Global giant re-invests in Turkish factory
Posted by meb at September 24th, 2009
General Electric, or GE, a global media, technology, services and manufacturing company, has begun to invest in future technologies at its engine-parts division in Turkey’s northwestern city of Eskişehir, according to a GE executive.
The firm will produce new compressor-wing technologies only in Turkey, said GE Turkey Managing Director Kürşat Özkan. The investment totals nearly $50 million, he added.
Speaking about the global crisis and its impacts, Özkan said that GE will continue its activities in Turkey. “We have started investing in future technologies here in our Eskişehir division, although there is a capacity surplus in the world. New compressor-wing technologies will be produced only in Turkey.”
The firm has already started developing some of its production technologies in Turkey, he said, adding, “It may not sound reasonable to make such a manufacturing investment in a period marked with demand contraction in the market, but we will have positioned ourselves once the market demand returns.”
An additional building has been built at the current Tusaş Engine Industries factory, he said. “There is not a booming demand at present, but in time this will be the best facility in the world for our product. With all its elements, this investment approaches $50 million. There are long-term projects that we cannot cut. Our activities for train production are ongoing. The European market needs next-generation trains, therefore Turkey may become a strong center for this industry. I predict that the factory will start operating next year.”
Özkan also commented on an engineering center in Gebze, the largest district of the northwestern industrial city of Kocaeli. “This is also a long-term project. We will eventually employ 200 engineers there. Training this many people requires long-term work. We will not make cuts there due to the crisis, since we have to continue our investments by training our staff.”
Replacing business models
Noting that business models based on long-term financing have deteriorated both in developed and developing countries in the aftermath of the global turmoil, Özkan expressed the need to replace them with alternatives.
In such a climate, it would not be realistic to have very aggressive growth targets, Özkan said, adding, “There will be difficult times for a few years worldwide. In the upcoming period, we do not expect to regain the previous situation immediately. But the most-feared period is now over.”
According to Özkan, GE expects a decline in its Turkey revenues this year compared with 2008. However, Garanti Bank, in which GE holds a stake, has performed well despite the climate. “We do not know whether 2010 will be a year of stagnation, but we hope that the worst days are now over,” he said.
Noting that the private sector is advancing in Turkey, Özkan added, “We learn many things from our partners, even in issues that we think we know well. We always take off our hat to Garanti in terms of consumer finance. Garanti is one of the brightest spots among GE’s global investments. We have obtained very good results in all investments and partnerships. That’s because of our capability to find good partners and the opportunities Turkey offers.”
GE is gradually minimizing the share of its GE Capital financial-services division on its balance sheet in the medium term, Özkan said, explaining the firm’s back-to-basics policy in developing countries. “But we will continue to invest in places that have a rare, well-positioned bank such as Garanti. They have a promising future.”
GE takes a cautious stance regarding large investment items and energy investments. Some projects do not seem feasible within current financing parameters, he said, adding that there are some projects that need to wait for both financing and regulatory approval.
Özkan also noted that fields such as energy, transportation and health care will continue to be the most important sectors in Turkey for GE in the post-2012 period. Regarding the issuance of the Renewable Energy Act, GE plans to undertake significant projects in this field, he said. Meanwhile, despite the crisis, the company has not interrupted its investments in research and development as well as hiring.
source: Hurriyet daily news
Related posts:
