Turkey Financial News » Industry & Insurance

Philips may revisit Turkey for growth

meb — Tue, 25 Oct 2011 08:04:33 +0000

Philips is seeking double-digit growth in Turkey, according to a top executive. The Dutch company is planning to relaunch manufacturing in the country.
Multinational Dutch company Philips is aiming for aggressive growth in the robust Turkish market, according to the top executive of the Turkish branch of the company, who noted that Phillips is considering joint ventures and acquisitions in Turkey to achieve its goals.

Philips might consider restarting manufacturing in Turkey due to “tremendous change” in global economic stability in recent years, said Willem Rozenberg, chief executive of Philips Turkey & Caucasus, speaking to the Hürriyet Daily News in an interview on Thursday. Founded in Istanbul in 1930, the company manufactured a wide range of products in Turkey until 2008. Talking about the future plans of the company, Rozenberg said, “The company might return to Turkish with an industrial presence in some form.”
“Turkish President Abdullah Gül emphasized previously about the new balance between East and West, as the West is losing some of it power to the East,” said Rozenberg, noting that Turkey has the vision to understand the change and locate itself in the heart of the evolution. “No one could have known that United States’ credit rating was going to be downgraded a few months ago,” he added.

Talking about the Turkish economy, Rozenberg said the country has turned into “an economically independent country” from a country that was in need of constant support from others such as the International Monetary Fund, or IMF, a few years ago. “Turkey now says that it can solve its own problems,” he said, adding that many investors trust in Turkey more than before. According to him, Turkey has a serious challenge still waiting to be tackled; the income distribution gap and lack of infrastructure in some regions. “Turkey is highly developed on one side and needs a lot of development on the other side,” added Rozenberg.

Rozenberg said the company has currently total market size of $2 billion in home appliances, $1 billion in lighting and $250 million in health care, noting that Philips Turkey aims to reach double-digit growth on a yearly basis. “We aim to exceed Turkey’s gross domestic product growth by two times in each year,” he said, noting that the company targets to reach 15 percent growth in the market.

“We cannot just be successful by bombarding the market with new products, but need locals inside,” Rozenberg said. “We are interested in capitalizing on local opportunities through local partners, joint ventures and acquisitions.”

“Turkey is an important example for other countries in the region,” said Rozenberg, noting that many international investors sees the country as “a hub for penetrating into new markets” such as the Middle East or North Africa. Referring to Turkish construction companies actively running giant projects in Russia, Iraq and Central Asian countries, he said Philips also plans to penetrate into new markets especially in the lighting sector through Turkish construction companies.

The company also plans to grow in home health care equipment. “We are having talks with Turkish officials to bring health service into patients’ homes,” said Rozenberg, adding that the finance of home health care services could be provided through health insurance policies. Monitoring patients at home and giving some services at home through high-tech user-friendly equipment could be much more affordable and efficient for Turkey, said Rozenberg. “Our company aims to take an active role in such a project that Turkish Health Ministry would launch in the future.”
source: Hurriyet daily news

First domestic diesel train to be source of pride for Turkey

meb — Thu, 21 Apr 2011 07:15:02 +0000

Amid recent debates over creating a domestic car brand in Turkey, a Turkish wagon company has already managed to produce a domestic train named the Anatolia.

The train will run on diesel, making it highly attractive for markets whose transportation system is mainly designed for diesel, the top official of Turkish Wagon Industry, Inc., (TÜVASAŞ), the producer of the trains, told Today’s Zaman.

The country’s first domestic diesel train Anatolia was put on the tracks during a ceremony on Tuesday in the northwestern province of Sakarya. TÜVASAŞ General Manager İbrahim Ertiryaki told Today’s Zaman that the latest available technology was used in producing the wagons, 85 percent of which were produced locally.

Speaking at the ceremony in Sakarya on Tuesday, Ertiryaki briefed the media, noting that the trains were produced in full accordance with International Union of Railways (UIC) standards, namely, the wagons must have fully automatic air conditioning, automatic doors and an electronically controlled brake system. In order to provide maximum passenger comfort, each vehicle has fully adjustable aircraft-type seats, an announcement system and LCD screens. Ertiryaki also said the trains could reach speeds of up to 140 kilometers per hour.

