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Sector-specific opportunities

Research

You should carry out as much market research and planning as possible before exporting to Turkey, using both desk research and visits to the market. You need to determine if there is a market for your product or service and whether your pricing is competitive.

DIT’s trade specialists can help you identify local representatives for your products in Turkey. See: https://www.gov.uk/overseas-customers-export-opportunities.

DIT provides free international export sales leads from its worldwide network. Find export opportunities in Turkey at: https://opportunities.export.great.gov.uk/.

Government tenders in Turkey

Turkey’s Foreign Direct Investment (FDI) Law is based on the principle of equal treatment, allowing international investors the same rights as local investors. However, Turkey has not yet signed the WTO Government Procurement Agreement (GPA).

Although foreign companies can participate in public tenders, domestic organisations are granted a 15% price advantage over bidders from outside Turkey. You are therefore recommended to work closely with a local partner.

Visit the Turkish Public Procurement Authority (KIK) for details of the laws and regulations on public procurement, and the process for bidding, at: http://www.kik.gov.tr/default.aspx.

See also the Invest in Turkey site for a list of upcoming tenders, at: http://www.invest.gov.tr/en-US/infocenter/upcomingtenders/Pages/UpcomingTenders.aspx.

[Source – DIT/gov.uk]

 

Airports sector

In 2011 the Turkish Ministry of Transport, Maritime Affairs and Communications committed to develop a third airport in Istanbul to underpin Turkey’s ambitious claims to be the premier hub connecting Europe, Asia and the rest of the world. The airport would also address the rapidly expanding demographic, economic and commercial interests of the nation.

The 25-year leased Build, Operate, Transfer contract was awarded in May 2013 to the Istanbul Grand Airport (IGA) consortium: Cengiz, Mapa, Limak, Kolin, Kalyon. Once complete, the new airport will have a 150 million passenger capacity, six runways, 16 taxiways, 165 aircraft passenger bridges at all terminals and a 6.5 million square metre apron with the capability of parking 500 aircraft, making it one of the world’s biggest.

The land delivery to IGA took place in July 2014 and currently the ground works are ongoing.

Opportunities for UK companies include:

  • planning and master planning

  • airport design and architecture

  • professional and legal services

  • airport management

  • airport security

  • luggage handling systems

  • airfield lighting

  • fire fighting equipment

  • other equipment and procurement

Contact Trade Manager: zeyno.sobaci@mobile.trade.gov.uk for more information on opportunities in Turkey’s airport projects.

[Source – DIT/gov.uk]

 

Business services sector

Turkey’s strategic location at the crossroads of Europe, the CIS, the Middle East, and North Africa, along with the country’s existing potential, increase in per capita income, and large, young and growing population have positively impacted the development of the business services sector in Turkey. Turkey has significant experience in a wide range of business service lines, such as engineering and architectural consulting, technical testing, and call centres. The country also boasts expertise in knowledge-based services, such as auditing and accounting, legal advisory, and consulting.

Engineering and architectural consulting

  • Engineering and architectural consulting companies in Turkey provide services related to engineering, architecture, design, technical drawing, urban planning, scientific and environmental services.

  • A skilled workforce, cost-effective service compared to international standards, expertise in diverse markets, and project types help move the sector forward in Turkey.

  • During the 2015-2016 academic year in Turkey, a total of 33,785 students graduated from the fields of engineering and engineering trades in universities, while 14,585 students received their degree in the fields of architecture and construction.

Technical testing

  • The technical testing market offers a wide variety of business lines, such as composition and purity testing, technical inspection, and road transport.

  • The total annual turnover in these services has been showing an upward trend in the last decade, and as industries such as manufacturing, automotive, chemicals, and ICT continue to grow in Turkey the need for technical testing will increase accordingly.

Call centres

  • The call centre sector in Turkey has gained momentum since the inception of the country’s first call centres in the 1990s.

