Republic of Turkey Prime Ministry

Investment Support & Promotion Agency of Turkey (ISPAT)

:

A Regional Business Hub

Necmettin KAYMAZ Chief Project Director

Turkey is located in the center of the most

promising markets of the World

Turkey : A Regional Hub for Your Global Business

Turkey’s geographic location is very convenient for accessing major markets..

Source: IMF World Economic Outlook and WTO; GDP, Imports and population figures as of 2014

Access to Multiple Markets

1,5 Billion People

$27 Trillion GDP,

$8+ trillion trade

(45% global trade)

at a 4-hour flight

distance

EUROPE

GDP: $20.8 trillion Import: $6.7 trillion Population: 670 million

RUSSIA

GDP – $1.9 trillion Import: $308 billion Population: 144 million

CENTRAL ASIA & CAUCASUS

GDP: $0.44 trillion Import: $97 billion Population: 85 million

MENA

GDP: $3.9 trillion Import: $1.1 trillion Population: 703 million

Turkey’s geographic location also enables you to follow and cover markets in 16 times zones from New York to Tokyo…

Custom union with the EU and free trade agreements (FTA) with 26 countries..

FTAs:

1. Albania 8. Lichtenstein 15. Tunisia 22. Lebanon*

2. Bosnia & Herzegovina 9. Macedonia 16. Montenegro 23. Kosovo*

3. South Korea 10. Morocco 17. Serbia 24. Ghana*

4. Egypt 11. Norway 18. Chile 25. Moldova*

5. Georgia 12. Palestine 19. Jordan 26. Faroe Islands*

6. Iceland 13. Switzerland 20. Mauritius

7. Israel 14. Syria 21. Malaysia Source: Ministry of Economy * In ratification process

Lucrative export opportunities are supported by custom union with the EU and free trade agreements with 26 countries…

Turkey has one of the best logistic performances in region, enabling efficient transportation of goods to export markets..

1

2

3

4

5Overal LPI

Customs

Infrastructure

International shipmentsLogistics quality & competence

Tracking & tracing

Timeliness

Germany (BestPerformer)

Turkey

Europe &Central Asia

Middle East &North Africa

Source: World Bank, 2014. 1=Low, 5=High performance 1) Efficiency of the clearance process (i.e., speed, simplicity and predictability of formalities) by border control agencies, including customs; 2) Quality of trade and transport related infrastructure (e.g., ports, railroads, roads, information technology); 3) Ease of arranging competitively priced shipments; 4) Competence and quality of logistics services (e.g., transport operators, customs brokers); 5) Ability to track and trace consignments; 6) Timeliness of shipments in reaching destination within the scheduled or expected delivery time.

Logistics Performance Index (LPI)

Turkey’s improved connectivity has been providing ease of transport of goods, especially through sea transport…

Source: UNCTAD Note: The Liner Shipping Connectivity Index captures how well countries are connected to global shipping networks. It is computed by the United Nations Conference on Trade and Development (UNCTAD) based on five components of the maritime transport sector: number of ships, their container-carrying capacity, maximum vessel size, number of services, and number of companies that deploy container ships in a country's ports. For each component a country's value is divided by the maximum value of each component in 2004, the five components are averaged for each country, and the average is divided by the maximum average for 2004 and multiplied by 100. The index generates a value of 100 for the country with the highest average index in 2004. . The underlying data come from Containerization International Online.

Source: TurkStat, breakdown based on trade value ($400bn in 2014)

0

25

50

75

100

125

150

175

Liner shipping connectivity index, 2014 (maximum value in 2004 = 100)

Sea; 57,0%

Rail; 0,5%

Road; 23,2%

Air; 9,7%

Other; 9,7%

Turkey's Foreign Trade by Mode of Transport

2014

Turkey is also well-connected with the rest of the world through airline transportation….

