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It’s a far cry from the problems Turkey faced back in 2001 when,close to economic collapse, the country agreed a toughrecovery program with the International Monetary Fund in returnfor substantial aid.

This backing was a turning point, according to SureyyaSerdengecti, governor of the Central Bank, as it focused theminds of the government and leading institutions on building asustainable, healthy economy. “The IMF agreements have, ofcourse, contributed to the positive economic situation,” he says,“but our progress has been aided by government policies andthe concerted efforts of other important public entities.”

Strict fiscal and monetary policies, which have reduced

runaway inflation to single figures and helped chip away at thehigh levels of foreign debt, have begun to bear fruit, saysSerdengecti, who also points to reform of the Central Bank in2001 as pivotal in putting the country on the right track.

“After the Central Bank gained independence, we had oneclear mission: to maintain price stability and tighten the creditswe extended to government,” he says.

Leading business people have also been buoyed by theendeavors of the Turkish government. Ferit Sahenk, chairmanof Dogus Group, a billion dollar conglomerate active in sectorsas diverse as finance, construction and tourism, says the Turkishgovernment’s commitment to the IMF framework gives reasonfor optimism.

“I have been very impressed by government efforts to do whatthey promised and stay behind the IMF program. It has surprisedmany people around the world,” he says.

The move towards EU membership—accession is expectedaround 2015—is also seen as a huge boon for the country’s 70million citizens. “I feel it will encourage foreign investors to lookat Turkey and the opportunities it offers,” Sahenk says.

Turkish Prime Minister Recep Tayyip Erdogan, leader of the

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Turkey has been in the news for all the rightreasons of late. Negotiations for entry intothe EU are underway and the country hasemerged as one of the most promisingdeveloping countries on the planet.

Turkey bounces back

www.globalbusiness.uk.com

Open for business

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F GB Turkey v8 25/11/05 19:16

Justice and Development Party (AK), has identified EU entry asa top priority. His reforms have paved the way for the openingof membership talks, which began in October 2005.

In line with EU requirements, Turkey has also introducedsubstantial human rights and social reforms. The penal codehas been overhauled and important public welfare programshave been introduced.

In health care, for example, Minister of Health, Recep Akdag,points out how reforms are taking place to make the publichealth care system more efficient and work along the lines ofthe British model of social security. “We are also looking forforeign investors to aid in purchasing equipment for radiotherapy,MR, tomography and laboratory services,” he says.

In the private sector, Turkey is drawing in foreign patients,mostly from Europe, who are frustrated by medical waitinglists in their own country. New facilities, such as the AnadoluMedical Center on the outskirts of Istanbul now offer top qualitymedical treatments at a fraction of Western European costs.

At another Turkish giant, Sabanci Holding, whose 64companies and 9 joint ventures last year created revenues ofU.S.$8.6 billion, chairperson and managing director GulerSabanci is optimistic about the benefits offered by EUmembership. “Fiscal discipline, sustained foreign exchange ratesand increasing exports have all been good for business andaccession talks will further help Turkey to achieve longer termpolitical and macroeconomic stability,” she says.

Sabanci also points to Turkey’s drive towards privatization asa major factor in attracting investors from abroad and foreigncompanies investigating joint venture opportunities.

Recent success stories are the privatization of Turk Telekom,where Saudi group Oger Telecom bought a 55% stake in thecompany for U.S.$6.55 billion–a record-breaking figure inprivatization revenue for the country. Last month, Tupras, thecountry’s largest oil refinery was also privatized to a consortiumled by Koc Holding and Royal Dutch Shell.

According to Rona Yircali, chairman of DEIK, the TurkishForeign Economic Relations Board, the privatization trend has come hand in hand with other initiatives that have openedthe Turkish economy, such as the lowering of restrictions on the movement of capital out of the country and the liberalizationof customs.

Turkey’s Custom Union agreement with the EU is also drawinginvestors in such areas as transport, communications, textiles,health care and tourism, Yircali says, “so they can produceservices and goods in Turkey and export them to EU countriesfree of duties.”

Yircali concedes that the government still needs to go furtherin reducing bureaucracy and taxation, but points to new lawsthat make it simple for foreign investors to establish companiesin Turkey and offer tax breaks to exporting companies as positivemoves. He is also keen to highlight Turkey’s improvingcommunications infrastructure and young, educated workforceas additional pluses for investors.

Turkey’s location is a key element in making the country anattractive investment destination, Yircali says. “Three hours byplane or four days by ship from Turkey, and one can reach aquarter of the world’s population. This includes mid-Asia, all ofEurope and all of the Middle East, a very good proportion ofAfrica and of Russia—that offers huge advantages tointernational companies.”

Banking and finance No industry in Turkey has undergone more change than thebanking and finance sector, where reform has been thecornerstone of the IMF’s aid program. According to Tevfik Bilgin,chairman of the Banking Regulatory and Supervisory Authority(BRSA), the government has spent over U.S.$47 billion cleaningup the banking sector, reducing the number of banks from 79to 44, taking on the bad loans of banks sold and pumping newcapital into the remaining state banks.

