64 percent of foreign companies to expand in Turkey

Istanbul, Turkey | August 24, 2007 by D-8 Secretariat

A majority of international investors currently operating in Turkey are heading to make new investments in the coming years, according to the International Investors Association’s (YASED) “Barometer Survey,” the results of which were announced by YASED Chairman Tahir Uysal earlier this month.

The survey determined evaluations being made by YASED members — foreign-based companies that have active operations in Turkey — about recent political and economic developments, their turnover, exports and profit goals and economic expectations. According to the survey results, economic expectations of foreign investors were generally positive, and 64% of of them are positive for the plan to expand in Turkey.

YASED members met their targets in the first half of 2007 when it came to profitability, exports and sales, and a significant number of them exceeded their goals. The majority of YASED members agreed that the economy will continue its growth at the current or an increasing rate, and most thought economic conditions for foreign investors can only get better.

According to a recent report issued by Deloitte, a leading global consulting firm, merger and acquisition transactions in Turkey in the first half of 2007 totaled $10.5 billion, and 41 major transactions worth $9.6 billion were realized by foreigners. It was also noted that European investors realized 31 transactions whose total volume was $6 billion.

Deloitte Turkey made an assessment on these transactions in a recent report which said Turkish companies continued to attract foreign capital despite the presidential election crisis and the general elections. The total value of the 66 transactions realized in the first six months of the year, taking into account the estimated value of some transactions whose values were not disclosed, reached $10.5 billion. This figure was $11 billion during the first half of 2006. According to Deloitte, the total volume of merger and purchase transactions in Turkey will reach $18 billion by the end of 2007.

In an assessment of the report, Basak Vardar, Deloitte Turkey ’s Institutional Finance partner, remarked that 80 percent of the investors who made transactions in Turkey in the last three years were happy with their decisions. “The interest of foreign investors in Turkey also grew in the first half of this year. Turkey continues [to be] assessed as a market where making beneficial investments is possible due to its chief qualities like low inflation, rapid growth and economic stability secured by EU and IMF measures,” the report said.

The purchase of Oyak Bank by the Dutch ING at $2.67 billion topped the list of transactions of 2007’s first half, while the second biggest was the purchase of the Izmir Harbor at $1.28 billion, and the third is Eczacibasi Health Services, purchased at $602 million. It was emphasized by the report that the most significant 10 transactions in the sectors of finance, energy, infrastructure, communication and real property comprised over 70 percent of all transactions.

According to a release made by the Foreign Economic Relations Council (DEIK), it has received 27 positive replies to proposals for joint meetings between Turkish and foreign business councils. DEIK Chairman Rona Yircali said foreigners have wanted to see stability in Turkey for a long time and their wish has come true. He said DEIK had organized a record 341 events in 2006 and with Turkey ’s accelerating stabilization and reform process, with the general elections out of the way, they were aiming to exceed this number in 2008. They have received many replies from the past four days from such groups as the Turkish-Korean Business Council, Japan and Pakistan business forums, the Turkish-Finnish Business Council and the Turkish-Russian Business Council.

D-8 Secretary General Dr Dipo Alam is enthusiastic with the survey result and underlined that as a member state of D-8, Turkey possess incredible economic potential, and member states of this organisation could use this potency to make tremendous growth by collaborating their own potentials with Turkey.

D-8 Secretariat made a number of meetings with Chambers of Commerce from the D-8 member state countries last June to discuss opportunities and challenges to expand public-private projects and cooperation in the D-8 activities. “Now we are very much looking forward to complete our preparation of the Preferential Trade Agreement, the expansion of intra-trade, industry colaboration, investments, energy, banking, tourism, and civil aviation to encourage a more active role of private sectors in economic partnerships and trade among D-8 member states,” said Dr. Alam yesterday at his office.

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