Fatih Kemal Ebiçlioğlu has been the president of Turkish conglomerate Koç Holding’s consumer durables business since 2015. He tells fDi that with reforms in education and exchange rate stability, Turkey is well placed to strengthen its position in global supply chains.
Q: Could you briefly outline Koç Holding’s consumer durables business?
A: Koç Holding maintains its strong position in the durable consumer goods sector with its leading brands in both domestic and global markets. Arçelik, the Koç Group’s leading company in the consumer durables segment, has global operations with 28 production facilities in nine countries. Today, Arçelik is a consumer-oriented and multinational appliances manufacturer that operates with 12 brands and employs more than 40,000 people worldwide. Arçelik’s research and development and design centres across the globe are home to more than 1600 researchers and hold over 3000 international patent applications to date.
Q: How has Covid-19 impacted Turkey’s appeal to investors?
A: With Covid-19, governments and the business community started to seek to diversify their manufacturing capabilities. Turkey is perfectly positioned with its geography and manufacturing capabilities to realise opportunities from this new landscape if the right actions are taken in a timely way. Considering the near-shoring trends and restructuring of the global supply chains, Turkey can be an important supply hub and contribute to global efforts on increasing resiliency.
Q: What actions are required to improve Turkey’s investment climate?
A: Turkey has the necessary technological and physical infrastructure, and skilled labour capacity. However, investors believe that businesses still need better certainty, stability and participatory decision-making processes. Improvement in the rule of law and reinforcement of the judicial system for fair and rapid decisions will pave the way for permanent and sustainable growth, accelerating the flow of investment into the country.
Despite Turkey’s great potential, the recent slowdowns in the macroeconomic outlook weaken and decelerate industrial development and investment environment. The high volatility of the exchange rate is one of the main obstacles in doing business; hence, Turkey needs to address the underlying reasons of this critical issue.
More needs to be done to disseminate and encourage more initiatives in the science, technology, engineering and maths education area too. Both the government, companies and non-government organisations conduct various projects regarding upskilling in Turkey; however, in the age of rapid digitalisation, more holistic efforts are needed to reach every child.
Q: Any final thoughts on Turkey as an FDI destination?
A: With its strategic location, modern logistics infrastructure and broad production potential, Turkey is a centre of attraction for international investors looking to capitalise on the country’s access to a giant market of 1.3 billion people and $26tn worth of trade volume within a four-hour flight radius. Access to skilled labour is a significant factor that positively affects investment decisions in Turkey. Moreover, strong and increasing domestic demand is boosting the investment appetite.
Thanks to the Customs Union being established back in 1995, Turkey has deep economic integration with the EU, and vast experience of adapting and implementing the EU legislation. Turkey recorded significant progress in terms of renewable energy infrastructure, products standards and compatibility of industries to EU norms during the last decade.
Today, many private sector companies in Turkey are directly following the EU’s environmental norms and setting ambitious targets. Taking precisely formulated initiatives, Turkey can strengthen its position in global supply chains and play a more active role in trade corridors.
In association with Investment Office of the Presidency of the Republic of Turkey. Writing and editing were carried out independently by fDi Intelligence.
This article was first published in the December 2021/January 2022 edition of fDi Intelligence magazine. Read the online edition here.