September 2023

Economic & business news from Türkiye

Türkiye records growth of 3.8% in Q2 2023

Türkiye records significant growth of 3.8% in Q2 2023 compared to the same period last year. This is an important performance given the tense global financial conditions and world trade which contracted by 1.8% compared to the same period of the previous year. This figure is all the more significant since the country had to compensate for the economic effects of the terrible earthquakes that occurred last February. Household consumption expenditure was the item that contributed the most to growth (10.7 points); they increased by 15.6% in Q2 compared to the same quarter of 2022.

The sectors that have contributed the most to the country's economic performance are:

• Services: 6.4%
• Construction: 6.2%
• Public administration, education, human health and social work activities: 5.1%
• Finance and insurance: 4.9%
• Real estate: 3.2%
• Information and communication activities: 1.3%
• The agricultural sector: 1.2%

Manufacturing and professional, administrative and support services activities contracted by 2.6% and 1.2% respectively. Imports of goods and services increased by 20.3% while exports decreased by 9%. In addition, the 4% growth announced for the Q1 2023 period has been revised to 3.9%.

Source: NTV, August 31, 2023

Danone invests 450 million TL in Türkiye

The French giant Danone has just started the production of medical nutrition products in Türkiye, at its Lüleburgaz site, after having made a significant investment of 450 million TL (around 16 million EUR). This is Danone's first hybrid plant producing both dairy and medical nutrition products.

Indeed, the demand for this category of products, used in the treatment of malnutrition, is increasingly important as populations continue to age and the rate of chronic diseases increases.

Türkiye represents a strategic market for the agri-food giant where it has been present for 40 years. The group operates there with its 6 production sites and more than 2000 employees and makes a serious contribution to the country's economy with a turnover of 500 million EUR and exports worth 20 million USD.

Source: Bloomberg, September 26, 2023

BASF invests in new production plant in Türkiye

BASF is set to double its production capacity for water-soluble acrylic acid dispersants at its Dilovasi, Türkiye site with the introduction of a new production plant.This investment aims to support BASF's customers in the detergent, cleaning and chemical processing industry across Europe, the Middle East and Africa. According to the company, the additional capacities are expected to be fully operational by the end of 2023.

These water-soluble dispersants and functional additives are marketed by BASF's Care Chemicals business division under the Sokalan® brand and have a wide range of applications. They facilitate the removal of dirt, disperse dirt dissolved in water and prevent limescale deposits on laundry, dishes and in washing machines and dishwashers. Additionally, they are used in various technical processes to prevent clogging.

BASF's Care Chemicals division offers a wide range of ingredients for personal care, home care, industrial cleaning and technical applications. It is one of the world's leading suppliers to the cosmetics industry as well as the detergent and cleaning products industry. The product portfolio includes surfactants, emulsifiers, polymers, emollients, chelating agents, cosmetic active ingredients and UV filters. BASF achieved EUR 87.3 billion in turnover in 2022 and employs more than 111,000 people worldwide.

Source: BASF, August 15, 2023

WEG invests in new factory in Türkiye

Brazilian multinational WEG, one of the world's largest electrical equipment manufacturers, is expanding its operations in Türkiye by investing in a new electric motor factory. 7,000 m2 of additional space has thus been added at its site in Dilovası (Kocaeli), at the assembly line and at the warehouse, which have been operational since August 2022. This space will be used to provide technical support to customers and to assemble the products.

It will enable WEG to expand its operations to markets in the Middle East, Eastern Europe, North Africa and Central Asia. This expansion also offers significant potential for local OEMs as the industrial sector in Türkiye continues to grow every year. Indeed, more than 30% of Turkish GDP comes from the industrial sector.

Founded in 1961, WEG is a manufacturer of electric motors, variable speed drives and drive and transmission systems, soft starters, geared motors. The group has been present on the Turkish market for many years thanks to its partners. The country, located right in the center of its main customers, indeed offers great opportunities to export to countries close to Türkiye.

Source: Water Magazine, September 14, 2023

TeamSystem acquires 53% of the shares of Turkish Mikrogrup

TeamSystem, a technology company of Italian origin and leader in the digital solutions market, acquires a 53% stake in the capital of Mikrogrup, a Turkish company specializing in the development of accounting software solutions for SMEs.

This operation is part of the continuity of the international growth strategy of the Italian group which continues its expansion particularly around the Mediterranean. Türkiye is currently experiencing strong growth thanks to the sustained development of digitalization and cloud trends and TeamSystem expects the Turkish market to grow sustainably with a CAGR of "well above 20%" according to its estimates. CEO.

TeamSystem intends to support Mikrogrup in achieving a leading position and making the company the ideal partner for all SMEs or professionals who wish to take advantage of the advantages of digital technology to become more competitive. With a turnover of around 25 million EUR and more than 150,000 SME customers, Mikrogrup is already considered a leader in the business solutions market in Türkiye.

TeamSystem is a technology company that develops digital solutions and supports its clients in their digital transformation based on a series of innovative technologies and AI. The company closed the year 2022 with a turnover of around 695 million EUR, it relies on a workforce of more than 3,000 employees serving around 2 million customers.

