US COMPANIES PLAN EXPANSION TO TURKEY

US companies plan expansion to Turkey

Tuesday, April 15, 2008

ISTANBUL - Turkish Daily News

  Some 65 companies from the United States gathered in Istanbul yesterday with the aim of finding local business partners and expanding their operations to Turkey and the nearby region.

 The meetings started yesterday within the framework of the “Trade Winds Europe” conference organized by the U.S. Department of Commerce and the Turkish-American Business Association (TABA AmCham) in Istanbul. The three-day conference that ends April 16 consists of panel discussions and hundreds of one-to-one meetings between U.S. companies and their potential local partners.

  Uğur Terzioğlu, the president of TABA AmCham, told reporters yesterday many of the U.S. companies participating in the event had notable roles in the U.S. market but did not necessarily have expertise in international trade. “These companies now want to open up to the world and therefore use Turkey as a springboard, because production and exports from Turkey are not subject to European Union customs,” he said.

Inspiration for new ventures:

The companies looking for Turkish partners operate in a variety of industries including aeronautics, energy, transport, mining, environment, defense, telecommunications, automotives, software, health and construction. Global brands taking part in the conference include Oracle, Motorola, Amelio Solar and M&T Bank.

  Arch, a Kentucky-based conveyor products manufacturer, is one of the companies looking for a Turkish distributor for its products.

  Rick Grana from the international sales department of Arch told the Turkish Daily News that the company's decision to enter the Turkish market was largely motivated by the positive growth of heavy industries in Turkey in recent years.

  “The notable growth in heavy industry, as well as our positive previous experiences in Greece and the Middle East make Turkey an attractive market to enter next,” Grana said.

Turkey represents opportunity:

  Stephen E. Alley, counselor for commercial affairs at the U.S. Embassy in Athens, told the TDN some companies visiting Istanbul would continue their journey to Athens later this week to inspect potential investment opportunities in Greece. “However, Turkey still appears a more dynamic country to invest in. Whereas Greece has become part of the old Europe and operating there is somewhat complex and over-regulated, Turkey is known as a growing and dynamic emerging market – and as such, a more attractive investment target for U.S. companies.” Some 250 U.S. companies have offices in Turkey. The annual trade volume between Turkey and the U.S. stands at around $11.2 billion. 

WILSON PRAISES TURKISH INVESTMENT OPPORTUNITIES AHEAD OF CONFERENCE

Wilson praises Turkish investment opportunities ahead of conference

14.04.2008 - Dünya Gazette

Wilson praises Turkish investment opportunities ahead of conference

A three-day trade conference sponsored by US and Turkish companies and business institutions and the US Commerce Department is set to begin today in Istanbul. Nearly 60 US companies are expected to attend the Trade Winds Europe conference. Before the event, US Ambassador to Ankara Ross Wilson wrote an article for Commercial News USA magazine saying that Turkey's economy has grown steadily and remarkably for the last six years thanks to government reforms. "Turkey's commitment to the reform process and political stability make it a very important economic magnet that has drawn approximately $50 worth of foreign capital for the last three years," he wrote. Wilson also stressed that Turkey's growing prosperity is raising its demand for products, services and business partners from the US. On the last day of the conference, Turkish and US companies will hold bilateral talks to evaluate investment and cooperation opportunities.

CHANGES TO ARTICLE 301 FACE DEBATE IN PARLIAMENT

Changes to article 301 face debate in parliament

14.04.2008 - Dünya Gazette

Changes to article 301 face debate in parliament

Justice Minister Mehmet Ali Sahin yesterday said proposed changes to Article 301 of the Turkish Penal Code (TCK) would be debated by Parliament's Justice Commission this week. Asked about criticisms of a separate proposal under which only the president could file a case to close a political party, so as to make closures harder, Sahin said several Western countries have the same policy. In addition, the full Parliament will continue three weeks of debates on the social security bill before its expected passage later this week.

TURKISH IRANIAN GAS DEAL TAKES SHAPE

Turkish Iranian gas deal takes shape

Friday, April 11, 2008 - Turkish Daily News

Turkey and Iran take one step further toward concluding a deal on development of Iran’s three South Pars gas fields, as delegations from the two neighbors discuss investment models during the week. Turkish Petroleum Corporation (TPAO) will look for partners once a final deal is reached on the $3-4 billion project

ANKARA – Delegations from Turkey and Iran met in Ankara yesterday to solidify the memorandum of understanding signed last year to develop Iran's three phases in South Pars gas fields.