The BRSA is an independent government body, set up fiveyears ago to regulate Turkey’s banks. Freed from thebureaucracy of the state Treasury, the BRSA, says Bilgin, is farmore dynamic. Its ability to get things done was vital in turningaround the banking disaster of 2000-2002. “This organizationis very important as it supervises the total assets of the Turkishbanking system,” he says.

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Left: Rona Yircali, Chairman, DEIK (Foreign Economic Relations Board)Center: Tevfik Bilgin, Chairman, Banking Regulatory & Supervisory AuthorityRight: Sureyya Serdengecti, Governor, Central Bank of the Republic of Turkey

F GB Turkey v8 25/11/05 19:16

These assets amount to U.S.$230 billion, small in comparisonwith the economy it serves, with Turkish GNP currently runningat around U.S.$300 billion. “In many western countries, the sizeof the banking system is 2-3 times the size of GNP, which meansthere is a lot of potential for future growth,” says Bilgin.

This need for more capital has resulted in foreign investmentpouring into the banking sector and buying stakes in local banks.In addition, the forthcoming Mortgage Act, intended to makemortgages readily available to the 70% of the population whodo not own their home, should help build the banking systemas people look to the banks for mortgage credit.

According to Bilgin, there is also a slow trend towardsprivatization in the banking sector with many governmentadvisors working on the issue. A favorite for privatization in thenear-future is Halkbank, one of the biggest state-owned banks

in the country. Instrumental in providing micro-financing toTurkey’s many small businesses and artisans, the bank has alsobecome a major player in retail banking and technology bankingfollowing its integration with Pamubank last year.

The merger, says general manager Huseyin Aydin, wasintended to make the bank more able to vie in the increasinglycompetitive Turkish banking marketplace. He says: “The sectorhas grown stronger as more foreign banks are participating.”

Likewise, the BRSA’s Tevfik Bilgin says, the stabilization ofthe economy as a whole has also had a positive knock-on effecton the banking sector. As inflation and interest rates havedecreased, so have the government’s securities interest rates,forcing banks to go back to their main business of lending tocompanies and consumers instead of making quick profits byinvesting in treasury securities.

Further improvements are set to come with the passing of anew Banking Law. Bilgin says the law aims to bring greatertransparency and corporate governance to the sector whilstalso achieving legal harmonization with EU standards.

One bank that is thriving in this environment is Garanti, partof the Dogus Group and Turkey’s third largest private bankwith 322 branches, U.S.$8.2 billion dollars in deposits and 3.7million customers. According to Dogus’s chairman Ferit Sahenk,consolidation and investments over the past two years have ledto Garanti doubling its working assets and market shares incredit and deposits.

Another leading player in Turkey’s banking and financesector is Global Securities, an independent financial firmproviding securities brokerage, corporate finance advisory,

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The heart of Turkey’s financial district

F GB Turkey v8 25/11/05 19:16

research, financial analysis and asset management services toa wide-ranging international and domestic clientele.

Established in 1990, Global Securities became the firstbrokerage house to be listed on the Istanbul Stock Exchange.Since the mid-1990s, it has firmly entrenched its position as amajor force in IPOs and SPOs, offering approximately 60 Turkishcorporations to domestic retail and foreign institutional investorswith placements valued at over U.S.$2.7 billion.

“Global Securities has grown in tandem with the Turkish capitalmarkets. We’ve played a leading role in both private sectorenterprise growth and the privatization of Turkish stateorganizations right from the beginning,” says chief executiveofficer Mert Engindeniz.

Global Securities has provided advisory services forprivatizations in numerous sectors including steel, refining,telecommunications, tobacco, petroleum products distribution,retail and airport ground services.The company has alsobenefited from Turkey’s increasingly stable economy, according

to director of economic research, Dr. Cem Akyurek. He says:“Turkey is currently going through an important transformation.We have an independent Central Bank that has gained a lot ofcredibility, outperformed its targets in the last three years andhelped keep the economy stable.”

Over the past 15 years, the company has also become anestablished intermediary through which foreign investmenthas entered Turkey. “In that time, a significant amount of capitalhas flowed into the country through us,” says Engindeniz.

According to Engindeniz, Global Securities’ commitment toenabling foreign businesses to execute transactions efficientlyand dependably on the Istanbul Stock Exchange means that itis highly trusted by foreign corporate investors.

“Our job has been not just to highlight opportunities to potential foreign investors, but to familiarize them with thebusiness landscape in Turkey and outline the risks involved,”says Engindeniz.

He says Global Securities has adopted a wide service modelto ensure that transactions occur. This involves coordinating allactivities with the various stakeholders, regulators and third partyadvisors. Engindeniz points to the fact that Global Securities’consultants take only a small retainer, with the majority of theirpayment dependent on a success fee, as evidence that thecompany has its clients’ interests at heart.

