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INDUSTRIAL MARKET

18

SEE INDUSTRY

Machinery and metalworking industry in

Turkey

Machinery manufacturing continues to be among the

key growth drivers of the Turkish economy. This sector

plays an important role in the development of Turkey's

manufacturing industry mostly thanks to its capability to

provide intermediate goods and inputs to other key sec-

tors such as construction, energy, textiles, agriculture,

andmining. Themachinerymanufacturing sector in Tur-

key is known for being R&D intensive, with over 450,000

engineers graduating annually, while at the same time

the sector is infamous for creating high value. The local

sourcing accounts for approximately 85% of all inputs

at the production level.

The production value in the Turkish machinery in-

dustry was estimated to be around USD 18,8 million

in 2011 according to data by the Turkish Statistical

Institute TurkStat. The sector is dominated by con-

struction and mining machinery (16%), machinery

tooling (15%), air conditioners and ventilation (12%),

general purpose parts and equipment (6%), motors

and turbines (6%), industrial washing and drying (5%)

and pumps and compressors (5%).

Machinery exports

Turkey exports machinery to a fragmented set of

countries mainly in the EU, with Germany, England

and France having the top three cumulative export

amount for the past five years. In 2012, the country's

machinery export market was valued at USD 21 bil-

lion. Overall, the manufacturing industry of Turkey has

grown significantly since the economic crisis in 2009.

From 2007 to 2012, machinery exports grew by a

CAGR of 7%. The country's Investment Support and

Promotion Agency has revealed that the target export

volume of machinery is USD 35,1 billion by 2018 and

USD 100 billion by 2023.

Enterprises and employment

The number of enterprises in Turkey's machinery sec-

tor has not changed drastically, but the number of em-

ployees has overall increased. According to the gov-

erning authority of the Turkish social security system, in

2015 Turkey had 9319 active machinery manufactur-

ers employing more than 135 thousand people. These

manufacturers are mostly SMEs with a flexible working

style; 85% of the enterprises had less than 20 employ-

ees and only 39 companies had more than 250 em-

ployees. 40% of the companies have revenues be-

tween USD 0,66 million and 30 million, whereas 10% of

companies have more than USD 30 million revenues.

Machinery production is mostly concentrated in orga-

nized industrial zones and smaller scale industrial

zones. The production sites show a preference for ar-

eas with strong support structures, such as access to

rawmaterials, skilled workforce, transportation and end

markets. While the Marmara and Aegean regions are

dominating the machinery production, recently growth

rates in the other regions have surpassed them.

Foreign and domestic investments

The total foreign direct investment (FDI) flow into

Turkey increased from USD 8,5 billion in 2005 to USD

15,9 billion in 2011, which represents a 11% CAGR.

The sector's 64% p.a. growth in FDI inflow from 2005

to present day has made machinery manufacturing a

major growth driver for overall manufacturing FDI.

Both domestic and foreign investments are for-

eign in the country, with the latter contributing to

33% of investments and 21% of job creation for the

period 2012-2013. In 2013, out of 239 total invest-

ments in the machinery sector, 22 were made with

foreign capital. The top two investments in the

country for 2013 overall were made with foreign

capital - these were the TL 214 million investment

for solar cells and panels manufacturing given to

Solarvan Gunes Enerjisi ve Ekipmanlan Uretimi ve

Sanayi Ticaret, which also created 150 job posi-

tions; and the TL 38 million given to BSH Ev Aletler

Sanayi ve Ticaret for the modernization of home

appliance manufacturing.

For the previous year a total of 308 investments

were made in the sector. Out of those, 20 were

realized with foreign capital, including the top

three investments for the year overall. These were

the TL 195 million that Vestel Elektronik received

for the modernization of electronic devices manu-

facturing; the TL 118 million for Bosch Rexroth

Otomasyon to modernize and expand their prod-

uct portfolio; and the TL 90 million that Turk Trak-

tor ve Ziraat Makineleri received to manufacture

agriculture tractors.

Steel and metal forging capabilities

Turkey's Investment Support and Promotion Agen-

cy points out the strong steel, metal forging and cast-

ing industries as another strong supporter of the

country's machinery production. Steel production ca-

pacity reached 50,1 million tones in 2012. The large

amount of material produced conveniently provides

raw material to the machinery industry. The top four

metal forging companies in the country have a total

capacity of nearly 80 tons per year as of 2010. At the

same time, metal casting production has increased

by 36% p.a. since 2009 and reached nearly 1,4 mil-

lion tones in 2012; during that time, the industry was

composed of 962 casting facilities where 33 thou-

sand people were employed.

Machine tools production

The term "machine tools" describes a comprehen-

sive range of machinery used for cutting, removing or

forming metal for the production of components which

are later on assembled into engineering products. In

the most simple definition, machine tools can be de-

scribed as "machines that produce machines". Some

of the most significant subsectors of this industry in-

clude the manufacture of motor vehicles, aerospace

products and general industrial equipment. These sec-

tors, together with the subcontractors who supply such

products, compose the client base for machine tools.

Machine tools production is usually viewed as a stra-

tegic sector for each country - in 2013 alone, the top

28 countries' production of machine tools amounted

to 68,7 billion dollars.

In Turkey, machine tools production started in the

mid 60s with the manufacturing of lathes by private

companies. The process was initiated by first signing

licensing agreements with two world famous machine

tools manufacturers. Turkey underwent a series of

national industrialization efforts which made state in-

stitutions a driver of the machine tools industry expan-

sion. After a significant period of time the efforts gave

results and the first Turkish-made machine tool ap-

peared on the market in 1984. The next several years

had various machine tools (such as universal/turret

turning lathes, universal/vertical milling machines, cy-

lindrical/surface grinding machines, tool grinding ma-

chines, radial grinding machines etc.) in large scale

production within Turkey. This same period coincided

with the first introduction of CNC machining centers to

the world market. Industrial manufacturers from the

country and abroad all demanded these hi-tech, com-

puter controlled machine tools. According to Turkey's

Ministry of economy, the Turkish machine tools indus-

try has been able to meet this new demand since the

beginning of the 90s. The process of producing better,

innovative machine tools with modern technology has

been an ongoing effort among machine tools manu-

facturers in Turkey since. Currently, when it comes to

machine tools Turkey relies on Turkish-made produc-

tion almost entirely. Worldwide statistics for the year

Source: Pixabay