Çağlayan: Giant US companies interested in investing in Turkey

Speaking at the inauguration ceremony of Turkey’s trade attaché office in Houston, where Deniz Şenyurt is the first to take up the new position, Çağlayan said that following the announcement of an incentive package by Prime Minister Recep Tayyip Erdoğan in the first week of April, Pepsi decided to increase its investments in Turkey from $800 million to $5 billion, making Turkey its distribution hub for the Middle East and North Africa (MENA) region. “American businessmen are more excited about the incentive package than us,” said Çağlayan, adding that Kimberly-Clark, which owns the brands Huggies and Kotex, revealed to the minister that they want to move their operations to Turkey. “Kimberly-Clark has investments in 37 countries and plans to make Turkey its logistic hub,” he added. Çağlayan also provided information on the investment plans of 3M, saying, “The executives of the company want to build a new factory in İstanbul to increase production and take advantage of incentives.” In addition, Quest Diagnostics plans to begin investments in Turkey’s healthcare sector. He also noted the importance of investment for GE, which is requesting to play a part in the production of wagons and engines for a planned 10,000 kilometer railway network.

The minister noted he held meetings with the executives of Blackberry and Chrysler in New York before his visit to Houston and they expressed their interest in investing in Turkey. He explained that Chrysler executives wanted to benefit from incentives directed at the automotive sector in Turkey, while executives from technology giant RIM -- known primarily for producing the Blackberry smartphone -- were interested in the Movement to Increase Opportunities and Technology (FATİH) project, a major education scheme that requires the procurement of millions of tablet PCs and will benefit 15 million Turkish students. Chrysler employs 52,000 people in 33 factories in four countries, and sells its products in 120 countries. The company has 9.2 percent of the automotive market share in US and 13 percent in Canada.

However, in 2009, Chrysler LLC emerged from a Chapter 11 bankruptcy reorganization and its operations were sold to a new company, Chrysler Group LLC, organized in alliance with the Italian car manufacturer Fiat. Initially holding a 20 percent stake in Chrysler Group, Fiat increased its share to 58.5 percent in 2011 following the acquisition of equity interests held by the US Treasury and Canada, totaling 6 and 1.5 percent respectively. Meanwhile, since 2011 RIM has lost a significant market share to Apple Inc. iPhone and Google Android smartphones worldwide, which has caused a decline in profit and share value. On Dec. 16, 2011, RIM shares fell to their lowest price since January 2004, with the stock dropping a total of 77 percent in 2011.By March 2012 the shares were worth under $14 -- from a height of over $140 in 2008.

Çağlayan praised successful Turkish businessmen operating in Houston and called on them as well as US businessesmen in Houston to invest in Turkey, noting that foreign investors should benefit from the new incentive package in Turkey. Informing them on the details of the incentive package, Çağlayan stressed there will be investment boom particularly in 2013 and said those businesses not taking part in the boom would lose out. He also predicted that the trade deficit with the US would be reduced as a result of the incentives package. Çağlayan’s announcement, which said Turkish Airlines (THY) would start direct flights from Turkey to Houston by the end of 2012 at the latest, was applauded for some time during the ceremony. During his visit, Çağlayan also met with members of the Texas Turkish-American Chamber of Commerce in Houston and visited Raindrop Turkish House, a non-profit educational, charitable, social and cultural organization founded by Turkish-Americans in Houston in 2000, and which is now operating in eight US states. After completing his talks, Çağlayan and his accompanying delegation will proceed to Mexico for a G20 meeting of Ministers of Economy and Commerce.

Meanwhile, 11 companies, including three foreign firms, have bid for the tender to construct the third bridge over the Istanbul Strait. The tender is set to be completed on Friday, April 20 and involves the construction of the bridge and a 414 kilometer-long highway. A previous tender took place for the project on January 10, but no offers were made, prompting the Turkish Ministry of Transportation, Maritime Affairs and Communications to revise the project and divide it into two parts. Accordingly, the third bridge and 90 kilometers of surrounding roads will be contracted out by a build-operate-transfer model, while the remaining 314 kilometers would be built using public funds. The third bridge over the Istanbul Strait will be 1,275 meters long.