“We don’t just write an evaluation report, take our fee andleave,” he says. “We hold our client’s hand all the way to the endof the project and maintain contact beyond that. Our interest isin nurturing long-term business relationships as opposed tonotching up one-off deals. Satisfied clients are repeat clients.”


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Left: Dr. Candan Karlitekin, Chairman, Turkish AirlinesCenter: Jonathan Soper, GM, Ceylan InterContinental Istanbul

Right: Mert Engindeniz, CEO, Global Securities

Your one-stop investment shop in

TURKEYGlobal Menkul Degerler A.S. (Global Securities), establishedin 1990, continues to build on its position as a premierpresence in the Turkish capital markets, further expandingthe comprehensive range of products and services availableto its domestic and international investor clientele.

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F GB Turkey v8 25/11/05 19:16

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Turkey made the headlines in 2001

when it suffered an economic

crisis. Now it is in the news again,

as it enjoys a climate of rapid

economic growth, low inflation

and political stability. What

factors have allowed Turkey such

a turnaround?

First of all, any crisis has to be managedand Turkey has shown it can do that, fromboth government and private sectorperspectives. After the 2001 crisis,Turkey realized the need to be more clearfor investors all around the world. It wasimportant not just to have a “quick fix” forthe economy, but a long-term plan,whereby Turkey could enjoy sustainablegrowth, prosperity and more confidencefrom international and domestic markets.

In my opinion, this has been madepossible by two things: success in theIMF program, which is like an insurancepolicy for investors, and our effort tojoin the EU. This shows Turkey really ison the path of change.

In terms of investment, there are anumber of untapped opportunities. Thegovernment is now dealing withprivatization, lowering interest rates andattracting foreign direct investment (FDI).It is easier for investors to come to Turkeynow, because the internal picture is veryclear and transparent.

What are are the key challenges

that need to be addressed in order

to consolidate the macroeconomic

success track record of Turkey?

The question in every investor’s mindis: “will these countries continue to dowhat they have been doing?” Turkey isreaping the benefits of privatization andFDI, and that is going to be the trend forcoming years. One challenge we facewith exports is the European economy.The parity of the Euro - Dollar currencyis very important for us. Oil prices areimportant too. Of course we have anelection coming up in 2007, but I do notexpect Turkey to change direction. I donot see any question marks over Turkey.

What are the key strategic

advantages that foreign investors

can gain when partnering with

Turkish companies?

Turkish investors or domestic partnersknow their country very well, so any risksor opportunities associated with amarketplace can always be brought tothe board. They also know the peoplethey are working with and understand theTurkish mentality and its customer base.

Turkey is also strategically located, soit should never be looked at as a stand-alone market. The region is veryimportant geographically and culturally,and we have successful relationshipswith many countries. Turkey cantherefore be used as a hub.

A large proportion of the population is under the age of 25, so there is huge potential in human resources.Almost everyone in Turkey speaksEnglish. The young people are especiallyinternationally minded.

How did Dogus Holding become

a symbol of Turkish enterprise?

Dogus is not a new company in Turkey.It was formed about 55 years ago. Wehave always managed to keep on top ofthe changing environment.

Adapting to change, seeing the realitiesand shaping our business accordingly isa way of life for our group. Our founder,my father, Mr. Sahenk, always shaped hisportfolio according to the trends.

After the 2001 crisis, we sold somebusinesses, moved out of certain sectorsand integrated our back offices to createefficiency. We looked at the culture of thegroup, the top management, what we aregood at and decided two things:

1) that we would only expand in thesectors we know and those we cancompete in on a global scale, and

2) that all our companies should createtheir own cashflow and a value-addedapproach to our group’s overall value.

We have an “arms-length” relationshipwith our businesses. Professionalism isthe most important thing in thisorganization.

What sectors are you currently

involved with?

We select the sectors that are growingnot only in Turkey, but also on a globalscale. We are involved with financialservices, automotive, tourism,construction and media. Tourism andconstruction will grow for at least another15-20 years, especially with the newmortgage laws that are being introduced,so good quality but affordable housingprojects will really take off.

The key sectors for us, however, will be banking and the automotiveindustry. We expect a lot of growth inconsumer banking, insurance andleasing, as well as investment advice andasset management.

As a businessman and an oldinvestment banker, I am very excitedabout Turkey’s future. Perceptions havechanged. People can see the energy, thegrowth potential and the quality of itspeople. For an investor who wants togrow in Turkey as a fixed investment,working with Turkish people is wonderful.The potential is very much there.

Dogus Group has an impressive portfolio spanning five sectors. Here, the Group’schairman, Ferit Sahenk, invites foreign companies to come take a closer look.

