July 2024

Economic & business news from Türkiye

Chinese BYD to Open Factory in Türkiye

A significant agreement has been signed between BYD, the world’s largest electric vehicle manufacturer, and the Turkish Ministry of Industry and Technology (T.C. Sanayi ve Teknoloji Bakanlığı | Republic Of Türkiye Ministry of Industry and Technology) for the construction of a new factory specializing in electric and plug-in hybrid vehicles. Set to have an annual production capacity of 150,000 vehicles, the facility will also include a research and development center focused on sustainable mobility technologies. Production is expected to start by the end of 2026, creating up to 5,000 direct jobs. The investment amounts to $1 billion USD.

Türkiye, the third-largest car producer in Europe, offers key strategic advantages that have attracted BYD to make this substantial investment. These include a developing technological ecosystem, a solid supplier base, an exceptional location, and a skilled workforce. This investment aims to enhance local production capabilities and improve logistical efficiency to meet the growing demand for new energy vehicles in the region, particularly targeting European consumers.

Türkiye is prioritizing the transition to electric and environmentally friendly vehicles, a commitment reflected in the national brand TOGG and the rapid deployment of charging stations across the country. With these new investments, Türkiye aims to become a leader in the transformation of the automotive sector.

This decision comes shortly after Türkiye imposed an additional 40% tax on electric vehicle imports from China last month. Other Chinese manufacturers are also in advanced discussions to set up production in Türkiye. For instance, SWM Motor, an Italian brand owned by the Chinese group Shineray, has applied to manufacture in Türkiye. Additionally, representatives from Skyworth have met with their Turkish distributor, Ulu Motor, in Ankara to discuss future investment projects in the country.

Source: CNN Türk, July 8, 2024

Moody’s Upgrades Türkiye’s Credit Rating by Two Notches

Moody's Investors Service has upgraded Türkiye’s sovereign credit rating from "B3" to "B1," with a positive outlook. This is the first such action by the international credit rating agency in over a decade. The decision was driven by improvements in Ankara's economic policies, particularly the return to a more "orthodox" monetary policy.

Türkiye faces significant economic challenges, including chronic inflation. Last year, the country established an economic team to stabilize the economy and control consumer prices. Inflation reached 69.8% in April, exceeding initial projections, but the regulator remains optimistic, forecasting a decrease to 38% by the end of 2024 and 14% by the end of 2025.

This aligns with government data released in May, which showed the Turkish economy growing by 5.7% in the first quarter of 2024, with strengthened domestic demand. “Inflation and domestic demand have started to moderate, giving us greater confidence that inflationary pressures will significantly ease over the coming months and into 2025,” Moody’s stated. The agency also noted that the central bank’s swift actions to enhance the credibility of its monetary policy are helping restore confidence in the currency.

This year, Türkiye has also seen credit rating upgrades from Fitch Ratings and S&P Global, highlighting the country's substantial efforts to stabilize its economy and bolster monetary policy credibility. Additionally, Türkiye’s removal from the Financial Action Task Force (FATF) grey list, acknowledging significant progress in combating money laundering and terrorism financing, represents a key milestone. These positive developments are expected to enhance investor confidence, attract more capital, and stimulate future economic growth.

Source: Anadolu Agency, July 20, 2024

Türkiye Ranks 3rd Globally in Online Shopping

According to a report by We Are Social and Meltwater on global digital data, the number of unique mobile users in Türkiye reached 133 million last year, marking a 2.4% year-on-year increase.

Türkiye ranks 36th worldwide in internet adoption relative to its population, with a penetration rate of 86.5%. It stands 19th globally for time spent online, averaging 7 hours and 6 minutes per day. About 86.5% of the population uses the internet, 67.4% engages with social media, and 93.8% has a mobile connection.

Social Media Usage

Instagram leads in Türkiye, being the most used social media platform with 21 hours and 24 minutes spent per user per month. It is followed by TikTok, with 20 hours and 54 minutes. Users primarily follow friends, family, acquaintances, as well as brands, TV shows, and influencers. Türkiye ranks 49th globally, with an 11.7% rate of following influencers on social media.

Online Shopping

Türkiye holds the 3rd position globally for weekly online shopping with 64.6%. Key factors driving online purchases include free delivery, easy product returns, coupons and discounts, fast and simple payment options, and customer reviews. Among users, 36.8% discover new brands and products through social media ads. Other sources include search engines, TV and app advertisements, and brand or product websites.

Globally, mobile phone usage surpassed 69% in 2024, with 5.65 billion users, while internet usage rose to 67.1% of the global population, or 5.44 billion people, reflecting a 3.4% increase from the previous year.