110 Countries & 229 International Destinations

Source: Turkish Airlines, as of 01.09. 2015

International connectivity

Source: Ministry of Development, 10th Development Plan, Taşımacılıktan Lojistiğe Dönüşüm Programı Eylem Planı

The government is committed to improving and transforming Turkey’s logistics infrastructure, which will further integrate Turkey with key markets…

From Transportation

to Logistics

Enhance competitiveness

of logistic companies

Establish

international logistic centers

Develop strategy &

institutional structuring

Improve logistics

infrastructure in cities

Provide effective custom

transactions

Complete large-scale

infrastructure projects

LPI Rank

Increase Air Cargo Capacity

Availability of skilled labor force together with a diligent working culture and cost-competitive edge provides companies to run their business efficiently in Turkey..

Source: IMD World Competitiveness Yearbook 2014, IMD WCY Executive Opinion Survey based on an index from 0 to 10 (0 = Not available 10 = Readily available); Eurostat

6,0

5,2 5,2 5,2 4,8

4,1

2,7

0

1

2

3

4

5

6

7,1 6,8 6,7

6,22 6,0 5,6

3,9

0

1

2

3

4

5

6

7

8

Annual Average Hours worked per week, 2014

45,8 45,0

39,2

28,8 27,2

18,8

12,4 11,5 9,7 8,8 6,9

0

15

30

45

Labor Cost Per Hour in Manufacturing ($), 2012

50,3

41,4 41,3 41,1 40,7 40,5 40,4 40,4 40,0 39,6 39,3 38,8

30

35

40

45

50

Availability of Competent Senior Managers, 2014 Availability of Qualified Engineers, 2014

SOURCE: TSKB

PCs and peripherals • Tripling production with new investment • To export 90% of total

production

Commercial vehicles • New model to be

manufactured in Turkey and exported to 65 countries

Diversified Technology • Super Hub;

manufacturing facility serving Europe, Middle East and Africa

FMCG

• Production base for the Middle Eastern and North African markets

Filters and generators • 85% of total

production to be exported

Textile

• Group’s largest production facility

in the world (15% of the group’s total volume sourced from Turkey)

New line of trucks

•Regional manufacturing

hub for new line of trucks

• Annual production capacity of 150K units

• Exporting 90% of its production to 30 countries

Due to its strategic location, many global companies have already been using Turkey as a manufacturing and export hub..

Multinational Company

Number of Countries Managed from Turkey

Coca Cola 90 GE Healthcare 80 Microsoft 80 Intel 67 Unilever 36 Verifone 30

Schneider Electric 27

Ericsson 22 Cargill 20 Pfizer 20 Volvo 18 BASF 18 PepsiCo 14 P&G 11 LG Electronics 9 Adobe 9

Turkey is also becoming a regional management hub for global companies…

Company Regions managed

from Turkey Rationale behind choosing Turkey as a management hub

90 countries • Eurasia • Africa

“Turkey is a strong country due to its dynamic economy and young population” -Ahmet Bozer, Executive Vice President and President of Coca Cola International, 2011

79 countries • Middle East • Africa

“Besides, the business opportunities Istanbul offers, its educated workforce and infrastructure supporting expats are important” -Ala Faramawy, VP Microsoft International, 2011

67 countries • Middle East • Africa

"Turkish managers have the European business ethics and discipline and the strong communication skills of Eastern managers" –Intel's Business Dev.Manager, Burak Aydın, 2012

52 countries • Europe • Central Asia • Middle East • North Africa

“Besides regional proximity to our clients, İstanbul provides appropriate infrastructure, convenient airport links, and a good quality of life for our staff.” Dimitris Tsitsiragos, VP, IFC, 2010

20 countries • Caucasus • Central Asia • Eastern Europe

"Pfizer Turkey is referred to as 'A School of Leaders', since it continuously transfers successful executives to Pfizer companies worldwide. Today, more than 35 Turkish senior executives are appointed to Pfizer affiliates all around the world. " –ISPAT website, 2012

Source: Press releases

Companies have a strong rationale for choosing Turkey as a regional hub..