When asked by Today’s Zaman if such developments in the Turkish railway sector could eventually lead to the production of domestic high-speed trains, Ertiryaki said this is in fact the ultimate goal, citing EUROTEM, a TÜVASAŞ and Hyundai joint venture project, to produce cars for high-speed trains.

“As our government has also made clear, the ultimate goal is to be able to produce such high-tech products in Turkey by ourselves in the near future,” he said. Ertiryaki drew parallels to the production of a domestic auto brand and said that such developments in other sectors would have a positive spillover effect on even more sectors.

Ertiryaki said producing a diesel-run train is significant in the sense that it was specifically designed for the needs of countries whose transportation systems mainly depend on diesel. He told Today’s Zaman that several countries from the Middle East to Europe have already shown a keen interest in such wagons.
‘It’s still the beginning for railways’

Addressing reporters during the ceremony on Tuesday, former Transportation Minister Binali Yıldırım, who resigned last month as required by the Law on Elections, said the government will not be content with only this project but will continue to take on other challenging projects as well. He also said the railroad sector in Turkey has shown significant improvement over the last nine years and is set for further progress.

According to Yıldırım, several countries from the European Union as well as Iraq have already placed orders for TÜVASAŞ’s wagons. He gave the example of Turkey’s Locomotive and Engine Industry Corporation (TÜLOMSAŞ), which has already started producing PowerHaul locomotives jointly with GE Transportation in the central province of Eskişehir. “For us it’s just the beginning of the journey,” he said.

Turkey has taken on extensive railroad and highway construction and outfitting projects over the past eight years. According to the Ministry of Transportation, more than 5,000 kilometers of rail have already been overhauled. The ministry has set as its goal for 2023, the centennial of the Turkish Republic, the laying 10,000 kilometers of high-speed train track and 4,000 kilometers of regular track.
PowerHaul locomotives also being produced in Turkey

TÜLOMSAŞ in 2008 signed a strategic partnership agreement with US-based General Electric (GE) to manufacture high-tech diesel locomotives in Turkey and export them abroad. The joint production of PowerHaul locomotives is already taking place in Eskişehir, where such locomotives are equipped with a 16-cylinder PowerHaul engine, GE’s most technologically advanced locomotive engine to date. This new engine, combined with other technologies from GE, is projected to reduce PowerHaul locomotive fuel use by up to 9 percent compared to current operatingfleet averages.
source: todays zaman

Groupama joins forces with two insurers

meb — Mon, 19 Oct 2009 13:03:16 +0000

Groupama, a leading European insurance, banking and financial services group, has decided to join forces with Turkey’s Başak Sigorta and Güven Sigorta under one brand in an attempt to expand operations in Turkey.

Becoming the third-largest insurance company, Groupama now aims to continue an ambitious investment plan with its Turkish branch. It announced last week the launch of “Groupama Sigorta” and “Groupama Emeklilik,” by merging Başak and Güven insurance companies. Groupama acquired Başak Sigorta and Başak Emeklilik in 2006 and Güven Sigorta and Güven Hayat in 2008.

“We joined two strong rooted companies’ forces by bringing local and international expertise together. With this merger, our clients will benefit from a strong service offering, an innovative product proposition and the strength of one of the leading international insurance companies, which already proved itself to more than 16 million customers all over the world,” said Jean-Francois Lemoux, international general manager of Groupama.

“Turkey, with its growth potential, has a strategic importance for Groupama, as it is a role model country within the group. The exciting dynamics of the market in Turkey is encouraging for us,” he said.

Targets of the group

Groupama will continue providing a competitive range of life and pension, household, liability, agricultural and motor products insurance, specially tailored to the needs of both retail and corporate customers, according to company statement. Groupama ranks second in life insurance and fifth in the non-life market with total revenues of 1.07 billion Turkish Liras (562 million euros), at the end of 2008. The new group will continue to be close to its 3 million customers with the support of more than 2,000 agents, 900 employees and partnerships all over Turkey.

The company aims to reach $1.5 billion in revenues and continues to have higher growth rates than the expanding insurance market in Turkey over the next three years.

To achieve these ambitious goals, Groupama is launching a new concept “Insurance+,” which is expected to be a milestone in the insurance market.

