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The Opportunities in Turkey for UK Companies October 2007

The Opportunities in Turkey for UK Companies October 2007. The Turkish Economy. Basic Facts Turkey: World’s 17th, Europe’s 6th largest economy GNP for 2006: $ 662 billion GNP per capita for 2006: $ 9,000 Unemployment rate 9% in 2006

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The Opportunities in Turkey for UK Companies October 2007

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  1. The Opportunities in Turkey for UK Companies October 2007

  2. The TurkishEconomy Basic Facts Turkey: World’s 17th, Europe’s 6th largest economy GNP for 2006: $ 662 billion GNP per capita for 2006: $ 9,000 Unemployment rate 9% in 2006 Inflation (CPI) down to single digits: 9.6 % in 2006; 4% 2007 target FDI in 2006: $20 billion (due to successful privatisation) Bilateral trade volume (UK-Turkey) $ 10.5 billion in 2005 $12 billion in 2006

  3. Main Economic Agenda • Improved economic stability under AKP’s one party government. • AKP sustained its strong majority in Parliament, with 48% of votes. • Presidential elections on the way. • EU Accession Talks started on 3 October 2005. • Key Government reforms include: • Social security reform • New legislation on tax administration and tax policy • Mortgage legislation

  4. TRADE • Total trade volume of Turkey in 2006 was $ 224 billion, increasing 62% from 2005. • UK is the top 8th importer to Turkey, with $ 5.1 billion in 2006. • The total trade volume between UK and Turkey was $12 billion in 2006 increasing • UK is Turkey’s 2nd export market as of 2006 • Turkey has Europe’s third largest population • Turkey is EU’s 6th largest trade partner • Turkey is in top ten emerging markets including markets like China and India

  5. Why You Should Consider Turkey Now • Average growth rate is 7.3% since 2004 - top three strongest growth in OECD • Turkey attracted $30 billion FDI in the last two years and expected to attract another $25 billion in 2007 • Turkey becomes “operation and production hub” for multinationals • Dynamic Private Sector • Springboard to Central Asia & Northern Middle East • EU Accession Negotiations • Key driver for change • Labour market reform as the prior issue in government’s agenda

  6. Top Exporters to Turkey($ bn)

  7. Key Privatisations • Turkish Airlines • TEDAS (State electricity distribution company) • TCDD (State Railways) • TEKEL (State tobacco company) • National Lottery Full details from Turkish Privatisation Agency (www.oib.gov.tr)

  8. Other Key Factors • Banking Sector • Majority of World’s largest banks merged with Turkish banks- consolidation is expected to continue • Large untapped SME market • Environment • 70 billion Euro investment required (World Bank estimate) • EU driven and subsidised • Waste Management, Water Basin Management, Recycling legislation under consideration

  9. Other Key Opportunities Cont. • Financial Services • Huge potential for mortgage market • Scope for further consolidation in non-banking financial sector • Transport Sector • Extension of rail network • Extension of suburban/commuter transport systems • Redevelopment of Airports • Ongoing rehabilitation of road network • Privatisation of sea ports

  10. British Companies in Turkey Over 900 UK companies have operations in Turkey Arcadia Group Group 4 Balfour Beatty HSBC BAT Imperial Tobacco BOC International Power BP Amoco Marks & Spencer British Standards Inst. Oxford Uni Press Cadburys Tesco Coats Viyela Thames Water Corus Unilever Glaxo Smith Kline Vodafone

  11. Doing Business in Turkey • Get yourself a good distributor/agent • Make sure you reach the decision maker at the top • Handle problems promptly and properly - close knit business community means bad news travels fast • The usual methods of payment are used • In general, Turkish firms have a good payment record • Credit checking facilities are available if needed • Export credits/insurance is available • Target the main cities first - Istanbul, Ankara, Izmir

  12. Business Customs • European business ethics and modern management practices • Highly (often foreign) educated managers & an increasing skills base • Increasing use of English for business, but fluency varies • Turks will take the time to meet foreign business visitors and entertainment is part of the normal process • Personal relationships are very important, always exchange pleasantries before getting down to business • Accept the offer of a tea/coffee/water when you meet • Be prepared to be invited out to dinner with your contact and maybe even to meet his family

  13. How Can we Help • Provide informal assistance and advice • Produce reports on the suitability of your product for the Turkish market and its chances of success • Find potential agents/distributors • Arrange visit programmes • Help arrange product launches • Put you in touch with the right people

  14. Could it all go Wrong • Uncertainty about presidential elections • Iraq/Iran/Syria security tensions increase and spill over into Turkey • Cyprus - deadlock continues, tensions increase within EU, provokes major row • EU Accession Talks stall and fail • Turkish intransigence on “sovereignty” • Turkish critics gain support and succeed in scuppering accession

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