Q What are the main reasons you, as an American investor, decided to invest in Turkey?

A

In the 1980s, I was working on the construction of an industrial city in Saudi Arabia. In 1984, on my way back to the US, I stopped over in Turkey and inquired as to whether we could do something similar there. At the time Turkey was working on the free zone programme. I had seen how industrialisation created jobs in other places. This action on my part was mostly motivated by my desire to contribute to the development of my country of origin.

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The Aegean Free Zone (AFZ) that I have developed and am operating is the first privately developed free in Turkey. At the time, Prime Minister Turgut Özal was introducing privatisation in Turkey, so the government was very accommodating and forward looking.

I used my experience in the development of industrial parks in the international arena to organise the infrastructure, the services and the management.

Q What is ESBAS’ strategy for attracting FDI? Which sectors and source countries are being targeted most heavily?

 

A

At the Aegean Free Zone, we have the capacity to create employment for some 30,000-35,000 people. This would be a very important employment base anywhere in the world. The Aegean Free Zone has the management, full employee services and operational capabilities to service hi-tech manufacturing companies employing large numbers of workers.

Electronics, automotive parts, machinery, textiles/garments, food packaging and IT are our main target sectors. We have been able to attract internationally-renowned companies, including Pulse Electronics (USA), Eldor Electronics (Italy), Delphi Packard and Delphi Diesel (USA), McCormick (UK), Hugo Boss (Germany) and Vestel Electronics (Turkey).

The Aegean Free Zone is a gateway to the Middle East, central Asia, and eastern Europe. Companies planning to do business in these regions would find the Aegean Free Zone an ideal place to base their operations.

Q What role has ESBAS played in the surrounding region’s development and that of Turkey?

A

The AFZ is an inspiring enterprise that demonstrates the vast potential for initiatives that equally benefit both employees, the local environment and the investors.

When one considers that today’s workers earn some $50m a year, the impact of this income is very important to the surrounding region of Gaziemir. The training that comes with the various hi-tech companies adds a very important input to the development of the country.

Q How many companies operate in the zone and how much more capacity do you have for growth? How much investment has it attracted?

A

Currently, 273 local and 74 foreign companies are operating at the zone employing 12,500 people. The goal of the AFZ is to be operating at full capacity by the year 2012 when there will be up to 35,000 employees and 500 companies. Last year $60m of investment was brought into the zone. Since its inception it has attracted $350m of investment. This represents some 10% of all FDI in Turkey and over 50% of FDI relating to exports from Turkey.

Although the absolute numbers are small compared to those of other European countries, such as Poland and Hungary, it is a proportionately large percentage of foreign and Turkish investment.

Q What are the biggest challenges that free zones in Turkey and around the world face and how can they be overcome?

A

The EU has given Turkey a date for the start of negotiations for accession to the union, which is a positive development. This will give Turkey an opportunity to upgrade its laws, rules, and regulations to western standards and criteria. Such an event would thus enhance Turkey’s desirability for investment and increase the credibility of Turkey as a stable investment milieu.

In addition, there are issues raised by the WTO that need to be addressed. These relate primarily to the perennial subject in world trade of “unfair competition”. These issues will be tabled at the World Free Zone Convention at the Aegean Free Zone Conference this month.