Dogus Group – A Turkish success story

Dogus GroupDogus Grubu Binalari, Buyukdere Cad. No. 65 Maslak 34398, Istanbul, Turkey

Tel: +90 212 335 3101 Fax: +90 212 335 3090 www.dogusgroup.com.tr

Ferit Sahenk - Chairman, Dogus Group

F GB Turkey v8 25/11/05 19:16



Intercity is the first, the largest and the fastest-growing fleetrental (operational leasing) company in Turkey with 10,000 carsand a 20% market share in the industry. The company has atotal asset size of U.S.$270 million, including its contractreceivables portfolio, and an annual turnover of U.S.$40 millionfor 2005. The company is growing faster than the industry,leveraging its lower cost base due to significant economies ofscale in financing, operations and vehicle purchasing. Intercityhas a very strong equity base of U.S.$40 million and thereforethe potential, and the ability, to increase its size and its leverage.

Established in October 1991 by young Turkish entrepreneurVural Ak, Intercity began providing long-term fleet rental servicesto corporations in 1994 and is the oldest company in theindustry. Having the “first-mover” advantage means the companyenjoys premium quality in its client portfolio—almost completelymade up of reputable multinationals and blue-chip Turkishcorporations. Multinational clients include Citibank, Coca-Cola,HSBC, Tesco, Ericsson, Philips, Siemens, Merloni and Lilly.

Intercity’s business model is a combination of a car serviceoperation and a leasing business. Regardless of brand or make,Intercity buys brand new vehicles from suppliers in line withcustomer demand and leases them over a 1-4 year timeframe.Clients receive one bill per month that includes both the rentalfee and services, similar to the “closed book” system in Western

Europe. The service includes fullmaintenance, insurance and tirereplacement. Clients also have theluxury of having their car picked up formaintenance and repair, from whereverthey are within Turkey and are offereda replacement vehicle of the samecategory upon request.

Intercity provides 24/7 roadsideassistance and maintenance throughthree fully owned service centers in

Istanbul, Izmir and Ankara and affiliated service centersacross the country. Its service facilities in Istanbul, Izmir andAnkara have an aggregate floor space of 35,000m2 and candeal with up to 350 cars per day—which sets the company apartfrom its competitors. Given the inadequate service chainpenetration in Turkey at present, the proprietary service networkis a key sales and service tool for Intercity. As well as being fullyequipped with up-to-the-minute devices and an expert staff of150 people, all workshops function in compliance with the WorldBank’s environmental safety standards.

Intercity is owned by Vural Ak, who has themajority, and a consortium of financialinvestors comprising Advent InternationalCorporation, Turkven Private Equity, DEG

(German bilateral development agency), FMO (Dutch bilateraldevelopment agency) and the World Bank’s InternationalFinance Corporation. These investors have provided more thanU.S.$140 million in equity and debt (with 5-7 year maturity) asof December 2005. Intercity is the only player in the market tohave attracted foreign commercial lenders, and has loweredcosts substantially, which has speeded up growth whilesimultaneously building an institution committed to quality.

Intercity is the only fleet rental company to be merited by theBritish Standards Institute (BSI) with the ISO 9001 QualityManagement Certificate for its procedures and dedication topursuing premium service quality. This year, the company waselected as the most admired “Superbrand” in its field, in aconsumer survey conducted by GFK Superbrands, a market-research company. This clearly shows the special positioningthe company has in the eyes of the public.

Turkey has over 7 million vehicles in circulation and over 1.5million are in corporate fleets. Half a million cars within thecorporate fleet sub-segment use automatic fuel billing servicesfrom major gas retail chains such as BP, Shell and Total. Asthese figures suggest, Turkey’s fleet rental market is still in itsinfancy, and 500,000 is a conservative estimate for thecurrent number of credit-worthy private sector corporatecustomers in Turkey. The long-term rental car fleet in Turkeycurrently consists of only 50,000 cars, at 10% penetration.

The latest news indicates that, starting next year, thegovernment and public sector companies will lease their fleetsby operational leasing, which would mean another 180,000potential vehicles will be available, indicating on aggregate aten-fold growth opportunity in the market.

Vural Ak says: “By possessing an impeccable, service-orientedmindset focused on its customers, Intercityhas differentiated itself significantly fromthe other players in the market and offers a“one-stop solution” for all its customers.”

The one and only fleet management company that thinks, works and grows with aservice-oriented approach: INTERCITY Rent a Car!

Shaping up an industry

InterCity Rent a CarDudullu Organize Sanayi Bölgesi, 3. Cadde, G-131 Sok. No: 26, 34775 Yukari Dudullu, Istanbul, Turkey

Tel: +90 (0216) 314 09 50 pbx Fax: +90 (0216) 314 07 66 [email protected]

Intercity – the first and largest fleet rental operation in Turkey

Vural Ak, GMIntercity Rent a Car

F GB Turkey v8 25/11/05 19:16

A measure of the growing number ofmultinationals establishing themselvesin Turkey can be taken from the numberof fleet cars being leased. According toVural Ak, general manager of IntercityRent a Car, which provides vehicles fororganizations such as Citibank, Coca-Cola and HSBC, the number of cars itleases has risen ten-fold in four years,to a current total of 10,000 vehicles.

The transport sector in general is ofgreat importance to Turkey, accounting for 13% of the country’sGNP, according to Binali Yildirim, Minister of Transportation andCommunications. “Our position between east and westmakes us a crucial bridge for the transportation of goods andcommodities between the two,” he says.

The ministry is currently overseeing a number of major projects:most notably the U.S.$3.16 billion Eastern Black Sea CoastalHighway, which will eventually extend 435 miles, and theU.S.$4.1billion Marmaray Project to upgrade the commuter railsystem in Istanbul.

According to Yildirim, the government is devoted toencouraging investment into this sector, with many of Turkey’scities providing incentives for foreign investors, such as taxexemptions and low production costs.

The liberalization of the telecoms sector has also broughtopportunities, says Yildirim, as has the huge unsatisfied demandfor broadband Internet access and satellite and cable TV thatexists in Turkey today. Turkcell, the leading mobile phoneoperator, is one of the top ten in Europe and the recentprivatization of Turk Telecom was applauded by the internationalbusiness community as it brought record-breaking revenues forthe government.

As well as road and rail transport, Turkey also has well-established sea haulage and air travel sectors. A major player

in the transportation and distribution area is Arkas Holding, oneof Turkey’s oldest shipping companies.

Established in 1902, the company was soon transportinggoods throughout the world, and today its maritimetransportation and agency services remain the mainstay of the business, with the Group now boasting a fleet of 17 container vessels.

The company acts as an agent for a number of the world’smajor carriers including: Senator Lines, Tarros International, YangMing Line, ACL, Grimaldi and Hanjin Shipping and also operatesa shipping line called EMES.

Arkas is also involved in a number of joint ventures withcontainer shipping companies such as MSC and Hapag-Lloyd,dispatching weekly services to destinations as far afield asNorthern Europe, the Far East and South America.

In land and air transportation Arkas has a joint venture withSchenker. The partnerships with MSC (Mediterranean ShippingCompany) and Schenker have been established for over adecade, evidence, says Arkas’s chairman, Lucien Arkas, thatthe Group is interested in partnering with companies for thelong-term. “You have to take a long-term view when enteringinto joint ventures,” he says.

“Good relations are maintained by ensuring a win-win situationis established, where both parties are satisfied and are makingprofits,” he adds.

Lucien Arkas, who has been on the board of the family-runbusiness for 41 years, says the Turkish government’sprivatization initiatives, and its efforts in developing the country’sinfrastructure, have created an environment where the businesshas been able to thrive. “This government is taking drastic,business-minded decisions and opening a lot of doors,” he says.

“Turkey is ideally placed to become a major distribution centerbut you need the infrastructure—the ports, warehouses andgeneral facilities—to cope with demand, otherwise theopportunities will not materialize.”



Turkey’s dynamic transport, communications,construction and real estate sectors areyielding some exciting openings. But not atthe expense of other industries. The countryremains a textile manufacturing powerhouseand is still a magnet for tourists.

A country full ofpromise and newpossibilities

The Stock Exchange in Istanbul

Binali Yildirim, Minister of Transportation

& Communications

F GB Turkey v8 25/11/05 19:16

Over the years, Arkas has diversified itsoperations into related fields and nowoperates 37 companies in such areas asshipping, ports, air and landtransportation and logistics, dataprocessing, insurance and rail and landdistribution services—the group owns350 trucks.

Employing 3,500 people, Arkas alsohas an international presence, withoffices in Greece, Ukraine, Bulgaria,Romania, Algeria as well as in Spain,where operations were launched inSeptember of this year.

It also operates the biggest private portin Turkey, located in Istanbul, togetherwith two other terminals in the city. It iscurrently in the process of bidding for amajor terminal in Izmir, on the west coast.

Lucien Arkas says the port couldbecome a major trading hub. “Withinvestment of a few hundred milliondollars, we could triple the currentcapacity of the harbor,” he says.

“It might take five to six years tocomplete, but it will bring in morebusiness and facilities and in generalbecome a trade center. Theseinvestments will of course pay off in thelong-term.”

In the airline sector, the main operatoris Turkish Airlines Inc. (THY). The carriercurrently transports over 12 millionpassengers a year on direct flights to atotal of 107 destinations, 28 at home and79 abroad, and recently unveiled plans

to add 23 new international destinationsfrom its Istanbul base next year.

The new routes include Middle Eastdestinations: Abu Dhabi, the Qataricapital Doha, Muscat in Oman, Tabriz inIran, Khartoum in Sudan, and the Yemenicapital Sana’a. It also plans to start

flights to Osaka in Japan and the Indiancity of Mumbai.

According to Dr. Candan Karlitekin,THY’s chairman, the expansion plansreflect the success of Turkish foreignpolicy in opening trade links with manydestinations and creating demand frombusiness travellers. “The airline businessin Turkey is really booming at themoment,” he says.