     The Iranian officials arrived Monday and held talks with officials from the Turkish Petroleum Corporation (TPAO) and state owned Turkish Pipeline Company (BOTAŞ) for three days. The Iranian delegation submitted its report to the Turkish Energy Ministry and returned home yesterday.

  Energy Minister Hilmi Güler signed a memorandum of understanding with Iran's former Oil Minister Kazem Vaziri-Hamaneh on July 13, 2007 allowing TPAO to produce 20 billion cubic meters of natural gas in phases 22, 23 and 24 of Iran's South Pars gas field. The plans also include an agreement to use Iran as a transit country for Turkmenistan's natural gas.

  

Investment model to be finalized soon

  The delegations discussed the investment model for TPAO, a high-level energy ministry official said. “TPAO and Iran are still elaborating on the investment model. We are close to reaching a conclusion. Technical teams will convene in Ankara or Tehran in a month,” he said. The official said there is no reason not to sign the contract with Iran this year.

  No developments took place in the electricity deal with Iran, the same official said. Turkey declared in August last year that it will help build a hydroelectric plant in Iran and will purchase three to six billion kilowatt-hours of electricity from Iran to cover its shortages.

  The TPAO will look for partners following finalization of the deal, as investment costs are expected to reach $3-4 billion, officials said. Iran will pay cash or natural gas in exchange for TPAO's production in the three fields. The annual gas flow expected is 20 billion cubic meters, which amounts to two-thirds of Turkey's gas needs. Gas will be transferred to Turkey through a pipeline to be built by BOTAŞ and Iran's concerned companies. Some of this gas will be used in Turkey, while the rest will be delivered to Europe, officials said. Turkey acquires around 65 percent of its natural gas from Russia and is looking for ways to divert its sources. Iran, the second-largest gas supplier to Turkey, had difficulties sustaining its natural gas flow to Turkey during previous winters, due to extraordinary cold weather and supply cuts by Turkmenistan.

THEY HAVE EARS THAT DO NOT HEAR, EYES THAT DO NOT SEE

They have ears that do not hear, eyes that do not see

 Friday, April 11, 2008 - Radikal Gazette

  A parliamentary Inspection Commission to look into fatal work-related accidents in Tuzla's shipyards could not be formed because the ruling party has not announced its 10 members for the commission yet, daily Radikal reported yesterday.

    The number of deaths due to work-related accidents reached 21 in a shipyard in Istanbul's Tuzla district in the past year.

  Due to Parliament's Human Rights Commission report, as well as separate motions by the ruling Justice and Development Party (AKP), main opposition Republican People's Party (CHP), Nationalist Movement Party (MHP) and pro-Kurdish Democratic Society Party (DTP), Parliament unanimously decided on Feb. 26 to form a parliamentary commission to investigate the deaths in the shipyards. However, the commission to carry out the inspections could not be formed because the AKP did not propose the 10 deputies, which it must do for the commission to be able to function. The Parliament speaker's office has warned the AKP to select the commission members.

  If the commission is formed, it will be composed of 10 members from the AKP, three from the CHP, two from the MHP and one from the DTP. A report, to be prepared by the commission, would be presented to Parliament in four months at latest.

  The CHP, the MHP and the DTP chose their deputies for membership in the commission, but the AKP has not submitted its list of names yet. Even this short delay could reflect on the situation with more deaths in the shipyards.

UNION WORKERS IMPRISONED IN INDUSTRIAL CONTAINERS

Union workers imprisoned in industrial containers

Friday, April 11, 2008 – Milliyet Gazette

  The owner of Öznur Cable, located in the second Organized Industrial park in Tekirdağ's Çerkezköy district, has been imprisoning union workers in large industrial containers, daily Milliyet reported yesterday.

  When Öznür Cable's owner, İbrahim Balarısı, began transferring assets to another company, Ak Cable, the weary workers joined the metal workers union in March 2007. However, during the transfer to Ak Cable, the unionized workers were either pressured to quit the union or were fired. The ones who quit were given severance pay at minimum wage, but a few decided to fight for their legal rights. With the union's victory in court, they were allowed to return to work.

