by editor | 15th August 2011 6:22 am
A total of 1,058 new foreign-owned companies were established in Turkey in the first quarter of this year. Turkey attracted $9.1 billion in FDI last year.
EU countries, currently under the strain of a worsening government-debt crisis, sent the highest share of total foreign direct investment (FDI) to Turkey in the first half of the year with $6.2 billion, a robust rise of 338.5 percent over the same months of 2010, data from the central bank have revealed.
The data arrives amid reports of global giant companies announcing plans to expand investments in the country. With its lucrative investment opportunities in and geographical proximity to fast-growing markets, Turkey appeals to more EU firms, who already make a large sum of their earnings from investments in the emerging markets, than it did in the past. A total of 1,058 new foreign-owned companies were established in Turkey in the first quarter of this year, while this number was 799 in the same quarter of last year. Turkey was the 27th most appealing destination for investment around the world, with $9.1 billion in FDI last year, a recent United Nations Conference on Trade and Development (UNCTAD) report showed. The latest data show this year’s FDI figure is likely to exceed 2010 numbers, helping the country climb higher on the list.
The central bank last week announced the results of its Balance of Payments Statistics report to find that the total value of net capital inflow to Turkey surged by an impressive 324 percent in the first half of the year over the same period of 2010 to reach $6.9 billion. European investors made $6.2 billion of the total FDI in Turkey in the given period. The total FDI in the January-June period was $2.96 billion higher than it was in the same six months of the preceding year.
The central bank data indicated that the FDI from surrounding markets and Middle Eastern countries to Turkey in the first half was 43.3 percent lower when compared to January-June of 2010 and remained at $76 million. The data arrive as a surprise, considering that Turkey has enjoyed a remarkable increase in FDI from Arab countries over the past few years.
In terms of the sectors’ share of the FDI in the first half, the lion’s share went to the service sector. Turkey’s service sector enjoyed $5.75 billion in FDI in the first half, representing a 585 percent rise over the same months of a year before. The total FDI in the service sector was only $840 million in January-June of 2010. The total value of real estate investments made by foreign entrepreneurs in Turkey in the first half was $1.24 billion, making it the second sector to attract the highest FDI. The total FDI in industrial activities in the first half reached $1.14 billion. This was a 48.5 percent increase in the given period. The FDI in the agriculture sector was $5 million, a relatively small share.
When the FDI inflow is analyzed on a country and regional basis, Spain led the EU countries, which brought the highest FDI to Turkey in the first half with $2.08 billion. Belgium came in second with $1.43 billion in FDI to Turkey while France was third with $816 of direct investment in the G-20 country in the first half. Turkey did not see any FDI from the African markets in the first half while FDI from the American continent reached $439 million with a 140 percent rise in the given period. FDI from Asian countries to Turkey saw a 329 percent increase in the first half over the same months of 2010 to reach $163 million.
‘Hyundai may open car engine production facility in Turkey’
Economy Minister Zafer Ça?layan said Turkey was a strong candidate for the S. Korean car-maker Hyundai to establish its new motor vehicle engine manufacturing factory, noting that the company was close to finalizing market research on the new investment.
Ça?layan was speaking to reporters in Seoul ahead of his departure from the country on Saturday. He said he met with Hyundai executives and invited the leading carmaker to open its new factory in Turkey. “We met with the CEO of Hyundai and asked him to open their factory in Turkey. He told us they had been carrying out feasibility studies for the factory,” Ça?layan said.
Ça?layan had a meeting with executives from 16 South Korean companies operating in the automotive, energy, construction, finance, mining, ship-building and retail sectors during his visit to Seoul.
“The total annual sales of these companies equal $252.7 billion. Hyundai, Samsung and Posco, all expected to make new investments in Turkey, were among these companies,” he said.
Making mention of projects to produce Turkey’s first domestic car, Ça?layan noted that an automobile to be manufactured in Turkey would enjoy great demand both in Turkey and in the surrounding markets. “Turkey is determined to produce its own automobile. We call on leading car-makers to work with us,” he said.
The minister added that a number of Korean firms were interested in investing in the Turkish energy sector while others wanted to join infrastructure projects.
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