  • According to the Turkish Call Centers Association, the industry had a value of 4.5 billion and employed 85,000 people in 1,229 call centres throughout the country in 2016, up from the 2013 figures of 2.9 billion, 70,200 employees, and 1,124 call centres.

  • The call centre sector has set an ambitious target of having a work force of 300,000 people by 2023.

Knowledge-based services

  • Knowledge-based services such as auditing and accounting, legal advisory, and consulting also play a crucial role in Turkey’s economy.

  • Turkey’s vibrant economy and improved business environment have paved the way for a dramatic increase in the number of foreign companies in Turkey.

  • The number of companies in Turkey with foreign capital quadrupled in the last decade to reach 52,700 in 2016. This increase, together with the improved business environment, has resulted in the growth of knowledge-based services in Turkey.

  • As new regulations come into force and Turkey aspires to have compatible standards with the EU, the sector is set to for significant growth.

[Source – Invest in Turkey]

 

Defence and security sector

There are significant opportunities in the defence and security sectors as Turkey is one of the world’s largest defence and security equipment importers.

One of Turkey’s strategic targets is to create a self-sufficient defence/security industry sector. UK industry should seek partnership with the Turkish industry – not just for business in Turkey, but for third markets as well.

Turkey is an important partner in building international security, and the Turkish security sector represents a significant market for the UK industry including cyber, energy, nuclear, airports and disaster relief.

Opportunities are available in:

  • nuclear

  • airports

Contact: belgin.clissold@fco.gov.uk for more information on opportunities in Turkey’s defence and security sector.

[Source – DIT/gov.uk]

 

Energy and renewables sector

Energy consumption in Turkey is low compared with Western European countries, but is steadily increasing. The Turkish Electricity Transmission Company estimates that Turkey’s demand for electricity will increase at an annual rate of 6% between 2009 and 2023. For Turkey to meet its energy demand, significant investments are necessary in the energy sector, estimated around US $130 billion by 2023.

The transition of the Turkish electricity market to a liberalised market has attracted both domestic and foreign investors, and privatisation together with plans to construct new power plants present further opportunities for foreign businesses.

In 2010 the Turkish and Russian Governments signed an agreement for Turkey's first nuclear power plant at Akkuyu, with the first reactor reaching completion by the end of 2020. In 2013 Turkey signed an agreement with a French/Japanese consortium for a second nuclear plant at Sinop with construction expected to start in 2018 and a site for a third nuclear plant is under consideration in the Trakya region with construction expected to start in 2023. The total programme is valued at US $45 billion.

Turkey also has significant interest in renewable energy. By 2023, the government wants 30% of Turkey’s energy to be generated from renewable sources. Turkey enacted a new law aimed to encourage renewable energy investment through offering better incentives, in particular in solar energy. This has attracted interest from Germany, Spain and the US.

Solar energy is the most important renewable power source for Turkey due to its climate. There are major solar energy project plans that are supported by the government such as a £3 billion project providing 4,000 MW of solar energy to power over one million homes.

Due to its climate and topography Turkey is also attractive for wind energy investments. Given the constraints on grid infrastructure potential, the highest feasible wind-power generation capacity is estimated at 48 GW, with 10 GW of this total capacity being offshore wind. 20 GW onshore wind has been set as the target capacity to attain by 2023 by the Energy Ministry.

Privatisation of energy production and distribution is underway, but progress so far has been mixed. There are opportunities for UK companies, particularly for service sector companies as new private sector owners look to make efficiency savings.

The UK is well-placed to offer technical expertise in areas such as low carbon energy generation, carbon markets, consultancy and grid connection, as well as energy efficiency in existing technologies. Promoting efficiency in energy use has previously not been a priority for Turkey, but Turkish policy-makers have sought to address the issue with legislation designed to reduce Turkey’s energy bill by US $5-6 billion.

