Foreign - Turkish Joint Ventures & Market Entry Strategies

An Overview of
Foreign - Turkish Joint Ventures &
Market Entry Strategies in Turkey
This report covers following companies:
ABB Group, Siemens AG, Robert Bosch GmbH, General Electric,
Alstom, Bombardier, Danone Groupe, Procter&Gamble, Unilever
Group, PepsiCo Inc, Mondelez International, Colgate-Palmolive,
Kellogg Co, Carlsberg A/S, Ferrero Group, Herbalife Ltd.

General information of the company
Company name: ABB Electricity Industry SA (ABB Elektrik Sanayi
A.Ş.)
Year of establishment in Turkey: 1965
Recent sales data: Net sales from production in Turkey (2013):
USD 191.365.465 (TL 413.349.405)
(Source: http://www.iso.org.tr/Sites/1/content/500-buyuk-liste.html?j=6493030)
Number of employees: 1100 employees in 5 factories and 4 service
centers located in 5 cities in Turkey.
Source: http://www.capital.com.tr/abb-turkiyede-3-kat-buyuyecek-haberler/24014.aspx
ABB's first plant in Kartal, Istanbul

Main businesses
ABB Turkey locally manufactures power and distribution transformers,
Medium-Voltage and Low-Voltage switchgear products, Discrete
Automation/Motion and Process Automation systems.
The company offers both modernization packages for existing
installations and the cutting-edge technology for new investments.
With the help of their local network of distributors, wholesalers, system
integrators and other operational partners, ABB Turkey provides full-
range application expertise, project management and systems delivery.
Source: http://www.abb.com.tr/?siteLanguage=us
ABB plant in Dudullu Industry Zone,
Istanbul

Entry structure into the Turkish market
ABB entered into Turkish market in 1965 without any local partners, by
establishing its fully-owned company and plant.
The first plant at Kartal area of Istanbul (31,000sqm) has started
producing power transformers in 1969.
Another plant (8,000sqm) at Dudullu area of Istanbul has started
producing “medium-voltage” switchgear products in 1996.
(On the other hand, before today’s ABB was formed as the result of a
merger in 1988 between the Swedish company ASEA and the Swiss
BBC, the two companies had separately entered the Turkish market in
the 1940s.)
Source: http://www.abb.com.tr/?siteLanguage=us

Production sites as the exporting hub
ABB Turkey is an export hub for some of the products such as
medium-voltage panels for power distribution and low-voltage panels
including testing facilities, which they export to 70 countries all over
the world (e.g. Mexico and some other Latin American countries as
well as European countries such as Germany).
ABB Turkey’s net export sales in 2013: USD 74.461.702
Net total sales in 2013 (export + local sales): USD 191.365.465.
(Source:
http://www.tim.org.tr/files/downloads/ihracat1000/2013/ihracat1000_2013_eng_w
eb.pdf)
Furthermore ABB Turkey has the overall European responsibility of
transformers for renewable systems (solar and wind).
In 2013, ABB acquired Turkey-based ELBI Elektrik (http://www.el-
bi.com/) to improve its position in the Turkish low-voltage products
segment and to take advantage of ELBI’s existing business in Eastern
Europe.
Source: xxxxxxx

ABB Factories and Locations in Turkey
Headquarters: ABB Elektrik Sanayi A.Ş., Kartal İstanbul
Kartal Plant (Power Systems & Turbocharging): Kartal İstanbul
Dudullu Plants ((Discrete Automation, Motion & Robotics, Process
Automation): Y. Dudullu İstanbul
Dilovası Plant (Power Products and Low Voltage Products): Dilovası
Kocaeli
Tuzla Plant (Low Voltage Systems, Motors and Generators): Tuzla
İstanbul
Country Service Organization: Kartal İstanbul
Adana Office: Seyhan - Adana
Ankara Office: Çankaya Ankara
Bursa Office: Osmangazi Bursa
Izmir Service Group (LV Products, Turbocharging): Çiğli İzmir
Source: http://www.abb.com.tr/cawp/trabb902/77fbe2af77c0396342256c54006be0ba.aspx

ABB plants in Istanbul
Kartal plant and HQ
Dudullu plant
Tuzla plant
Dilovası plant
Black Sea
Marmara Sea

Success factors in Turkey
ABB Turkey has both governmental and private sector customers. On
the governmental side, ABB works mainly on public transport and
public power-generation projects by bidding and trying to win public
tenders.
On the private sector side, two largest family-owned conglomerates in
Turkey, Koç Holding and Sabancı Holding, are among major
customers of ABB Turkey.
Alongside Koç and Sabancı, ABB Turkey also puts emphasis on the
relationships with other elite families in Turkish business landscape to
take advantage of their vast industrial and political networks.
ABB Turkey also established long-term relationships with influential
NGOs such as TUSIAD (The Association of Turkish Industrialists and
Businessmen), who play a major role both as a channel to lobbying
and interacting with political actors and as an important source of
information about the market and industry.
In other words, ABB has been successful in understanding and
evaluating the characteristics of local market and local business
mentality.
Source: http://goo.gl/iI0a82

Company name: Siemens Industry and Trade S.A. (Siemens Sanayi
ve Ticaret A.Ş.)
Year of establishment: 1958
Recent sales data: In 2013, Siemens’ sales to customers in Turkey
amounted to USD 1.2 billion and new orders totaled USD 1.78 billion.
(Source: http://www.siemens.com/about/en/worldwide/turkey_1154687.htm)
Siemens Turkey net sales from production in 2013:
USD 526.226.620 (TL 1.136.649.500)
Source: http://www.iso.org.tr/Sites/1/content/500-buyuk-liste.html?j=6493030
Number of employees: Siemens Industry and Trade S.A employs
2.930 people in Turkey (as of June 2014).
Siemens HQ in Kartal, Istanbul

Main businesses
Siemens offers a wide range of solutions and services in Turkey, where
its Industry, Energy, Healthcare, and Infrastructure & Cities Sectors
occupy leading positions.
Industry: Siemens delivers several Automation and Drive Technology
equipment for iron, steel and construction industries including raw
metal mills, lighting and ventilation systems for highway tunnels, water
treatment plants etc.
Energy: Siemens participates in several power generation and power
transmission projects , such as combined cycle power plants, wind
power plants, turbines for steam power plants, projects etc.
Healthcare: Siemens provides state-of-the-art medical equipment and
renovation projects for both private and public hospitals.
In near future, Siemens Turkey’s “Infrastructure and Cities” division
intends to expand their export portfolio with new products such as
Smart Grid and e-mobility systems.

In 1856 and 1881, Siemens installed the first telegraph and first
telephone lines in Istanbul. Later on, Siemens built the first electricity
plant in Istanbul to run the street trams and bring electricity to private
households.
After radio broadcasting started in Turkey, Siemens established its first
official company in Istanbul in 1927 and started to import Siemens
radios (a fully-owned German company and registered as “Siemens
Elektrik Türk A.Ş. / Siemens Turkish Electricity Corporation S.A.”).
In 1958, Siemens decided to play a bigger role in the industrialization
process of Turkey. They made a JV with Koç Holding
(http://www.koc.com.tr/en-us), the largest family-owned conglomerate
in the country, and formed a new company with the name “Simko” (JV
shares were 25% Koç and 75% Siemens).

In 1961, Simko plant began the production of energy and telecom
components at its 14.000sqm premises in Kartal area of Istanbul(today
90,000sqm). In 1989, Kartal plant started to produce digital electronic
switching systems.
The End of JV: Koç Holding sold all its shares to Siemens in 2001,
and Simko changed its name to Siemens Sanayi ve Ticaret A.Ş.
(Siemens Industry and Trade S.A.).
(On the other hand, the strong relationship and solidarity between
Siemens and Koç still continues.)
In 2009, Siemens built a new plant at Gebze Industrial Zone near
Istanbul, and started to produce components for medium- and low-
voltage technology.

Siemens Turkey as a global production center
Kartal plant (previously "Simko") exports from Turkey to 80 countries
in a wide geographical region from the Middle East to the Far East.
Kartal plant’s major export product is high voltage circuit-breakers. The
plant has a capacity of producing 3.000 units a year, and all circuit-
breakers are exported. Besides, industrial drive automation equipment
and auxiliary contactors are also among major export products of
Kartal plant.
In terms of worldwide service and maintenance export, Siemens
Turkey works under the coordination of Siemens HQ in Germany, and
mainly focuses on geographically near regions such as Middle East,
Western Europe, North Africa and CIS countries.
Siemens has 2 production sites in
Turkey: Kartal plant on the Asian side of
Istanbul (picture),
and Gebze plant in Kocaeli (again near
Istanbul).
Source: http://www.enerjidergisi.com.tr/haber/2012/11/siemens-5-kitada-100-ulkeye-turkiyeden-ulasiyor

Siemens Turkey as a global production center
Gebze plant, became operational in 2011 with €100m investment in
110.000sgm area, has the global responsibility for exporting medium
voltage air-insulated switchgears to 40 countries in 5 continents.
Gebze plant was the first LEED gold-certified production facility in
Turkey (Leadership in Energy and Environmental Design).
Siemens also built a new R&D center near its Gebze plant with an
investment plan of EUR 15 million for 3 year period.
New R&D Center, active in Industry and Infrastructure and Cities
sectors with main focus in Industry Automation, Energy Automation
and Medium Voltage areas, aims to increase the export volume from
Turkey by diversifying production through R&D.
Siemens Gebze plant in Kocaeli
(near Istanbul).
Source: http://www.slideshare.net/alirizaersoy1/siemens-turkiye

The reason of dissolution of the JV
Koç’s decision to sell its Simko shares to Siemens in 2001 was a part
of comprehensive restructuring strategy inside Koç Group.
In July 2000, for the first time in its corporate history, Koç Group has
assigned a new CEO from outside of the family. It was a huge step
towards professionalism in a family-owned business.
And as a part of a long-term strategy, they also decided to restructure
all business areas of the Group by eliminating the irrelevant activities
and focusing on the most relevant ones. So, they decided that, in
terms of planning the future investments, Simko will not take place
among the most relevant business areas of Koç.
Actually, Mr Nusret Arsel, Managing Director of Simko since 1961 and
also son-in-law of Koç family since 1956, had strongly objected to the
decision of selling the shares, but he couldn’t change the course of
events.
(Source: http://www.milliyet.com.tr/nusret-arsel-artik-
siemens/ekonomi/ydetay/1823995/default.htm)

The reason of dissolution of the JV
According to Koç Group’s press bulletins at that time, Siemens AG’s
global strategy had also played a role in this decision, most probably
referring to a strategy of gradually ending the local JVs and fully
acquiring its partnerships in the emerging countries.
By the way, the legendary founder of Koç Group, Mr Vehbi Koç, had
also clearly stated that one of his biggest ambitions was to convince
Siemens to invest in Turkey. In a politically liberal perspective, he
believed that attracting foreign direct investment to Turkey was the only
solution to make Turkey progress and compete in worldwide markets.
This positive perspective towards foreign investment has been shared
and supported by almost all Turkish governments since 1950s.
More importantly, after the dissolution, the partnership and solidarity
between Koç Group and Siemens have continued in a “preferred
supplier – client” framework. Siemens continued to supply technology
and equipment in several projects and facilities of Koç Group. Their
“friendship and partnership” has become even stronger than before.
(Source: http://arsiv.ntvmsnbc.com/news/20530.asp)

Company name: P&G Consumer Goods Industry SA (P&G Tüketim
Malları Sanayi A.Ş.)
Recent sales data:
Number of employees: 900 (including headquarters and 2 plants).
Main business:
P&G Turkey’s headquarters are in İçerenköy on the Asian side of
Istanbul. There are 2 plants in Gebze and Şekerpınar Industry Zone
near Istanbul, producing detergents, diaper, hygienic pad and bleacher.
P&G Turkey also serves as the headquarters for operations in the
Caucasus, the Central Asian republics, and Israel.

Main business
In the last 27 years, P&G has made a direct investment over USD 550
million in Turkey. Two P&G plants in Turkey supply not only local
demand, but they also export to the regional countries and Europe.
P&G is active in Turkey with its 25 brands in many categories from
household cleaning to personal care and baby care. Approximately
95% of households in Turkey contain at least one Procter & Gamble
brand.
Household Care Brands: Alo, Ace, Ariel, Braun, Duracell, Fairy, Prima
Beauty and Personal Care Brands: Blendax, Braun, Gillette, Head &
Shoulders, Ipana, Koleston, Max Factor, Olay, Oral-B, Orkid, Pantene,
Rejoice.

In 1987, P&G entered into Turkish market by acquiring the 50% shares
of a local family-owned company called “Alo Mintax” (owned by Dürüst
family), who were already producing “Alo” laundry detergent, “Mintax”
cream gel detergent and “Pinky” shampoo.
One year later, P&G bought all shares and fully acquired this local
company.
At that time, top shampoo brand in Turkey was Blendax (originally
German brand). P&G has globally bought Blendax in 1989, and added
it to brand portfolio in Turkey.
Alo and Mintax were the first Turkish
brands acquired by P&G.
Blendax shampoo in 1980s.

In 1990, P&G has made a new JV with Eczacıbaşı Group
(http://www.eczacibasi.com.tr/en/home), one of the biggest family-
owned industry conglomerates in Turkey, and they established a new
company called Sanipak SA to produce and sell three locally market-
leader brands: Orkid hygienic pad, Prima baby diaper and Ipana
toothpaste (bought from Bristol-Meyers).
At the same time, P&G has started to bring some of its global brands
into Turkey, such as Ace, Ariel, Pantene and Rejoice.
The End of JV: P&G’s partnership with Eczacıbaşı has ended in 1998
and they formed fully-owned company “P&G Consumer Goods
Industry SA” (P&G Tüketim Malları Sanayi A.Ş.).
The reason behind the dissolution was the different approaches in
sales and marketing activities. Even though Eczacıbaşı is also very
good and competent in marketing, P&G wanted to be the sole
decision-maker on the critical and strategic issues of marketing.

Success factors
The key success factor of P&G in Turkey is their strong ability to
monitor and understand the changes in consumer behaviors.
Many local FMCG companies in Turkey have learned about the basics
of “branding and targeted marketing” from listening to P&G’s success
stories.
On the other hand, the strong relationship between , P&G and
Eczacıbaşı still continues: Very recently, in July 2014, they signed an
agreement to sell OTC products through pharmacies. The agreement
encompasses İpana, Oral-B, Prima, Orkid, Gillette, H&S, Koleston and
other P&G health and grooming brands. Eczacıbaşı’s distribution
network currently reaches more than 4000 pharmacies in Turkey.
Source: http://goo.gl/un7Enb
Eczacıbaşı CEO Dr. Erdal Karamercan
and P&G Turkey CEO Tankut Turnaoğlu,
July 2014.

Production sites in Turkey – Gebze Plant
“Prima” diaper, “Orkid” hygienic pad, “Alo” and “Ariel” laundry
detergents are produced in Gebze plant.
“Fairy” dishwashing liquid detergent and “Ace” household detergent
are produced in Şekerpınar plant. Other products such as Pantene
and Rejoice are imported from European plants.
P&G Turkey exports its products to over 25 countries in CEEMEA
region (Central and Eastern Europe, Middle East and Africa).
P&G Turkey’s overall export to 25 countries in the last 14 years has
exceeded USD 1.5 billion.
(Source: http://www.pg.com.tr/procter/pg_turkiye.htm
http://proje.capital.com.tr/kolaylik-saglanirsa-yeni-yatirim-yapariz-
haberler/17183.aspx)
P&G Şekerpınar plant

Company name: Colgate Palmolive Cleaning Product Industry and
Trade SA
Recent sales data:
Number of employees: The company has 800 employees, including
HQ in Küçükyalı and the plant in Gebze.
Main business:
Colgate Palmolive Turkey focuses on three core categories: Oral Care,
Personal Care, Home Care with leading brands such as Colgate,
Palmolive, Protex, Ajax, Hacı Şakir and Lady Speed Stick deodorant.
They have an HQ in Küçükyalı area on the Asian side of Istanbul, sales
offices in Izmir and Ankara.
Colgate Palmolive Turkey is the HQ for 13 countries in the New
Geographies division, responsible from Central Asia, the Caucasus,
Mongolia and Belarus.

Production sites
Colgate Palmolive used to have two plants in Turkey:
1) Ayazağa plant to produce Hacı Şakir soap and shampoo near
Maslak area of Istanbul (9.000sqm production facility on a 22.000sqm
area). In 2005, this soap production line was moved to Gebze plant
with a production capacity of 50.000 tons/year.
2) Gebze plant, founded in 1997, to produce oral care, personal care
and household care products.
Today, Gebze plant exports 40% of its production to more than 60
countries. Major target countries in export are Western Europe,
Russia, Bulgaria, Romania, Iraq, Poland, Egypt, Kazakhstan, Albania
and Jordan.
(Source: http://www.ortakalan.com.tr/haberler/haci-sakir,-120-yasinda-1241#1)
Colgate Palmolive Gebze plant

The acquisition of Hacı Şakir soap brand
In 1987, owners of legendary Turkish soap brand Hacı Şakir,
Sabuncuoğlu family, sold the company to Maya Group
(http://www.maya.com.tr/) due to their financial difficulties.
In the meantime, Henkel wanted to buy Hacı Şakir, but negotiations
didn't progress. In 1991, owners of Maya Group, Özsüer family, sold
67% of Hacı Şakir to Colgate Palmolive.
8 years after this JV, when Maya Group saw that soap business
doesn’t meet their financial expectations, Colgate Palmolive fully
acquired Hacı Şakir in 1999. (Actually, Maya Group’s main business
was construction and real estate development. They also brought IKEA
to Turkey).
Soon after the acquisition, Colgate Palmolive introduced Hacı Şakir
shampoo to target low- and middle-income consumers, while their
Palmolive shampoo targets high-income consumers.
Source: http://www.milliyet.com.tr/2005/04/10/business/bus05.html
Historical Turkish soap brand Hacı Şakir,
founded in 1889, has been acquired by
Colgate Palmolive in 1999.

Colgate Palmolive entered into Turkish market in 1985 by a JV with
Başer Kimya, a local detergent and chemical raw materials company of
Başer Group, located in Adana city, an industrial and agricultural center
near to Turkey’s Mediterranean coast. They founded a company called
"Colgate Baser Kimya Sanayii AŞ" (shares 45% Colgate, 55% Başer)
and started to produce shampoo, toothpaste, detergent and bleacher in
the facilities of Başer Kimya.
In 1995, as their JV still continues, Colgate Palmolive has founded its
own company called “Colgate Palmolive Cleaning Product Industry and
Trade SA”. The JV agreement has been revised, and Colgate
separated its sales and marketing divisions from Başer Group.
So, Başer’s role in the JV was limited to manufacturer.
In 1997, Colgate Palmolive’s new plant in Gebze became operational,
and the JV with Başer Kimya has started to gradually lose its
efficiency.
(Source: http://www.capital.com.tr/temizlik-devinin-tuketim-analizi-

Dissolution of the JV
In terms of the efficiency concerns about maintaining the JV, there was
another key factor: While Başer was mainly strong on laundry
detergents and bleachers; Colgate’s local growth strategy was focused
on oral care and personal care products.
Because Başer had its own detergent brands, the first JV agreement
used to forbid Başer from being a competitor to Colgate in Turkey until
2001. In the meantime, along with producing for Colgate brands, Başer
also continued producing its own detergent products for local and
export markets, and also “private label / unbranded” detergents for
Turkish supermarket chains.
In 2008, Başer Kimya purchased remaining 55% shares from Colgate,
and the JV has officially ended. Later on, with a “clever” move, they
changed the name of the company to ABC Kimya. Turkish consumers
were already familiar with ABC brand, because it was originally
Colgate’s laundry detergent brand, introduced to Turkish market by
Colgate Başer JV in 1985.
Source: http://www.capital.com.tr/satin-almalarla-buyuyecegiz-
haberler/16906.aspx

Company name: Kent Gıda Industry and Trade SA (Kent Gıda San. ve
Tic. A.Ş.)
Year of establishment: 1993 (entry into Turkey)
Recent sales data: In 2013, Mondelez Turkey’s total turnover was
around USD 280 million (TL 600 million), net sales from production
(local + export) amounted to USD 176.759.260 (TL 381.800.000), and
net export sales were about USD 95 million (TL 200 million).
Gebze Plant exports 43% of its production from Turkey to around 50
countries. (Source:
http://global.mondelezinternational.com/tr/tr/mediacenter/bulletin_71.aspx)
Number of employees: Together with its HQ next to the plant,
Mondelez employs 1300 people in Turkey.
Main business: Today, Mondelez Turkey, registered as Kent Gıda, is
only active in confectionary, chocolate and instant coffee businesses.
Kent chocolate

Mondelēz, previously known as Kraft Foods until 2012, entered into
Turkish market in 1993 by purchasing 49% of Marsa, a margarine and
edible oils company of Sabancı Group (http://www.marsa.com.tr/).
To be more precise, Marsa’s JV partner was Kraft Jacobs Suchard AG,
part of Philip Morris Companies Inc. by way of Kraft Foods Inc. So, the
new JV in Turkey was named as Marsa Kraft Jacobs Suchard.
The JV had surely started with good intentions, but even at first glance,
there was an obvious discrepancy among core businesses of the
partners. Marsa was aiming to grow in edible oils, but Kraft was strong
in snacks.
More importantly, two consecutive economic crises in 1994 and 2001
seriously shrunk the consumer expenditures nationwide; and all
businesses had to revise their growth expectations.
So, Kraft became reluctant on playing the indirect investor / financier
role in its partner’s margarine business. Finally, Kraft sold its 49%
shares back to Marsa to end the partnership. (Source:
http://www.milliyet.com.tr/2005/12/25/ekonomi/eko01.html)

When the JV of Kraft and Marsa ended, Kraft acquired Kar Gıda in
2002, a snacks manufacturer founded by the previous owners of Uzay
Gıda, which was then already acquired by Fritolay.
With the acquisition of Kar Gıda, Kraft added successful potato chips
brands (such as Cipso, Pekos, Patos, Critos and Çerezos) into its
portfolio, and became a leading player in Turkish snacks market.
In the meantime, outside of the domain of Kraft and Marsa, another
story was developing:
In 2002, British company Cadbury Plc (exactly its Cadbury Schweppes
division) had entered into Turkish market by purchasing 51% shares of
confectionary manufacturer Kent Gıda from Tahincioğlu family
(http://www.tahinciogluholding.com/). Later on, gradually in 2006 and
2009, Cadbury acquired all shares of Kent Gıda. At that time, Kent was
one of the most preferred confectionary and chocolate brands for low-
and medium-income Turkish consumers.
In 2007, Cadbury had also bought the chewing gum company
Intergum from Turkish-Jewish businessman Jak Amram, who had
introduced the legendary “Dandy” gums to Turkish market in 1972.