Karlitekin, who has worked in differentsectors in Turkey, says the airline hasanother 59 new aircraft on order, acombination of Boeing 737-800s andAirbus A330s, A320s and A321s, the first of which should start operating inearly 2006. “By the end of 2008, we’llhave 120 active aircraft,” he says. “Weneed this amount to cope with economicdevelopments.”

Such is the current success of THY, thatwhen it launched a public offering lastyear, eventually generating U.S.$199million, demand was five times

oversubscribed for the 23% of companyshares on offer. The government hasannounced plans to sell another stakein the airline before the end of the yearthrough the Turkish PrivatizationAdministration, but wants to retain a50.3% majority shareholding at present.

“We know the government wants toprivatize more of THY as time goes onbut they are very mindful about the paceof privatization,” says Karlitekin.

Apparel and textilesFor business and tourist travelers alike, avisit to Turkey is not complete unless theycome away with a souvenir oriental rug.It is one of the first images that come tomind when you think about Turkey and isa symbol of the rich tradition of textilemanufacturing that exists in the country.

In more modern times, Turkey has beena textile manufacturing powerhouseand a leading production center for manyof the world’s most prestigious brandssuch as Calvin Klein, Tommy Hilfiger,Ralph Lauren and Gucci.

According to Halit Narin, chairman ofthe Turkish Textile Employers’Association, Turkey’s textile industry hasresponded well to intense competition

from low cost manufacturers. He says:“We still produce four million tons of fibera year, more than China and India.”

At the same time, the industry is goingthrough some important structuralchanges, as it makes the transition frombeing solely a manufacturer for westernbrands to creating its own brands, sellingand marketing them to the world, andmoving into the retail part of the business.“It is a great example of the industry’sability to constantly adapt,” says Narin.

At the vanguard of this trend is Network,one of the leading clothing brands inTurkey. A subsidiary of the Altinyildizgroup, which also owns the country’slargest department store chain, Boyner,Network has a total of 45 shops, themajority in Turkey but outlets also exist inBelgium, Prague, Frankfurt and Dubai.Moves to expand into Lebanon andSaudi Arabia are taking shape.

Network’s designs are described by thecompany’s general manager, Mehmet



By the end of 2008, we’ll have 120 active aircraft. Weneed this amount to cope with economic developments.

Dr Candan Karlitekin, Chairman, Turkish Airlines Inc. “ ”

Koton, one of Turkey’s most exciting clothing brands, growing fast in Turkey and abroadwww.koton.com.tr

F GB Turkey v8 25/11/05 19:16



Hotic, as “upmarket products for thebusinesswoman with an active life.”

Network, he says, “is neither a luxurybrand nor a regular, casual brand. Weproduce high quality products, able tomeet the high expectations of acosmopolitan, style-conscious woman.”

Prior to creating its own fashions, thecompany produced clothing for westernbrands such as Hugo Boss and BananaRepublic, and while that remains a crucialelement to the business, according toHotic, the firm’s senior managementrealized it had to adapt to cope with thechallenge from countries like China.

He says: “We knew that if we were asimple textile company, we would facefierce competition from everywhere in theworld, but if we could add an extra valueto our company, we would be in a morepowerful position.”

With a heritage of having produced topstyles for respected brands, the step frommanufacturing into design and retail wasa natural one, says Hotic.

“For years we have produced for themand learned from their vision and workculture. We have put that acquired know-how, in terms of technology and clothingdesign, at the center of our ownoperations,” he says.

The Network brand was launched inSeptember 1999, with the “vision of howinternational women would look in thenew millennium,” according to Hotic.

The company employs a franchisingsystem, working with establishedcompanies to open and promote newstores in fresh locations. It is currentlylooking for strong foreign partners withretail experience to help them expandtheir brand globally but especially in theUnited States. “We plan to take our brandto the U.S. but we cannot simply open ashop,” says Hotic. “We must first makebrand investments to ensure there isstrong brand recognition and properbrand management.”

According to Hotic, the company offersthe advantage of having a well-established brand with integratedproduction facilities, and he feels there ishuge potential for growth in retailing overthe next decade.

Network is also eager to attract stockinvestors, interested in investing long-term in the business. The company islisted on the Istanbul Stock Exchangeand their stock price has been growingat an impressive average annual rate of30% over the past few years.

“Our business has the potential to growto three times its current size,” says Hotic.“In Turkey, we are very strong, we havea big market share and we are profitable.These characteristics are very attractivefor investors.”

Another company seeking investors isthe Orka Group. Founded in 1986 inIstanbul, Orka is a globally operatingmenswear company offering a broadrange of fashion and accessories. Its

three brands—Damat, Tween and ADV—are globally recognized lifestyle brandsthat are both designed and producedwithin Turkey.

