operational among similar units expected to be established across Coca-Cola's nine groups.

The center aims to accelerate the development of digital capabilities and digital transformation, will enable rapid and automatic access to information on different themes (marketing, strategy and finance) through technological applications, and will improve business efficiency through to data analysis tools. Priority will also be given to the development of applications offering rapid and automatic access to information, increasing business efficiency and accelerating decision-making and action processes.

The aim is to make Türkiye the base of the region’s digital transformation. The country benefits from a favorable technological ecosystem, with recognized and internationally successful start-ups in areas such as digital commerce, gaming and financial technologies. In addition, Türkiye has been one of Coca-Cola's regional and strategic management centers since 1964. Today, the company is established there with 16 brands and 11 factories. The center will employ 20 people, including 13 of Turkish nationality; the team will be made up of 60% women.

Source: Bloomberg, September 15, 2023

Still Arser opens operations center in Türkiye

STILL ARSER, JV between German KION Group, the largest manufacturer of forklifts and warehouse equipment in the EMEA region, and Turkish Arkas Holding, has commissioned an operational center located in Çerkezköy (northeast of Türkiye). Investment cost: TRY 30 million.

The center, with a closed area of ​​5,000 m2, will operate to European standards and will ensure the overhaul of used vehicles and aims to renew at least 250 vehicles per year using innovative technologies. The vehicles will be completely dismantled, fitted with new parts and restored to their new appearance and then offered to the market for rental and sale.

Türkiye is the 7th largest market in the EMEA region, which is why the country “deserves special attention and investment” according to Christophe Lautray, Vice President Sales and Services for the EMEA region of the KION group.

STILL ARSER provides services in the intralogistics sector: the company offers the sale and rental of new and used forklifts, after-sales service and automation solutions.

The company was created under the name ARSER within the Arkas Group in 1996, became a distributor of STILL in 2001 and changed its name in 2013 to become STILL ARSER.

Source: ST Endüstri, September 14, 2023

DFSK is back on the Turkish market

The Chinese automobile manufacturer DFSK has just re-entered the Turkish market by launching the marketing of 6 vehicles, 2 of which are electric, via its Turkish distributor SHSFilo. These models will come in the form of 2 petrol SUVs, 2 petrol utility vehicles and 2 electric utility vehicles. The manufacturer plans to expand its offering in 2024 with light hybrid SUV, plug-in SUV and sedan models.

DFSK was born in 2003 from the merger of DongFeng, one of the oldest Chinese brands, and Sokon, one of the largest Chinese industrial groups specializing in the manufacture of utility vehicles. Today the brand markets its models in more than 70 countries. It has 7 production sites in China, Indonesia and the United States.

Chinese manufacturers have gained popularity and continue to establish themselves in Türkiye. Voyah, MG, Skywell, Chery and Leapmotor already market their models on the Turkish market. The giant BYD signed a letter of intent last March with ALJ Türkiye for the distribution of its electric vehicles. Sales are expected to begin in November. The Changan brand should also market its first Alsvin model by the end of the year with the strong message of offering “the cheapest car”. The Hongqi brand, which has served as the official vehicle of Chinese heads of state since the days of former Chinese President Mao Zedong, will also enter the Turkish market with its electric SUV model. Türkiye thus becomes the second country where Hongqi is established after Norway among European countries.

Source: Dünya, September 1, 2023; Ekonomim, October 17, 2023

Takeover of Whirlpool by Turkish Arçelik approved

Last January, Türkiye's Arçelik signed an agreement with Whirlpool, one of the world's leading manufacturers of household appliances, to acquire its production and marketing subsidiaries in Europe.

Under EU rules on corporate mergers, the European Union Commission has approved the acquisition of exclusive control of American company Whirlpool's household appliances business in Europe, the Middle East and Africa by Arçelik. The antitrust authorities have in fact concluded that the transaction will not pose competition problems, taking into account in particular the existence of alternative suppliers in the countries of the European Economic Area where both parties are active.

The companies will create a new entity consisting of Arcelik's European units producing large and small appliances as well as consumer electronics and Whirlpool's European operations. Arcelik will own 75% of the company and Whirlpool the remaining 25%. Whirlpool's brands include Ariston, Indesit, Hotpoint, Ignis, Privileg, Bauknecht, Polar and Laden. Arcelik's brands are Beko, Blomberg, Arctic, Altus, Grundig, Flavel, Leisure, Zenith and Elektrabregenz.

Source: Stock Exchange Zone, October 24, 2023

Turkish series are popular at Cannes

Last week, the 39th edition of MIP Markets - MIPTV, MIPCOM & more was held in Cannes, the international audiovisual content trade show where more than 2,600 producers, 3,100 buyers and more than 11,000 visitors gathered. Türkiye was represented by 34 companies, 20 of which participated via the Istanbul Chamber of Commerce.

