The disruptions to the global economy during the pandemic have upset cross-continent supply chains while leading some global giants to move their production to Turkey, a major alternative to China in terms of quality production, logistics infrastructure and incentive system. This trend is likely to continue with the country attracting more investors from Europe.
Sweden’s flat-pack furniture giant IKEA and Polish fashion retailer LPP said earlier this month that they are planning to move part of their production to Turkey to minimize problems with global supply chains and increased shipping costs. German pharmaceutical giant Boehringer Ingelheim and Belgian packaging firm DW Reusables also announced new investments in the country.
Turkey – a country that receives foreign direct investment (FDI) from around the world, including Europe, has a profitable investment environment with comprehensive incentives, said Marek Nowakowski, Head of the Polish Turkish Chamber of Commerce. He said Polish investors are also interested in the country.
Nowakowski said chemical materials used in automotive and construction are at the forefront of the fields that Polish companies eyeing to invest in Turkey are considering, while more work can also be done in the agricultural sector.
The logistics infrastructure is developed in Turkey, he went on to say, noting that the railway that will connect Poland and Turkey will be opened soon.
“Our companies are considering (to invest in) Turkey instead of China.” The Polish trade official said,who stressed that the product quality is also much higher in Turkey while manufacturing is cost-effective here.
Poland Turkey Chamber of Commerce Turkey Representative Koray Akgüloğlu, meanwhile, stated that Polish investors are also interested in the medical equipment and cosmetics sectors: “Polish investors are aware of the rapid development in these sectors in Turkey. Some Polish companies are planning to open chain stores in the country and even manufacture here.”
Stating that these are high-quality local Polish brands, Akgüloğlu said, “They are already trading with Turkish partners. The next step is to invest because the market in Turkey is twice as large as in Poland.”
Stating that they are planning to hold a video conference with the cosmetics industry and potential partners in Turkey next month, Akgüloğlu said strengthening the fields of activity in Turkey means strengthening trade with the Middle East and North Africa for Polish companies.
Noting that companies want to benefit from Turkey’s geographical proximity and other advantages, Akgüloğlu said that the reason behind the investment decision of Polish ready-made clothing company LPP in Turkey is its long-time relations with Turkish fashion manufacturers and the firm’s strong supply network in the country.
Akgüloğlu said: “The company wanted to open stores here and use Turkey as a bridge to reach tourists from neighboring countries and to access other markets. They plan to first develop their infrastructure and supply network in Turkey, and then export to the Middle East and African countries.”
‘Investments to grow’
Tuğrul Şeremet, chairperson of the board of directors of Turkey Belgium Luxembourg Chamber of Commerce (TBLTO), stated that it is pleasing that Belgium-based company DW Reusables has made direct investments in Turkey by purchasing Etap Plastik and Etap Doğan.
Noting that the vital disruptions in the global supply chain after the pandemic period were a turning point for the economic relations of Europe and Turkey, Şeremet said: “Similar investments will continue to increase, there will be positive developments in the volume of foreign trade. Turkish companies are also making and will make new investments in Belgium.”
As problems regarding the supply of containers stemming from the uncertainty created by the delta variant affected forecasting and planning, Şeremet pointed out that foreign companies are now tending to seek alternative production in nearby regions.
The experience of the sector in the production of plastic-based products, the rapid reaction and management skills of Turkish companies in times of crisis, quality workforce and high compliance with European Union standards were powerful reasons for the companies’ recent investment decisions, he said.
Most recently, on Oct. 18-21, private sector delegations from the Belgian Flemish, Walloon and Brussels special economic zones met with Turkish private sector representatives to discuss topics such as investment, commercial cooperation, exports and imports.
Cost advantages
Kadir Kurtuluş, chairperson of the board of directors of the Russian Turkish Trade House, explained that, in addition to Turkey’s economic advantages and geopolitical position, it also offers many advantages to investors in terms of modern logistics infrastructure and flexible incentive packages.
Noting that the country is a safe and independent route for the transportation of energy resources to European countries in the east-west corridor, Kurtuluş said, “Turkey, due to its geographical location, provides a cost advantage in terms of freight not only with containers but also Ro-Ro, cargo and truck transportation.”
Some 2,130 companies operating in Turkey have Russian capital, Kurtuluş said,noting that the cooperation between the two countries in the agricultural sector continues to increase, while there are still many business fields that need to be mobilized.