February 2024

Economic & business news from Türkiye

Advantis supports the industrial establishment of the Böllhoff Group in Türkiye

The Böllhoff Group, a global manufacturer of assembly technologies, organized a groundbreaking ceremony on February 7 to mark the start of the construction phase of its future industrial site in Turkey for an investment of EUR 26 million. .

The production plant will be located in the Izbaş Free Zone, located north of the city of İzmir. The facility, with an area of ​​10,538 m2, will be the 14th global location of the Böllhoff Group and will employ approximately 70 local employees. All products manufactured there will be exported for use in Böllhoff's facilities in France and all sourcing necessary for manufacturing, from molds to raw materials, will be carried out from Turkey.

In his speech at the ceremony, Michael Böllhoff, Chairman of the Board of Directors, highlighted the reasons for choosing Turkey: “Turkey stands out for its labor costs, logistical advantages and proximity with EU markets.”

Sources: Advantis, Böllhoff Group

EBRD and Truffle Capital invest in Turkish fintech DG Pays

The European Bank for Reconstruction and Development (EBRD) and Truffle Capital have completed their investment in Turkish fintech company Dg Pays, marking the EBRD's second investment and Truffle Capital's first in the fintech company. It is also one of the largest investments made in Turkey in the fintech field.

“There is a competitive environment in Turkey similar to that of Europe” according to Bernard-Louis Roques, CEO of Truffle Capital, which is thus making its very first investment in Turkey. “One of the advantages of the company's presence in Turkey is that it is the first line of access to the Middle East. This is something that is generally done more successfully from Turkey than from Europe." Truffle Capital is a French venture capital fund with a strong track record in fintech investments.

With this latest investment, DG Pays doubles its valuation, which now stands at over 600 million USD. Founded in 2017, the Turkish fintech is a fast-growing payment technology service provider. It works with a wide range of institutions in Turkey encompassing almost all major banks as well as other entities such as telecommunications operators, public transport operators, municipalities, supermarket chains and insurance companies.

Source: Dünya, February 27, 2024

French brand Alpine arrives in Türkiye

Operating under the Renault group, the Alpine sports car brand plans to launch in Turkey with the A110 model, introduced in 2017.

The A110 model will be offered in 3 versions which use the same 1.8 turbo 4-cylinder petrol unit, but which do not display the same power. The entry-level A110 develops 252 hp and accelerates from 0 to 100 km/h in 4.5 seconds, while the A110 GT and A110 S offer 300 hp and reaches a speed of 0 to 100 km/h in 4 ,2 seconds. The 3 versions keep a light weight to preserve great agility (1102 kg, 1119 kg and 1129 kg). The marketing price has not yet been revealed.

The iconic Alpine brand was founded in 1955 by Jean Rédélé in Dieppe in Normandy. The company took off with the appearance of the original A110 in 1962. At the time, Alpine and Renault collaborated closely since Alpines were sold and maintained by Renault dealerships. The brand made a remarkable breakthrough in the sports car sector by winning numerous rallies. In 1973, Alpine became the first manufacturer to be crowned World Rally Champion. After 35 years of absence, Alpine reappeared on the circuits in 2013 and commercially in 2017 with the manufacture of the Alpine A110.

Source: Haber Döviz, February 21, 2024

Ghitha Holding buys Turkish MNG Airlines

Ghitha Holding announced the acquisition of a 44% stake in MNG Airlines for USD 211.2 million. This major acquisition aims to propel Ghitha’s expansion into the logistics and food sector and marks an important step towards Ghitha’s goal of becoming the largest food trading company in the region.

Ghitha Holding, a subsidiary of Abu Dhabi investment giant International Holding Company (IHC), already diversified into food, agriculture and various catering sectors, assesses this strategic acquisition as crucial for expand the reach of its global supply chain. The acquisition aims to strengthen the company’s logistics and distribution capabilities.