During the first session of MIPCOM 2023, Türkiye ranked first in television series exports, excluding English-speaking countries, and third in the world after the United States and the United Kingdom. The series “Yalı Çapkını” (translated as “Golden Boy”) was notably sold at a record price of 700,000 USD per episode.

In recent years, Turkish productions have enjoyed dazzling success: 750 million people in 152 countries watch content produced in Türkiye. The Turkish audiovisual sector now ranks second in the world in terms of export of television series. The United States remains in the lead when it comes to series exports. Türkiye comes first in exporting non-English-speaking series, ahead of South Korea and France. Historical fiction like Muhteşem Yüzyıl (The Magnificent Century) or Diriliş Ertuğrul (Resurrection: Ertuğrul) as well as dramas like Aşk-ı Memnu (Forbidden Love), Kara Sevda (Endless Love), Öyle bir Geçer Zaman Ki (Time Goes By) or Fatmagül are among the most exported and viewed Turkish series in the world.

Turkish exports of films and TV series reached around USD 750 million in 2022. This figure is expected to reach USD 1 billion in 2023. Spain is the largest importer of Turkish series which are also very popular in Latin America.

Source: TRT Haber, October 16, 2023

Partnership between Zorlu Enerji and Schaelffer

A partnership agreement has been signed between Türkiye's Zorlu Enerji and German technology company Schaeffler to develop innovative maintenance solutions and services for wind turbines in Türkiye.

The partnership aims to develop solutions for workshop maintenance services of key wind turbine equipment and improve the efficiency, sustainability and reliability of wind power generation in Türkiye. Under this partnership, Zorlu Enerji established the “Zorlu Repair and Renewal Center” located in Denizli region to provide comprehensive maintenance services for wind turbine components. The center will initially serve Zorlu Enerji’s wind energy portfolio and will later expand its services to other power plant operators in the region. Schaeffler will design and produce the bearings for critical equipment used in wind turbines. This partnership is expected to revolutionize wind turbine maintenance services in Türkiye.

Today, the country has around 4,000 wind turbines. It is expected that serious investments will be made in wind power as part of a desire to increase the use of renewable energies in the overall energy mix.

Source: Dünya, October 5, 2023

The largest industrial companies in Türkiye

Istanbul Chamber of Industry (ISO) revealed the ISO 500 ranking, Türkiye's 500 largest industrial companies in 2022. TÜPRAŞ Company, the oil refining subsidiary of Turkish giant Koc Holding A.Ş, was once again crowned the largest industrial enterprise in the country with a production-based turnover worth 418.4 billion TL (≈25.2 billion USD). The oil refining subsidiary of Azerbaijani energy company SOCAR, STAR Rafineri, ranks second with sales of 189.2 billion TL (≈11.4 billion USD). Finally, Koç Holding's automobile subsidiary Ford Otosan ranks third with 140.1 billion TL (≈8.44 billion USD).

Total sales of the 500 largest industrial companies jumped 119% year-on-year to reach 4,500 billion TL (≈270 billion USD) in 2022, thanks in particular to the solid performance of exports, dynamic domestic demand, the rise in exchange rates and prices and the increase in export earnings in Turkish lira.

Indeed, Turkish exports increased by 12.9% to reach USD 254 billion in 2022, while the exports of the 500 largest industrial companies climbed by 14.1% to reach almost USD 98 billion. Thus, the export growth of the ISO 500 group exceeded Türkiye's overall performance by 1.2%, with a share in the country's industrial exports of around 40%.

The companies in the ranking cover 24 distinct sectors. Among all sectors, the food sector has the largest number of companies, with a total of 94 entities. This sector was closely followed by the primary metallurgical industry (77 companies). The motor vehicle, trailer and semi-trailer manufacturing sector was another large sector, with 43 companies.

Source: ISO-Istanbul Sanayi Odası, September 26, 2023

Turkish giant Nurol Teknoloji acquires German IKH

Turkish company Nurol Teknoloji, one of the world's leading manufacturers of advanced technical ballistic ceramics, has acquired a majority stake in German ceramic raw materials manufacturer Industrie Keramik Hochrhein (IKH).

With this acquisition, Nurol Teknoloji aims to strengthen its leadership in the field of ballistic ceramics but also to accelerate R&D efforts in advanced technical ceramics and to develop innovative products in this field.

Nurol Holding is an industrial conglomerate in Türkiye operating in several sectors (construction, energy, tourism) including the manufacturing of military vehicles. It is one of the major players in the Turkish defense ecosystem and one of the largest suppliers of armored vehicles to Türkiye and NATO countries. The company produces armor for personnel and vehicles on land, air and sea using advanced technical ceramics such as boron carbide (B4C), silicon carbide (SiC) and alumina (Al2O3).

The German company IKH develops and produces innovative ceramic powders. It has two factories producing oxidized and non-oxidized fine and ultrafine ceramic powders, and supplies specific powders meeting the needs of various industries.

Source: Nurol Teknoloji, October 6, 2023