But in 2010, Kraft Foods globally acquired Cadbury Plc. So, Kent
Gıda and Intergum have been automatically added into Kraft’s portfolio
in Turkey.
While Kraft Gıda was growing in Turkey, Kraft Foods Inc has separated
its consumer staples division in North America from its global snacks
operations in 2012, and the latter has changed its name to “Mondelez
International” to form the first globally active snacks company.
More importantly, however, Mondelez Turkey was not going to stay in
snacks business forever: In 2013, Mondelez made a serious
divestiture of noncore businesses, and finally sold its snacks
subsidiary Kraft Gıda to Doğuş Çay, a major Turkish tea and sugar
company (http://www.doguscay.com.tr/index.php?lang=en).
Today, Mondelez Turkey, registered as Kent Gıda, is only active in
confectionary, chocolate and instant coffee businesses, where most of
its brands are market leaders in their own categories.
Sources: http://global.mondelezinternational.com/tr/tr/About/Turkey.aspx
http://www.fundinguniverse.com/company-histories/kraft-jacobs-suchard-ag-
history/

Production site in Turkey
Mondelez has a high-tech plant and R&D facilities on 85.000sqm
covered area in Gebze, near Istanbul.
The plant was originally founded by Kent Gıda 30 years ago. In the last
12 years, both Cadbury and Mondelez made several direct
investments for developing this production facility. A chewing gum
factory and a new production line for Milka chocolates have been
recently added to Gebze plant.
Today, when Mondelez intends to launch a new product even in the
USA or in Japan, then the plant in Turkey becomes a prominent
candidate as possible production facility.
Gebze Plant exports 43% of its production from Turkey to around 50
countries.
Kent Gıda plant &
Mondelez HQ in Gebze

Success factors
Traditional tastes and trends are essential for Turkish customers, while
newly developed global products also create a huge demand.
Mondelez owns traditional products such as Falım gum and Kent
chocolate, but also strongly promotes some of its global brands such
as Milka, First and Jacobs in Turkish market.
Mondelez makes continues investment in market research and trend
analysis efforts to understand and stay up-to-date with the changes in
Turkish customer profile.
Source: http://www.gidahatti.com/sohbet-arsivi/trend-belirleyen-
markalara-sahibiz
Here is a list of product categories and brands produced in Turkish
plant:
Candy: Jelibon, Topitop, Olips, Missbon, Tofita, PopTip.
Chewing gum: First, Falım, Şıpsevdi, Tipitip.
Chocolate: Milka, Toblerone.
Coffee: Jacobs, and Maxwell House.

Company name:General Elektrik Trade & Service SA (General
Elektrik Ticaret & Servis AŞ)
Recent sales data:
Number of employees: 700
Main business: Today, GE Turkey is active in infrastructure, energy,
transportation and healthcare businesses with over 700 employees.
GE usually doesn’t enter a new market alone, but by making local
partnerships with already developed and competitive companies.
The first foreign investment in Turkey was the light bulb factory
founded in 1948 with the partnership of General Electric, Koç Group
and Türkiye İş Bankası (shares unknown). This factory was active until
the year 2000, then the plant was moved to Hungary.
In 2012, GE announced to invest USD 900 million in aviation, energy,
health and transportation in Turkey over the next 3 years, with a focus
on infrastructure, innovation and R&D. And USD 515 million of this
investment plan has already been realized., as of Q1 2014.
(Source: http://goo.gl/RD0IP0)

TAI and TEI in aircraft industry:
In 1984, Tusaş Aerospace Industries Inc (TAI) was established as
Turkish and US joint venture, contracted for 25 years.
The aim of the JV was to manufacture F-16 combat aircrafts for
Turkish Air Force. Share ownership was 51% Turkish government,
42% Lockheed Martin of Turkey and 7% General Electric International.
In 1985, as an essential step in this JV, another company called Tuşaş
Engine Industries Inc (TEI) was also formed in partnership with
General Electric Turkey (46.2% GE, 53.8% Turkish government).
(http://www.tei.com.tr/yeni/en/)
TEI plant, Tuşaş Engine Industries,
has 1.200 employees in Eskişehir.

In 2000, GE Aviation founded a fully-owned aircraft technologies R&D
center (GE Marmara Technology Center) inside the TUBITAK campus
in Gebze (http://www.gemtc.com.tr/).
In 2007, this was followed by the establishment of Turkey Technology
Center, again a cooperation of TEI and GE, where 250 Turkish
engineers work on engine design, maintenance and software
development implementations for GE Aviation, GE Energy and GE Oil
& Gas.
In 2005, Turkish government had acquired all foreign shares of TAI.
But in TEI, GE still holds 46.2% of the shares. TEI has around 1,200
employees in its plant and HQ in Eskişehir.
Today, maintenance services and aircraft parts manufactured by TEI
are exported to world’s leading aircraft producers, Boeing and Airbus.
TEI is also an important player in GE Aviation’s global supply chain.
Every two minutes, an airplane equipped with parts manufactured in
Eskisehir takes off in the world. GE engines power more than 60
percent of all airplanes in Turkey.
Source: http://www.invest.gov.tr/en-US/successstories/Pages/Ge.aspx

In 2001, GE made a JV with Turkish industrial ceramics giant Kale
Group to establish KALE Power Controls Electrical Systems Inc
(15% GE, 85% Kale Group). KALE Power Controls sells electrical
insulators manufactured by Kale Seramik, electrical switchgear by
AEG, industrial drive systems by GE, and industrial automation
systems (SCADA systems).
In 2007, GE Energy had bought 50% of Gama Enerji AS, a Turkish
power and water infrastructure producer headquartered in Ankara.
Gama Enerji built several dams, power plants and wind farms using
GE equipment. In March 2014, however, GE has moved to sell its
shares in Gama Enerji back to Gama Holding, intending to end their
seven-year partnership. GE said the decision had been made upon
restructuring investment portfolio, but still they would continue pursuing
new opportunities with Gama Holding in a “supplier-client” framework.
Today, GE engines and turbines power more than 50 percent of the
electricity generated from natural gas in Turkey.

GE Healthcare is active in Turkey for the last 25 years. They sold
many high-tech equipment to several prestigious health institutions
around the country.
In 2007, GE Healthcare made its first direct investment in Turkey and
bought all shares of AMD (Advanced Medical Devices) in Ankara, a
small-size local production and distribution company with strong
relationships in public and private hospitals. AMD’s name was changed
to GE Klinik Sistemler A.Ş.
In 2008, GE Healthcare’s Eastern and Africa Growth Markets division
(EAGM, including 84 countries) selected Turkey as its headquarters in
their regional marketing activities.

GE Transportation and Turkey’s only locomotive manufacturer
Tülomsaş ( a state-run company) have announced a strategic
partnership in 2008 to build an assembly line for GE’s PowerHaul™
locomotives in Tülomsaş plant in Eskişehir. The assembly of the first
locomotive was completed in 2011.
The locomotives are marketed in Europe, Middle East and North
Africa. What GE expects from this partnership is an export volume of
USD 1.5 billion over next 10 years. http://www.tulomsas.com.tr/
GE’s PowerHaul™ locomotives
assembled in Tülomsaş plant
in Eskişehir.

JVs with Doğuş Group
Doğuş Group, with its wide range of activities, has been a major
partner for GE’s investments in Turkey.
In 2005, GE bought 20.85% share in Garanti Bank, and became equal
strategic partners with Doğuş Group (30.5% share), the bank’s parent
company. (Garanti’s almost 50% shares are publicly traded).
After the global financial crisis, however, GE decided to diminish its
finance sector exposure, and withdrew from Garanti Bank by selling its
18.6% shares to Spanish bank BBVA for USD 3.78 billion in 2010.
In 2006, GE Real Estate Europe had also bought 25.5% shares of
Doğuş Real Estate, and the company’s name was changed to Doğuş-
GE Real Estate Investment Trust.
In 2010, however, GE Capital Corporation sold its all shares in Doğuş-
GE REIT back to Doğuş Group for USD 28 million.
http://www.dogusgrubu.com.tr/en

Success factors
GE’s main businesses have always been perfectly coherent and
parallel with Turkish government’s “strategic industries”. In other
words, for Turkish government, top-priority was defense in 1980s, and
then it was energy in 2000s and healthcare in 2010s. And GE was
always there; ready to offer its services.
As a matter of fact, even today, whenever GE releases a press bulletin
about its investment plans in Turkey, they always refer to their
commitment to being a supporter and actor of Turkish government's
visionary plan "Turkey in 2023, The Centennial of Turkish Republic".
Government's "2023 Plan" simply aims Turkey to be the 10th largest
economy in the world (today, the 16th largest economy).
GE also benefits from a wide-ranging package of incentives offered to
all foreign investors to boost local production as a way to narrow the
country’s current account deficit.
Turkey is looking to spur investment in industries that rely on imports to
produce their goods to help narrow a current- account gap of about
nine percent of its USD 772 billion gross domestic product. The
government is focusing its efforts on industries including defense,
automotive, rail and sea transport, pharmaceuticals, education, tourism
and mining.
http://www.bloomberg.com/news/2012-06-11/general-electric-to-invest-900-
million-in-turkey-in-3-years-1-.html

Company name: Unilever Industry and Trade Turkish SA (Unilever
Sanayi ve Ticaret Türk AŞ)
Recent sales data: USD 1.3 billion (85-90% of this annual sales figure
comes from Turkey, remaining part the Caucasus, Central Asia and the
CIS countries)
Number of employees: Unilever has over 5,000 full-time employees
in Turkey with its HQ in Istanbul and eight manufacturing plants in the
regions of Anatolia, Black Sea and Marmara.
Main business: Unilever Turkey has 4 main business areas (food, ice
cream, cleaning and beauty) with several sub-categories and brands.
Unilever's all brands and
sub-brands in Turkey.

Unilever indirectly entered into Turkish market in 1924, even before the
merger of Lever and Margarine Unie, which formed Unilever in 1930.
Lever’s subsidiary G&A Baker Ltd opened an office in Istanbul to
import and sell their Sunlight soaps in Turkey. Later on, in 1947, G&A
Baker bought a factory for edible seed oil extraction in Bakırköy,
Istanbul.
In 1951, Unilever decided to have more active role in Turkish market
and made a JV with Iş Bank (http://www.isbank.com.tr/EN/), Turkey's
first public bank and premiere national financial institution.
So, Unilever-İş Trade and Industry Turkish Ltd was established in
Istanbul (JV shares 75% Unilever, 25% Iş Bank). Seed oil factory of
G&A Baker was also transferred to the new company. And this factory
started to produce “Sana” and “Vita” branded margarines in 1953.
(Today, Sana is still the market leader in its category.)
İş Bank was Unilever's first
Turkish JV partner.
Sana margarine ad in 1953

The first factory stayed active until 1988, while in 1986 Unilever
founded a fully-owned and more modern margarine plant in Çorlu,
100km west from Istanbul. Finally in 1990, Unilever bought 25%
shares of Unilever-İş and fully owned the company.
After Sana, the first margarine in Turkey, Unilever continued to bring
other “firsts” to Turkey: “Omo” has been the first branded laundry
detergent in 1966. “Lipton” was the first private investment in tea
industry in 1986. “Clear” was the first anti-dandruff shampoo in 1986.
“Dove” was the first moisturizing soap in 1993.
Unilever Brands in Turkey:
Food and Ice Cream: Sana (1953), Knorr (1978), Lipton (1986), Becel
(1992), Algida (1993).
Home Care: Cif (1984), Sunlight Cif (2010), Domestos (1999), Omo
(1966), Rinso (1994), Yumoş (1986).
Personal Care: Axe, Clear (1986), Dove (1993), Dove Men, Elidor
(1973), Lux, Rexona, Signal (1984).
http://www.unilever.com.tr/aboutus/introductiontounilever/rakamlarlaunilever/

In the late 1980s, Unilever continued to grow its brand portfolio in
different categories, and they purchased the sunflower oil company
“Aymar” from Koç Group in 1989. In 1995, Unilever also purchased the
legendary and historic olive oil company “Komili” from Komili family,
who had started the olive oil business in 1878 in the Komi village of
Greek island Mytilene.
In 2000, Unilever fully acquired many local Turkish companies such as
Besan Food Industry, Çapamarka (producer of starch, instant soup and
puddings), Bozkurt (jam and marmalade producer). In 2001, Unilever
also acquired Dosan Konserve (canned food factory) in Rize at the
eastern Black Sea region of Turkey.
In early 2000s, however, Unilever had globally decided to reduce the
number of brands and sub-categories by selling off some noncore
businesses in all countries. So, in 2003, Unilever Turkey sold “Aymar”,
“Çapamarka”, “Bozkurt Jam” and “Vita Margarine” to Toros Ltd, owned
by Özyurt family from Gaziantep.
Another divestiture came in 2008, and Unilever sold Komili to Anadolu
Group, who owns McDonald’s Turkey, Coca-Cola Turkey and Efes
Pilsen beer. (http://www.anadolugrubu.com.tr/en)

Production sites in Turkey as the exporting hub
Unilever exports to 34 countries from its 8 production sites in Turkey in
an amount of USD 159 million annually.
The marketing operations in the NAMET-RUB region (North Africa,
Middle East, Turkey, Russia, Ukraine, and Belarus) are managed by
Unilever Istanbul HQ. And 95% of all Unilever products sold in Turkey
are produced in these 8 plants:
Çorlu (2 plants): Margarine and Ice Cream
Rize (3 plants): Tea Manufacturing
Çayırova Plant: Tea Packaging and Soup / Bouillon
Gebze Plant (third biggest factory of Unilever in the world):
Detergents, Household and Personal Care products
Konya Plant: Ice Cream
http://www.invest.gov.tr/en-US/successstories/Pages/Unilever.aspx

Çorlu (2 plants)
Margarine & ice cream
Rize (3 plants):
Tea manufacturing
Çayırova (tea packaging) &
Gebze (detergent)
Konya plant:
Ice cream

The new ice-cream factory in the central Anatolian province of Konya
became operational in June in 2013 (investment around EUR 95
million).
Now, Unilever is planning to build another factory in Konya again, with
an investment of more than EUR 150 million for the production of home
care and personal care products, including Omo, Domestos, Yumoş,
Cif, Rinso, Elidor and Dove brands.
On average, Unilever invests around USD 40 million annually in
Turkey.
Unilever sees Istanbul as a brand-product development center,
logistics and export hub for 34 countries in the NAMET-RUB region.
They invested USD 3 million to build a special R&D facility in Istanbul.
Unilever Turkey HQ,
in Ümraniye, Istanbul

Success factors
Unilever held first-mover advantages in many product categories in
Turkey. As Unilever was more willing to take the risks of developing
countries than many large Western competitors, it was rewarded by
limited or no competition (notably, P&G entered into Turkish market in
1987).
Unilever made large investments in plants and equipment, often at the
expense of short-term remittances for dividends to its shareholders, in
order to build sustainable businesses. They took a long-term
investment horizon in Turkey, and simply waited for better times.
It was also difficult to survive in the “era of protectionism” for local
producers against foreign multinationals in 1960s and ‘70s. It was only
1980s that Turkish government policies began to shift from a
protectionist “import substitution” growth strategy to liberal policies and
export promotion.
Source: http://www.hbs.edu/faculty/Publication%20Files/06-061.pdf

Success factors
During the 1980s, despite policy liberalization, Turkey used to have a
poor institutional environment for business, including political
interference, a weak justice system, and widespread corruption.
Within this context, Unilever achieved a remarkable success in staying
outside of party politics; and focused on building and sustaining a large
Turkish business, and operating it fully within the norms of Unilever’s
worldwide corporate ethical standards.
The early localization of senior management was also critical in
providing voice, contacts and legitimacy in Turkey. So, Unilever
became embedded in local business and political systems, and was
able to function as a quasi-insider within governmental and business
networks.
Source: http://www.hbs.edu/faculty/Publication%20Files/06-061.pdf

Company names:
Alstom Grid Energy Industry SA (Alstom Grid Enerji Endüstrisi A.Ş.),
Alstom Electricity Industry SA (Alstom Elektrik Endüstrisi A.Ş.),
Alstom Power and Transportation SA (Alstom Power ve Ulaşım A.Ş)
Number of employees: 1.200 (including its HQ in Istanbul; 5 sales
offices in Istanbul and Ankara; and Alstom Grid Power Transformers
factory in Gebze)
Recent sales data:
Net Sales of Alstom Grid Energy Industry SA (Alstom Grid Enerji
Endüstrisi A.Ş.)
Exports in 2013: USD 189.031.256
Domestic Sales in 2013: TL 195.633.128
Profit before taxes in 2013: TL 35.123.612
(Sales Data Source: TIM (Turkey Exporters Assembly)
http://www.tim.org.tr/files/downloads/ihracat1000/2013/ihracat1000_2013_eng_w
eb.pdf)

Main business:
Alstom Turkey is active in power generation, power transmission
and rail transport infrastructure.
Alstom Grid delivers smart and conventional electrical grid
applications for more efficient and eco-friendly electricity grids.
In 2011, Alstom Grid Turkey became the HQ of Southern European
and Central Asian region. 26 countries in the region from Portugal to
Kyrghizistan are managed from Turkey. (detailed list of projects is available
here)
Alstom Power provides solutions in wide range of energy resources
(gas, coal, nuclear, wind, and hydro-electric etc.) in cooperation with
private companies and governmental bodies. (detailed list of projects is
available here)
Alstom Transport designs and develops equipment and services in
the railway market from trains to signaling, infrastructure, services and
turnkey solutions. Alstom Transport’s Middle East & Africa HQ is in
Istanbul and there is a Sales Office in Ankara. (detailed list of projects is
available here)

Entry structure in Turkey
Alstom started its activities in Turkey in 1950s by supplying electrical
trains for Istanbul's suburban railway line, which became operational in
1955.
Alstom has been a contributor to energy and rail transport
infrastructure in the country for more than 60 years. Until today, Alstom
has supplied many equipment for Turkey’s 61GW installed power
generation capacity, including the Atatürk dam, the largest hydro power
plant in the country.
Alstom has also installed approximately 50% of the transmission
products of TEIAŞ (state-run Turkish Electricity Transmission
Company) and performed several railway projects, such as Istanbul’s
first Metro Line, the delivery of 460 locomotives for the Turkish State
Railways (TCDD) and the Istanbul tramway lines.
Alstom electrical trains (E8000-series)
in Istanbul's suburban railway line in
1950s.
"Kabataş – Bağcılar" tramway in
Istanbul.

Alstom Grid Turkey: Production site as export hub
Alstom Grid Turkey
Alstom's grid division started its activities in the country in 1966 to
supply high-voltage products and turnkey delivery systems.
The company has a Power Transformers Factory in Gebze
(54,000sqm), established in 1966, one of the largest factories in this
field in the world. In the lasr 8 years, Alstom made €42 million direct
investment for this plant.
85% of the capacity produced in the plant is exported to all around the
world.
According to the data of TIM (Turkey Exporters Assembly), Alstom Grid
took the first place and became an exporting champion in the
“Transformers, Inductors” category in 2012 and 2013.
Alstom Grid
Power Transformers Factory in Gebze

Alstom Power Turkey
Alstom Power Turkey
Alstom Thermal Power and Alstom Renewable Power offer a portfolio
covering all fuel types in the industry. Thermal Power has a
comprehensive portfolio of coal, gas, oil and nuclear, and holds leading
position in turnkey power plants. Renewable Power offers solutions
including hydro, wind, geothermal, biomass, solar and marine
energies. In terms of geothermal resources, Turkey ranks 7th in the
world and 1st in Europe.
On March 2014, Alstom acquired a 30% stake in Turkish energy
company Deltom Jeotermal, a subsidiary of Delta Group, to develop
geothermal sites and install power plants utilizing geothermal sources
in the country.
The map of Alstom Power's projects
in cooperation with private & public
companies.
(Bigger version of this map:
http://goo.gl/zf6uIC)

Alstom Transport Turkey
Alstom Transport Turkey
Alstom Transport has no production facility in Turkey, but offers a
rolling stock covering the entire rail transport market, from high speed
to light urban transport, including metros, tramways, suburban and
regional trains and locomotives. Alstom Transport also offers
maintenance, supplying spare parts, renewal and logistics chain
managements.
In April 2012, Alstom Transport Turkey became the Regional Hub of
Middle East & Africa area. Many Turkish engineers, technicians and
employees are developing and managing transport projects for the
whole Middle East & Africa region.
Alstom, Siemens and Bombardier were the three bidders in Turkish
State Railways TCDD’s latest high-speed trains tender on May 2014.
Siemens won the tender with a proposal of €340 million, and Alstom
has just filed an objection to the results on August 25, 2014.
By the way, at the end of 2012, TCDD had awarded Alstom a €22m
contract to service and maintain its first set of high-speed trains,
purchased from Spanish manufacturer CAF.

Projects in Transport
Project-based cooperation between Alstom Transport and Turkish
companies / governmental bodies:
Istanbul Metropolitan Municipality (İBB):
“Taksim - 4. Levent” metro line, infrastructure, electrification, signaling
and communication equipment, rolling stock, delivered in 2000.
Turkish State Railways (TCDD):
30 suburban trains, delivered in 1955, some trains stayed in
operation until 2013. 18 Electrical Locomotives, delivered in 1955
and 1969. 418 Diesel-Electric Locomotives, delivered in 1970 , 226
still in operation. 75 trains, delivered in 1979. 30 Diesel-Electric
Locomotives, delivered in 1991.
On-going projects (Alstom Transport):
Istanbul Metropolitan Municipality:
“Bağcılar - Olympic Village” metro line, 80 metro vehicles.
“Kabataş - Bağcılar” tramway line, 37 vehicles and training simulator.
Turkish State Railways (TCDD):
“Eskişehir - Balıkesir” line, signaling and telecommunication systems.
Maintenance services for 12 High-Speed Trains.

Project-based cooperation / Power
Alstom Power Turkey, major clients of finished projects and delivery
dates:
Gas: Uni-Mar Enerji, ENKA Holding, PETKIM – SOCAR
Coal / Lignite: EÜAŞ (Turkish State Electricity Generation Company)
Hydro: DSI (Turkish State Water Supply Authority), Sanko Holding
On-going projects: Eren Enerji, Doğuş Enerji (Doğuş Group),
Anadolu Group, Kalehan Enerji, EnerjiSa (Sabancı Group & EON)
Enerjisa has been a major partner for Alstom Power projects: In 2008,
Alstom Hydro has signed a contract with Enerjisa to supply equipment
to 3 new hydro power plants on the Seyhan and Göksu rivers in
Adana, southern Turkey. In 2010, Enerjisa signed another contract with
Alstom to supply, erect and commission the electro-mechanical
equipment for the Arkun hydro power plant on the Çoruh River. Arkun
will provide Turkey with 800 GWh of locally produced, renewable
energy and generate sufficient power to provide electricity to around
460,000 homes.
Enerjisa aims to reach an installed capacity of 5000 MW and to handle
10% of energy market in Turkey by 2015.

Project-based cooperation / Power
In September 2013, Alstom Power Turkey has signed three major
contracts for Alpaslan II (292 MW), Upper Kaleköy1 (636 MW) and
Tepekışla2 (72MW) hydro power plant projects, totalling around €100
million.
Alpaslan II project is owned by Enerjisa, and located on Murat River in
Muş city, in eastern Turkey. Upper Kaleköy project is owned by joint-
venture between Cengiz and Özaltın, near Bingöl city, eastern Turkey.
Tepekışla project is owned by a subsidiary of Sanko Enerji, and
located on the river Kelkit, near the city of Tokat, northern Turkey.
By the way, Alstom’s first wind energy project in Turkey was Hatay
Şenköy Wind Farm, constructed by Güriş A.Ş. in June 2011 with a
capacity of 27 MWs.
Şenköy Wind Farm in Hatay,
by Alstom and Güriş.
Alstom-EnerjiSa project "Alpaslan II"
on Murat River in Muş city,
eastern Turkey.

Project-based cooperation / Grid
Alstom Grid Turkey, major clients of finished projects and delivery
dates:
TEİAŞ (Turkish State Electricity Transmission Company), Eren
Holding.
In August 2014, Alstom Grid Turkey has been awarded a contract of
around €10 million by Eren Enerji (Eren Holding) for the Zetes-3
thermal power plant in Zonguldak province. Eren Enerji already
operates Zestes-1 (160 MW), and Zetes-2 power plants. In 2010,
Alstom had already supplied with full turnkey scope the 400 kV gas-
insulated substation for Zetes-2 power plant.
Other on-going local projects:
Habaş Group, Eltem Elektrik, Bereket Enerji, Albe Enerji (Era Group).

Project-based cooperation / Grid
Alstom Grid Turkey's recent export projects:
Alstom Grid Turkey’s Gebze plant manufactured a generator step-up
transformer for Thermoelektrarna ŠOŠTANJ (TES), the Slovenian
state-owned utility.
Following this project, a similar contract came from Serbia: Alstom Grid
Turkey will manufacture another generator step-up transformer for the
Tent-B Nikola Tesla Power Plant 1 in Serbia. The contract, worth
around €3.5 million, was signed with PE EPS (Public Enterprise-
Electric Power Industry of Serbia), 100% owned by the Republic of
Serbia.
Alstom Grid Turkey will also supply 3-phase shunt reactors for the
Hongsa Lignite Thermal Power Plant in Laos. The contract, worth
around €10 million, was awarded by Electricity Generation Authority of
Thailand (EGAT).
In 2012, Alstom Grid's Gebze factory manufactured the biggest ever
converter transformers for the German railway high speed network of
Deutsche Bahn AG.
Alstom Grid Turkey exports 85% of its production to all over the world
from USA to Germany, and from South Africa to Venezuela.

Success factors and criticism
For decades, French companies enjoyed the “privileged partner” status
in public projects in Turkey, thanks to strong historic ties between two
countries.
The sensitive political relationships between governments, however,
temporarily affected French companies’ ability to win public tenders.
Especially, when former President Sarkozy’s anti-Turkish remarks
disturbed Ankara; French companies started to experience difficulties
in business deals in Turkey. On the other hand, some other problems
have emerged directly because of French companies’ insufficient
performance though.
A critical example was the tender for modernization of existing railway
routes in Marmaray project in Istanbul, which links the city’s Asian and
European sides via an undersea train line:
The contract was awarded to the AMD Consortium of Alstom, Marubeni
(Japan) and local partner Doğuş Group in March 2006. Later on,
however, Alstom and its partners tried to revise the price and increase
the bill, without even properly starting the project for four years.
When Turkish government rejected the request, the AMD Consortium’s
answer was the unilateral withdrawal from the contract on April 2010.
The case ended up in arbitration, leaving a slightly suspicious
reference on the corporate reputation of Alstom Transport. …

Success factors and criticism
In the meantime, in October 2008; Alstom, Spanish CAF, Hyundai
Rotem and the consortium of Bombardier, Siemens and local company
Nurol Holding were the four bidders at Marmaray’s big tender to
procure the trains. Alstom and CAF were eliminated from the short-
list, because they allegedly gave conditional offers or didn’t meet the
prerequisites. Only two remaining offers were evaluated, and Hyundai
Rotem won the deal. (Source:
http://www.hurriyet.com.tr/ekonomi/10135652.asp)
Nonetheless, there has never been a complete ban on Alstom in
Turkey.The company continued to win some public projects. For
instance, in November 2011, Turkish state railway TCDD awarded
Alstom Transport a €89m contract to supply signaling and telecoms for
a project to raise speeds on the railway line from Eskişehir to Balıkesir.
And at the end of 2012, TCDD again awarded Alstom a €22m contract
to service and maintain its high-speed trains, purchased from
Spanish manufacturer CAF. Alstom Transport also has two more on-
going projects for Istanbul Metropolitan Municipality (İBB): “Bağcılar -
Olympic Village” metro line, and “Kabataş - Bağcılar” tramway line.

Company name: Bombardier Transportation Ulaşım Dış Ticaret Ltd.
Year of establishment: Market entry 1986, office opening 2008
Recent sales data:
Number of employees: There is only one office of business
development executives (around 10 manager-level people)
Main business:
Bombardier Transportation, active in Turkey since 1986, built the metro
system in Ankara, and developed the Light Rail Transit (LRT) and
tramway systems in Istanbul, Ankara, and provided trains for İzmir,
Adana, Eskişehir and Bursa.
Bombardier provides not only trains, but also signaling and controlling
equipment and services for the safety of rail systems.
So, Bombardier’s rail signaling operation in Turkey has started 25
years ago, even earlier than its presence as a train supplier.
It was March 1989 when Bombardier has delivered five mass transit
signaling systems for Istanbul’s Light Rail Metro, equipped with the
BOMBARDIER CITYFLO 250 fixed block system.

Export from Turkey
Bombardier Transportation’s Global Procurement Office in Istanbul
was opened in 2008, in Güzelyalı, Pendik area on the Asian side of
Istanbul.
Turkish suppliers in Bombardier’s global supply chain:
Istanbul office mainly focuses on finding the potential Turkish
manufacturers, who might be available and eligible to cooperate in
Bombardier’s long-term global projects. The office actively tries to
integrate Turkish suppliers into Bombardier’s global supply chain.
The goal is to develop a sophisticated network of sub-industry
suppliers who share a global vision. And Bombardier’s all these efforts
are surely the preliminary steps for a full-scale production operation in
Turkey in the future, either by establishing Bombardier’s own
production facility or by using this network of local suppliers.
Bombardier encourages and supports its Turkish suppliers to
successfully pass Bureau Veritas inspections and finally achieve the
IRIS certification (International Railway Industry Standard).
Source: http://www.rayhaber.com/2013/bombardier-transportation-turkiyedeki-
varligini-guclendirmeyi-hedefliyor/

Export from Turkey
By the way, as of 2013, Bombardier’s Global Procurement Office in
Istanbul has already realized over USD 10 million exports by
procuring from Turkish suppliers.
Authorized suppliers in Turkey manufactured and delivered metal
components, certain hardware parts, upholstery, etc, for Bombardier’s
several production facilities around the world.
More importantly, Turkish government’s strategic decision to make
USD 20 billion investment in the country’s railway system until 2023,
surely promises even bigger opportunities for Bombardier’s future
operations in Turkey.
Bombardier’s plans for local production facility in Turkey are based on
the possibility of winning the next Very High Speed train tender of
TCDD. If Bombardier wins the deal, they will seriously consider the
possibilities of either manufacturing the trains with full contribution of
Turkish suppliers or even establishing a plant in Turkey.
Source: http://www.dunya.com/yht-ihalesi-alirsa-turkiyeyi-uretim-ussu-yapacak-
223115h.htm
Source: http://www.rayhaber.com/2012/bombardier-yatirim-icin-turkiyede-yan-
sanayi-olusturuyor/

Transportation projects in Turkey
In 2001, Istanbul Transport SA (Istanbul Ulaşım AŞ), subsidiary of
Istanbul Municipality, ordered 55 Bombardier low-floor light rail trams.
The vehicles are still operating on Istanbul city center and suburb lines.
Bombardier Transportation has also delivered its rail signaling
technology for the Sultan Çiftliği tram line (T4) in Istanbul, the Light Rail
Metro in İzmir, the CITYFLO 350 solution for the Istanbul Kirazlı -
Olympic Village metro (M3) and Adana Metro systems.
Most recent signaling project for Istanbul’s Üsküdar – Ümraniye –
Çekmeköy metro line will be the first “fully driverless” metro line in
Turkey, based on Bombardier’s technology . For this project,
Bombardier helped arrange an export credit facility extended by ING
Bank NV, KFW and Unicredit Bank AG to the City of Istanbul.
Bombardier is also delivering its European Rail Traffic Management
System (ERTMS) technology in Turkey, to be installed on the Irmak-
Karabük-Zonguldak line.
Source: http://www.bombardier.com/en/search-results.html?q=turkey

Phase I of the Ankara Metro (M1 line) was completed in 1997 by the
Consortium consisting of Bombardier, SNC-Lavalin and two Turkish
construction and engineering firms, Gama Industry SA and Güriş SA.
Bombardier designed and supplied the 108-vehicle fleet and the
maintenance equipment and services. The Consortium also arranged
for complete financing of the project, including Canadian and UK
export credits and a commercial loan from an International bank
syndicate.
Actually, the first tender for M1 line was in 1988. The consortium had
won the deal with a “build-operate-transfer” model, dictated by the
Turkish State Planning Authority. But after the mayoral elections in
1989, the new mayor suspended the project until 1992 and changed
the contract type from “build-operate-transfer” to "turnkey delivery" in
1993. The new contract was again awarded to Güriş-Bombardier, and
finally trains became operational on December 1997.
Ankara metro, M1 line, traveling
between Kızılay, the city center, and
Batıkent.

Projects in Eskişehir, Turkey
In June 2002, a consortium of Bombardier and Turkish engineering
group Yapi Merkezi was awarded a contract for the light rail transit
system in Eskişehir. When delivered, the project received the 2004
Rail System Award from the International Association of Public
Transportation.
For this project in Eskişehir, Bombardier arranged the complete project
financing, consisting of an export credit from Sweden and credits from
Nordic and European investment banks.
After the delivery of these18 Bombardier FLEXITY trams in 2002 and
five additional trams in 2006, the Municipality of Eskişehir ordered
ten more vehicles (100% low-floor trams) from Bombardier in June
2012. All vehicles are delivered.
(By the way, in 2005, Yapı Merkezi had joined into a consortium with
Mitsubishi, Obayashi and Kajima from Japan, and won the contract of
Dubai metro in UAE.)
Yapı Merkezi was Bombardier's
consortium partner in Eskişehir in 2002.

