Turkey's Fastener Industry | FASTENER EURASIA MAGAZINE
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TURKEY, THE RISING MARKET IN FASTENERS

TURKISH ECONOMY

The Turkish economy, from 2003 to 2018, has posted record growth and climbed from 18th place to 13th globally. Over the past 16 years, Turkey has put in a noteworthy performance by increasing the size of its overall economy from USD 236 billion in 2002 to USD 784 billion in 2018. Turkey is the 11th largest economy in terms of GDP per capita among countries with population over 50 million.

Turkey is a natural bridge between both the East-West and the North-South axes, thus creating an efficient and cost-effective hub to major markets. Multinationals are increasingly choosing Turkey as a preferred hub for manufacturing, exports, as well as management. Turkey offers abundant opportunities in a wide variety of sectors where it has a competitive edge.

HOUSEHOLD APPLIANCES, PARTS AND COMPONENTS

The Turkish household appliances sector started production as an assembly industry in the 1950s. The first product was manufactured in 1955 and the first Turkish-made refrigerator was on the market in 1960. The Turkish household appliances industry has achieved tremendous growth since then. Having started out with companies working under licensing agreements and then passed over to know-how usage, the sector today has carved out some major success in world markets with its original design and technology. Now, the household appliances industry is one of the well-established and dynamic sectors in Turkey. The industry is mainly composed of two subsectors; namely, the white goods (durables) which dominates the sector and the small household appliances.

In addition to over 50 medium-scale manufacturing companies and the major producers in the market, there are also around 500 supplier companies of parts and components. Turkish household appliances producers have created their original strong brands, leading to tight consumer-dependence in the domestic market while gaining ground in foreign markets, mainly in the EU countries. Product range is wide enough to supply European markets and satisfy sophisticated European customers. The built-in appliances category is another rapidly developing product range in Turkey.

TURKEY’S SHIPBUILDING INDUSTRY 

As a result of Turkey’s geographical location and global developments, Turkey’s shipbuilding industry has been boosted. Turkey is a growing force within the international maritime sector. The Turkish shipbuilding industry has modern, technologically developed and quality certified shipyards, together with a well-experienced work force.
The industry has rapidly achieved significant development in a short period of time. In last five years Turkey has improved its shipbuilding industry rapidly and becoming the fifth largest shipbuilding country in the world. A high expectation of development in the shipbuilding industry brings parallel investments. Turkish shipyards have 4.4 million DWT(Deadweight ton) new ship building capacity, 19 million DWT repair and maintenance capacity, 239,000 ton steel processing capacity and an 80,000 DWT new ship building capacity as one piece.
 
The Turkish shipbuilding industry makes a considerable contribution to the Turkish economy with 1.5 billion US$ from new ship building, and 1 billion US$ from repair and maintenance activities. Sector development also helps the domestic production of materials and equipment which are used in shipbuilding. Furthermore, the industry creates an employment opportunity for approximately 20,334 people directly and 63,000 people in total with related industries.
Due to the developments in the Turkish shipbuilding industry and world demand, there has been a sharp increase in production volume and product diversity at ship subsidiary industries in Turkey. The sector can produce anchors, chains, bollards, locking equipment, windlasses and equipment, electric cables and hydraulic units.

AUTOMOTIVE AND SPARE PARTS 

The foundation of Turkey’s automotive industry dates back to the early 1960s. During a period of rapid industrialization and progress, this key sector transformed itself from assembly-based partnerships to a full-fledged industry with design capability and massive production capacity. Since 2000, original equipment manufacturers (OEM) have invested over USD 15 billion in their operations in Turkey. These investments significantly expanded their manufacturing capabilities, which in turn led Turkey to become an important part of the global value chain of international OEMs. Meeting and exceeding international quality and safety standards, today’s Turkish automotive industry is highly efficient and competitive thanks to value-added production.
Here are some essential facts and figures about the Turkish automotive sector:

