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Rise of the Anatolian Tigers
27 August 2014
A group of small family businesses centres have become major international players that now present an opportunity for investors, finds Nicholas Clayton
Since the mid-2000s, the Turkish government has pushed hard for
local companies to expand their trade and investment ties with
non-EU neighbouring markets both as a means of ameliorating the
country’s high current account deficit and also to
position the country as a regional economic centre.
Turkey has steadily made in-roads into the CIS and Middle East
and north Africa markets by expanding exports and providing
know-how in the construction and manufacturing sectors, but
Turkish companies have only recently penetrated sub-Saharan
The Confederation of Businessmen and Industrialists of Turkey
(Tuskon) announced in 2011 that it had prioritised the
establishment of stronger business ties in new African markets,
and some progress has been made.
Turkey had just 12 embassies in Africa in 2003, but has since
expanded that to 34, with new posts for commercial councillors
created in 17 sub-Saharan states.
Turkey’s bilateral trade volume with Africa has
surged from $16bn in 2010 to $23.4bn last year, and Turkish
Airlines now flies to 39 destinations in Africa, adding its
latest — Cotonou, Benin — in June. Turkey
formally joined the African Development Bank last December and
Turkish companies have launched a series of ventures in Africa
over the past few years, although many of them remain at the
early stages of development.
In Uganda, for instance, a consortium of 11 Turkish companies
called the Turko Group announced earlier this year that it had
earmarked $20m for a series of ventures in agriculture,
healthcare and construction.
The Turkish government has also signalled its
interest in establishing a foothold in even the riskiest of
African markets. In 2011, Turkish Prime Minister Recep Tayyip
Erdogan became the first non-African head of state to visit the
Somali capital Mogadishu since the country descended into
conflict in 1991.
Turkey has since given hundreds of millions of dollars of aid
to Somalia, and has followed its humanitarian entry with
private investment. Last September, Turkish company Favori, a
part of the familyowned Kozuva conglomerate, took over the
management of Mogadishu’s Aden Adde International
Airport and pledged to invest in a $10m expansion. Turkish
construction firms have also been reportedly linked to a series
of infrastructure and retail projects under development in
Analysts say Turkish banks have been slow to follow the
country’s trailblazing construction and
manufacturing companies entering the African market. With
little presence on the continent, Turkish lenders have been
reticent to grant companies project finance or export credit
for investments there. This has created a potential opening for
liquid foreign investors seeking partnerships with Anatolian
Tigers on African ventures.
Gun says he is bullish on the opportunities that now exist for
foreign firms seeking to ride Anatolian Tigers’
aggressive globalisation, but added that misunderstandings in
negotiations are common. "You really have to try to understand
the culture that is unique to the environment," he says.
He adds that foreign investors should be aware that many of
these companies conduct their business in a way that is similar
to handling a family’s personal finances, and "not
all business transactions will be reflected in the books".
Although such discoveries can be disconcerting from a western
corporate point of view, they do not necessarily indicate
mismanagement, he adds.