Category: Business

Tesco: looking to make headway in Turkey as GDP per capita continues to soar

(Source: Datamonitor)trackingRetail giant Tesco aims to increase its store base in Turkey by nearly 50% in 2011, a significant rise in its rate of expansion. The move will help Tesco keep pace with its global competitors and capitalize on increasingly favorable market conditions, as well as open doors to potential entry into the Middle East and Africa, making Tesco a truly global retailer.

The world’s second largest retailer, Tesco, is planning to accelerate its expansion in Turkey through its subsidiary Kipa, which it acquired in 2003. The retailer plans to open a further 51 stores in the country in the remainder of 2011, marking a significant increase in the rate of store openings. In the year to February 2011, the network of Kipa stores increased from 105 to 121 stores. By June 2011, 125 Kipa stores were present in the country. As such, Tesco plans to increase its store network by 45.5% in Turkey in 2011.

The proposed store openings include 16 hypermarkets, 25 supermarkets, and 10 Express convenience stores, suggesting that Tesco is attempting to capture a wide breadth of locations and consumer demographics.

Tesco’s sales in Turkey have improved markedly over the last quarter. Like-for-like sales at Kipa stores rose by 3.4% in Q1 2011, following a fall of 2.0% in the previous quarter. Likewise, rival retailer Carrefour’s Turkish operations also fared well in Q1 2011, with sales at constant exchange rates rising by 4.4% to E416m compared to Q1 2010.

Tesco’s improving performance is testament to the favorable trading conditions in the country. GDP per capita has shown consistently strong growth, rising by 6.9% in 2010. Moreover, Turkey benefits from a very young population compared to the rest of the Europe, as well as an increasingly affluent and growing middle class. Consequently, Turkey is in a prime position for continued growth. The grocery market itself remains quite fragmented, with hypermarkets, supermarkets, and discounters accounting for just under a third of the market, providing significant opportunities for growth through acquisitions.

For such reasons, Tesco’s close competitors have also been making headway in Turkey, including Carrefour, which operated 1,138 stores at the end of 2010, and Metro’s Real. Both retailers have significantly increased their portfolios in the country, which undoubtedly has prompted Tesco to ramp up its own brand presence.

Despite having acquired an existing player with which Turkish consumers are familiar, and operating with an experienced partner, Tesco’s pace of expansion in Turkey has been very slow. Now is the time for it to make its presence felt. Not only is Turkey a very lucrative market for new entrants in itself, it also provides an effective gateway into the Middle East and northern Africa, regions where Tesco does not yet have a presence. However, if it is to compete with its closest rivals, it is vital that it improves its global positioning. As such, Tesco’s Kipa network in Turkey will prove invaluable in the company’s quest for global expansion.

A service of YellowBrix, Inc.

via Tesco: looking to make headway in Turkey as GDP per capita continues to soar.

June 24, 2011
Turkish national flag carrier named best airline company in Europe

ISTANBUL, June 22. (AA). Turkey’s national flag carrier was picked as Europe’s best airline company, the director general said on Wednesday.

Turkish Airlines’ Director General Temel Kotil said Skytrax company named THY as the “Best Airlines Europe” in a survey attended by 18.8 million passengers in the world.

“We are the first Turkish company surpassing Europe,” Kotil told AA correspondent.

Kotil said THY also won “best premium economy seat” and “South Europe’s best airline” awards.

Skytrax is a world recognised brand associated with air travel excellence in the 21st century, providing unique expertise to the world airline and airport industry through the most professional Audit and Service Benchmarking programmes of Product and Service Quality.

During the 10-month survey period, 18.8 million airline customers from over 100 different nationalities participated in this customer satisfaction survey. The Survey includes over 200 airlines, from the largest international airlines to small domestic carriers, and measured standards across more than 38 different items of airline front-line product and service. The study analyses customer satisfaction for the Airline Passenger Experience, across the Airport and Onboard environments – check-in to boarding, onboard seat comfort, cabin cleanliness, food, beverages, IFE and staff service.

via BSANNA News – BSANNA NEWS.

June 23, 2011
EU data rules out ‘too poor to join’ theory for Turkey

According to Wednesday’s data, GDP per capita in Turkey increased to 48 percent of the EU average (100) in 2010.