Orka’s chairman, Suleyman Orakcioglusays: “The strength of these brands is thekey to our success. They were createdto bridge the gap between the high streetand the international designer brands, tooffer an exclusive product range atcompetitive prices. Our collections caterfor every occasion, appealing to the mostvaried target groups and satisfying themost exacting demands.”

Orka Group is a pioneer in men’sfashion clothing with new and innovativedesigns. Constant product improvementand enhancement of both design andquality are the group’s prime focus andis two of the reasons for the exclusivity ofthe company’s ready-made garmentsand dress materials.

On the strength of its experience andsuccess, Orka Group is currently

Left: Atalay Sahinoglu, Chairman, Nuh CimentoRight: Lucien Arkas, Chairman, Arkas Holding S.A.

Orka Group, globally recognised mens designer fashion from Istanbul. www.damat.com.tr

Süleyman Seba Cad. No: 48 BJK Plaza

A Blok B2-06 Akaretler - Besiktas 34357

Istanbul, Turkey

Tel: +90 212 327 40 00

Fax: +90 212 327 34 66

[email protected]

www.tgd.com.tr

Sögütözü Mahallesi 2. Street No: 63, 06520 Sögütözü, Ankara, Turkey

Tel: +90 312 289 20 11 / 312 289 47 16-17www.halkbank.com.tr

Mr. Hüseyin AydinGeneral Manager

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extending its geographical coverage to a number of highlypromising markets outside Turkey, thereby boosting the group’sprospects for growth.

As Orakcioglu says: “Europe is the priority target market forall the brand companies. Through this expansion, our brandshave already gained loyal customers in more than 22 countriesworldwide. We intend to strengthen our presence in existingmarkets as well as to seize new opportunities and expandbusiness worldwide.”

The vitality of the Turkish textile sector is also reflected in thesuccess of new companies entering the sector such as Koton,which produces a trendy range of clothes. In just seven years,the company has gone from opening its first store to havingaround 100 outlets today, the majority of which were openedin the last three years.

Set to launch its first international store in Germany in 2006,CEO Yilmaz Yilmaz says the strategy is to expand into additionalEuropean countries with investment partners to whom they cangive a master franchise of their stores. “Koton has had incrediblegrowth,” says Yilmaz. “If we continue at this rate, we hope tobe one of the main players in the textile sector in the region withinfive years.”

Construction and Real EstateAnother area seeing real benefits from Turkey’s economic growthis the construction and real estate sector. With the economyexpanding so rapidly, materials are required for largeinfrastructure projects, while the demand for new housing, whichhas been prompted by the forthcoming Mortgage Act, hascreated expectations in the industry that a boom is just aroundthe corner.

At Nuh Cimento Sanayi A.S., one of Turkey’s and Europe’slargest cement producers, chairman and general coordinatorAtalay Sahinoglu says the company has doubled its profitsand capacity in the past two years and now annually producesover four million tons of clinker, the main component of cement.

The company is part of a larger group called Nuh Group, whichalso has interests in energy production and shipping.

A former president of Istanbul’s Chamber of Commerce,Sahinoglu says Nuh Cimento exports 60% of its capacity, mainlyto Spain, Italy and Holland. The company has established a jointventure in Spain and plans to expand aggressively abroad withsimilar partnerships in other European and developing markets.“There is huge demand from the Middle East for cement and

we are studying various projects, such as setting up a factoryin Iraq. Eastern Europe also offers a lot of potential,” he says.

In the real estate sector, Turkey’s largest real estate broker,Turyap, is also seeking investors, this time for expansion in thedomestic market.

The company has a network of 283 franchised officesthroughout Turkey and offers evaluation services to individualsand banks in the residential, commercial and industrial property sectors.

According to general manager Mehmet Onur Saribay, the newMortgage Law will stimulate business on a huge scale, offeringopportunities to foreign investors.“Even now, we prepare ahundred reports per day. That means a hundred people are inthe process of buying a house,” he says. “When the new lawtakes hold we will need 3,000 more experts.”

Saribay says the company is looking to partner with companieswho can help manage the upturn in the amount of appraisalsrequired and is already in talks with a number of U.S. firms.

“Only a few years ago, nobody wanted to come to Turkey.Now, with the improvements, everybody wants to do businesshere,” he says.

Tourism People aren’t just coming to Turkey to do business, however.Tourism is also vital to the country’s economy, and continuesto grow as more holidaymakers hear about the wide range ofattractions the destination offers. The World Travel and TourismCouncil expects Turkey’s tourism industry to grow by 3.9% perannum, in real terms, until 2015.

The Turkish people have an unrivaled reputation for hospitality,the cuisine is spectacular, the coastline beautiful, and manyTurkish cities are dotted with grand mosques and bazaars.

None more so than Istanbul, home to the glorious BlueMosque and a city that bridges the magnificent Bosphorus River,one half of its population in Asia, the other in Europe.