Light Rail Transit System - Izmir, Turkey
In August 2000, Bombardier Transportation was awarded a contract
from the Metropolitan Municipality of Izmir for a light rail system.
As the lead consortium member, Bombardier designed, supplied and
commissioned the full turnkey system including tunnels, viaducts, 10
passenger stations, 45 vehicles, and all other system elements.
Bombardier Transportation also arranged for complete project
financing consisting of export credits from the UK, Germany and
Sweden and commercial loans from international banking syndicates.
(By the way, apart from the light rail system, Bombardier also provides
rail signaling technology for the vehicles in İzmir Metro, delivered by
ABB – Yapi Merkezi consortium in April 2000.)
Light Rail Transit system in Izmir

Company names:
1) Danone Hayat Beverage and Food Industry and Trade SA (Danone
Hayat İçecek ve Gıda Sanayi ve Ticaret A.Ş.) (Danone Hayat),
2) Danone Tikveşli Food and Beverage Industry and Trade SA
(Danone Tikveşli Gıda ve İçecek Sanayi ve Ticaret A.Ş.) (Danone
Tikveşli)
3a) Numil Food Products Industry and Trade SA (Numil Gıda Ürünleri
San. ve Tic. A.Ş.) (Milupa and Bebelac baby food brands under the
company Numil)
3b) Nutricia Medical Nutrition SA (Nutricia Medikal Beslenme AŞ)
Recent sales data:
Main business:
Danone’s main activity areas in Turkey are the production and
marketing of dairy products, bottled water and baby foods.
As of 2014, Danone Turkey has over 500 employees, 3.500 contracted
farmers and 1.000 ingredient suppliers. The company has an extensive
“fridge chain” of 60.000 sales points and 100 distribution partners
around the country.

In 1997, Danone started to operate in Turkey by forming a 50%-50%
JV with Sabancı Group. The new company was named as DanoneSa.
The first operation by DanoneSa was the internal acquisition of “Hayat
Su”, which was the bottled spring water company of Sabancı Group
since 1984.
In 1998, DanoneSa entered dairy business and bought Tikveşli Gıda
from Vardarlı family for USD 40 million. Tikveşli has always been a
legendary brand in dairy products market in Turkey; especially in
yoghurt category, it has always been acknowledged as premium and
top-quality brand since it was founded in 1943.
Hayat Su was born in Sabancı Group in
1984, now belongs to Danone Hayat
Beverage Inc since 1997.

In 1999, DanoneSa also acquired Birtat dairy company for USD 30
million. Birtat, located in Ankara, had a major market share particularly
in central and eastern Anatolia region.
In April 2000, DanoneSa extended its bottled water operation, fully
acquired Flora Su, and entered into home&office delivery business (in
5 gallon dispenser-size bottles). In 2003, Akmina flavored mineral
water and Şaşal Su were also added to brand portfolio.
Source: http://www.hayatsu.com.tr/hayatsu.html
http://hurarsiv.hurriyet.com.tr/goster/haber.aspx?id=236890
http://www.hurriyet.com.tr/ekonomi/23214848.asp
http://www.capital.com.tr/%E2%80%9Cbuyurken-sirket-de-
alacagiz%E2%80%9D-haberler/21303.aspx
Tikveşli yoghurt and
Danone natural yoghurt

The end of JV with Sabancı:
In 2001, Sabancı and Danone realized that their initial expectations for
profit and market share were not easy to attain. In 2002, in the 5th year
of initial JV contract, the agreement terms were amended and a new
clause was added, allowing both parties to end the JV. In the
meantime, Sabancı had established its own food company, Sabancı
Gıda, and independently made investments by acquiring a local pasta
and flour manufacturer “Piyale”.
The main problem in DanoneSa JV was the fact that Sabancı was not
happy with the limited freedom in decision making processes, and
always wanted to act in a more flexible and more agile way without
reporting to a multinational partner. Partly because of an overrated
self-confidence and partly because of the well-rooted traditional
mindset of family-owned conglomerates, they didn’t like the idea of
being dependent on the global strategies of a foreign partner.
And at the end of 2003, Sabancı decided to exit from dairy business.
Danone bought all shares of DanoneSa for USD 72 million and the
company name was changed to “Danone-Tikveşli”. (Source:
http://www.capital.com.tr/yabanciyla-evlilik-neden-yurumedi-
(By the way, five years later, as a result of Sabancı Group’s strategic
restructuring plans, they have completely left the food business, and
sold off the entire stake of Sabancı Gıda).

One year later after the dissolution of JV, Danone bought the dairy
division of Nestle Turkey, and added their two major dairy brands (Mis
Süt and Gülüm Süt) into its own portfolio.
In the period from 2003 to 2006, apart from new company acquisitions,
Danone Turkey made around EUR 50 million industrial investments to
improve its production facility in Lüleburgaz. Two of their best selling
products, Danino and Danette, which were previously imported from
European plants, now could be produced in Turkey and even exported
to other countries.
In this period, total investments of Danone Turkey reached to EUR 250
million (including acquisitions).
After improving the production capacity of Lüleburgaz plant in 2005,
they started to export Danette to Bulgaria, durable UHT milk to Iraq
and Syria, and yoghurt to the UK.
Lüleburgaz plant

In November 2007, Danone Turkey bought Numil AŞ as well, which
was the importer and marketer of Milupa, Bebelac and Nutricia baby
food brands.
From 2006 to 2010, Danone’s investment in Turkey reached to TL 500
million. Again in 2010, total net sales of Danone Turkey was TL 750
million.
In May 2013, Danone continued to grow in bottled water business by
acquiring 50,1% shares of Sırma Group, which had reported net sales
of USD 131 million in 2012.
Sırma Group is active in Turkish beverage industry since 1950s, they
have a major market share not only in natural spring water, but also in
mineral water (plain and fruit flavored). Sırma Group exports its
products to 37 countries in four continents.
Danone’s main growth strategy is to develop the existing market
volume by creating new demand and reaching new potential
customers. Acquiring certain local competitors also plays a supporting
role in this aggressive growth strategy.

Danone-Tikveşli has a dairy plant in Lüleburgaz (160km west of
Istanbul, nearly in the midpoint between Bulgarian border and Istanbul
city center). It is the most modern dairy plant in the Middle East.
Danino (fruit flavored cheese), Danette pudding, Activia probiotic
yoghurt, and Danone Tikveşli yoghurt are produced in Lüleburgaz
plant, which is situated on a 130.000sqm area (40.000 sqm covered).
There are five other plants used for bottled water production: Hayat Su
spring water is produced in 3 plants in Adapazarı, Finike and Pozantı.
Hayat Su exports to 15 countries such as Bahrain, Qatar, Malta,
Afghanistan, the UK, Denmark, Germany, the Netherlands and the
USA. The biggest market share comes from European countries.
There are also two more water plants, “Şaşal Su” in Izmir and Akmina
mineral water plant in Bolu. Akmina products are also exported to
Greece, Denmark, Belgium, and the UK.
Finally, the newly acquired Sırma Su has five different plants in Burdur,
Sapanca, Kartepe- Sapanca, Bursa, and Nazilli- Aydın. Sırma Group
exports its product to 37 countries in four continents.

Packaged water market in Turkey:
Turkish bottled water market size is around USD 2.1 billion. And
Turkey’s total export volume of packaged water in 2013 was around
USD 32 million. (Source: http://www.suder.org.tr/sektor.html).
There are nearly 250 active companies ranging from small to large
sizes, where 30% of the market is shared by 5 big companies.
Total annual consumption volume of bottled water in Turkey is around
10 billion liter.
There is a strong competition in metropolitan cities, where Danone’s
newly acquired company Sırma Su holds 30% of Istanbul’s bottled
water market.

Success factors
Turkish dairy market consists of two main categories: Traditional
products such as milk and yoghurt, and value-added products such
as Danino, Danette etc. Danone believes that the future growth in
market volume will come from value-added category.
In terms of consumer habits, however, there is major problem in
traditional category: Especially in the rural areas of Turkey, most of
consumers still prefer door-to-door traveling street sellers, who deliver
milk and yoghurt directly from their family-owned farms to their
neighborhood customers, of course, in completely unhygienic
conditions. Because of this traditional consumer behavior and huge
informal economy, Danone invests serious budgets in advertising and
PR to increase consumer awareness about packaged goods.
Corporate social responsibility projects also play a significant role in
Danone’s long term efforts: Under the “Farmer Development Program”,
started in 2008, Danone built 18 milk houses in selected villages to
share the know-how of milk production in European Union’s quality
standards. Danone carries out this project in cooperation with the
Ministry of Agriculture and the Turkish Bank of Agriculture.

Company name: PepsiCo has two companies in Turkey: PepsiCo
Beverages (Pepsi Cola Servis ve Dağıtım Ltd) and PepsiCo Snacks
(Fritolay Gıda San. ve Tic. AŞ). (http://www.pepsico.com.tr/)
Recent sales data:
Main business:
PepsiCo Beverages Turkey has over 1600 employees in 3 plants and
9 warehouses. Its HQ is located in Levent area on the European side
of Istanbul. The plants in Adana, İzmir and Çorlu produce Pepsi, Pepsi
Light, Pepsi Max, Pepsi Twist, Fruko, Yedigün, 7Up, Tropicana and
Lipton Ice Tea (under a special agreement with Unilever). Gatorade
energy drinks are also available in Turkish market, but not produced in
Turkey yet. And more interestingly, PepsiCo Beverages also makes the
nationwide distribution of Red Bull in Turkey.
Frito Lay Turkey’s HQ is in Ümraniye area on the Asian side of
Istanbul, and produces Doritos, Lay’s, Cheetos, Ruffles, Çerezza
snacks, A la Turca cookies and Rocco candies and gums in its two
plants in Kocaeli and Tarsus. Frito Lay Turkey has 1400 employees
including its HQ in Ümraniye, first plant in Kocaeli and the second plant
in Tarsus. 1800 people work in the distribution network and deliver to
185.000 sales points around the country.

PepsiCo Beverages Turkey
Pepsi Cola was sporadically available in Turkey since 1962 as an
imported product in limited quantities, but Pepsi Bottling Group (PBG)
officially entered into Turkish market in 1964 by a partnership with
“Tamek Gıda”, which was founded by Mehmet Melih Sipahioğlu in
1955 in Bursa province. Tamek had started its operation as a ready-to-
serve canned food and ketchup manufacturer; and in 1963 they also
started to produce Tamek bottled fruit juices. In 1964, PBG bought
22.8% shares of Tamek, and the factory in Bursa started to produce
Pepsi Cola.
Mr Sipahioğlu, the sole licencee for Pepsi Cola bottling in Turkey, was
an innovative and visionary businessman. In 1967, he produced
“Fruko” soda, the first orange-flavored soda drink in Turkey (a
carbonated drink similar to today’s Fanta).
Tamek fruit juice bottles from 1970s
Fruko orange flavored soda

Fruko soda has been a true success story, created a new market
category and became the generic name of orange-flavored soda drinks
in Turkey. Mr Sipahioğlu established “Tamek Holding” and separated
his canned food business and soft drinks business, where he was
partner with PBG. And the soft drinks division was renamed as Fruko
Soft Drinks Industry SA (Fruko Meşrubat Sanayi A.Ş.).
The partnership continued for nearly four decades; PepsiCo was so
happy with this cooperation that Fruko was selected as the “World’s
Best PBG Company” for several times.
After 38 years of partnership, in March 2002, PBG purchased all
shares of Fruko from Mr Sipahioğlu for USD 100 million. So, PBG fully
acquired the production and distribution operations of Pepsi Cola,
Fruko soda, 7-Up soda and Yedigün soda in Turkey.
(For Tamek fruit juices, a special contract was signed, where
Sipahioğlu family kept the ownership status of Tamek, and PBG
undertook the nationwide distribution operations only).
In 2010, PBG has globally transformed to PepsiCo Beverages.