“We are not launching a campaign,” said Alain Baudry, Groupama Insurance general manager. “We are bringing an innovative and dynamic approach in order to provide maximum satisfaction and a strong commitment to our customers, enabling us to stay closer to them. We strongly believe that “Insurance+” will bring new dimensions to insurance in Turkey.”

“Insurance+” will cover car and household insurance services as a start. As an example, for car insurance, after the accident dossier is completed, the payment will be done within five days. If this is not the case, until the end of the year, Groupama will provide a one-year free insurance to the customer. New cars insured with Groupama will be covered with the new value of the car during three years in case of total pert and theft losses.

The new brand, Groupama, will be supported by a comprehensive campaign that will include advertising, public relations and corporate responsibility programs.

Turkey is the group’s third largest partnership in terms of turnover, reported Anatolia news agency, citing Lemoux. Regarding Güneş Sigorta, through which the group entered Turkey 18 years ago, he said: “We do not manage the company at present. If Vakıfbank decides to sell it one day, we are open to it.”

Groupama is present in 13 countries in Europe and Asia, including Italy, Spain, Britain, Portugal, Turkey, Greece, Hungary, Romania, Slovakia, Bulgaria, China and Vietnam.
source: Hurriyet daily news

Global giant re-invests in Turkish factory

meb — Thu, 24 Sep 2009 07:19:04 +0000

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

First Turkish-made satellite settles into orbit

meb — Thu, 24 Sep 2009 07:13:50 +0000

The first satellite manufactured in Turkey, created by the İstanbul Technical University (İTÜ) flight and space sciences faculty’s space engineering department, has settled into orbit around the Earth.

According to reports, Turkish satellite İTÜpSAT1, launched from Sriharikota by the Indian Space Research Organization (ISRO) at 9:21 a.m. local time yesterday on a PSLV C-14 rocket, settled into its orbital path, 720 kilometers above the surface of the earth, at 9:41 a.m. The cube-shaped satellite travels at a speed of nearly 7.5 kilometers per second, orbiting the Earth once every 90 minutes. It will take photographs of the Earth’s continents.

İTÜpSAT1 is expected to stay in orbit for six months. Flight and space sciences faculty Dean Dr. Fevzi Ünal, speaking to the press from the observation lounge of the university where the satellite’s launch was broadcast live, noted that the satellite launch was the product of several years’ work. The satellite’s production cost $150,000, but along with the infrastructure to make its creation possible and the 60,000 euros for the rocket launch, the entire project cost around 1 million euros, Ünal explained. The satellite is to orbit the Earth continually, transmitting data when it passes over Turkey. Ünal said they planned to establish contact with the satellite three to four times a day.
source: Today’s Zaman

Drop in Turkish industrial output slows

meb — Tue, 08 Sep 2009 13:45:18 +0000

The industrial production will show signs of significant recovery in the final quarter of the year, according to Industry and Trade Minister Nihat Ergün. ‘But no one should expect a rapid and speculative rally. What’s important is to take healthy steps and enable a stable growth.’ DHA photo.

The pace of decline in Turkish industrial output slowed in July for the fifth consecutive month as the deepest contraction on record eased.

Industrial output fell 9.2 percent from a year ago, following a decline of 10.3 percent in June, the Ankara-based Turkish Statistical Institute, or TurkStat, said on its Web site Tuesday. Output was expected to decrease 9 percent, according to the median estimate of 12 economists polled by Bloomberg.

“It’s clear that the contraction will continue in the third quarter of the year,” said Özgur Altuğ, an economist at BGC Partners in Istanbul.

In the sub-sectors level of industry, the mining-sector index rose from 145.8 to 147.2, an increase of 0.9 percent, in July compared with the same month of the previous year. The manufacturing-sector index declined 10.5 percent, from 118.6 to 106.2, while the drop in the electricity, gas and water index was 3.2 percent in July compared with same month of the previous year. Output of intermediate goods dropped 10.8 percent and energy output declined 4.4 percent, while the output of durable consumer goods increased 3.5 percent.

The biggest decline was seen in the manufacture of miscellaneous transport equipment – 36 percent in July, compared to the same period last year. The manufacture of motor vehicles, trailers and semi-trailers also declined 27.3 percent during the same period.

The highest increase in output was experienced in the manufacture of radio, TV and communications equipment, with 36.5 percent.

Evaluating the situation, Industry and Trade Minister Nihat Ergün said that the wheels will begin to turn steadier in the final quarter of the year.

