Certain business sectors in Turkey are firing on all cylinders. Attracting attention from global investors, entrepreneurs and savvy business executives, the supercharged industries matter for one reason. They are all contributing towards Turkey’s 2023 vision plan to be a top ten economy of the world.
While the economy has currently hit a snag, growth is still happening, and the Turkish economy reported a 7.4% growth for Quarter 1 of 2018. A closer look at high-performance sectors reveals an entirely different operation than that of 20 years ago.
So, which Turkish industries are significantly contributing towards changing the face of the country?
5 High-Performance Business Sectors in Turkey
By far, the top performing industry has been infrastructure. Over 15 years, Turkey has embarked on a series of mega-projects to modernise what was once a dilapidated sector. Airports, bridges and highways have all been upgraded or built to aid growth of the economy, population and trade, and most have been done through PPP projects (public, private partnerships.)
Since 1986, 225 PPP projects totalling 135 billion USD worth of contracts took place in Turkey. Just over 69 million USD focused on airports alone, which in turn dramatically benefited tourism and export/import industries. While high-speed railways are still high on the list of projects to compete, all eyes are on two developments in particular.
The New Istanbul Third Airport and Istanbul Kanal, of which the latter has been nicknamed a crazy project since it aims to create an island out of European Istanbul. Bidding for the 3-story grand Istanbul tunnel project will also start in 2018.
Turkey began producing vehicles in the 1960s, but the stagnant market lacked enthusiasm. That all changed in 2000, with significant investment and during 2017 alone, 13 OEMs, including global brand names produced 1.7 million vehicles.
Turkey now ranks as the 14th largest automotive sector in the world, and global OEMs with factories in the country include Fiat and Ford. Shipping to 250 automotive suppliers around the world, 80% of production in 2017 was exported abroad. More importantly, Turkey is the number one automotive importer to the EU having shipped sizeable productions to Spain, France, Italy, Germany and of course, the UK, one of their major trade partners.
However, despite their success record, the government says it is lagging behind car ownership figures, and there are sizeable returns for investors looking to tap into the Turkish domestic automotive industry.
3: Foreign Real Estate
An enormous success story is the Turkish real estate business that has seen a massive jump for a variety of reasons. Domestically, it has done well as mortgage interest rates dropped dramatically compared to 2002, and a rising GDP has made home ownership more affordable.
However, foreign real estate investors had their eye on low prices per square metre, as well as a fast track title deeds service. Initially, once Turkey softened their regulations for international buyers, it was independent ownership of residential homes that took off, but over the years, prominent foreign companies have also got involved with residential and office projects.
Istanbul property has always led the real estate market, and this is clear from tall, skyscraper projects dotting the horizon, but in more recent years, places like Bursa and Trabzon have risen in popularity through their appeal to Middle Eastern investors. In the last 15 years, foreign real estate investment in Turkey totalled 42 billion USD.
As outlined in the 2023 tourism vision plan, Turkey’s high hopes of becoming one of the top ten visited countries in the world will generate annual revenues of 50 billion USD. There is no denying that over the last 10 years, tourism has massively changed in Turkey and it is all part of a calculated plan to diversify niches and visiting nationalities through branded promotions.
Turkey aims to attract 50 million visitors a year, and for a while, it looked like they might achieve it before their targeted date of 2023. In 2014, 42 million people visited the country and Istanbul was ranked as the sixth most popular destination.
Fast forward to 2018, and plans are back on track as Turkey once again becomes a hot destination to visit. However, there is still much work to do and, in the process, investors are eyeing up exactly how to get in on the action.
5: Agriculture and Food
Turkey has three different climate zones and a vast variety of terrain making it an ideal producer of many agricultural goods. While the Aegean region harvests olives in abundance, the northeast prides itself on high quality tea and hazelnuts. The Mediterranean coastal resort of Antalya is nicknamed the citrus capital, while the central Anatolian region has the perfect setup for vineyards.
The list goes on, and Turkey has capitalised on the advantages to export all over the world. The agriculture and food industry is now responsible for employing 20% of Turkey’s working citizens and for 6.1% of the GDP. Globally, it is the 7th largest producer, but drill down to specific niches like honey, dried figs, and it is coming out on top. In 2016, its global agriculture and food exports to more than 190 countries amounted to a staggering 16.9 billion USD.
They are still saying there is mass potential though because, by 2023, they want to be in the top five agriculture producers of the world and any savvy investor in this sector can tap into a variety of government-approved incentives.
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