Frito Lay Turkey
Frito Lay entered into Turkish market in 1988 by purchasing 50%
shares of Uzay Gıda, a local snacks manufacturer. Five years later, in
1993, Frito Lay fully acquired Uzay Gıda, and its production facility was
moved from Istanbul to Kocaeli. Second plant became operational in
Tarsus in June 2007.
In its two plants, Frito Lay Turkey produces snacks (Doritos, Lay’s,
Cheetos, Ruffles, Çerezza), cookies (A la Turca) and candies and
gums (Rocco).
Frito Lay has 75% share in Turkish salty snacks market (including
potato and corn snacks). Per capita consumption of salty snacks is
around 1.2 kg/year in Turkey, still in low levels in comparison to other
countries, as it is 4 kg/year in Europe and 6 kg/year in the USA.
(Uzay Gıda was originally a part of the “Ülker Group”, the largest Turkish
conglomerate in food business, founded in 1944 by two brothers Sabri Ülker and
Asım Ülker. In 1987, however, the younger brother Asım sold his shares to his
brother, took Uzay Gıda for himself, and left the holding company.
After Asım Ülker sold Uzay Gıda to Frito Lay in 1993, he established a new
snacks company (Kar Gida) and simply became competitor to Frito Lay. Kar
Gıda became very successful and gained a 30% share in potato chips market.
Finally in 2002, it was sold Kraft Foods. Today, Asım Ülker and his sons continue
their business life in construction industry: http://www.kargroup.com/)

Thanks to the innovative products developed in local R&D department
in Kocaeli plant, PepsiCo Turkey annually grows by 20% in salty
snacks and 10% in candy and gum categories.
The R&D center in Kocaeli plant also serves to meet the consumer
expectations of all countries in the PepsiCo’s Southeast European
Region. For instance, the formula of “Ruffles with Burger King Flavor”,
developed in Turkey, was asked by 5 other PepsiCo countries to be
adapted in their own local markets.
(Kocaeli plant developed a waste treatment facility and exported this
technology to Frito Lay Portugal.)
"Doritos A la Turca" with poppy seeds
flavor.
“Ruffles with Burger King Flavor”,
developed in Turkey, adapted to 5 other
PepsiCo countries.

Especially the new snacks with regional flavors and traditional
ingredients (such as poppy seeds, olive oil, hot chili and other spices)
helped grow the market volume. In 2011, PepsiCo Snacks Turkey
introduced 10 new products, and achieved 20% growth in total sales in
local market.
Tarsus plant, located in 96.000sqm area (16.500sqm covered area),
was built by an investment of USD 32 million, and increased Frito Lay
Turkey’s production capacity by 24%. This modern plant was designed
to use solar energy to help reduce power consumption.
Frito Lay produces around 100.000 tons/year snacks in its two plants,
and around 2.500 tons of this production is exported to countries such
as Azerbaijan, Georgia, Kazakhstan, Iraq, Jordan and Lebanon.
In snacks production, Frito Lay uses a special kind of industrial potato
grown from “elite seeds”. So, the company built a network of around
400 contracted Turkish farmers and supported them in modern
agriculture techniques to achieve the best possible harvest in 3500
hectares of potato field.

Success / failure factors
In the period from 2003 to 2005, PepsiCo Beverages experienced a
serious market share loss in Turkey, declining from 35% to 20%. Some
external and internal factors came together and caused this negative
outcome.
First of all, in June 2003, Ülker Group (Yıldız Holding) introduced the
3rd cola brand into Turkish market: Cola Turka. It was a sensational
launch campaign based on overrated nationalist propaganda,
communicating the message “indigenously Turkish cola”. For couple of
years, with the help of Ülker Group’s extensive distribution network as
well, Cola Turka temporarily gained serious market share, stealing
from both Pepsi Cola and Coca-Cola. It was a short-lived success
story though. Today, Cola Turka’s market share is surely negligible.
In this difficult period, Pepsi’s own distribution network also failed to
work hard enough, and Pepsi’s availability ratio at nationwide sales
points declined to 60%, where Coca-Cola’s reach was 85%.

Success / failure factors
And last but not least, the global management of Pepsi neglected
Turkey to some degree, didn’t pay attention to the needs of local
marketing department. Pepsi ended up losing the contact with the
consumer, and missed the evolution in consumer behaviors, but
nobody in Pepsi Turkey could take an action about it.
For instance, especially when Turkish consumers became very price-
sensitive and open to cross-selling promotional campaigns, it was not
a good idea to repeat the global ad campaigns in Turkey. Turkish
people would be happier to see local stars and hear about promotions
rather than watching Jennifer Lopez or David Beckham in Pepsi
advertisements.
Global management finally assigned a new country director toTurkey in
July 2005, and Pepsi slowly got back on the right track to solve the
problems in distribution, marketing communications and innovative
products.
Pepsi's cross-selling promotion campaign
with local stars.
Each bottle contains free minutes voucher
from GSM operator Turkcell.

Success factors
In 2010, of PepsiCo Beverages Turkey became the “growth champion”
in PepsiCo’s entire European region. Per capita consumption of soft
drinks, however, is around 100 liter/year in Turkey, and 350 liter/year in
Germany. So, there is still a long way to grow the local market
potential. Turkish R&D departments of PepsiCo Beverages
continuously introduce new flavors to grow the existing market volume.
(The formula of Yedigün Mandarin soda, developed in Turkey, was asked by
PepsiCo plants in Romania, United Arab Emirates, Greece, Kazakhstan and
Russia for adapting into their own countries.)
Since 2008, PepsiCo Turkey is the operational HQ of 14 countries in
the Southeast European Region, including Cyprus, Serbia, Bosnia and
Herzegovina, Kosovo, Macedonia, Croatia, Slovenia, Montenegro,
Romania, Bulgaria, Moldova, Israel and Greece.
Yedigün Mandarin soda,
developed in Turkey, and adapted to
several PepsiCo countries

Company Names: Bosch has six different companies in Turkey:
- Bosch Industry and Trade A.Ş.
- Bosch Turkish Vehicle Spare Parts Industry A.Ş
- Bosch Heating and Air Conditioning Manufacture and Trade A.Ş.
- BSH Bosch und Siemens Home Appliances A.Ş.
- Bosch Rexroth A.Ş.
- Bosch Brake Systems A.Ş.
Number of Employees: 8,250
Sales of Bosch Turkey in 2013: EUR 1.53 billion net sales (including
EUR 1.1 billion export from Turkey)
(In 2010, local sales of Bosch Turkey were EUR 630 million, and export sales
were EUR 850 million. Estimated turnover for 2014 is over EUR 2.1 billion.)
Main business: Bosch Turkey operates in the areas of “Automotive
technology”, “Energy and building technology”, “Industrial technology”
and “Consumer goods”.
Turkey is an important manufacturing and export location, and a
growing R&D center for the Bosch Group's global operations. Export
destinations of Bosch Turkey are over 40 countries in Europe and Asia.

Bosch Locations in Turkey
Istanbul Maslak: Bosch Turkey HQ (legal, marketing, corporate)
Istanbul Ümraniye: Home Appliances HQ
Tekirdağ Çerkezköy: Home Appliances plant
Bursa: Plants for Gasoline Systems, Diesel Systems, Chassis
Systems, Brakes, and Rexroth plant
Gebze: Bosch Rexroth HQ
Manisa: Thermo-technic plant.
Istanbul Koşuyolu: Sales and marketing for thermo-technic systems.
Bosch diesel and gasoline injection
systems plant in Bursa.

Robert Bosch company entered into Turkish market in 1910 by giving a
sales license to Mr Fritz Belart-Lanz in Istanbul. At that time, Turkish-
German relations were very close and strong. In 1917, the company
founder Robert Bosch personally visited Istanbul and tried to further
develop the relationships with Turkish government. However, the
turmoil of the First World War and the following Independence War of
Turkish Republic had to slow down the growth plans.
In 1948, Mr Ahmet Veli Menger, a Russian-Turkish businessman and
founder of the holding company AVM, became the Turkey agent of
both Robert Bosch AG and Daimler-Benz AG. The first Bosch Service
operations started in Istanbul and Ankara as early as the 1960s.
Mr Menger started to build a repair and maintenance network for
Bosch products, and improved Bosch’s brand reputation around the
country. His holding company AVM later became one of the JV
partners in Bosch’s first subsidiary in Turkey in 1971.
Ahmet Veli Menger Holding, the first
JV partner of Bosch Turkey in 1971.

The JV company “Robert Bosch Turkish Vehicle Spare Parts Industry
SA” (Robert Bosch Türk Motorlu Araçlar Yan Sanayi A.Ş) was founded
in Bursa, 90 kilometers south of Istanbul.
Bosch had a majority shareholding, and other partners were the local
bank Yapı Kredi and Ahmet Veli Menger Holding.
In 1972, Bursa plant opened and started to manufacture nozzles for
diesel injection systems. In 1988, Robert Bosch Turkish Vehicle
Spare Parts Industry SA opened a office in Istanbul to provide service
and marketing. In 2002, the plant started to produce a more specific
kind of high-pressure “common rail” injection systems. In 2009, high-
pressure injection valves for gasoline engines were also added to
production line.
The Bursa plant has been the only Turkish company to have twice
received the Business Excellence Award presented by the European
Foundation of Quality Management (EFQM) in Helsinki in 2003 and in
Paris in 2008.
Today, the total manufacturing area in Bursa has grown to more than
200,000sqm. In 42 years, since the first factory started the production,
Robert Bosch Group made a total amount of EUR 1.9 billion direct
investment in Turkey.

In 1990, Bosch Turkey decided to make its second factory investment
in thermo-technic industry (gas-fired water heaters).
At that time, Elginkan Holding, a local engineering conglomerate from
Manisa, was already a strong and well-rooted player in the market.
Bosch made an equal share JV with Elginkan Holding; the thermo-
technic plant in Manisa was opened in 1992 on 110.000sqm area.
In 1999, however, Bosch purchased all shares from Elginkan, and
the company’s name was changed to Bosch Heating and Air
Conditioning Devices Manufacture and Trade Inc. At the end of 2011,
the factory in Manisa was selected the “best Bosch thermo-technic
plant in the world”, and reached to an annual production capacity of
524.000 combi-boiler units.
(Elginkan Holding, owned and managed by the Elginkan Foundation, has a
unique corporate structure without any shareholders. Since all members
of Elginkan family have passed away, the holding and the Foundation are
managed by professional executives. Because there are no shareholders,
all profit is used in technological investment and educational charity
projects. The holding has around USD 600 million turnover coming from its
20 companies in several industries.) Elginkan Holding was Bosch's first
partner in thermo-technic industry.