Source: Ekonomim, July 12, 2024

ZF Friedrichshafen Moves Production to Türkiye

The German giant ZF Friedrichshafen, a globally recognized automotive supplier, has decided to transfer its production from Germany to Türkiye, where it already operates three subsidiaries. This decision is driven by lower costs, relative proximity to Europe, and the exemption from EU regulations, making Türkiye an especially attractive investment destination for the German company.

The move is also influenced by political conditions, EU bureaucracy, and high economic costs. The manufacturer has put many investments on hold due to reduced use of transmissions in electric vehicles. Additionally, it has been reported that 12,000 of the 54,000 employees in Germany might lose their jobs due to cost-cutting measures.

The automotive parts manufacturer is a global supplier of transmission and chassis technologies for cars and commercial vehicles. With approximately 168,700 employees worldwide, ZF Group reported a revenue of 46.6 billion EUR for the 2023 fiscal year. The company operates 162 production sites in 31 countries and will celebrate its 110th anniversary next year.

Source: Ekonomim, July 11, 2024

Energy Storage: Sino-Turkish Partnership

Maxxen Energy, a subsidiary of the Turkish firm Kontek Energy, has signed a partnership agreement with the Chinese company Hithium Energy Storage to produce 10 GWh of energy storage equipment over the next five years. This collaboration will bolster Türkiye's position in the global energy storage market. The new facility, located in the Aydın Ortaklar industrial zone, will utilize advanced sustainable technologies and significantly increase employment opportunities.

The strategic collaboration between Maxxen Energy and Hithium Energy aims to develop more sustainable energy systems and expand the use of energy storage technologies locally and globally. This partnership will support Türkiye in achieving its renewable energy goals, including enhancing solar and wind capacities. Tolga Murat Özdemir, CEO of Kontek Energy, emphasized the importance of energy storage in meeting future energy demands and reducing carbon footprints.

The new Maxxen Energy production facility will incorporate innovative technologies such as rainwater harvesting and glass solar facades, operating as a carbon-neutral building. The partnership with Hithium Energy is expected to lead to significant advancements in the energy sector and contribute to global energy sustainability efforts.

Reminder: Türkiye has ratified the Paris Agreements to limit global warming by reducing greenhouse gas emissions and taking necessary measures to achieve carbon neutrality by 2053.

Source: Maxxen Energy Press Release, May 2024

Investment AB Latour Acquires Turkish Firm Arkel

Investment AB Latour, the Swedish company founded by aristocrat and businessman Gustaf Douglas, has acquired ARKEL Elektrik Elektronik San.veTic.AŞ., Türkiye’s leading elevator technology firm. This acquisition marks Latour’s entry into the Turkish market.

Founded in 1988, Arkel specializes in the production of elevator components, including control boards, control panels, emergency systems, revision and alarm kits, and control units. With over 400 employees, Arkel generates an annual revenue of €62 million.

The CEO of Innovalift AB, a Latour subsidiary responsible for the acquisition, stated that this transaction will significantly enhance the company's position in the elevator control systems sector and open new geographic markets.

Investment AB Latour, listed on the Swedish stock exchange, also owns Securitas AB, one of Europe’s largest security companies, and Assa Abloy, the world’s largest lock manufacturer. With an annual revenue of over $8 billion, Latour is a significant player across various sectors.

Gustaf Douglas, who passed away last year, was one of Sweden’s wealthiest individuals with a fortune of $7.2 billion. He belonged to one of Europe's most prominent aristocratic families, being a Count of Morton through his father and a member of the Principality of Eulenburg through his mother. Following his death, his children have taken over the leadership of Investment AB Latour.

Source: Dünya, July 25, 2024

Strategic Merger between DP World and Evyap

The Emirati logistics giant DP World and the Turkish group Evyap have completed a strategic merger, uniting the strengths of two major Turkish ports located on the Sea of Marmara to create a new international logistics hub aimed at enhancing Türkiye's global trade. Currently, both terminals are operating at near full capacity.

Under the terms of the agreement, DP World will acquire a 58% stake in Evyapport, while the Evyap Group will hold a 42% stake in DP World Yarımca. The two ports will operate under a unified brand and management.

DP World executives have highlighted Türkiye as one of the group's key markets. They believe the merger will improve end-to-end solutions and provide new benefits in terms of speed and efficiency. DP World Yarımca has an annual capacity of 1.15 million TEUs and can accommodate up to four ships. Its two largest quays each measure approximately 450 meters in length and feature advanced technology capable of achieving 120 moves per hour. Located close to highways and rail systems, the port also employs eight remote-controlled STS cranes and boasts technical expertise with 23 rows.

The newly formed entity will reduce operational times, increase service diversity, and add value to Turkish trade through efficiency gains at both partner terminals. The merger will create a combined docking space of 2,085 meters, allowing more than one ultra-large container ship to dock simultaneously across the two terminals. The total container handling capacity will also exceed two million TEUs per year.