Founded in 1996, MNG Airlines is one of Turkey's leading cargo carriers. The company continues its operations with a fleet of 4 Airbus A300-600s, 2 Airbus A330-300Fs and 1 A330-200Fs. It has an export warehouse located 12 km from Atatürk Airport commissioned in 2000 built on a space of 10,000 m2 with a volume of 60,000 m3 and a capacity of 7,000 Europe pallets and fully compliant with EU standards.

This partnership expands Ghitha's reach, reinforces its commitment to quality sourcing while allowing it to leverage MNG's expertise to better serve its customers. This key acquisition remains subject to regulatory approvals which is expected to be finalized in the first half of 2024.

Source: Gulf Business, February 6, 2024

Maurice Ward Group acquires Turkish Air Tech Kargo

Maurice Ward Group (MWG), a privately owned and independent regional freight forwarder based in Ireland, announces the acquisition of Air Tech Kargo Turkiye. With this acquisition, MWG continues its mission to hold wholly-owned facilities in all Greater Europe countries and Turkey becomes the 28 country on the continent to have MWG-owned operations. This acquisition marks a significant step for MWG as Turkey is considered an extremely important market, well positioned to become a major manufacturing and trading center for Europe. With the diversification of the supply chain and continued offshoring, MWG sees enormous growth potential. The acquisition will add more than 60,000 additional air cargo shipments to the MWG network per year and provide comprehensive coverage of all major ports and airports.

Founded in 1968, Maurice Ward Group provides global freight forwarding, warehousing, logistics and customs clearance solutions. As for Air Tech Kargo, it is a company founded in 2015 certified freight agent by IATA. MWG was its most important partner. This transaction will enable Turkish to fully exploit market opportunities in Turkey and realize its growth ambitions in the market. after the United Kingdom.

Source: Patronlar Dünyası, February 1, 2024

Tourism: 2 Turkish cities in the top 5

Istanbul and Antalya are among the top 5 cities in the world in terms of the number of international arrivals in 2023 according to the “Top 100 City Destinations Index 2023” report published by Euromonitor International. Istanbul comes first with 20.2 million international travelers welcomed, a growth of 26% year-on-year. The megacity of nearly 16 million inhabitants was followed by London in second place (18.8 million) and Dubai in third place (16.8 million).

More surprising, the seaside destination of Antalya which has become the 4th city in the world to have welcomed the most international arrivals with 16.5 million travelers. This is more than 12 times its own population, with Antalya home to around 1.3 million. Antalya is a popular travel destination particularly for Germans, Russians and British who make up the vast majority of its international arrivals. Located on the Mediterranean shore, it is full of secluded bays, popular beaches and also historic sites. These unique tourist characteristics in the world led Mustafa Kemal Atatürk, the founder of the Republic of Turkey, to one day proclaim: "There is no doubt that Antalya is the most beautiful place in the world."

In January 2024, Turkey removed the requirement for U.S., Canadian and Mexican travelers to obtain an e-visa for visits lasting less than 90 days. It is expected that this recent relaxation will increase the number of international travelers in 2024. Medical tourism constitutes another important factor of attractiveness. In 2022, 1.2 million people traveled to Turkey for the purpose of medical tourism. Last year, the number of tourists increased by 10.4% in Turkey to reach more than 49 million visitors.

Source: BBC Travel, February 6, 2024

Turkish-Chinese agreement of 600 Mns USD

Turkish company Progresiva Energy Investments has signed an agreement with Chinese power plant equipment manufacturer Harbin Electric International (HEI) to build and finance an electricity storage facility and wind farm in Turkey. The project will be the largest energy storage facility in Europe. Total amount of investment: 600 million USD. The investment size for the 1,000 MWh storage facility will range between USD 350 million and USD 375 million, while that for the 250 MW wind farm will be around USD 250 million.

Chinese company HEI will be the main contractor for engineering, construction and procurement of the project. As for Kontrolmatik Technologies, Progresiva's main shareholder, it will be responsible for the electrical work. Its subsidiary Pomega Energy Storage Technologies will act as subcontractor for the purchase of the batteries. The storage facility, which will be located in Tekirdağ in the northern Marmara region, known for its intense industrial and energy consumption, is expected to be commissioned in 2025, followed by the wind farm in 2027.