  The first two workers to return on March 14, Refik Yılmaz and Ahmet Erdem, were sent to work in a storehouse, instead of their usual workstations. A few days later they were transferred to an industrial container where they were kept under guard at all times, including during bathroom breaks, and told they would work there until they “ceded their rights.” Nine other workers were eventually sent to join them.

   After 13 days of imprisonment, their lawyer, accompanied by police and other union workers, arrived at the factory to uncover the story. Çerkezköy's district official, Ahmet Akın Varıcıer, said he will launch an investigation into the affair. 

ISTANBUL INCREASES REVENUES PER ROOM

Istanbul increases revenues per room

 

Friday, April 11, 2008- Turkish Daily News

 ISTANBUL -  Istanbul ranks third among European cities in terms of the increase in revenues per available room in 2007, consulting firm Deloitte announced in a report.

 

Turkey's most populous city ranks 20th in the global list. Istanbul increased its revenues per available room by 22.1 percent in U.S. dollar terms, rising above the average of Europe, according to Deloitte's “Hospitality Vision - Global Performance Review” report, which evaluates the past year for the global hospitality sector.

  “The East-meets-West charms of Istanbul and its promotion as a center for art and culture has assisted this growth,” said Deloitte in the report, noting that Istanbul's average room rates are more competitive than its rivals. Demand is high from Middle East business travelers, particularly in the summer, according to the report published Tuesday.

 

Istanbul attracts attention as a symbol of the nation's success, said Ahmet Cangöz, Hospitality Industry Leader at Deloitte Turkey. “Istanbul climbed 12 ranks to 20th spot [in global ranking] since 2000. It is becoming a rising star of global tourism,” he said. “The fact that Istanbul has been elected the European Capital of Culture for 2010 offers new opportunities.”

  

Global performance:

  Hospitality sector, which displayed a high performance in terms of average revenues per room and occupancy rates in 2007, attained double-digit growth rates, Deloitte said. Average revenue per hotel room in Europe rose by 15.8 percent to $114, according to the report, in which 165 countries outside North America are compared.

  According to the European ranking, Moscow tops the list of revenues per available room with a 23.5 percent rise. Paris ranks second with an increase of 23.2 percent, just ahead of Istanbul. Venice and London follow Istanbul with 22 percent and 18.5 percent increases respectively.

  Seven out of top 10 cities that obtain highest hospitality revenues are European cities, said Cangöz. Europe is still the heart of tourism and remains a favorite destination for travelers, he said.

  The Deloitte report also focused on the positive impact of “open skies” agreement.

  “We will see more competition as transatlantic air travel is liberalized through the ‘open skies' agreement,” the report said. “With European airlines now being able to fly to the United States from any European airport and not just their home country, we expect to see a scrabble for flights to and from Europe's major hubs. Airlines are collaborating with former rivals to create competitive schedules, and all of this is good news for the consumer.”

 

Firms aim to bring added value to the market

Firms aim to bring added value to the market

April 28, 2008 – Turkish Daily News

 

ISTANBUL - Turkey's value-added technological product deficit forces rival sector giants to cooperate in bringing value-added products to Turkey's market. The firms, which operate in the technology and communication sectors, emphasized the importance of research and development (R&D) at a Forum Istanbul conference Thursday.

 

  “We should focus on founding value-added technology firms as well as developing R&D operations,” said Süreyya Ciliv, the chief executive officer (CEO) of Turkcell.

 

  “R&D is not the only factor that brings success. Sales and marketing are also important in profitability. Most of the global R&D operations belong to the private sector,” Ciliv noted.

 

  Emphasizing the importance of education, Ciliv said training people and integrating with the current technology are essential in being a technology center. “Turkey can do this,” said Ciliv.

 

“We need to focus on creating value added technology brands as well as increasing R&D operations. Firms that operate in Turkey should be open to cooperation, even though they compete within the market, in order achieve this goal. As Turkcell, we are supporting cooperation activities.”

 

  “We have been competing with Turkcell for the last two years, but Ciliv and I agree on the ideas of cooperating in order to bring-value added products to the market and enhancing R&D operations,” said Attila Vitai, chief executive officer of Vodafone Turkey, the second largest mobile phone operator in the country. “What we need is a market which enables us to introduce our own products, which we develop through R&D operations. You do not necessarily need to export the products you developed in the United States, for example. You can introduce the product in its domestic market. We need such a market in Turkey. If we begin investing today, Turkey can be an R&D center in a decade,” Vitai said.

