Raising exports to Israel
Israeli commerce head sees massive potential for Turkish exports to ‘island country’
Adelegation of 18 Israeli importers visited Istanbul from Nov. 1-3 during ‘Export Week 2017,’ which was organized by Turkish Exporters Assembly (TIM). DUNYA Executive had the chance to meet and talk on bilateral trade relations with Zeev Lavie, director of the international relations division at the Federation of Israeli Chambers of Commerce, Israel’s largest and oldest business organization. According to Israeli official data, the total trade volume between Turkey and Israel amounts to $4.3 billion. Lavie said that Israel imports $4.4 billion of food products a year, adding that “only 8% of it is supplied from Turkey. The Israeli economy has a lot [more] to gain from Turkey.”
This figure alone highlights the fact that there are many areas of untapped growth in terms of trade between the two countries. “Last year we have seen a big rise in interest from Turkey to Israel,” said Levie. Indeed, there seems to be plenty going on between the business worlds of the two nations. Aside from the 18 importer companies who attended Turkey’s Export Week, TIM made a visit to Israel in May with a delegation of more than 100 companies, including two Turkish industry giants Koc and Sabanci, and AKIB (the Mediterranean Exporter Association) will have a presence at ISRAFOOD2017 later this month. In addition, ANFAS Food Product in Antalya will host a large food delegation of 25 Israeli companies in January, the Istanbul Chamber of Industry (ISO) is planning to take a delegation of textile manufacturers to Israel in January and Israel’s economy minister is planning to visit Turkey with a high-level delegation in the same month.
Deals in the pipeline
The 18 Israeli companies that attended the Export Week in Istanbul
were all buyers and importers from a variety of sectors including food, healthcare, confectionery, steel and packaging equipment. Lavie said the companies met dozens of Turkish manufacturers. “We have deals in the pipeline already,” he said, adding that the companies also found the opportunity during Export Week to meet their neighboring countries that they don’t usually do business with, such as Egypt, Jordan and Malaysia. “How cool it is that they can do business with all these people thanks to Turkey, which serves a uniting role in this,” he said.
Israel imports for ‘20 million people’
Stating that the Israeli economy has a great deal to gain from Turkey, Lavie believes that when exporters look at Israel they usually see a small market. “Even though Israel has a population of about 8.5 million it imports for nearly 20 million people,” he said. “In recent decades Israel’s economy has doubled. Our GDP per capita is about $37,000 now, akin to any other Western economy. It is a highly advanced economy with a 3.5% growth rate. Israeli exports are well-developed because of its high tech sectors. We attract a lot of FDI,” he added.
Lavie said Is-
rael imports almost everything and has a huge purchasing power. “Since we don’t really trade with our neighbors, we are like an island economy. So instead of importing from China we can import more from Turkey, whether it be textiles, furniture, sanitary products or ceramics,” he said. According to Lavie, Turkey is a big export destination for Israel. He said there are plenty of opportunities for Israeli exporters, especially in telecommunications, IT, cyber security, medical devices, cleantech, water treatment technologies, waste water, ITS and smart transportation technologies, which Israel is good at and Turkey needs.
‘Human to human’ business
With more than 60% mainly coming from chemicals, refined petroleum and minerals, Israel’s exports are highly centralized. Conversely, imports are diverse. According Lavie, Israel mainly imports automotives, which Turkey is used to delivering. For instance, Toyota vehicles are made in and imported from Turkey. Israel also buys metals, machinery, textiles, food and plastics from Turkey. “Since Turkey is a big food manufacturer, this is definitely an area we can grow,”
Lavie said, underlining that Israel’s annual food imports amount to $4.4 billion, with only 8% currently coming from Turkey.
Speaking about the potential between Turkey and Israel to do more business, Lavie said: “When you do business with someone, it is not B2B, but human to human. I think Israelis and Turkish people have the same business culture. We have a proximity in terms of shipping and logistics. There are many agreements in place such as free trade, double taxation and investment.”
‘A win-win situation’
“We are not competing economies, rather we complete each other. For Turkey to grow from high quantity-low quality to a higher amount of quality, there needs to be more R&D and more innovation so that it competes in global markets,” he said. “With a two-hour flight, Turkish industrialists can easily find Israeli partners in Industry 4.0, automated vehicles, through the internet and cyber security to be able to access an interesting eco-system of innovation. This is a win-win situation.”
According to Lavie, even during the biggest disagreements between two countries, not only did bilateral trade figures not go down, they actually increased. “The potential is there now, it is money time. All 18 companies in the delegation have money to spend here,” he concluded.