Turkey's installed electricity capacity reached 107,000 MW at the end of 2023 (compared to 32,000 MW in 2022). Renewable energy resources constitute 55% of installed capacity. Indeed, renewable energy support mechanisms and renewable resource zones have rapidly increased the country's total installed capacity and energy production. Turkey currently ranks 1st in installed geothermal energy capacity, 2nd in installed hydroelectric capacity, 7th in wind energy and 8th in installed solar energy capacity among European countries. As a reminder, Turkey has set the objective of achieving carbon neutrality by 2053 as part of its commitment to the Paris Agreements.

Source: Daily Sabah, February 21, 2024

Haier inaugurates its new site in Türkiye

Chinese giant Haier, one of the world's largest manufacturers of household appliances, has inaugurated its new cooking equipment manufacturing plant as well as a new R&D center in Turkey for a total investment of EUR 70 million. The new site, located in the ZIO in Eskişehir, will have an annual capacity of 300,000 units of built-in ovens which will increase to 1.2 million units within 5 years.

The factory aims to be a real production and re-export hub for the group which intends to export the products manufactured to the European continent. The built-in ovens manufactured will be equipped with the latest technologies: AI, Internet connection, remote control. With the dishwasher and dryer manufacturing plants commissioned in 2021, Haier's investments in Eskişehir now amount to EUR 200 million.

World leader with a market share of 17%, Haier also dreams of becoming number 1 in Europe (currently 4th with a market share of 8.3%) and is counting on its new facilities in Turkey to achieve this.

Source: Dünya, February 28, 2024

South Korean MegaGen invests in Türkiye

The South Korean MegaGen, the 8th largest implant manufacturer in the world, has chosen Turkey to set up its first production plant outside of South Korea. MegaGen plans its industrial implementation in several stages: the company plans to make an initial investment of 15 million USD in a production line; then as the expected ROI is obtained, more investments will be made to expand the site and increase production capacities. The company anticipates a total investment of 100 million USD after 5 years.

The choice of Turkey was motivated for several reasons: a very important medical tourism destination, the geostrategic position of a hub which will allow South Korea to export to several countries in the MENA region, a country “open to development” according to statements by Kwang Bum Park, CEO of MegaGen, as well as available aid and subsidies. The factory will be located in Istanbul, the economic heart of the country. It will be equipped with intelligent production systems with robotic systems. Training will be provided to Turkish and foreign dentists. Ultimately, MegaGen could consider producing other products. Founded in 2002, MegaGen manufactures dental chairs, imaging systems and software in addition to being an implant manufacturer. Its implant technologies are used in more than 120 countries including Turkey.

Source: Ekonomim, February 26, 2024

The Norwegian Fund has invested more than EUR 1.3 billion in Türkiye in 2023

The Norwegian sovereign wealth fund invested last year in 39 Turkish companies for a total amount of 1.3 billion USD. The Tupras refinery received the largest equity investment; The fund holds a 1.3% stake in the company, with a total investment of approximately USD 121.7 million.

Other major investments made include the investment of 106.15 million USD in the conglomerate Koc Holding, 90.98 million USD invested in the discount supermarket chain BIM, 73.89 million USD invested in the bank Akbank, 63 .34 million USD in the company Turkish Airlines and 60.54 million USD in Aselsan, Turkish defense giant. The fund's largest percentage of participation is that of Mavi, a ready-to-wear brand, in which it holds a 4.18% share with an investment of 32.73 million USD.

The Norwegian sovereign wealth fund is the largest fund in the world; last year it saw a record return of EUR 197 billion through investments in 8,859 companies in 65 countries. In Turkey, the fund's investments continue to grow each year: they increased from 485 million USD in 2021 to 1.22 billion USD in 2022.

Source: Anadolu Agency, January 31, 2024

IFC has invested more than USD 20 billion in Türkiye

The International Finance Corporation (IFC) has invested more than USD 20 billion in the private sector in Turkey over the past 10 years. IFC investments have increased significantly over the past two years to support the private sector in an environment of macroeconomic fluctuations. Nearly 3 billion USD among the 20 billion USD of investments were made between July 2022 and June 2023. The IFC has also committed to donating around 1 billion USD for the reconstruction of the regions affected by the earthquakes of February 6 2023.