•    Leveraging a competitive and highly-skilled workforce combined with a dynamic local market and favorable geographical location, the vehicle production of 9 global OEMs in Turkey has increased by almost five times from 300,000s in 2002 to over 1.5 million units in 2018. This represents a compound annual growth rate (CAGR) of around 10 percent during that period. Over the past five years alone, MAN has increased its production by 143 percent, Toyota by 95 percent, Ford by 52 percent, and Fiat by 35 percent.
•    Significant growth posted by Turkey’s automotive sector led to Turkey becoming the 15th largest automotive manufacturer in the world and 5th largest in Europe by the end of 2018.
•    Turkey has already become a center of excellence, particularly with respect to the production of commercial vehicles. By the end of 2018, Turkey was the number two producer of commercial vehicles (CVs) in Europe.
•    Proven as a production hub of excellence, the Turkish automotive industry is now aiming at improving its R&D, design, and branding capabilities. As of 2019, 184 R&D and design centers belonging to automotive manufacturers and suppliers were operational in Turkey.
•    Notable examples of global brands with product development, design, and engineering activities in Turkey include Ford, Fiat, Daimler, and AVL. Ford Otosan’s R&D center is one of Ford’s three largest global R&D centers, while Fiat’s R&D center in Bursa is the Italian company’s only center serving the European market outside its home country. Meanwhile, Daimler’s R&D center in Istanbul complements the German company’s truck and bus manufacturing operations in Turkey. AVL Turkey, which opened up its 2nd R&D center in Turkey, started to develop autonomous and hybrid vehicle technologies.
•    Turkey offers a supportive environment on the supply chain side. There are around 1,100 component suppliers supporting the production of OEMs. With the parts going directly to the production lines of vehicle manufacturers, the localization rate of OEMs varies between 50 and 70 percent.
•    Turkey is home to many global suppliers. There are more than 250 global suppliers that use Turkey as a production base, with 30 of them ranking among the 50 largest global suppliers.
•    Auto manufacturers increasingly choose Turkey as a production base for their export sales. This is evidenced by the fact that 85 percent of vehicle production in Turkey was destined for foreign markets in 2018. More than 1.3 million vehicles were exported from Turkey to foreign markets in the same year. In addition, Turkey was the number one vehicle exporter to European markets with 1.1 million units in 2018.

ELECTRONICS

The Turkish electronics industry is continuously working to produce innovative, high quality and globally competitive products. 
The Turkish electronics industry manufacturers/exporters follow European and international standards and norms. The obligation to affix the “CE Mark” to products began in the local market in 2002. At the same time, Turkish manufacturers have been closely following the developments  in international quality and environmental standards. Exports are primarily directed to European markets. European Union is the most important market for the Turkish electronics sector. England is the top exporting country of the sector with a 13.0% rate and Germany (10.8%), France (6.9%) are the following export markets. Apart from the European Union countries, peripheral countries (such as Irak, Turkmenistan) and the USA are the other important exporting countries for the sector.

DEFENSE & AEROSPACE INDUSTRY

The Turkish defense and aerospace industry has been undergoing a profound transformation over the past decades. Having achieved unparalleled success in the industry in recent years, today Turkey has one of the fastest developing defense and aerospace sectors in the world. The experience and emphasis on quality is evident among Turkish defense and aerospace companies as they undertake numerous endeavors, create products that are competitive worldwide, and assume important roles in international projects. With their qualified human resources and state-of-the-art technology infrastructure, Turkish companies bring global solutions to satisfy many countries' local requirements. These Turkish companies conduct activities in many critical areas of the defense and aerospace sector, from original design development to domestic production, from modernization to modification, and from R&D to international projects.


Turkey is one of the largest defense spenders in the world. Turkey's USD 19 billion defense expenditure in 2018 ranked as the 15th largest defense budget in the world. Turnover in the defense industry doubled over the past decade and reached USD 8.8 billion in 2018. In parallel with the development of the Turkish aerospace and defense sector's capability in the past decade, the exports and international cooperation opportunities for Turkish companies have increased. The industry's exports increased from USD 600 million in 2007 to USD 2.2 billion in 2018. With a developed and skilled production capacity, the orders received by the industry amounted to USD 12.2 billion in 2018.

MACHINERY

Machinery manufacturing continues to be one of the key growth drivers of the Turkish economy. This sector plays a crucial role in the development of Turkey's greater manufacturing industry due in no small part to its capability to produce intermediate goods and to provide inputs to key sectors such as chemicals, construction, automotive, energy, textiles, agriculture, and mining. The machinery manufacturing sector in Turkey is known for being R&D intensive -- Turkey graduates over 35,000 engineers every year in mechanical fields -- and for creating high value. 

Turkey's competitiveness in the machinery sector is driven by favorable input costs and strong enablers. Input costs include competitive labor cost, an affordable and reliable energy supply, and logistical advantages based on the geostrategic location of Turkey; enablers, on the other hand, include a skilled workforce, generous investment incentives, an innovation-oriented infrastructure, and a strong supply base and domestic clusters.

TURKEY’S FASTENER INDUSTRY

Developments in the fasteners industry of Turkey, in line with industrialization in Turkey, accelerated in recent years. With the investments made within the fastener industry both in quality and technology in recent years, Turkey has reached a very competitive position in the production of special and standard products. Correspondingly to this development, production and export figures are rising rapidly.

