U.S. investor appetite
The referendum results will not discourage the U.S. companies, who visited Turkey
U.S. companies are unfazed by the current political climate during this crucial time in Turkish history, a group of visiting executives said. They see a country teeming with investment and expansion opportunities.
The Transportation Technology Trade Mission, organized by the American Chamber of Trade, brought representatives of 11 U.S. companies to Turkey in late March. Executives from Nova Power Solutions, Trimble Navigation and Tunnel Radio, speaking to Dunya Executive in interviews, described the visit as a success in which they were able to establish solid contacts with government bodies, municipalities, local partners and production sites.
None of them seemed concerned by the result of Sunday’s referendum.
“Politics can enable or discourage growth, but it is not necessarily a barrier to business, unless they make it a barrier to business,” said Kurt Worden, business development manager at Nova Power Solutions. “And I can’t see that it is in any country’s interest to prohibit growth of its economy, regardless of whether the referendum result is ‘yes’ or ‘no.’ So the referendum is Turkey’s business, not ours.”
Rick Cassidy, global director of corporate strategic accounts for Trimble Navigation, a GPS and positioning-technology company that already has a $2 million investment in the third Istanbul airport, thinks that government stability is critical for ensuring companies’ ability to do business.
Sabin Reynolds, Tunnel Radio’s director of sales, underlined the potential for opportunities when he said he had not seen anything in Turkey’s political landscape that would discourage him from continuing his efforts.
When asked about the importance of the trade mission, these three investors all said one thing: The opportunities they discovered exceeded their expectations.
“Our investment in the airport is relatively small, but looking at so many opportunities this week (we may) certainly grow that pretty significantly,” said Trimble’s Cassidy. Trimble has partners in the region that run other metro line projects. The company indicated it is willing to participate in tenders for large projects, as it builds relationships.
Nova, which has been operating in Turkey since 2013 in the de- fense sector, also viewed the trade mission as an opportunity to expand its current business since transportation in Turkey is a sector with growth potential. Nova provides power protection, distribution, conditioning and backup-power systems for critical equipment and systems in various sectors, mainly defense.
“That’s why we place importance on this trade mission. Our products fit where there is a power need for critical systems and also for security infrastructure for projects like the Marmaray (tunnel) or other kinds of rail applications,” said Suleyman Bayramoglu, Nova’s business development manager in the Middle East and north Africa.
This was Tunnel Radio’s first visit to Turkey. Reynolds said he wants to make the country a hub for the company’s European and Middle East operations. Tunnel is interested in expansion and sees potential in European, Middle Eastern, north African and the Central Asian markets, which they believe is generally underserved with the type of technology that Tunnel Radio offers.
Reynolds said that the trade mission allowed Tunnel to focus on what its sees as the gateway to other regions.
“With all the technological innovation, integration and the infrastructure planning of ongoing projects, particularly in Istanbul, it makes sense for us to research and (use) this particular area as the hub of our European and other region activities,” said Reynolds.
Tunnel’s aim for the mission was to validate its market research, explore relationships and to network with potential partners.
“The European market is hit or miss, as far as its maturity and certain technological advances. But (in terms of ) the limits for smaller to mid-sized companies such as ours, the European market is vast. So we’ve been able to isolate and centralize our focus and get the right return on our invested efforts. That’s where Turkey becomes exceptionally attractive because infrastructure investments, development and planning is also very central,” said Reynolds.
He also underlined Turkey’s location was a factor. Tunnel can more easily navigate the market because it is fairly well centralized in Istanbul and Ankara.
Most of the partners and relationships the company has been exploring through the trade mission already have a presence in Middle Eastern and north African markets, he said.
“By and large, they also have branch offices in the greater Eu-
Politics can enable or discourage growth. But it is not a necessarily a barrier to business unless it is made into one. That’s what these U.S. investors think about Turkey’s attractiveness and new business opportunities. The referendum result will not discourage the U.S.-based companies who visited with a large trade mission.
ropean market. So for us, it’s a hub, it’s a central location, and the ease of doing business attracted us versus going to the European market, in general, due to our size and the sheer vast opportunity. We feel like Turkey is really evolved in a way we can stay and step with it,” he added.
Low labor costs
Nova Power Solutions also considers Turkey to be a gateway market. The company sells products throughout Europe, the Middle East and in north Africa. As a U.S.based business with its primary production on the West Coast, it faces difficulties serving Middle Eastern and north African customers from such a distance.
The company is very consumer-intensive, according to Worden, who outlined its expansion plans in the region.
“We will establish a sales organization first, then an MRO (maintenance, repair and operations) organization to service existing Middle East and European markets, as well as the Turkish market. Then, taking advantage of the excellent engineering skills, the tax advantages of free-trade-zone areas and the superior labor costs that Turkey has to offer, we can begin production and probably and significantly increase the company market share worldwide at that point,” said Worden.
Cassidy also thinks that the opportunities are vast and extraordinary, such as the planned third Is- tanbul airport and metro lines that would potentially expand the local representation his company has had for a number of years.
“That is the message I’m taking back,” he said. “We need to be here much more and be more influential than we have been in the past. Certainly, there is risk wherever we go in the world, but we should not to be as reluctant as we have been.”
There are no agreements yet, but all the executives expect to sign deals in the coming weeks or months. “Every meeting had an excellent potential to have signed a deal. So this is just a beginning of a long period of follow-up conver- sations to make those deals happen. I was very impressed with the ESBAS industrial estate , which is largest free-trade zone in volume. Sabiha Gokcen TechnoPark is also impressive,” said Worden.
Trimble executives left Turkey with multiple follow-up opportunities in hand across different sectors, such agriculture, construction, geospatial data, transportation and utilities in government and resources. Tunnel Radio decided to fragment its market approach and now plans to partner with a local company for mining, transportation and infrastructure industries in less than a year.