In 1995, BSH Bosch Siemens Home Appliances GmbH acquired 75%
majority stake in Profilo, the 2nd biggest largest white-goods
manufacturer in Turkey. Profilo was founded and owned by Turkish-
Jewish businessman Jak Kamhi and his family.
So, the new company BSH Turkey started the production with separate
brand names Bosch, Siemens, and Profilo in its Çerkezköy factory
(550.000sqm). In 2007, a new dishwasher plant was opened next to
the home appliances plant in Çerkezköy.
(In 2003, however, after a dispute on management issues, Kamhi family
decided to leave the company by selling off their 13.86% shares to
Deutsche Bank. Mr Jak Kamhi announced that he took USD 42 million from
Deutsche Bank for his personal shares of 6.9%. Later on, remaining
Turkish shareholders, apart from Kamhi family, sold their 11.11% stake to
BSH for USD 70 million.)
In 2013, BSH Turkey made USD 867 million export (3.4 million unit
products, nearly 70% of the plants production capacity). (Source)
(Bosch and Siemens branded white-goods are targeted for middle- and
upper middle-income consumers. Profilo products are for a wide range of
low- and middle-income consumers.) Bosch acquired majority stake of Profilo.

Production sites in Turkey
- Çerkezköy plant of Home Appliances,
opened in 1993 on 550.000sqm area.
- 2nd plant of injection systems in
Bursa. Total manufacturing area in
Bursa has grown to 200,000sqm.
- Thermo-technic plant in Manisa,
opened in 1992 on 110.000sqm area.

Production sites in Turkey
Bosch Rexroth A.Ş. offers drive and control technologies for
automation and hydraulic components. Bosch Automation began its
activities in Turkey in 1976 with the name "Hidropar A.Ş." in a small
atelier (250sqm) in Istanbul. After the merger of Bosch Automation and
Mannesmann Rexroth in May 2001, the company proceeded with the
name of Bosch Rexroth A.Ş. Now it has total area of 120.000sqm
(72.000sqm closed area) and almost 1000 employees in its HQ in
Gebze and production plant in Bursa. Bosch Rexroth plans to produce
1 million unit hydraulic pumps in 2014 in Turkey. Their major projects in
Turkey were Galata Bridge, Deriner Dam and Sir Dam.
Bosch Brake Systems (Bosch Fren Sistemleri), founded in 1975 in
Bursa, is active in the field of manufacturing of hydraulic brake systems
for automotive and light commercial vehicles. The new Bosch Brake
Systems plant in Bursa sells 70% of its products in local market, and
the remaining products are exported to India, Brazil, Italy, Spain and
Russia.
Bosch Rexroth made the hydraulic
drives of Galata Bridge in Istanbul.

Success factors
With its EUR 1.53 billion turnover and EUR 1.1 billion export in 2013,
Bosch Turkey expects 11% growth in its exports in 2014. In addition to
EUR 155 million investment made in 2013 (mainly in automotive plants
in Bursa), Bosch intends to make another EUR 135 million investment
in Turkey in 2014. Over 60% of the turnover of Bosch Turkey comes
from automotive industry. (In 42 years, Robert Bosch Group made a
total amount of EUR 1.9 billion direct investment in Turkey.)
The thermotechnic plant in Manisa has the capacity of manufacturing
800 different components in heating and air conditioning systems. The
plant has produced 600.000 gas-fired combi-boilers in 2013.
In terms of turnover in home appliances, Bosch Turkey (BSH) is at
the 3rd rank after Germany and China. And the local market share of
BSH Turkey is over 30%. Today, BSH Turkey’s annual capacity for
“export from production” is around 4.5 million units, and it is expected
to reach 8 million units in next 5 years.
Three R&D and innovation centers in Turkey export know-how and
technology to 13 countries from the USA to Japan. Bosch Turkey has
applied for 75 patent registrations in 2013.

Company name: Türk Tuborg Brewing and Malting Inc
Recent sales data: TL 461.410.000 in 2013 (Source: Türk Tuborg Annual
Report of 2013)
Main business: Brewery and malt production.
Türk Tuborg factory in İzmir

Carlsberg entered into Turkish market by purchasing the majority stake
of Türk Tuborg from Yaşar Holding in 2001. The story of Tuborg beer in
Turkey, however, goes back to 1967. At that time, Danish Tuborg
Company was not acquired by Carlsberg yet.
So, Tuborg Company from Denmark came to Turkey in 1967 to sign a
JV agreement with Yaşar Holding, one of the largest family-owned
industry conglomerates of Turkey, headquartered in İzmir.
With the JV agreement, a new company was established: “Türk
Tuborg Brewing and Malting Inc” (60% Danish Tuborg, 40% Yaşar
Holding). Türk Tuborg factory in İzmir was opened in 1969.
(After several investments and improvements, today the factory has an
annual production capacity of 300 million liter beer and 36.000 ton
malt).
In 1988-89, Turkey suffered from a deep economic crisis, where
unemployment and inflation have seriously increased and consumer
spending plummeted. Danish Tuborg Company considered exiting
from Turkish market and sold a major part of its shares to Yaşar
Holding and became a minority shareholder in Türk Tuborg.

In 2001, however, Carlsberg purchased back the majority shares of
Türk Tuborg (51%) from Yaşar Holding. (In the meantime, Carlsberg
Group had already fully acquired Tuborg Company in Denmark.)
In 2003, Carlsberg acquired 95.65% of Türk Tuborg from Yaşar
Holding for USD 57.3 million, and Yaşar has exited from beer business.
(Remaining 4.35% of Türk Tuborg shares are in public trade).
Actually, Yaşar Holding had never set big goals in beer business. At the
time of Yaşar’s exit, Tuborg was the second largest player with 30%
market share, and Turkish beer market was undoubtedly dominated by
Efes Pilsen (70% market share). While Efes Pilsen, owned by Anadolu
Group, had five factories across the country, Tuborg had only one in
İzmir.
In the next five years after the 2003 acquisition, even though Carlsberg
continued to make around USD 220 million investments in Turkey,
Tuborg business didn’t progress as profitable as Carlsberg expected:
Turkish government had issued severe taxes and strict regulations on
alcoholic beverages industry, where marketing and sponsorship
activities were crucially restricted.
Efes Pilsen increased its local market share to over 80%, and Tuborg’s
share started to swing around lower than 10% in 2008..

Finally, in July 2008, Carlsberg decided to sell off all shares of Türk
Tuborg to Israeli CBC Group’s subsidiary IBBL (International Beer
Breweries Ltd) for USD 80 million. The Central Bottling Company
Group (CBC), the parent company of IBBL, was Carlsberg’s business
partner in Israel, Romania and Albania.
Although the sales in local market were not satisfactory, Türk Tuborg
has enjoyed the magic touch of IBBL, and increased its export volume
by 8% in 2009.
In 2012, Türk Tuborg’s consolidated export net sales have increased
from TL 47.4 million to TL 64.4 million. So, the company achieved 36%
increase in its exports, and realized 51% of Turkey’s total beer exports.
(Source)
In 2013, Türk Tuborg achieved 8% increase in its exports on Turkish
lira basis as compared to the previous year, and achieved 53% of
Turkey’s total alcoholic beer exports. The company’s net sales in 2013
were realized as TL 461.410.000. (Source) Export destinations
include 51 countries from Middle East to Europe, Americas and Africa.

Export sales and local success
Today, as part of the license deal between Carlsberg and the CBC
Group, Türk Tuborg factory in İzmir continues to produce Carlsberg,
Tuborg Gold, Tuborg Special, Tuborg Draft, Vole, Skol, Troy and Venüs
brands.
Thanks to Tuborg’s successful new product launch campaign for
“Tuborg Gold – 100% Malt”, Tuborg’s local market share increased
from 10% to 22% in 2013 (and Efes Pilsen’s local market share
decreased from 88% to 76%).
Today, the volume of Turkish beer market is estimated to be around
USD 1 billion.
Beer brands produced in
Tuborg plant in İzmir.

Key facts
Key facts about Turkish brewing sector
(from the report "Economic Impact of the Turkish Brewing Sector", 2011)
The Turkish brewing sector is dominated by two large companies:
Anadolu Efes and Türk Tuborg. Besides them, there are five smaller
breweries active in the Turkish beer market.
In 2010, total beer production in Turkey was 10 million hectoliters (hl).
The domestic sales amounted to 9,2 million hl, and the beer
consumption per capita was 12.4 liters (the average for EU27
countries is 75.3 liters).
Approximately 10% of the beer production in Turkey is exported.
The main export markets are Germany, Lebanon, Iraq and Azerbaijan.
In 2010, 1 million hl of beer (9% more than in 2009) has been exported
with a value of EUR 51.6 million.
Since 2002, the Turkish excise rate levied on beer has been raised
eight times, and is significantly above the average excise rate levied
in EU Member States. It is almost as high as the excise rate in Finland,
which has the highest excise tax within EU countries.
Source: “Economic Impact of the Turkish Brewing Sector”

Company name: Kellogg Med Gıda Ticaret Ltd
Recent sales data:
Number of employees:
Main business: Production and marketing of cereals and cereal bars
with brand names Special K, Coco Pops, Honey Pops, Tresor, and
Corn Flakes.
Turkish consumers were familiar with “Corn Flakes” for over 20 years,
which was only available as an imported product in select
supermarkets. In 1990s, Kellogg’s products were imported by
Sezginler Holding, which has unfortunately bankrupted in the economic
crisis of 2001, due to the exchange rate fluctuations.
In 2005, Kellogg and Ülker (Yıldız Holding) made an equal share JV
with an initial investment plan of EUR 12 million to build a cereal
factory. And the company “Kellogg Med Gıda” was founded.
(Ülker was founded as a small biscuit manufacturer in 1944. Today, Ülker is a
subsidiary of Yıldız Holding and the “trademark” brand of Yıldız Holding’s all food
products.)

In 2006, the cereal factory in Pendik, Istanbul, has started the
production of the cereal “Coco Pops”. In 2008, “Special K” cereal was
also added into the production line.
Today, five different kinds of Kellogg cereals are produced in Pendik
plant, which is located on 5.500sqm covered area and operates with a
production capacity of 9.300 tons/year.
Cereal consumption per capita in Turkey is as low as 250 gram/year
(as of 2013), in comparison to 9 kg/year in European countries such as
the UK and Ireland. Even in Greece, where most of the local people
don’t have regular habit of having breakfast in the morning, the cereal
consumption per capita is around 2 kg/year. On the other hand, the
growth ratio of Turkish cereals market is outstanding, as the per capita
consumption was only 70 gram/year in 2005.

As of November 2012, the total market volume of breakfast cereals
and “meal replacement” products in Turkey was TL 350 million (TL 230
million for breakfast cereals and fiber-rich mueslis, TL 90 million for
shake products of “weight management / skip the meal” category, and
TL 30 million for diet snacks). For 2015, it is estimated that total sales
of breakfast cereals in Turkey would reach to USD 136.7 million.
(Source: “Packaged Food Sales in Turkey”, 2011)
Ülker-Kellogg is the 2nd largest player in breakfast cereals market in
Turkey with 28% share, where Nestle is the leader with its 60% market
share.
Breakfast cereals market in Turkey surely promises a serious potential
for growth in near future. As a result of urbanization and hectic city life,
emerging need for quick and practical meals, increasing numbers of
mothers at work, and the growing awareness of healthy nutrition, each
year around 1 million new families in metropolitan cities start
purchasing breakfast cereals.
The main concern, however, is the fact that people from smaller cities
and rural areas, who live up with lower-income and more conservative
mindset, will not easily alter their typical morning meal from the
traditional Turkish breakfast of “tea, cheese, olives and bread” to
breakfast cereals.

Foreign - Turkish Joint Ventures & Market Entry Strategies

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