There are major opportunities in:

  • legal and regulatory advice

  • human resources training

  • local capacity building

  • supply chain

Contact the Trade Manager umay.uysal@mobile.trade.gov.uk for more information on nuclear and renewable energy and power projects.

[Source – DIT/gov.uk]

 

Financial services and banking sector

Turkey has a very competitive retail financial services industry, often listed as one of the most advanced in the world.

The sector has gone through a radical structural transformation since the financial crisis in 2001. A new industry watchdog has been created and has responsibility for enforcing strict reserve requirements.

The Turkish banking industry is considerably healthier than its European counterparts and survived the recent financial crisis relatively unscathed partly as a result of this reform.

The financial and legal services sector in Turkey offers a wide range of opportunities. Under close regulatory supervision, Turkish financial institutions boast healthy financial ratios and bright growth prospects. Currently the loan to GDP ratio (around 50%) is low and coupled with a healthy expected GDP growth rate, the loan portfolio of the Turkish banking sector is expected to grow 18% per annum and deposits are expected to grow on average 15% per annum for the next few years.

Turkish financial institutions have little exposure to potential European debt issues and have an improving earnings growth outlook compared to regional peers. Non-bank financial institutions are still small compared to banks but due to Turkey’s rooted stock exchange, the brokerage and fund business remain viable and healthy. The insurance sector is also vibrant and top foreign players such as Aviva and AXA are all present in Turkey.

The Turkish financial service sector is heavily regulated and requirements are very strict. As a result, Turkish banks are regarded as some of the safest in the world. Technology is widely used and Turkish internet and telephone banking systems are some of the most advanced in the world.

Due to the young demographics of the country, consumer banking is important and developed. Turkish financial services professionals are well educated and most of them speak at least one foreign language, English in most instances.

Turkish banks and other financial professional services institutions are open and used to collaborating with foreign firms. Banking licences are distributed by the Banking Regulation and Supervision Agency and the selection process is rigorous.

There are opportunities for UK investors in:

  • infrastructure finance

  • asset management

  • private pension schemes

  • Islamic finance

Contact the Trade Manager sinan.akkaya@mobile.trade.gov.uk for more information on opportunities in Turkey’s financial sector.

[Source – DIT/gov.uk]

 

Healthcare and life sciences sector

Health is one of the fastest growing sectors in Turkey. An important factor behind Turkey’s continued healthcare budget growth is the country’s enhanced health insurance coverage and the demand for new healthcare facilities across the country.

Besides state investments, the private sector is closely involved in building private healthcare facilities, contributing to demand for state-of-the-art medical equipment and devices. There are plans to develop 30-40, 3-5,000 bed healthcare campuses and related facilities across the country. With its growth trend in the last few years, the sector is one of the top sectors attracting business and investment opportunities.

Key opportunities

There is considerable scope for UK companies to enter the supply and service provision chain. The possible value to UK companies is estimated at £2.5 billion.

Opportunities can be found in the following areas:

  • the total bed capacity in Turkish hospitals is above 200,000. The privatisation and transformation of the healthcare system, establishment of new healthcare facilities under the PPP model and on-going hospital projects of the Ministry of Health, offer significant opportunities for foreign exports and investment

  • EU harmonisation of standards, part of the overall sector modernisation, will reduce the specific barriers to entry to the Turkish market. This will make those operating in other EU and international markets much more easily able to sell to Turkey

  • demographic factors, including an increasing population and longer life expectancy, will boost demand for healthcare in Turkey

  • introduction of universal health insurance coverage

  • potential for generic sector growth, with market demand patterns structured by a cost conscious government and population

  • design – innovative e-delivery, energy efficient/green buildings, intelligent IT, designing of rooms and devices for operation theatres, laboratories and patient rooms

  • provision of goods – equipment, devices, furniture, consumables

  • provision of services – catering, cleaning, security, hotel and accommodation services

  • operation of commercial areas – cafes, restaurants, shops, banks, chemists etc.