For two years, the financial company has been trying to improve financial access to women entrepreneurs and small businesses, by increasing investments in sustainable and critical infrastructure, supporting the Turkish manufacturing sector in particular through businesses and production projects oriented towards export and increased trade.

In addition, the World Bank Group will provide direct loans of USD 18 billion to the private sector over the next three years, in addition to the USD 17 billion programs implemented in Turkey meaning a budget plan of approximately USD 35 billion USD in total. Additionally, the International Bank for Reconstruction and Development (IBRD) approved USD 1 billion in financing in June 2023 to help rebuild earthquake-affected regions that will benefit 14 million people.

Source: Dünya, February 28, 2024

Japanese Kyokuyo acquires Turkish transformer

Kyokuyo, Japan's 4th largest seafood company, has acquired a majority stake in Turkish fish processor Kocaman. Terms were not revealed, but the deal includes the transfer of 1.78 million Kyokuyo shares to Kocaman's owners.

With this acquisition, the Japanese giant wishes to strengthen its production and sales activity for Europe by making Kocaman, which exports frozen food products to the old continent, one of its subsidiaries.

This transaction is part of the Japanese global strategy to expand its activities abroad by developing bases there with a policy of producing and marketing abroad. Under the plan, Kyokuyo established Kyokuyo Vina Foods, a food production subsidiary in Vietnam in 2022, and Ocean's Kitchen Property Management in 2023, in Washington, United States to manufacture and sell crab kamaboko, or dried surimi.

Japanese giant Kyokuyo reported net sales of EUR 1.9 billion, an increase of 1.8% compared to the previous financial year.

Source: Sea Food Source, February 1, 2024

Indian Nodwin Gaming acquires Ninja Global

The Indian company Nodwin Gaming, a subsidiary of Nazara Technologies Limited and specialized in esports, has acquired 100% of the shares of Nınja Global FZCO, a gaming company based in Turkey and the Middle East. This acquisition marks an important step for Nodwin Gaming towards enhancing its international presence, particularly in the West Asian and Turkish markets.

Indeed, Nodwin Gaming is actively expanding its global presence, with a particular focus on key emerging markets and within the new global BRICS+ network.

The integration of Ninja is a “natural and essential” step. It follows the acquisition of gaming marketing services company PublishMe (Turkish-Emirati) in October for USD 2 million and 13.51% stake in Freaks 4U Gaming (Germany) for USD 8 million.

The acquisition of Ninja Global is expected to strengthen the Indian company's existing capabilities to offer solutions to publishers and #brands operating in Turkey and the Middle East.

As the esports industry continues to grow rapidly, this investment demonstrates Nodwin Gaming’s commitment to expanding its presence in key markets.

Source: The Hindu Business Line, February 14, 2024

German Adesso acquires Turkish Arteno

The German group Adesso, a global IT services provider, has acquired the Turkish company Arteno Consulting, specializing in SAP consulting.

With this acquisition, the German group continues its international expansion and its growth strategy. It complements its technology portfolio in Turkey with the addition of highly sought-after SAP services while expanding SmartShore's capabilities for its international customers. The Arteno team will be integrated into the Adesso Türkiye company.

As an experienced consulting firm, SAP Silver Partner certified Arteno adds highly specialized expertise in developing Adesso's existing and new client businesses in Turkey. For ten years, the company has been advising Turkish clients and well-known companies in the German-speaking market and deploying solutions for them at their respective locations in Turkey. In addition, access to the vast international market and resources of the Adesso Group will offer Arteno employees strong development potential.

With more than 9,200 employees and an annual turnover of more than EUR 1 billion expected in 2023, the Adesso Group is one of the largest German IT service providers. It offers consulting and software development services for business process optimization and ready-to-use software for standard applications.

Source: Business Insider, February 20, 2024