Source: The Maritime Executive, July 22, 2024

The Emirati Giant e& Acquires Turkish GlassHouse

Emirati telecommunications leader e&, formerly known as Emirates Telecommunications Group and Etisalat, has acquired the Turkish cloud services provider GlassHouse Türkiye through its wholly-owned subsidiary e& Enterprise. The deal, valued at $60 million, was concluded with Mediterra Capital, a Turkish private equity firm. This acquisition marks e&'s entry into the Turkish cloud market following successful expansions in Saudi Arabia and Egypt in 2019 and 2023, respectively. Upon completion, GlassHouse's financials will be consolidated into e&'s.

GlassHouse specializes in data backup and business continuity, achieving double-digit revenue growth and generating over 80% of its revenues in US dollars. With offices in Türkiye, Qatar, and South Africa, the company serves 2,000 clients across various sectors, including technology, defense, and Türkiye's largest banks.

This acquisition is a strategic move for e&, enhancing its service offerings and market presence. It reflects e&'s ambition to strengthen its position in the digital and IT services sector and demonstrates its commitment to diversifying its portfolio and expanding its capabilities in high-growth areas such as cloud services and SAP infrastructure. By acquiring GlassHouse, e& not only enters the Turkish market but also strengthens its regional position in the IT and cloud services sector.

e& also holds a 14.6% stake in the UK company Vodafone. Its consolidated net profit reached AED 2.3 billion ($630 million) in 2023, marking a 7% increase year-on-year.

Source: Agbi, June 26, 2024

Pegasystems Acquires Turkish Company Ultima

Pegasystems, the American software giant founded by Alan Trefler, has acquired Turkish company Ultima, marking Pegasystems' direct entry into the Turkish market. Alan Trefler, who won the World Chess Championship at the age of 21, founded Pegasystems in 1983. The company is renowned for its low-code decision support platform that leverages AI and workflow automation. The Pega platform helps businesses personalize customer engagement, automate services, and streamline operations with its scalable and flexible architecture. Pegasystems currently employs nearly 5,000 people and generates $1.5 billion in revenue, partnering with major companies like ING, Lloyds Banking Group, PayPal, and Cisco across over 40 countries.

Pegasystems and Ultima have already been collaborating in the Turkish market for more than seven years. This acquisition will strengthen the existing support network for its clients in Türkiye by integrating Ultima's expertise into Pega's operations. The goal is to ensure high levels of application expertise, service, and support, maintaining strong and trusted relationships.

Ultima is known for its strategic business applications and IT infrastructure development across various sectors, including cloud technologies and cybersecurity. The company collaborates with major Turkish firms such as Is Bankasi and Vodafone.

Source: Türkiye Today, July 3, 2024

Amadeus Opens New R&D Center in Istanbul

Spanish technology giant Amadeus has inaugurated its third largest research and development (R&D) center in Istanbul, employing around 500 developers. This move aligns with Türkiye's growing R&D landscape, which now boasts over 1,600 centers and hosts approximately 10,000 tech companies. The country's qualified workforce and attractive incentives have made it a prime location for global R&D activities.

Economic ties between Spain and Türkiye are also strengthening, with more than 700 Spanish-invested companies operating in Türkiye and bilateral trade reaching approximately $20 billion. Spanish investments in Türkiye have amassed over $13 billion.

Founded in 1987 and headquartered in Madrid, Amadeus specializes in technology solutions for the travel and tourism industry. It is a leading global provider of distribution systems and technology for travel agencies, airlines, hotels, airports, and other industry players. For 2023, Amadeus reported revenues of €4.56 billion.

Source: Daily Sabah, July 21, 2024

Turquie : Investissement de 30 milliards USD pour les Hautes Technologies

La Turquie a lancé le programme "HIT 30 : Programme de Promotion de la Haute Technologie", un ambitieux plan d'investissement de 30 milliards USD destiné à stimuler le développement des technologies de pointe. Ce programme vise à propulser la Turquie en tant que centre mondial des investissements en haute technologie, avec des incitations fiscales, des subventions et divers soutiens pour la recherche, le développement (R&D) et la production dans six domaines clés.

Les principaux objectifs du programme incluent :

- Production de batteries : 4,5 milliards USD seront investis pour créer une capacité de production de 80 GWh de batteries en Turquie.

- Fabrication de véhicules électriques : Avec un soutien de 5 milliards USD, la Turquie vise une production annuelle de 1 million de véhicules électriques.

- Production de puces : 5 milliards USD seront alloués pour établir au moins une usine de puces à échelle industrielle.