One of Istanbul’s most prestigious hotels is the five-star CeylanInterContinental Istanbul, located in the center, close to TaksimSquare. Its elegant comfort, outstanding service and broadchoice of cuisine and facilities recently prompted InterContinentalto bestow its Quality Excellence award on the property. “Wehave a very good team and we try to provide a personal servicehere,” says the hotel’s general manager, Jonathan Soper.“Awards are always subjective, but it’s good to be recognizedfor the high degree of satisfaction our guests feel.”

Soper says Istanbul’s attraction as a destination of greathistorical and cultural importance has been boosted by recenthigh-profile events held in the city. Last year’s Eurovison SongContest took place there, as did a major NATO summit.The hotel hosted 13 delegations for the NATO event and isincreasingly being used for conferences and events forprofessional organizations in industries as diverse as architectureand pharmaceuticals.

Combining amazing sights and sounds with a location that ishelping the city grow rapidly as a trading hub, visitors to Istanbul,Soper says, often mix business with pleasure.

“Despite being a modern city, Istanbul is still seen as an exoticdestination,” he says. “There is an Eastern oriental appeal thatmeans when business people come here, they always seemto find an excuse to stay a little longer.”



Turkey has a rich cultural diversity

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Health care in Turkey has improvedin quality and service, thanks to the opening of the Anadolu MedicalCenter this year. The Center wasestablished by the Anadolu Group,which has invested U.S. $120 millionin the not-for-profit institution tobecome a center of medicalexcellence, for the region and for all Europe.

After just six months, the AnadoluMedical Center is already proving itself to be a key player inhealth care. As Dr. Murat Dayanıklı, CEO states: “Our center ofexcellence programs in oncology, cardiac care, women’s healthand neurosciences are already recognized as the leadingprograms in Turkey and the entire region.

“We are not resting on our laurels, however, and expect tobecome recognized as the premier hospital in Europe, attractingmore patients from Europe, the Middle East and theCommonwealth of Independent States (CIS), in the fields ofoncology, cardiovascular surgery, IVF, neurology, plastic andreconstructive surgery, orthopedics and executive check-ups.”

Working in a strategic partnership with Johns Hopkins, the leading teaching facility and hospital in the United States,Anadolu Medical Center is setting enviable standards through a combination of research, education and superiorhealth care delivery.

“In the coming three to five years, you will see us establishedas one of the leading institutions in the region,” Dayanıklısays confidently. “This is a strategic goal and already, byachieving our short term objectives, we have created a verystrong platform for further achievements.”

The statistics bear this out. With 120 full-time physicians—35% of them U.S. medical board certified—covering almostevery specialty and sub-specialty, and a total roster of 200physicians, Anadolu Medical Center has attracted top qualityhuman resources. It is also working with the Johns Hopkins’School of Nursing and has created a program to furtherimprove nursing quality.

The Anadolu Medical Center has heavilyinvested in infrastructure: at 45,000m2, the Centerhas a luxurious 215m2 per bed—the highest ratioin the region. Technology and equipmentinvestment is high on the agenda.

Anadolu is one of only four health centers inEurope to have the Cyberknife—a sophisticatedradiotherapy instrument—and the only one in theMiddle East and the CIS. The Center is theselected teaching facility in Europe for its use.

International appealThis burgeoning reputation for excellent medical care iscombined with an appealing coastal location, with thechance to explore Turkey and sample its famous hospitality,so it is no surprise patients flock here from outside the region.

To facilitate demand, the hospital provides an InternationalPatient Services Department, which offers a comprehensiveservice for international patients, providing medical advice andtreatment tailored to their specific needs. The Center is locatedjust 10 minutes away from Sabiha Gokcen International Airportin Istanbul. This is just one of many facilities which sets theAnadolu Medical Center apart from the other institutions.

Dayanıklı is justly proud of the services offered to internationalpatients: “With multi-lingual translation services and staffoperating 24/7, cost estimates, lodging and transportarrangements, as well as second opinion services viatelemedicine, we are committed to providing a five-star servicefor all our international patients,” he says.

Health care by designAnadolu Medical Center was designed with patient care inmind. The architects responsible concentrated on the premiseof privacy for inpatients, outpatients and guests. The Centerfeatures individual intensive care rooms, VIP rooms and a

15-bed same-day surgery unit next to theoperating rooms. Dayanıklı says: “Turkey is acountry renowned for its hospitality and wecomplement this with a high quality, low costservice in a beautiful setting, with a guaranteeof satisfaction.”

With so much achieved in such a short periodof time, it seems the Anadolu Medical Center isalready well on its way to becoming the JohnsHopkins of Europe.

Dr. Murat DayanıklıCEO

The Anadolu Group’s new medical center plans to become the “Johns Hopkins of Europe” with its five-star health care provision.

A healthy investment

Anadolu Medical CenterInternational Patient Services Department: +90 262 678 5307

24-Hour Call Center: +90 216 444 4276 www.anadolusaglik.org

The Anadolu Medical Center —State-of-the-art health care

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F GB Turkey v8 25/11/05 19:17

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