 

TOKİ sets 500,000 flats target until end of 2011

TOKİ sets 500,000 flats target until end of 2011

April 28, 2008 – Milliyet Gazette

 

ISTANBUL - The Mass Housing Administration (TOKİ) is planning to complete the construction of 500,000 flats by the end of 2011, according to TOKİ Chairman Erdoğan Bayraktar.

 

  While some claim TOKİ has reduced flat prices, Bayraktar said that, in fact, prices have been increasing for some time. Bayraktar traveled to Denizli, in the southwest, to supervise TOKİ's investments.

 

  “Labor costs in the construction sector increased by 50 percent while inflation increased by 8 percent. We have made a small reduction for flats within the urban transformation project in Denizli since there are no land costs or social facilities in that project," Bayraktar said. "They just set the price according to the construction cost. It is impossible to decrease the prices further."

 

  He noted that there has been no opportunity to buy a house for YTL 50,000 ($39,000) in Turkey. Both contractors and the state are losing money and those with low incomes do not have enough sources, he said. "We do our best and everyone should know this," Bayraktar said.

 

  “We aim to reach 330,000 flats by the end of 2008; 400,000 flats by the end of 2009 and 500,000 flats by the end of 2011," said Bayraktar in response to a question about TOKİ's future targets. Bayraktar added that TOKİ had constantly differing responsibilities. On the one hand, TOKİ offers high-quality, secure and affordable flats their customers deserve and, on the other hand, they try to create a different understanding of dwelling and urbanization with their projects.

 

Turk Telekom pricing found controversial

Türk Telekom pricing found controversial

April 28, 2008

ISTANBUL - TDN with wire dispatches

  As full-page advertisements by the Privatization Administration calling on investors to buy Türk Telekom shares appeared in Turkish newspapers yesterday, daily Radikal criticized the approaching initial public offering (IPO), claiming the shares are being put on sale “dirt cheap.”

 

  The government aims to raise as much as $1.9 billion from the IPO for a 15-percent stake in Türk Telekom, the nation's fixed-line phone company.

 

  Initial offers will be collected starting today through Wednesday, while final offers will be collected from May 7 through 9. Of the total shares, 65 percent will be sold to foreign investors and 35 percent to domestic investors.

 

  Türk Telekom is then scheduled to begin trading on the Istanbul Stock Exchange (IMKB) May 15.

 

  The shares will be offered for between YTL 3.9 ($3) and YTL 4.7 each, valuing the company at between YTL 13.5 billion and YTL 16.5 billion.

 

  The stake may be increased to 17.2 percent, or a total of as much as $2.2 billion, to meet demand.

  

The sale in 2005:

  The government, which is selling off state assets under a $10 billion International Monetary Fund loan agreement, sold 55 percent of Türk Telekom to Saudi Oger for $6.6 billion in 2005. The IPO, at the high end of the range, would value all of Türk Telekom at $12.7 billion, up from $11.9 billion at the time of the sale to Oger.

 

  “This is an incredible price,” Toygun Onaran, an analyst at EFG Istanbul Securities, told Bloomberg. “They probably had concerns about lack of demand from investors. The valuation of the company is very close to when Oger Telecom bought its stake three years ago.”

 

  Analysts from companies that will act as intermediates in the IPO say the offering during such a delicate international situation is “wrong,” Radikal reported in its headline story yesterday. Emphasizing that the price is too cheap, the newspaper noted that Turkcell, a private telecommunications company, is worth YTL 23 billion.

  

Price/earnings ratio:

  “According to the IPO price, Türk Telekom's price/earnings (P/E) ratio stands at 6.5. The average P/E at the stock exchange is at 8.5-9. Turkcell's P/E stands at 13.3 Thus, Türk Telekom is being offered virtually for free,” the newspaper said.

 

  Comparing the two companies, Radikal said Turkcell, with a capital of YTL 2.2 billion, made a net profit of YTL 1.7 billion in 2007. Meanwhile, Türk Telekom, with a capital of YTL 3.5 billion, closed the same year with YTL 2.5 billion net profits.

 

  Türk Telekom sales jumped 23 percent to YTL 9.2 billion in 2007. The company had 18.2 million fixed-line subscribers at the end of 2007, while its broadband Internet subscribers stood at 4.2 million.