Improvement will start in the final quarter:

The industry began to improve as of March, he said. It has been rising ever since and that should not be ignored, Ergün added.

“Comparing the data to previous months would bear healthier results than comparing it to a year earlier, when the impact of global crisis was not being felt as strongly,” he said. “During the months of summer a grave rally in the production was not expected anyhow.”

“Wheels in industrial production will begin to turn right in the final quarter of the year,” said Ergün. “But no one should expect a rapid and speculative rally. What’s important is to take healthy steps and enable a stable growth.”

The highest risk is to disturb the confidence and stability in the country, he said. “It’s our common responsibility to protect this environment. Therefore pessimistic speculations should be avoided,” he added.
source: Hurriyet daily news

Turkish defense fair sees increased interest from African continent

meb — Sun, 26 Apr 2009 20:59:01 +0000

Turkey’s four-day 9th International Defense Industry Fair (IDEF’09), due to start tomorrow in İstanbul, will host high-ranking defense officials from about 14 African countries for the first time while the level of participation from Europe at senior levels will be quite low.

However, exhibition booths where advanced arms will be exhibited still belong mostly to European and US arms manufacturers. Defense ministers from 14 African countries, including Ethiopia, Gambia, Tanzania and Uganda, will be present at the fair, while no senior US officials are expected to participate. However, US arms producers, including Lockheed Martin and Boeing, will exhibit their products at the fair.

Russia, which boycotted the previous IDEF fair held in Ankara in 2007, will participate this year at a senior level, with its two deputy defense ministers traveling to Turkey for the fair, according to the list of participants posted on the fair Web site.

Israel, which Turkey has partnered with in major arms production deals, will participate in the fair at the undersecretarial level. Iraqi and Syrian defense ministers will also represent their countries at the Turkish defense fair for the first time.

Mainly because no adequate fairground was available in Ankara at the time of the IDEF fair — organized jointly by the Foundation to Strengthen the Turkish Armed Forces (TSKGV) and fair organizer TÜYAP — this year’s fair is being held in İstanbul in the district of Büyükçekmece.

Russia seeks arms deal with Turkey

Anatoly Aksenov, an advisor to Russia’s state-owned Rosoboronexport arms company, holding a press conference in Moscow on April 21, stated that Turkey had shown interest in buying Russian missile-defense systems and attack helicopters. Russia and Turkey may sign a military technical cooperation agreement after the fair, he said.

Russia will exhibit about 120 types of arms and defense vehicles at the IDEF’09 fair, Aksenov said, according to the Cihan news agency.

The volume of trade conducted annually between Russia and Turkey has grown to over $40 billion but the share of this amount going to military technical cooperation between the two countries is very small, he said, adding that the reason why their level of military cooperation is so low is because Turkey is a member of NATO and is mainly dependent on the US for arms systems.

“We as Russia have, however, been building some arms systems in accordance with NATO standards,” Aksenov added.

Russia’s Rosoboronexport will deliver about 800 Kornet-E medium-range anti-tank missile systems to the Turkish army as a stopgap measure while local Roketsan continues to develop an indigenous medium-range anti-tank missile system. The Kornet-Es, with a range of up to 4,000 meters, will be delivered in two years’ time as part of a deal worth about $100 million.

Turkey has also conducted talks with Rosoboronexport for the purchase of at least 12 Mi-28 attack helicopters while continuing to seek US Cobra attack helicopters after Washington turned down a Turkish request for a number of Cobras early last year because no aircraft were available.

Meanwhile, Lockheed Martin is expected to sign agreements with Turkish companies ALP Aviation, ASELSAN and Kale Aviation on April 28. Under the agreement the Turkish companies would produce some parts for aircraft being produced as part of the US Joint Strike Fighter (JSF) program. Turkey will also buy 100 of these fighters in a deal worth $10 billion.

The Eurofighter consortium, which built Typhoon fighters, will present a Typhoon simulator at the fair. Six Eurofighter Typhoons are expected to join exercises codenamed Anatolian Eagle due to be held at a military range in Konya in June.

Turkey earlier decided to buy US JSFs instead of Eurofighter Typhoon aircraft. However, consortium officials are confident that Turkey may buy from these aircraft in the future if not now.

