Germany’s Bosch, in Turkey since 1910, says it will keep investing here
Robert Bosch, the German engineering and electronics company, is targeting growth of 10 percent in 2017 for its Turkish subsidiary after it expanded revenue by 14 percent to 12 billion lira last year, said Steven Young, Bosch’s president for Turkey and the Middle East. Bosch has invested more than 6 billion euros in Turkey in the past five years, including 750 million lira in 2016, Young sait at a news conference on Thursday. The investment has created 5,000 new jobs in Turkey, he added.
Bosch Turkey consists of five companies active in mobility solutions, energy and construction, industrial technology and consumer goods. The company traces its Turkish operations back to 1910 and has been producing here since 1972. Today, some 17,000 people work at its manufacturing, sales and research and development units in Turkey, which are the company’s second-biggest operation in Europe after Germany. Last year, Bosch accounted for 1.5 percent of total Turkish exports, shipping 7 billion lira worth of goods to 40 countries. Recent political turmoil has not swayed the Gerlingen, Germany-based company’s commitment to Turkey, Young said. “Bosch’s Turkey operations have significant importance for Bosch, and our headquarters support Bosch Turkey,” Young said, describing the company’s view of Turkey as a “long-term vision.” “Turkey and the other 150 countries we’ve been operating in may have volatile times, regarding the economy or other aspects. But we have competent local executives and they steer the ship successfully,” he said. Young spoke with Dunya Executive about the investment environment in Turkey and Bosch Turkey’s future projects.
Are you concerned about political instability in Turkey?
We are not politicians, and politics do not matter for our business. We don’t steer the economy either. Since we have started operating in Turkey, there have been economic crises and political crises as well. There have been three military coups in the history of The Turkish Republic, and Bosch was always here. We have never considered a cut or change in our investment plans. What is important for us is to be good at our job and provide a convenient environment for the job that we need to do. As long as we achieve these and build a relationship with our
customers, we will proceed with our strong growth in Turkey, in my personal opinion.
How does the level of technology use in Turkey affect your business?
Turkey is definitely a technology-friendly country. Turkey’s population has an age average of 30, 29.7 to be exact. Therefore, it has a really flexible society that can adapt to innovations at a tremendous pace, and it’s an enormous advantage in this regard.
What are Bosch Turkey’s plans to upgrade in Turkey to Industry 4.0?
In March 2016, we visited our Industry 4.0 facilities in Germany with the former minister of industry, Fikri Isik. Mr. Isik agreed that if Turkey tries to upgrade to Industry 4.0, the government should own this process. Now there is a working group within the Industry Ministry, and relevant stakeholders are working on plans. Generally speaking, Industry 4.0 is a hot topic in Turkey, and there has been much written about it. But I think Turkish businessman still hesitate to take a big step. As Bosch Turkey, we try to help them to make a right decision through education, informing, sharing our own experiences at our facilities. That’s the reason we established the Future in Industry platform (www.sanayidegelecek.com).
When needed, our customers can visit our facilities in Turkey or abroad. Sure, there has to be an investment made, but you don’t have to build a brand new factory from scratch. Industry 4.0 applications can also be used in current facilities for modernization.
How do you evaluate Turkish industry’s digital transformation?
If there is sufficient state aid for Industry 4.0 investments - which I assume is the case in Turkey right now - the process can easily be funded and the benefit of that may reach up to 30 percent efficiency. But more important, if you can’t upgrade you will go out of play as your global customer will demand a product manufactured with Industry 4.0 standards that speaks the same language as the same supply chain. That’s a bigger threat. In five years, it will become a reality. That’s why we now try to explain this to Turkish industrials clearly. There’s nothing to be afraid of. Now is just a period where we build awareness. The multinationals operating in Turkey are really proactive on this issue. We already started and are even implementing Industry 4.0 compatible applications with some of them. But family corporations and small and medium-sized enterprises, which generate a large part of the Turkish economy, are still playing the waiting game and hesitating.
Will these smaller firms meet Industry 4.0 goals by imitating multinationals, or will they be sidelined in five years?
It’s not realistic to see everything through rose-colored glasses. Surely some of them will go out of the play or try to upgrade to Industry 4.0 in a shorter time period, which will be more problematic and costlier. That’s supply-and-demand equilibrium. For now, time is on their side and as they digitalize they can realize a faster and more comfortable transformation. The earlier the transformation the cheaper, and higher quality will be achieved by the Turkish business world.