  • professional, clinical and facilities management services to the delivery of these projects

  • integrated software systems between hospitals for communication and data sharing

  • sterilisation – operation theatres, intensive care units, devices and laboratories

  • patient tracing and monitoring equipment – bed-head monitors, tablets, mounted sensors

  • security – CCTV’s, scanning devices, alarm and fire systems

There are also wider opportunities and demand in the Turkish healthcare sector in the supply of:

  • dental products and consumables

  • orthopaedic and implantable products and consumables

  • splints and other fracture appliances, hearing aids and consumables

  • education and training – practitioners, nurses, device technicians, catering staff, cleaning staff

  • high-end advanced medical technologies and equipment in all areas of medicine, but especially in diagnostics, laboratory systems, and robotic surgery equipment

  • telehealth equipment and suppliers – primary care, home care, mobile care services with proven benefits for patients with long term conditions

  • elderly and disabled medical services – home care, mobile care

Export trade may benefit from closer links with the EU, an improvement in local industry standards and an increase in international investment.

Getting into the Turkish healthcare market

In order to market medical equipment in Turkey, we advise you to find an exclusive distributor or representative in the Turkish market. They should have a strong reseller base to market and service the products across the country, follow public and private medical equipment tenders and be knowledgeable about shipping products into Turkey.

Medical equipment exported to Turkey has to comply with Turkish customs regulations. A foreign company’s representative in Turkey has to register the product in the National Data Bank that keeps track of all medical equipment marketed in Turkey. This will then place the product on the all-important approved list of the Social Security Agency.

Contact Trade Manager: zeyno.sobaci@mobile.trade.gov.uk for more information on opportunities in Public Private Partnership (PPP) hospital projects.

Contact Trade Adviser: merve.gokben@mobile.trade.gov.uk for more information on opportunities in the healthcare products sector.

[Source – DIT/gov.uk]

 

ICT and telecommunications sector

The Turkish software sector was worth over £650 million in 2013, and has grown 13% annually in recent years, now totalling over £900 million.

The success of the ICT sector in Turkey depends on the success in bringing down illegal software use, which at 65% is nearly twice the global average. The global economic crisis may have provided a boost to hosted software and outsourcing solutions, which have grown in popularity.

There is considerable potential for software market growth but lack of access to credit limits Turkish SMEs’ willingness to spend on applications and solutions that often must be financed from operational budgets.

The Turkish Government is focusing on its e-Transformation Turkey Project and the other areas in line with its information society strategy, for example email-KEP, e-Visa and e-Passport. As part of its Information Society Strategy and Action Plan, Turkey will aim to initiate new initiatives, in order to attract foreign investors, to improve effectiveness of communication with universities, to create necessary human resources for the implementation of the strategy and to perform changes in related legislation. For more information, see: http://www.bilgitoplumustratejisi.org/en.

The young population of Turkey continues to drive sales of PCs, cell phones, consumer electronics, and cellular voice and data services. The audio-visual market is expected to rise further as smart buildings are constructed with audio-visual and control room installations as well as support entertainment consumer goods and services such as Internet Protocol Television (IPTV). 

Research from the BCCT via BGA Partners (January 2018) indicates that in Europe, people look at their smartphones 48 times a day. In Turkey, this number rises to 78 according to research by Deloitte. 78 times a day means that Turkish people check their phones every 13 minutes.

While mobile phone addiction seems to be higher in Turkey than in Europe, statistics say that 79% of people will check their phones within 15 minutes of waking up. In Europe this figure is at the level of 62%. Similarly, the proportion of people checking their smartphones within 15 minutes of going to sleep is around 53% in Europe, while this figure is 72% for Turkey.

66% of people are aware that that they use their mobile phones with excess, and half of these say they do try to limit their usage. Another interesting statistic shows that two out of every three videos are shared on instant messaging platforms such as WhatsApp or Facebook Messenger according to research.

