Doing business in Turkey: a long-term commitment
Don’t be distracted by the fluctuations in the exchange rate of the Turkish Lira or by daily news items in the Turkish media. Look at the fundamentals of the dynamic and fast growing Turkish economy and the long trends in Turkey and the wider region. That was in essence the message of Mr. Ivar Blanken, CFO of Unilever Turkey, Russia, Middle East and North Africa, conveyed as key-note speaker at the second event of the Dutch Business Association Turkey.
He shared with the members of the DBA Turkey Unilever’s perspective on the economic outlook for Turkey and of Unilever’s position in Turkey. Blanken’s forecast for Turkey’s economic growth this year is around 4 percent. “We expect the same figure on average in the medium term”, he said.
Yes Turkey has a hefty current account deficit that should be reduced to make the economy less dependent on capital inflows to finance its deficit. But most fundamentals are right and most prospects are bright. Turkey has a big market of 73 million consumers. The middle class is growing fast and the median income as well. It has a young population that is eager to learn. The quality of education is improving. The banking sector is healthy. And Turkey has become an important hub, for Unilever and for a growing number of other companies as well, because of its strategic location between Europe, Asia and North Africa.
Turkey is one of the most important hubs within Unilever. The company has 8 factories and one under construction. Furthermore it has an IT centre, R&D centre, logistics centre, brand and development centre and export centre. At least 1.5 billion people and $ 23 trillion in GDP are accessible in 3 hours via Turkey. The GDP centre of gravity is changing from Europe and the U.S. to Asia. Thanks to oil and gas exporting the countries in Turkey’s neighborhood – Russia, Middle East and North Africa – have a current account surplus equal to China ($ 360 billion).
Turkey has already an urbanization rate equal to France – 7 out of 10 Turks live in an urban area – and that trend will continue. In 2030 78% of the Turkish population will live in cities. Manisa, Denizli, Samsun and Eskişehir will be the rising stars. Mersin will be the fastest growing city. The population will continue to shift from East to West. And the consumers will shift from ‘Haves’ to ‘Have Lots’. In the next 20 years Turkey will be an aging population. And because of these trends there is a growing market for everything related to health and wellness – gyms, sport equipment, spas, sport shoes, sporting outfits, creams, organic food and supplements – and life style items in general.
For all these reasons doing business in Turkey has great prospects, Ivar Blanken made clear. During the Q&A session the CFO of Unilever in Istanbul gave more detailed information on the main topics he discussed during his presentation.
The most important advise he had for SME entrepreneurs who are contemplating entering the Turkish market? Make sure to find a reliable Turkish partner to set up and expand your business in Turkey.