In the beginning of last week, a delegation of high-profile Turkish executives visited New York with ISPAT (Investment Support and Promotion Agency of Turkey), where they addressed recent issues facing the Turkish market. On their agenda was the post-coup investor perspectives and the investment challenges, as they gave cross- sectorial perspectives (from finance, consumer goods, technology, energy and infrastructure) on the recent instability, existing opportunities and predictions for the future.
The delegation included PepsiCo’s General Manager in Turkey, Levent Yuksel; Tankut Turnaoglu, who is the second Turkish CEO of Procter & Gamble; Aysegul Aydin, Partner in Charge of Heidrick & Struggles in Turkey and Prof. Dr. Ege Yazgan, Vice Dean of Bilgi University in Istanbul who supplied an academic perspective.
The delegation of Turkish representatives of global brands, further addressed issues such as the growth rates and the FDI flows into the country, upcoming investment deals and product launches and on leveraging Turkey as a national spring-board with access to 1.5 billion people via the MENA and the EU region.
One point which the high-profile Turkish delegation agreed on was that the general negative perception and coverage of the press after the coup attempt in Turkey this summer was far from reality. With the general hope that their visit would help pick up Turkey’s image in the foreign markets and especially in the US, Levent Yuksel, the President of PepsiCo, mentioned that their visit marks only the beginning of a long-term marathon. As the Turkish representative of the global brand, Yuksel mentioned PepsiCo values Turkey as a significant operation. Even though Turkey has recently been through certain challenges, perhaps the most important certainty we should realize is how “business moves forward”. One fact which all delegates stressed was the dynamic and young population of Turkey - functioning as an important strength that drives the growth of the country’s economy - followed immediately by a rapidly developing middle class and qualified work force. It should be perceived that Turkey is a powerful consumption economy and even after the tumultuous post-coup era, there has not been any significant foreign investment withdrawal from the country. Most foreign investors are confident that Turkey will outgrow the shock and continue on it’s development trend. Certainly, if it was any other country to witness the same shock, the outcome might have been very different.
Moreover, PepsiCo Turkey President Levent Yuksel, mentioned how the company has focused on the opportunity and the positive outcome that may arise out of difficult situations; what is important is to show progress in performance. After the July 15th coup attempt, the message PepsiCo gave was one of holding on to the work even harder and of embracing development. The fact that the company announced their 6th national factory in Turkey just a few months after the coup attempt in July proves their strong commitment to this message. This 6th PepsiCo factory will be operating on a significant scale to produce Turkey’s snack supply. PepsiCo is already the leading company, in most liquid refreshment and snack categories available, yet this position only drives the company to achieve further progress. They are confident that this development trend will continue in the future. PepsiCo exemplifies that with a “focus on the positive” even a crisis can turn into opportunity for the benefit of all. Turkey is a strategic market and a resilient economy, despite certain ups and downs that may happen along the way, the strategic investor should look at the long term trend.
Prof. Dr. Ege Yazgan, Vice Rector of Bilgi University in Turkey who teaches on international economics among other subjects, also drew attention to the resilient nature of the Turkish economy. He characterized the current environment as one which a series of adverse traumas have brought Turkey into and the negative impact that resulted as a consequence is in temporary nature and does not constitute a structural break in the country’s’ upwards development scheme. It should be considered pretty normal for the development trend to pursue on a slow rate these days, we should not disregard the general long term upward direction resulted from strong fundamentals secured by ongoing urbanization and young population. Prof. Dr. Ege Yazgan stressed the trust business executives have in the fundamentals of the country and highlighted the most recent industrial development policy which, coupled with strong industrialization, aims to transform Turkey into an industrial hub.
ISPAT emphasizes that Turkey’s score has risen in the World Bank’s Ease of Doing Business ranking during the last decade and has become a global economy with a rising level of inward investment flows. As at the end of June 2016, there were approximately 50,000 foreign companies operating in Turkey, which was up from 5,600 in 2002. Up until 2002, total FDI into Turkey stood at USD 15 billion. However, from 2003 to September 2016, Turkey has attracted more than USD 170 billion of inward investment.
