The flagship of Turkish economy hosted Estonian logisticians

Up until now, Turkey has been acknowledged by Estonians as an excellent holiday destination and far less emphasis has been put on the economic co-operation. When scrutinising the developments of the past years, we can spot many interesting aspects in the economy of this country located on the border between Asia and Europe and there could be plenty of reason for the partnership with Estonia.

The Republic of Turkey, young and dynamic with its population of 74 million, happens to have one of the most rapidly growing economies in the world, coming in second after the China in 2011 according to Mr. Nihat Ergün, the Turkish Minister of Science, Industry and Technology. During times when so many countries have struggled to recover from economic recession, the economy of Turkey has been flourishing – the growth was 9.2 per cent in 2010 and 8.5 per cent in 2011.

During their study trip to Turkey, the members of the Estonian Logistics Cluster paid a visit to the headquarters of Koc Holding, the flagship of Turkish economy, with the aim to discuss various partnership options and also in order to present the potential Estonia has to offer in the transport of goods to Russia and Scandinavia.

Koc Holding, founded in 1926 and owned by one of the wealthiest families in Turkey is at present one of the largest European companies with the headquarters in Istanbul. Koc Group with its 75.7 billion Turkish Lira annual turnover unites 113 companies with a total of 90,000 employees as well as 14,000 dealers, agents and follow-up services employees.

At the meeting with Ms. Funda Güngör Akpinar, Investor Relations Coordinator and Dr. Ahmet Çimenoğlu, Economic Research Coordinator, the entrepreneurs had a chance to present the advantages of Estonia’s logistic location for the shipment of the Koc Group industrial sector products to Russia and Scandinavia. Koc Holding owns the home appliances’ brands like Arēelik, Beko, Grundig, Altus, Blomberg, Arctic, Defv, Leisure, Arstil, Elektra Bregenz and Flavel. Koc, being the third world’s largest manufacturer of home appliances after Electrolux and Indesit, would be a partner with many potential cooperation opportunities for the Estonia’s transit corridor. Some of the home appliances assembled in Turkey are being shipped to Nordic countries and Russia. Estonian logisticians offered a partnership opportunity for setting up an interim warehouse or distribution centre for these house appliances into Estonia.

At present, a container ship service is calling to Dnepropetrovsk, Ukraine three times a week. And a EVR Cargo container freight train is connecting Dnepropetrovsk, Ukraine to Muuga, transporting about 25% of its weekly capacity to Dnepropetrovsk. The logisticians are interested in getting more cargo to be shipped from Turkey towards Estonia.

More specific discussion on transit happened during the meeting with Koc Group logistics company Zer with representatives indicating an acute interest in learning more about the potential of our logistics companies. As the first step, an agreement was made that the members of the Estonian Logistics Cluster delegation are going to receive official invitations from Zer to submit a price proposal for the transport of goods to the Nordic countries. This is the first time in the history of Cluster study trips that actual offers are generated during the first meeting already.

In addition to the transport, home appliances and automotive industry sectors, Koc is engaged in banking, foodstuffs, construction, energy, tourism and IT sectors. Koc Group has two schools - Koç School and Koç University, both established by Vehbi Koç Foundation. Koc is a sole company in Turkey listed in Fortune Global 500.

When it comes to the trade of manufactured goods, a Customs Union agreement has been active between Turkey and the European Union since 1995. The agreement requires Turkey to perform in line with certain EU policies e.g. technical regulations, competition, and intellectual property rights. The Customs Union coming into effect increased the volume of the exchange of goods between Turkey and the European Union, so more than half of the Turkish trade in goods can be accounted for European Union. According to the information provided by the Statistical Office of Estonia, Turkey was the 22nd trading partner to Estonia by total trade turnover in 2010. Compared to 2009, Estonia’s total trade in goods with Turkey increased about 60% in 2010, including export by 70% and import by 35%.