Fastener production of Turkey, starting with brand new machines in the newly established facilities in the 1950s, grew with Turkey's great industrial move in the 1970s. In those years, the production of screw machines and die has also started in Turkey. With the growth in the sectors such as automotive and white goods fasteners manufacturers also started to invest in the growth of their production. Also in the 1980s, importing new and used machinery from the Far East and Europe gained more intensity. In addition, those were the times Turkey began to become an open market to Europe and the world. In the 1990s, along with Turkey's switching to the free-market economy in full and China factor stepping in caused an increase in imports. 
To provide solutions to the sector and to protect the manufacturers BESIAD (Association of Fasteners Industrialist and Businessmen) was established in 2000. Under BESIAD's leadership, international trade fairs for fasteners started to take place in Turkey.
Many well-equipped laboratories have been established that provide world-class service to meet needs for tests and measurements required for quality. MATİL A.Ş in Istanbul and MFCE (Metal Forming Center of Excellence) in Ankara are some examples.

Turkey imports approximately 95 thousand tons and exports 300 thousand tons of which 150 thousand tons as fasteners and 150 thousand tons fasteners installed on goods. Turkey's domestic market size is around 500 thousand tons. Main sectors for fasteners include automotive, white goods, furniture, and machinery. As for the foreign market, the highest sales are made to European countries. Sales to Europe cover about 60 percent of total exports. 
Automotive is the sector with the largest export value in Turkey. 80% of the fasteners used in automobiles and commercial vehicles produced in Turkey are supplied from manufacturers in the domestic market. Hence, the importance of automotive fasteners sector is very big for the fastener industry of Turkey.

But the automotive sub-industry is larger than the automotive industry itself in Turkey. Turkey's automotive sub-industry's production is 3-folds that of the main industry. It exports to other automotive companies in the world about 3 times more parts than it provides to the automotive main industry in the domestic market. 

The most important competitiveness of Turkey in competition with China is capabilities to make custom products. There is also production speed and logistically close distance to the European market. While Turkish manufacturers can deliver goods to the farthest corner of Europe in 6 days, this period is 40 days in China. Fastener manufacturers in Turkey use the state-of-art machinery, tools, and equipment which increases production speed, efficiency, and quality. In addition, 80% of the companies hold all the necessary quality standard certifications and other required documents. Quality engineering is in an advanced state. 

The biggest element that increases the competitiveness of the country is the raw material production made in Turkey. Domestic raw material producers have started to export wire to many countries besides the domestic market and Turkey’s wire export figures have reached 1 million tons. 

   TURKEY’S FASTENER EXPORT FIGURES

 

2018

2019

2018/19

2019

Ton

Ton

% Change

% Share

1

GERMANY

49.877

46.361

-7,0%

33,4%

2

ITALY

6.587

6.640

0,8%

4,8%

3

POLAND

4.909

6.419

30,8%

4,6%

4

SLOVAKIA

5.326

5.219

-2,0%

3,8%

5

FRANCE

4.881

5.207

6,7%

3,8%

6

SPAIN

4.912

4.950

0,8%

3,6%

7

USA

1.600

3.211

100,7%

2,3%

8

EGYPT

2.478

2.794

12,7%

2,0%

9

SWEDEN

2.693

2.684

-0,3%

1,9%

10

RUSSIA

2.369

2.653

12,0%

1,9%

11

AUSTRIA

2.742

2.506

-8,6%

1,8%

12

ROMANIA

2.136

2.414

13,0%

1,7%

13

UK

2.433

2.378

-2,3%

1,7%

14

UKRAINE

1.021

2.284

123,7%

1,6%

15

KAZAKHSTAN

3.188

2.179

-31,7%

1,6%

16

MOROCCO

1.741

2.116

21,5%

1,5%

17

KUWAIT

152

2.108

1288,5%

1,5%

18

IRAQ

1.419

2.059

45,1%

1,5%

19

NETHERLANDS

1.813

1.804

-0,5%

1,3%

20

ALGERIA

2.413

1.719

-28,8%

1,2%

 

OTHERS

30.483

31.124

2,1%

22,4%

 

TOTAL

135.173

138.829

2,7%

100%

 

 

 

 

TURKEY’S FASTENER EXPORT BY REGIONS

2018

2019

2018/19

2019

Ton

Ton

% Change

% Share

1

EUROPEAN UNION

97.289

95.055

-2,3%

68,5%

2

OTHER EUROPEAN COUNTRIES

12.691

14.506

14,3%

10,4%

3

MIDDLE EAST

5.606

8.478

51,2%

6,1%

4

NORTH AFRICA

7.817

8.410

7,6%

6,1%

5

NORTH AMERICA

1.783

3.303

85,2%

2,4%

6

FREE ZONES

2.367

2.153

-9,0%

1,6%

7

LATIN AMERICA

1.832

2.036

11,1%

1,5%

8

ASIA

2.733

1.940

-29,0%

1,4%

9

CENTRAL, EAST AND SOUTH AFRICA

1.235

1.598

29,4%

1,2%

10

WEST AFRICA

1.767

1.314

-25,7%

0,9%

11

OCEANIA

53

36

-31,7%

0,0%

 

TOTAL

135.173

138.829

2,7%

100%