 

  Türk Telekom's participating portfolio includes 81 percent of Avea, a rival of Turkcell, said Radikal.

 

  “Either [the government] wants to make someone rich, or it is having a hard time in revenues,” said analysts speaking to Radikal on condition of anonymity. “Turkey has been offsetting its high current account deficit with either direct foreign capital inflows or portfolio investments. But with the global crisis, abundant liquidity is no more, or more important than that, the cost of money has risen.”  

 

Istanbul's Küçükçekmece to host Bosphorus City project

Istanbul's Küçükçekmece to host Bosphorus City project

April, 2 – 2008 – Milliyet Gazette

 

ISTANBUL - The Bosphorus City project being carried out by Sinpaş Real Estate Investment Partnership (GYO) in Istanbul's Küçükçekmece district in the Halkalı area has received a building permit for 670 independent units in the first phase.

 

     Revenue to the tune of YTL 150 million ($115 million) is aimed at from sales of the first phase.

 

  Inspired by the Bosporus, the Bosphorus City will be launched in the first week of May. The project, which will be constructed on a plot spanning 412,177 square meters owned by Sinpaş GYO, will include a total of 2,086 apartments in the other phases. The building permits for the other phases will be obtained in the fall. 

 

  Sinpaş GYO is planning to construct another project with a different design on a plot of 166,085 square meters near the Bosphorus City project. The Aqua City 2010 project is also ongoing in Istanbul's Sarıgazi area.

 

  The Bosphorus City project will include the characteristic features of Bebek Parkı, İstinye Koyu, Yeniköy, Paşabahçe, Emirgan Çınaraltı, Kanlıca, Anadolu and Rumeli Hisarı, Kandilli and Çengelköy squares. The project will have sports grounds, walking paths, social facilities and flora, specific to the districts. Green area of 79,473 square meters, open sports ground of 11,550 square meters, social facility area of 10,019 square meters and a day nursery of 647 square meters will also be constructed in the project.

 

Cicek:

Cicek: "Future prosecution under article 301 will require presidential approval"

08.04.2008 - 11:22 - DUNYA GAZETTE

Cicek: "Future prosecution under article 301 will require presidential approval"

The Cabinet met for nearly four hours yesterday under the chairmanship of Prime Minister Recep Tayyip Erdogan. Afterwards, Justice Minister and government spokesperson Cemil Cicek said the government wants to change controversial Article 301 so that any future prosecutions under it would require presidential approval. Cicek also criticized a recent incident of political violence at Antalya's Akdeniz University, saying that deans and staff should pay more attention to their university duties.

May 1 to be labor day, but not holiday

May 1 to be labor day, but not holiday

22.04.2008 – Dunya Gazette

May 1 to be labor day, but not holiday

After yesterday's Cabinet meeting, government Spokesman and Deputy Prime Minister Cemil Cicek said the government had decided that May 1 would be celebrated as a labor and solidarity day in line with other practices worldwide, but it wouldn't be an official holiday. Asked about trade unions' views on the issue, Cicek stressed the current world economic recession, saying, "The Cabinet considered the price tag of this decision, nearly 2 billion YTL."

 

Deppler:

Deppler: "Turkey doesn't need another IMF program"

25.04.2008 - Dunya Gazette

Deppler: "Turkey doesn't need another IMF program"

Speaking to this week's Forum Istanbul-2008 meeting, International Monetary Fund European Department head Michael Deppler yesterday said there is no need for a new IMF program for Turkey, saying that the country's economy has grown stronger over the past five years. Addressing the impact of current US economic woes on the global economy, Deppler said, "The US is experiencing a severe economic slowdown, and this will affect Europe and Turkey." Deppler said the IMF anticipates Turkey's annual growth rate will fall to 4 percent. Urging Turkey to maintain its current fiscal policies to cushion the impact of the global recession, Deppler also called for steps to boost foreign investors' confidence. He said Turkey needs to reform its tax system, curb the informal economy, and make the labor market more flexible. Also speaking to the forum, State Minister for the Economy Mehmet Simsek said that over the last five years Turkey has substantially reduced its budget deficit and reformed its financial system and banking sector, adding that thanks to these achievements, its economy had become more resistant to global shocks. Simsek also said the flow of foreign capital to Turkey should continue.