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urkey is a unique country that straddles two continents: part of the
country lies in Asia and a small part is in Europe. The city of Istanbul is
partly on both continents, divided by the Bosphorus, a strait connecting the
Black Sea with the Sea of Marmara. Turkey is the second most populous
country in Europe, after Germany, and 99 per cent of the population is
Muslim.
Turkey’s major imports are from the U.S. and Europe. The travel time for freight from most countries in Europe is approximately two days. The duty is less than 1% on goods imported from Europe. However, duty on Indian goods, including Value-Added Tax of 18%, will be as high as 40-45%. Presently, Indian goods sent by sea freight to Turkey go through one or two trans-shipments at Dubai, Nicosia, etc. There are some direct shipments also from India to Istanbul. Sea freight charges from India, as paid by some Turkish companies, are about $1,300 for 20-foot containers.
WEAKNESSES
Until a few years ago Turkey had interest rates as high as 3,500% and many
expatriate Indians told me that they were living on the interest earnings.
Now the interest rate is about 25-30% and inflation is 35%. The currency has
been greatly devalued with $1 equal to TKL (Turkish Lira) 1.33 million. Both
the dollar and the euro are equally acceptable in Turkey. Due to the crisis
in payments of high-interest deposits more than a dozen banks went under in
the last couple of years. The banking system even today is fragile and
undependable.
OPPORTUNITIES
Turkey is the second largest market in Europe. It does not have a big
manufacturing base even though some companies like Kalle, which manufactures
locks, Bureausit and Eurosit, which manufacture seating, and Arcelik
(pronounced Archlik), specialising in white and brown goods, are big.
Arcelik is the third largest corporation in Turkey with an annual turnover
of $8 billion. Many Indian companies like Bharat Heavy Electricals Ltd.,
Bharat Earth Movers Ltd., the Punj group and Tata International are active
in Turkey. There are plenty of opportunities in energy, construction and
mining, textiles, chemicals, consumer goods manufacturing, etc.
BUSINESS STRATEGY
Though the response to the fair was lukewarm due to inadequate awareness
creation, I made a few good contacts for possible dealership /
representation. Basically, we need a local to understand the market, spot
oppor-tunities and get us in. Big government contracts and business
decisions are made in Ankara. Traders or importers/exporters are in
Istanbul. There are manufacturing centres in various cities. If we are
unable to appoint a good dealer who will also keep some stocks then the
other option is to keep the stocks in a custom-bonded warehouse preferably
in Genoa from where clearing and shipment will take a maximum of two days.
An expatriate Indian, Major Adi Junglewala, who has been in Iran and Turkey
for the last 35 years, can assist us in developing the market.
Dhruv Sharma (centre) with Francis Chandiyok (left), Adviser to the Chairman
of the Almana Group of Doha, and Major Adi Junglewala (right) at the
entrance to the fair.
• Furniture: I visited the headquarters of “Office 1 Superstore”, the largest retail chain, and also met their head of operations. They sell furniture, safes, stationery products and cash counting machines. I also met a few local traders and manufacturers. Prices need to be worked out aggressively due to our brand not carrying any premium at present. In terms of quality, I found our seating and desking to be superior in features to both Bureausit and Eurosit. Also “Knock-Down” is a new concept in Turkey and was received well. They have welded products only. Steel cupboards are not used in homes at all but only in offices. Desks and home cupboards are mostly made of wood, MDF (Medium Density Fibre), Pre-Laminated Board, etc. The fastest selling products in the market are computer desks and seating.
• Security Equipment: Awareness of performance standards is not very high even for bank quality safes. One well-established company, whose owner I met, is exporting in a big way to Egypt. If our specs and prices suit him (at first glance our prices were competitive) then he could consider promoting our safes too. Some inquiries were received for Safire, Rhino and other safes. Also there are big requirements for doors - both ordinary ones for homes and the fire-resistant ones.
• Locks: Kalle is the undisputed market leader. I received some inquiries for the Ultra range of door locks. Our prices were competitive (I sold all our locks at more than the Free on Board price given to me!). There are big requirements for locks for homes and hotels. For hotels, locks with swipe cards are required.
• Material Handling Equipment: I had detailed discussions with the president of a major construction company, based in Ankara, which is selling equipment against government tenders for the mining and construction industry.
• Appliance: As requested by Shyam Motwani, Senior Vice President, Appliance Division, I have brought the catalogues of Arcelik’s complete range for reference. Their export executive is expected to be here in November and he will be visiting Onida at Delhi and IFB at Goa besides us.