This year’s IDEF fair will also witness an increased number of Turkish defense companies presenting arms systems developed in Turkey with the support of foreign technology.

Since 2004 Turkey has put an emphasis on the domestic production of arms systems, having relied on foreign companies for about 85 percent of its weaponry.

Undersecretary for the Defense Industry Murad Bayar said the share of domestically produced arms systems employed in Turkey has reached 42 percent and Turkey has set a goal of reaching a target of 50 percent by 2010.

There has been a 12 percent increase (from 298 to 333) in the number of foreign firms participating in this year’s fair compared to 2007, while there is a 21 percent increase (from 133 to 161 firms) in the number of Turkish firms participating in this year’s IDEF.

Defense sector and economic crisis

Bayar believes the defense sector will not be affected by the current economic downturn, which has caused the unemployment rate among Turks to rise to over 15 percent.

Speaking to Sunday’s Zaman, Bayar said Turkey’s defense industry was not currently being affected by the economic crisis and that military projects were being implemented as planned.

“On the contrary, all arms acquisition projects create employment and support the economy because the majority of these projects support the local production of systems inside the country. Thus, the money we are spending on defense supports Turkey, easing the effects of the economic crisis,” he said.

Turkey’s defense expenditure constitutes around 1.9 percent of the country’s gross domestic product (GDP), Bayar noted.

Details about the Defense Industry Support Fund (SSDF), an extra-budgetary fund for defense spending, have been disclosed for the first time in a report posted on the Web site of the Undersecretariat for the Defense Industry (SSM). Covering 2007 and earlier, the report puts 2007 SSDF revenues at $1.256 billion and expenditure at $1.194 billion. Many procurement projects are funded through the SSDF.

The Defense Ministry budget is TL 14.53 billion for the fiscal year 2009, a 9.1 percent increase from its 2008 budget of TL 13.27 billion. However, this budget does not include extra-budgetary allocations, only some of which are disclosed.

Portions of the budgets of the Gendarmerie General Command (JGK) and the Coast Guard Command (SGK) are also spent on defense, although they are not included in the Defense Ministry budget. Turkey is estimated to be spending about $5 billion on arms procurement annually.

A report released by the EU last November stated that no progress had been made in ensuring full civilian supervision over Turkey’s defense expenditures.

The Turkish procurement policy has been eased to allow US companies to compete in arms projects. Turkey has, for example, lifted a condition requiring US companies competing in Turkish tenders to already have export licenses.

“We definitely want US companies to compete in our tenders,” Bayar said.
source: Sundays Zaman

International defense fair to open in Turkey

meb — Sun, 26 Apr 2009 20:56:42 +0000

An international defense industry fair will open in the Turkish city of İstanbul on Monday.

The International Defense Industry Fair (IDEF’09) will be inaugurated at the TUYAP Fair, Convention and Congress Center in İstanbul.

Leading defense industry firms in Turkey and the world will participate in the fair to stay open till April 30.

The fair has been held in the capital Ankara since 1993, however the organizer committee decided to organize it in İstanbul this year.

Turkish Armed Forces Foundation is hosting the fair under the auspices of the Ministry of National Defence.
source: Today’s Zaman

Shipyard delivers yacht to Saudi prince

meb — Sun, 26 Apr 2009 20:53:49 +0000

The Nourah of Riyadh, the megayacht produced in the Kocaeli Free Zone, was delivered to its owners with a ceremony Friday. The yacht, which cost 40 million euros, will be used by Saudi Prince Mohammad Bin Abdulaziz.

Speaking at the ceremony at the free zone, State Minister Kürşad Tüzmen said Turkey has become the third in yacht production, while standing at No. 7 in shipbuilding.

The 65-meter-long yacht is the biggest megayacht produced in Turkey. “We like to break records,” Tüzmen said. “With a new record, we will build a 75-meter-long yacht here next time.”

The Nourah of Riyadh was built at the shipyard of Yachtley, a company of Saudi, Lebanese and Turkish capital. Bader Fahad M. Al Athel, vice president of the company, said the firm was founded in 2005. Yachtley has invested in Turkey, “trusting in the quality of workforce and production,” he said. “I am sure that Yachtley yachts will rank among the best ones in the world.”