Yet another result of this research is related with mobile access of e-commerce websites. In 2015, 32% of smartphone users were using their mobile phones to glance at shopping websites. Today, the proportion has risen to 46%. This shows that mobile access has gained much importance from the perspective of e-commerce.

Mobile advertising has also been increasing its share among the other digital advertising media. The Turkish public, with its attachment to smartphones, points to a big potential in terms of mobile advertising.

For more information on opportunities in the ICT/telecommunications sector contact the DIT team in Turkey at: https://www.gov.uk/world/organisations/department-for-international-trade-turkey#contact-us.

[Source – Invest in Turkey/gov.uk]

 

Infrastructure, construction and design sector

The Turkish Government’s 2023 Vision and planned expenditure will mean that UK firms with expertise in creative and technical services with good networking skills will get a chance to take part in the high-growth areas of service-related business, such as sustainable construction-related consultancy, urban regeneration, engineering and design.

Public Private Partnership (PPP) projects will be more widespread and the upgrading of the existing infrastructure – motorways, railways and airports – as well as building new infrastructure, will be on the agenda. The annual need for new housing is approximately 400,000 units domestically.

The sector is considered to be the “Locomotive” of the economy and creates 7% of all employment. Turkish contractors are active in around 100 countries and are known for being successful, especially in volatile environments.

Turkey offers great opportunities for real estate developers and investors by combining a large construction sector with growing commercial and industrial output.

Some key facts and figures in the Turkish real estate sector include:

  • The real estate sector accounted for approximately 5% of GDP in the last decade. On the investment side, FDI inflow rose to US $16.5 billion, with real estate and construction garnering US $4.1 billion (24.8%) of total FDI in 2015.

  • Urban renewal and mega projects dominate the agenda for the foreseeable future, particularly in Istanbul. Some projects in the city include the Marmaray, Canal Istanbul, the third Bosphorus Bridge, and Istanbul’s third airport.

  • It is estimated that around 6.7 million residential units nationwide will be demolished and rebuilt over the next 20 years, meaning an average of 334,000 units per year. Around US $15 billion of financing will be required each year for urban renewal projects. In total, a budget of US $400 billion has been allocated for this initiative, with the private sector taking the lead role.

  • According to the Knight Frank Global House Price Index, Turkey ranked first in the 55-location index in Q4 of 2015 in terms of annual price growth index. Turkey saw a year-on-year increase of 18.4% and thus emerged as the top-performing housing market in the world, ahead of New Zealand, Sweden, and Australia.

  • The total number of houses sold in the Turkish property market reached 1,289,320 units in 2015; likewise sales of real estate to foreigners began to increase following the abolishment of the reciprocity law in 2012. In 2015, 22,830 houses were sold to foreigners in Turkey, marking a year-on-year increase of 20.4%. With regard to house sales to foreigners, Istanbul was the top-performing province with 7,493 sales in 2015, followed by Antalya with 6,072 sales, Bursa with 1,501 sales, and Yalova with 1,425 sales.

  • Office construction licenses obtained throughout Turkey increased by 27%, and together totaled 7 million m² of additional planned office space in 2013. Class-A office space supply is expected to reach 6.5 million m² by the end of 2017 with the completion of projects such as the Istanbul Finance Center, which, according to projections, will provide employment for 30,000 people.

  • 368 shopping centers are operational in Turkey with a total gross leasable area of 10.89 million m². 108 shopping centers in Istanbul with a total gross leasable area of 4 million m² represent 37% of the total leasable shopping center area in Turkey.

  • According to JLL’s Cross Border Retailer Attractiveness Index 2015, Istanbul is the 7th most attractive market in Europe after London, Paris, Moscow, Milan, Madrid and Rome.

  • In spite of the growth in recent years, Turkey is still below the average of total leasable area per person compared to the European average. This indicates potential for further retail growth in Turkey.