Data released by Eurostat, the EU’s official statistics office, on Wednesday showing the gross domestic product (GDP) per capita in 27 member countries and the six non-EU members found Turkey overtook the union’s Romania and Bulgaria in 2010, challenging the “too big and too poor” argument used by parties opposed to Turkey’s acceptance into the union.

The Eurostat figures cover the 27 member states, three European Free Trade Association (EFTA) countries, four candidate countries and three Western Balkan countries. GDP per capita expressed in purchasing power standards (PPS) in the member countries varied from 43 percent of the EU 27 average in the poorest member country Bulgaria to 283 percent of the average in the richest Luxembourg.

According to Wednesday’s data, GDP per capita in Turkey increased to 48 percent of the EU average (100) in 2010, up from 44 percent in 2008, leaving two of the members, Bulgaria and Romania, who had 43 and 45 percent, respectively, behind. Turkey’s economy grew by 8.9 percent in 2010 over the preceding year, faster than the EU average, marking a strong comeback from the 2009 global credit crunch.

If Turkey is accepted into the EU today, it would have a higher GDP per capita than Bulgaria, Romania, Latvia, Poland and Lithuania when these countries first entered the union. Bulgaria and Romania’s GDP per capita remained at 37 and 38 percent of the EU average when they entered the bloc in 2007. Latvia, Poland and Lithuania had 41 and 47 percent, respectively, when they became EU members in 2004.

Observers argue these figures are proof that Turkey’s economic growth cannot be an excuse for entry into the EU. Another critical fact is that countries like Latvia and Lithuania, which are currently only slightly above Turkey, with 52 and 58 percent of the EU’s average GDP per capita, are expected to see a relatively slower economic growth in the following five years.

Latvia’s economy contracted by 0.3 percent last year over 2009 while Lithuania suffered a stagnation of 1.3 percent in the same period. Comparing these two performances to Turkey’s 8.9 percent growth in the given period along with estimations for an average annual growth of 5 percent during the next five years, Turkey is likely to climb up the ladder and leave these two countries behind on the GDP per capita list.

The EU began accession talks with Turkey in 2005 but they have proceeded slowly, held up by the slow pace of reforms as well as opposition from France and Germany. Skepticism about the EU has risen in Turkey, where some people feel the 27-state bloc is unfairly hindering the majority Muslim but secular nation’s membership bid.

What opponents of Turkey’s accession complain most about is that its population is too poor and too big (at 73 million today and 80 million by 2015). If calculated in terms of purchasing power parity, Turkey is among the world’s top 16 economies, with a 2010 GDP of $735.8 billion. The country aspires to become one of the 10 largest economies by the year 2023.

Cihan news agency

June 23, 2011
gulfnews : In Theory: Turkey success could inspire Arab states

Turkey’s unique model of development reflects the major changes in the economic and political structure of its society

* By Mohammad Al Asoomi, Special to Gulf News

* Published: 00:00 June 23, 2011

* Gulf News

Turkey’s unique model of development reflects the major changes in the economic and political structure of its society. The country has for many years fluctuated between the advanced and developing worlds, as it has between liberal and military systems and its economic and political affairs.

In light of these changes, the question of how Turkey was able to attain such progress over the past decade is a valid one. Was it a result of the great challenge posed by the European Union? Or can this success be attributed to Turkish Prime Minister Recep Tayyip Erdogan, the so-called Ataturk of the 21st century?

I believe there are many reasons behind Turkey’s success, and the country has clearly become a model for Western and Eastern countries. In the West, there are many Eastern European countries, which are still suffering from economic problems despite the passing of 20 years since the fall of the Berlin Wall and the entry of most of these countries into the European Union.

In the East, there are problems such as unemployment, corruption and poor living standards, even in the two oil rich countries that lie on Turkey’s eastern borders.

Statistically, income per capita in Turkey increased two times from $7,000 (Dh25,711) in 2001 to $14,000 in 2011, while imports jumped from $36 billion in 2002 to $114 billion in 2010. Turkey achieved high growth rates in the past few years, and its growth is considered one of the world’s most dramatic.

Consumer price inflation

On the other hand, consumer price inflation fell drastically from 73 per cent in 2001 to 4 per cent this year, while financial and monetary reforms led to fixing the exchange rate of the Turkish lira against euro, which is equal to two liras on average. It is telling that previously the lira was almost worthless and was valued by the weight of the banknotes, not by its actual financial value.