- Énergie solaire : Des subventions allant jusqu'à 8 000 USD par mégawatt seront accordées pour atteindre une capacité de production de 5 gigawatts en énergie solaire.

- Énergie éolienne : Le programme soutiendra la fabrication de composants critiques et de turbines offshore.

- Recherche et développement : Ankara prendra en charge la moitié des dépenses de personnel des nouveaux centres R&D créés par les 1 000 plus grandes entreprises mondiales.

Le HIT 30 s'accompagne d'initiatives pour la transformation numérique, la transition écologique et l'innovation technologique, visant à augmenter les exportations de haute technologie pour atteindre 50 % des exportations totales en produits et services à haute valeur technologique.

Source : Agence Anadolu, 27 juillet 2024

Floods & Drought: 600 Million USD in Project Funding

The World Bank has approved a 600 million USD funding to support Türkiye's efforts to protect its population and enhance its resilience against floods and droughts, which are increasing in frequency and intensity due to climate change.

The flood and drought management project in Türkiye will help increase flood control for people living in flood-prone areas, improve farmers' ability to monitor drought, and strengthen the country's institutional capacity for managing flood and drought risks. The flood management component will directly benefit over 150,000 people living in seven flood-prone river basins, while 10,000 farmers will receive vital drought monitoring data, including real-time data, to help them better manage water stress.

Floods, which now account for nearly 30% of all natural disasters in the country, have caused significant economic damage and a growing number of fatalities. Drought presents another major challenge, particularly for Türkiye, which is the 9th largest producer of agricultural products globally.

Türkiye is undertaking extensive efforts to enhance its resilience to climate-related risks, protect its population and economy, and achieve carbon neutrality by 2053 under the Paris Agreement.

Source: Hürriyet Daily News, June 30, 2024

Space Travel: First Signal Received from Türksat 6A Satellite

The Türksat 6A satellite, Türkiye's first national communications satellite, was launched from Cape Canaveral, Florida at 2:30 AM local time on July 9. The satellite was sent into space by a SpaceX Falcon 9 rocket. This milestone represents a significant advancement for Türkiye in satellite communications, enhancing the country's technological independence and national security.

Positioned at 42 degrees east longitude, Türksat 6A will provide communication services to over 5 billion people, covering regions such as India, Thailand, Malaysia, and Indonesia. With a power output of 8.4 kilowatts and weighing 4,229 kg, the satellite is expected to operate for at least 15 years. After its orbital insertion, its systems will undergo initial checks, followed by a month of testing before its official commissioning by Türksat.

Türksat 6A was developed by Turkish engineers at TUSAŞ's Space Systems Integration and Test Center in Ankara. It features over 80% domestic components. The project, led by the Ministry of Transport and Infrastructure, TÜBİTAK, Aselsan, Turkish Aerospace, and CTech, will expand Türksat's coverage to previously underserved countries, increasing the number of people covered by Turkish satellites from 3.5 billion to over 5 billion.

Source: Dünya, July 9, 2024

Turkish Airlines: Best Airline in Europe

Turkish Airlines has been named "Best Airline in Europe" for the ninth time by the aviation rating agency Skytrax at the World Airline Awards ceremony held in London. The airline also received the awards for "Best Business Class Catering in the World" and "Best Airline in Southern Europe."

These accolades highlight the airline's high level of service quality and its commitment to providing a comfortable travel experience for its passengers. They reflect the airline's performance and excellence, particularly in a competitive region.

Founded in 1933, Turkish Airlines operates a fleet of 458 aircraft (both passenger and cargo) serving 347 destinations in 130 countries.

Globally, Turkish Airlines ranks as the 7th best airline in the world, ahead of Air France (9th). The top 3 airlines are Qatar Airways, Singapore Airlines, and Emirates.

Source: Daily Sabah, June 25, 2024

Airport Services: Another Award for Istanbul Airport

The leading travel magazine, Travel + Leisure (New York), has awarded Istanbul Airport (IGA) the title of “Best Airport in the World.”

The airport received this accolade through votes from the magazine's readers, who number over 16 million each month. They participated in the annual "World's 10 Best International Airports" survey. Istanbul Airport scored 95.79 points.

The survey, conducted between October 2023 and February 2024, evaluated airports based on criteria such as accessibility, check-in, security, dining, shopping, and design. Istanbul Airport İGA stood out with its modern technologies and state-of-the-art facilities, demonstrating its ability to meet the expectations of travelers worldwide. This achievement highlights the airport's continuous efforts to enhance its services and satisfy its customers, surpassing prestigious competitors such as Changi, Hamad, and Dubai.

Istanbul Airport İGA first participated in the Travel + Leisure annual survey in 2021 and became the first Turkish airport to make the list.

Source: Ray Haber, July 18, 2024