Source: TeamSystem, August 1, 2023

TOGG is working on new generation batteries, including hydrogen

Turkish car manufacturer Togg, whose first 100% electric model (TX10) was launched last March and which has already managed to put more than 2,000 vehicles on the roads, has shared its future strategy regarding #batteries and technologies new generation energy sources.

The brand intends to invest in NMC (Nickel Manganese Cobalt) technology in 2026, technologies much more suited to electric cars, instead of LFP (Lithium Iron Phosphate) batteries although the latter are used by most manufacturers in cars. electrical.

The main goal of transitioning to this technology is the ability to charge faster at higher powers in a shorter time, with a longer range, as well as safer and cheaper batteries. In this sense, NMC batteries are the most suitable option thanks to the characteristics they offer in terms of energy density and power.

To meet the challenges of sustainable mobility, Togg is also working on hydrogen fuel cell technology, a clean technology and engine par excellence. The advantages of a hydrogen fuel cell vehicle are multiple: silent, no CO2 or fine particle emissions and the vehicles offer autonomy and performance similar to current cars.

Source: Haberler, August 24, 2023

Istanbul ranks 7th busiest airport in the world

By climbing 7 places, Istanbul Airport (IST) climbs into the top 10 busiest airports in the world in terms of passengers in 2022 and ranks 7th with 64.3 million travelers welcomed. The airport thus recorded a significant increase of 73.8% compared to the previous year.

It is located just in front of the legendary London Heathrow airport (8th) as well as Delhi airport (9th) and Paris CDG (10th).

Hartsfield-Jackson Atlanta International Airport maintains its leadership position and tops the rankings. With the resumption of international travel, global passenger traffic in 2022 reached almost 7 billion, an increase of 53.5% compared to 2021 and 73.8% compared to 2019 figures.

In terms of international passengers, Istanbul ranks 5th with more than 48 million travelers welcomed. Furthermore, Istanbul Airport ranked 1st in Europe in terms of passenger traffic increase for the month of July 2023 (+16.5%) and welcomed 7.4 million travelers.

Note that the top 10 busiest airports in the world represent 10% of global traffic.

Source: Airports Council International, April 5, 2023

Türkiye obtains financing of 966 million USD

The World Bank has granted a loan of USD 966 million to Türkiye to enable it to finance its ecological transformation. This loan is part of the World Bank's commitment to provide USD 35 billion in financing to Türkiye over a three-year period.

This financing can be used for new investments in the real sector, in particular for reconstruction following the earthquakes of last February as well as for “green” transformation.

As part of this overall envelope, funding of EUR 500 million to develop renewable energy projects in the public sector and in municipalities will be implemented by the Ministry of Environment, Urbanization and Climate Change and the Turkish bank Iller Bankasi.

Funding of EUR 395.75 million has already been granted for the “Water Circularity and Efficiency Improvement Project” which aims to improve the circularity and efficiency of water in Türkiye to help address the challenges water scarcity induced by climate change and reduce wastewater pollution in water-stressed areas.

The amount of financing from the bank currently reaches ≈3.2 billion USD.

Source: DailySabah, September 22, 2023

Türkiye has considerable potential in renewable energies

Türkiye has an extremely advantageous predisposition regarding the use of renewable energies, particularly solar and wind. This is recalled by the Ministry of Energy and Natural Resources, which plans to install 42,000 MW of solar energy, 18,000 MW of wind energy and 5,000 MW of offshore wind energy by 2035. The Turkish renewable energy market is estimated to register a CAGR of around 4.9% during the forecast period 2022-2027.

These energy objectives aim to reduce Türkiye's external dependence by maximizing the use of local resources and to fight against climate change. Türkiye is thus continuing its efforts with the aim of increasing share of renewable sources and add nuclear energy to the energy basket.

This is how Türkiye is currently discussing with China regarding the construction of a new nuclear power plant, the negotiations of which should be finalized in the coming months while talks with Russia regarding the second plant continue. Turkish authorities are also in contact with South Korea.

Source: Ekonomim, September 15, 2023

Around 5.5% of Turkish companies use AI

According to a study conducted by TUIK, around 5.5% of Turkish companies surveyed reported using artificial intelligence (AI) technologies, up from 3.5% in 2022.

48.4% of these companies use AI technologies that identify objects or people based on images. Next come technologies that automate different workflows or assist in decision-making and technologies that generate written or spoken language.

Companies said the main reason AI is not used is high cost. Others cited a lack of staff with the required expertise, followed by incompatibility with existing equipment, software or systems.

The survey also showed that 96% of companies with more than 10 employees have access to the Internet (up from 85.4% last year). Around 56% of businesses reported having a website (vs. 51.2% in 2021). This figure reaches 93% for companies with more than 250 employees and 52% for small companies with fewer than 50 employees.

Finally, about 18% of businesses made online sales through websites, mobile apps, or electronic data interchange (EDI) in 2022.

Source: Hürriyet Daily News, September 16, 2023