The euro has become the second-most circulated currency in the world, and is the common traded currency in Turkey’s shops and restaurants just like the Turkish lira in efforts to establish Turkey as a euro country under the Maastricht Treaty. Apart from all these economic reforms, Turkey has also responded to most legislative demands by the EU as it brought about radical changes in its judicial system in the past 10 years.

It also adopted the proportional representation system for the first time during its parliamentary elections last week, giving the Kurdish minority more powers of self-government.

Political stability

As a result of its political and economic reforms, Turkey has effectively neutered the military institution, a once all-powerful military apparatus long seen as the guardian of secularism in the country. It has also managed to achieve political stability of significant importance to the economic growth in the country.

Therefore, Turkey succeeded in putting its train on EU tracks, regardless of the position of the right-wing alliance of French President Nicolas Sarkozy and German Chancellor Angela Merkel, because the interests of the EU countries will eventually determine Turkey’s membership in the EU.

When compared to the impact of the membership of some East European countries, which added an increased burden on the union, Turkey’s membership will give a big boost to the EU due to its powerful economy, political influence and strategic location, as well as its global strategic weight — a fact understood by Europe’s moderate politicians.

To be emulated

As for eastern countries, especially the Arabic states, the Turkish experience is seen as a role model of development to be emulated. This is because the conditions of many Arab countries are similar to those of Turkey before it undertook reforms that put it within the Group of 20 (G20), which is made up of 20 major economies and are responsible for steering the global economy and ensuring global economic stability.

Arab countries are now all set and more prepared in view of the so-called Arab Spring, which will never be a real spring without achieving economic success that affects people’s daily living issues, which are one of the key demands of the popular demonstrations in the Arab countries.

Indeed, economic progress in the next few years will be the main criterion to determine the success of the Arab Spring.

Dr Mohammad Al Asoomi is a UAE economic expert.

via gulfnews : In Theory: Turkey success could inspire Arab states.

June 23, 2011
Turkey’s Airlines Are Flying High

Business in booming for Turkey’s commercial aviation industry. Led by Turkish Airlines, the industry has already ordered some 5.3 billion dollars worth of new aircraft.

Turkish Airlines is one of Europe's fastest growing carriers

ISTANBUL – Turkey’s steady emergence as a global economic power is pushing its commercial aviation industry to new heights.

The country already has one of the fastest growing airline industries in the world. And over the next decade, Turkish Airlines and other local operators – including Pegasus, Sky and Saga – could add up to 300 new aircraft to their fleets, according to Aldo Besile, Boeing’s assistant director of European sales. The Turkish companies have already placed new orders for 57 new planes that together cost approximately 5.3 billion dollars.

“We predict that this healthy growth will continue,” said Besile. “As Boeing, we are happy to support the success of these Turkish companies’ corporate models with the highest quality products. We believe that the local airline market is right to be upbeat because this sector is really growing quickly in Turkey.”

The airline industry appears to be an upswing worldwide following the 10 billion-dollar hit it took during the global recession of 2009. At the recent International Air Transport Association’s (IATA) meeting in Singapore, airlines downgraded their combined projected growth figures for 2011 from 8.6 billion dollars to 4 billion dollars.

“Some of the external reasons for this decreased number were the costs of fuel, wars and disasters, and volcanic eruptions; all of which affect the airline industry,” said Besile. “However, Turkey continues to look very stable.”

The full article in Turkish was by Tolga Ozbek

Photo – Deanster1983

All rights reserved ©Worldcrunch – in partnership with Hürriyet

via Turkey’s Airlines Are Flying High – Worldcrunch – All News is Global.

June 22, 2011
Turkey’s bankers tap into Kurdish boom

ERBIL // At the first branch of the Turkish VakifBank in Iraq, the manager sits proudly in his office under a portrait of Mustafa Kemal Ataturk, the founder of modern Turkey.

But while Ataturk coveted the oil-rich territory of northern Iraq when he founded Turkey, the banker Yesur Meylani has not come to occupy land. In fact, he is a Kurd – one of more than 21,000 Turks who have moved to Erbil, many in the hope of tapping into the booming cross-border trade.

Yesur Meylani is the manager of VakifBank, a Turkish bank that is opening up branches in Iraq. Lee Hoagland / The National

Masrour Barzani, grandson of the man seen as the founder of the Kurdish national movement, says he wants to change ‘the mentality of people whom we live with to accept the Kurds as equals.’ Read article

With a long history of tension with Kurds in Turkey and a volatile Iraqi border, Turkey might not seem like the ideal business partner for the semi-autonomous Kurdistan region. But against all odds, the relationship is growing.