  • By the end of 2015, there were 13,615 registered accommodation facilities. 9,188 of these facilities were licensed by their respective municipalities, while the remaining 4,427 held tourism operation licenses. The combined total bed capacity of these facilities exceeds 1,250,000, although there is still a gap between supply and demand, particularly in Istanbul.

  • There are currently 281 projects in the pipeline that would add 74,130 much-needed beds to Turkey's short supply.

[Source – mostly Invest in Turkey (2018)]

 

Tourism sector

As the sixth most popular tourist destination in the world and well on its way to attracting more than 40 million tourists annually within the next couple of years, Turkey continues to present vast investment opportunities in both the established and newly-developing subsectors of the industry.

With its favorable location, existing potential, mega projects, and ambitious targets set for 2023, the tourism sector continues to grow at a rate that outstrips its bed capacity. Even though there has been a surge of investments in the last several years, there is still ample room for new ventures. Eastern and Southeastern Anatolia both have untapped potential for culture tourism as well as the increasingly popular boutique hotel concept, which blends well with the characteristic nature, history, and culture of the regions.

Here are some essential facts and figures about the Turkish tourism sector:

  • Turkey is currently the sixth most popular tourist destination in the world, attracting more than 30 million tourists annually and continuing to show positive growth year-on-year.

  • The tourism sector has set annual targets of 50 million tourist arrivals and revenues of US $50 billion by 2023.

  • According to the Ministry of Culture and Tourism, the number of foreign travelers arriving in Turkey in 2015 was 39.4 million, while total turnover of the tourism industry that same year was US $31.4 billion.

  • Growth in the Turkish tourism industry has been above the global average in recent years, and the direct contribution of the industry to the current account deficit in 2015 was 80%, while its contribution to GDP reached 4.37% the same year.

  • By the end of 2015, there were 13,615 registered accommodation facilities. 9,188 of these facilities were licensed by their respective municipalities, while the remaining 4,427 held tourism operation licenses. The combined total bed capacity of these facilities exceeds 1,250,000.

  • There are currently 281 projects in the pipeline that would add 74,130 much-needed beds to Turkey’s short supply.

  • Antalya is the most preferred city in Turkey based on the number of incoming foreign visitors. Visited by 34% of the foreign tourists in 2014, Antalya has over 500 four-star and five-star hotels in its center and surrounding towns such as Kemer, Belek and Kas.

  • In 2015, there were more than 165 hotel chains in Turkey, with 15% of these hotels being owned by international investors.

  • Turkey has 7,200 km of coastline and ranks second among 38 countries with its 436 blue-flag beaches; only Spain has more blue-flag beaches than Turkey with 578. There are also 22 blue-flag marinas in Turkey.

  • In terms of geothermal tourism potential, Turkey is among the top seven countries in the world and ranks first in Europe with its 1,500 thermal springs. Bed capacity in the various thermal spa resorts has reached a combined 55,140.

  • Turkey is also an emerging destination for golf tourism with 15 tourism operation-licensed golf resorts. Most golf courses in Turkey use Bermuda grass, which is perfect for a Mediterranean climate and can be used for more than a decade.

  • Based on 2015 tourism figures, Euromonitor International has ranked the world’s top 100 most-visited cities, with Antalya coming in tenth place with 11.1 million foreign visitors.

  • Owing to its increasing global connectivity, due in no small part to its favourable geographical position, Istanbul is very much the centre of attention with its recent rise to the fifth most visited city according to MasterCard Global Destinations Cities Index 2015 with over 11.8 million foreign and domestic visitors annually.

  • The International Congress and Convention Association's (ICCA) Country and City Rankings Report for 2014 saw Istanbul maintain its top 10 position as a global congress destination. Ranking eighth in the world in 2014 with 130 congresses, Istanbul has now held a top-ten position since 2010.

  • The Turkish Government offers incentives and pursues policies that offer reduced utility prices and reduced tax rates while decisively eliminating any bureaucratic barriers that may hinder growth in the tourism sector.

[Source – mostly Invest in Turkey (2018)]


 

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