Procter & Gamble’s Turkey President Tankut Turnaoglu, additionally mentioned how Turkey has become a talent generation engine and that this talent is highly adaptive. The aim is to make Turkey a global hub among others like Dublin. Turkey’s macroeconomic and consumption data levels indicate development and progress. P&G Turkey, as a company with about 65 personal health care brands, is placed within the brands’ European region and operates as the regions’ main development engine. This fact is further in support of the fact that Turkey is home to a powerful middle class and young population, ascending Turkey up and forward. P&G’s goal is to bring global brand products into Turkish market for this aforementioned consumer capacity and today 95% of the households in the Turkey have at least one P&G product in their homes. Furthermore, 60% of those products are produced in Turkey. In the recent years, P&G has chosen Turkey to be the first country market to launch their brand-new products in. Turkey’s population was the first among other global market countries to be introduced to the new P&G products. On the current investment climate, Turnaoglu, who also serves on AmCham Turkey’s Board of Directors, indicates that FDI levels have dropped worldwide and that not only in Turkey. AmCham Turkey, act as a bridge between Turkey and the U.S. to further improve bilateral trade, investments and relations, and to support Turkey’s economic development by strengthening the business environment and stimulating foreign direct investments.
Aysegul Aydin, is the founding and managing partner of Heidrick & Struggles, operating in Turkey for the past 16 years and recognized as the leading leadership advisory firm, providing human capital services including executive search, leadership consulting and services for boards of directors to Turkish and multinational companies operating in the domestic market, the CIS and the international arena. This fact alone places Aydin in a very strategic position which allows her to see the business climate of the CIS & MENA regions from a bird’s eye view. “In an uncertain and fast-changing world, the need for business leadership has never been greater. We are focused on helping organizations find and develop visionary and agile leaders, and equipping them with leadership tools to succeed in volatile operating environments,'' she describes. According to Aydin, the comparative position of Turkish professionals to their counterparts in other foreign markets is remarkable. In the past 20 years, Turks have been on significant demand. In other words, Turkey exports talent and potential. Compared to Europeans the well educated, driven population of young Turks are hard-workers and fast-learners. Consequently, and in part, thankfully, the business sector in Turkey moves forward despite certain ups and downs. Aydin also highlights that Heidrick & Struggles Turkey, has not witnessed any concern from foreign investors, who seem aware of Turkey’s potential and unique talent. Their revenue has not faced any decline, despite the events of this summer.
In addition, ISPAT notes that Turkey is now in the process of delivering the Priority Transformation Program for a comprehensive policy framework for sustainable economic growth. Its main pillars are to strengthen macroeconomic stability, to enhance human capital and maintaining efficiency in the labor market, to increase the capacity for development of technology and innovation; and to strength the physical infrastructure of the country.
The "Priority Transformation Program" covers reforms in 25 priority areas including more than a thousand actions at a macro and micro level. The process just commenced. Turkey is constantly following global and domestic developments and adjusting and reforming its business environment to these new developments.
In the photo: Front row (from left to right): Arda Ermut, President of the Investment Support and Promotion Agency of Turkey (ISPAT) and President of the World Association of Investment Promotion Agencies (WAIPA); Aysegül Aydin, Founding and Managing Partner, Heidrick & Struggles’ Turkey; Tankut Turnaoğlu, General Manager/Vice President, P&G Turkey and Caucasus; Cenk Kıvılcım, General Manager Cisco Turkey; Murat Kansu, General Manager, Microsoft Turkey
Back row (from left to right): Selçuk Yorgancıoğlu, Partner, Head of Turkey & Central Asia, The Abraaj Group; Ismail Esin, Managing Partner, Istanbul, Baker and McKenzie; Mahmut L. Ünlü, Chairman and CEO Ünlü & Co.; Canan M. Özsoy President & CEO, GE Turkey; Serra Akçaoğlu, Citi Country Chair, CEO and Board Member, Citibank A.Ş. Turkey; İhsan Necipoğlu, President, Dow Turkey & Central Asia; Professor Ege Yazgan, Vice Rector, Istanbul Bilgi University