The Nourah of Riyadh, whose construction started in January 2006, has six guest cabins, one VIP cabin, a king room, a theater and dining hall, a main hall, 21 cabins for the crew and a Jacuzzi. It also has two elevators and a helipad. It was designed by renowned designer Donald Starkey. It will first be sent to Cannes.
source: Hurriyet daily news

Leading Indian firm to invest in Turkey

meb — Fri, 20 Mar 2009 20:42:47 +0000

IMFA Group, India’s leading manufacturer of ferroalloys, is planning to invest in the Central Anatolian province of Sivas, the Sivas Chamber of Commerce and Industry (STSO) said in a statement on Thursday.

The province is home to rich underground mineral reserves, the statement noted.

IMFA Group will cooperate with Turkey’s Yazici Group in its investment, the statement said. IMFA Group General Director Arvind Mishra paid a visit to the STSO’s headquarters as part of his research into investment opportunities in Sivas and had talks with the STSO Chairman Osman Yıldırım on Thursday.

During the visit Yıldırım said that vacant land would be allocated to IMFA Group free of charge in Sivas’ Organized Industrial Zone for the company to build a factory.
source: Today’s Zaman

Turkey’s industrial output displays sharp drop

meb — Tue, 10 Mar 2009 17:48:47 +0000

Turkish industrial production slumped 21.3 percent in January, the most since at least 1986, as exporters unable to find buyers suspended production and fired workers. This was the sixth consecutive monthly drop.

The drop in production compares with a revised 17.8 percent in December, the Turkish Statistical Institute, or TÜİK, said on its Web site yesterday. Output was expected to decline 19 percent, according to the median estimate of nine economists polled by Bloomberg.

Economists said weak industrial production data will have major implications for the economy, including supporting the Central Bank’s policy of monetary easing and stepping up pressure on the government to agree to an IMF deal after months of talks.

“People were expecting another bad number but this is much worse than what the markets expected… risks are definitely on the downside for our forecast of a 2.2 percent contraction in gross domestic product in 2009,” Levent Durusoy, an economist at Yatırım Finansman, told Reuters.

Manufacturing industry output, including dynamo sectors such as textiles and automotive, fell 24.2 percent, the Ankara-based statistics agency said. Water, gas and electricity output fell 6 percent, while the country’s smaller mining sector’s output fell 3.8 percent on the year.

“The serious contraction in the industrial production shows that the wheels of the industry have stopped,” Fatih Keresteci, HSBC strategist, said.

The fall comes as the global credit crisis cuts demand in Europe for Turkish-made products such as cars and washing machines.

Unemployment hit a four-year high of 12.3 percent in November and the Central Bank has cut the benchmark interest rate by 5.25 percentage points in four months to stave off recession.

“In previous crises there’s always been an export market that would give some protection to companies; now there’s no one to sell to,” said Cem Eroğlu, economist at Vakıfbank, a state-run lender based in Ankara. “We still haven’t seen the impact of the rate cuts on real economic activity and it’s likely unemployment will hit 14 percent soon.”

Exports fell 26 percent in January from a year earlier to $7.9 billion, TÜİK said on Feb. 27. Industrial production had dropped by 17.6 percent year-on-year in December, and by 0.9 percent overall in 2008 versus 6.9 percent growth in the previous year.

Constant deterioration in key economic indicators such as exports, unemployment, economic growth has increased pressure on the government to take new steps to reinforce the economy against the global economic crisis.

“It will most probably intensify the pressures on the government to agree with the IMF on a new standby program. The media will most probably be harshly criticizing the government’s inaction against the global crisis,” JP Morgan Chase analyst Yarkın Cebeci said.

“The public spending’s contribution to the gross domestic product will be critical as no other contribution comes from elsewhere” said Ayşe Çolak of Tera Stock Brokers.
source: Hurriyet daily news

Capacity utilization rate in Turkey down in February

meb — Tue, 10 Mar 2009 17:45:46 +0000

The capacity utilization rate in the Turkish manufacturing industry was down in February, the statistics board announced on Tuesday.

Turkey’s Board of Statistics (TÜİK) made public the tendencies in the manufacturing industry in February 2009, and said the capacity utilization rate dropped to 63.8 percent in the mentioned month when compared with the same month in 2008.

The capacity utilization rate was 79.3 percent in February 2008. Thus, it was 15.5 points down in February 2009.

The rate was also around 63.8 percent in January 2009.
source: Today’s Zaman