“The politics and the economics are feeding each other,” Mr Meylani said.

VakifBank, which has about 650 branches in Turkey, opened in Erbil in February “because of the good relations between Turkey and Kurdistan and also because of the volume of trade”, he said.

Turkey’s export volume to Iraq was US$7.5 billion (Dh27.5bn) in 2010, about 70 per cent of which was focused on Iraqi Kurdistan. Much of the trade is carried on trucks that squeeze through the only official border crossing between the two countries at Ibrahim Khalil – around 1,500 in each direction every day.

Aydin Selcen, the consul general at the Turkish consulate in Erbil, said: “The business volume that we have with this region, the Iraqi Kurdistan region, is equal to what we have for Syria, Lebanon, Jordan combined.” said When the consulate opened at one of Erbil’s new office blocks in March 2010, it became Turkey’s third consulate in Iraq.

Iraqi Kurdistan has 16 Turkish schools and two Turkish hospitals, and more than half of the foreign companies registered in the region – 741 in total – are from Turkey, Mr Selcen said. He said trade is “going to increase drastically” as Ankara pushes to reach its target of $25bn of trade annually with Iraq.

One of the main drivers of the economic relationship is Turkey’s thirst for energy to fuel its expanding economy, alongside its desire to diversify suppliers – Russia now provides about 70 per cent of the country’s natural gas.

“What they produce now in natural gas can satisfy one quarter of what we need. So if you add the undiscovered oil and gas resources to already existing ones, it’s for sure an interesting destination for our companies,” Mr Selcen said.

But while cross-border business is flourishing, the Kurdish militants known as the Kurdistan Workers’ Party, or the PKK, continue to damage relations. The group, which is designated as a terrorist organisation by several states including the US, has a stronghold in Iraq’s remote northern mountains. The guerrillas use the base to launch attacks on Turkey, and the Turks have bombed the rugged terrain, targeting the PKK.

Mr Selcen said counter-terrorism is one of the most important issues of co-operation between the two countries. He said there has been progress, “but this is such a sensitive issue that, of course, we are asking for more”.

Masrour Barzani, the chief of the Kurdistan Region Security Protection Agency, said the PKK operates in “harsh terrain” near the borders of Iraq, Iran and Turkey: “It’s difficult for Turkey to control it. It’s difficult for Iran to control it and it’s definitely difficult for us to control it.”

“We’ve been telling the Turks that we don’t think military solutions are the best solutions. We believe that peaceful solutions are going to last and that’s what we support and I think they understand that now.”

Mr Barzani said: “Trade and economic relations is helping the relationship, because before that there was more tension between the Kurdistan region and Turkey, with the Turks and the Kurds in general.”

Ako Shwani, a history professor at the University of Sulaymaniyah, said the Turks have a history of oppressing the Kurds, but they are changing tack to improve their human rights record in a bid to join the European Union.

Iraq has about 4.5 million to 6 million Kurds; Turkey has 14 million, according to the CIA World Factbook. Mr Shwani said the Turkish government fears that Iraqi Kurdistan’s success could inspire Turkish Kurds to push for independence.

“We have a parliament and a government, and the region’s greater degree of autonomy is not good in the Turkish mind,” he said.

Locals suspect that Turkey is sending its secret police into Iraqi Kurdistan to gather information, he said. “We don’t hate the Turkish people, we hate the Turkish regime.”

In the Souk al Kabeer, or the big market, at the foot of Erbil’s hulking citadel, merchants are taking advantage of the security in the region. The winding corridors teem with shops selling fabrics, perfumes and food; street hawkers polish shoes and sell pirated DVDs with titles such as The Fall of Baghdad.

“We’re happy to trade with Turkey,” said a Turkmen shop owner who gave his name as Mohammed. “Ten years ago, there were only locals here, but now there are people from everywhere and there’s very little poverty.”

Yousef Yaseen, a Kurdish graduate of Erbil University whose family owns five gold shops in the souk, agreed that locals are pleased to see Turks settling in the city.

Some of the Kurds do not support the PKK “troublemakers”, he said. “There are a lot of Turkish companies here. It’s a good thing.”

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via Full: Open for business: Turkey’s bankers tap into Kurdish boom – The National.

June 22, 2011