Türkiye is Going Green
Turkish industries have to turn sustainable quickly, and there is a growing demand for green expertise.
Finland-Türkiye Business Seminar organized by Business Finland and the Embassy of Finland in Ankara, with the support of DEIK, at the Hilton Istanbul Bosphorus 7.6.2022.
Text: Lotta Nuotio
Publisher: Kauppapolitiikka
Link to Kauppapolitiikka's website (Link to another website.)
The sun is shining and the noise of Istanbul's traffic recedes a little further into the background. We are in the garden of the headquarters of Türkiye's largest business consortium, Koç Holding, and we are looking at the view of the Bosphorus. The meeting between the management of Koç Group and the delegation from Finland, led by Minister Ville Skinnari has just ended a few moments ago.
The hosts are clearly interested and engaged. It is apparent from the fast-paced movement of pens and the sounds of excited questions from the other side of the conference table.
I thought aloud to Joona Selin, a special advisor and expert in international business, that interest in Finnish green solutions seems to be genuine, not just a matter polite hospitality.
- The interest is indeed genuine. A large part of Türkiye’s exports goes to the EU market. The industry here is under great pressure to renew its policies. In order for business to continue, it is necessary to meet the requirements of green transitions, confirms Selin, who works at the Finnish Embassy in Ankara.
The main themes of the three-day Team Finland visit are green transition and digitalization. The themes were selected through listening to current market demands. Companies have been included from five different sectors: construction, energy, steel, Telecom and textile.
- Europe is indeed an important market for Turkish industry, and here we have to comply with EU regulations. At the same time, there aren't that many sustainability and low-carbon solutions yet, because Türkiye's own regulation is still in its infancy, confirms Marika Ollaranta , director of the industrial low-carbon program from Business Finland, also participating in the trip.
Interest in environmental and sustainability issues has grown rapidly here. Some of the representatives of the participating companies even wonder aloud at the speed of change. Change is underway in all industries, from construction to renewable energy, and they are looking for more environmentally friendly and efficient solutions.
Innovations and technologies can be found in Finland, but we need markets and production. In Türkiye, you can find the market, large-scale production and the demand for Finnish know-how and solutions.
Unlocked Potential
Therefore, it is no wonder that trade between Türkiye and Finland is growing. Last year, it even reached record figures, almost two billion euros. Finland's trade balance with Türkiye is positive and exports to Türkiye grew by a quarter last year.
Still, compared to the possibilities, the trade figures are modest.
- Unfortunately, Türkiye's opportunities have been overshadowed in Finland. There needs to be more understanding among Finnish companies about what this country's potential is. Work is done all the time with smaller groups visiting both countries, Selin says on the way to the next opportunity.
The suspicious attitude of companies towards the opportunities offered by the country may have been increased by Türkiye's attitude towards Finland's NATO membership. However, 19 companies took part in the visit, and the worry dissipated right at the beginning of the visit. Things go as "business as usual", or even a little better: the reception is warm, interested, even very enthusiastic.
Efficiency is prevalent, but challenges persist
In Istanbul, it's easy to believe the country's market potential just by keeping your eyes open. There are skyscrapers, big highways and container ships sailing through the Bosphorus, industrial areas on the city's outskirts.
The city of around 15 million inhabitants is the absolute pearl of the Turkish economy, but there are also dozens of other modern cities in the country. In addition, possibilities are not limited to Türkiye.
- Türkiye has a strong presence in Africa, it has representation in almost every country and direct flight connections. In addition, the ties to the Middle East and Central Asia are also strong due to history. The location is great, and there are also opportunities here for joint projects between Turkey and Finland in other countries, Selin emphasizes.
In recent years, however, Türkiye has also suffered from economic difficulties. Growth has shrunk, the value of the lira has collapsed and inflation has shot up. Of course, concerns about the economic situation and the solvency of banks and companies overshadow new business opportunities.
- Fortunately, the banking and industry sector are used to coping with wave movements; the economy here is characterized by a certain carrying capacity. Leading Turkish industrial companies operate internationally and in several different industries. This of course helps, even if the domestic market is difficult. Finnish companies should focus on business development with solvent operators, says Selin.
In any case, billions of investments are on the way. For example, the steel industry is a good example of an industry that has a large scale market, stable companies on the customer side as well as a strong demand for Finnish know-how.
Building with less carbon
The same can be said for concrete and cement industries. Türkiye produces concrete and cement in large quantities and the emission requirements are getting stricter. That's why Betolar Oyj, which offers a low-carbon solution for their production, has come along for the visit.
- This is a huge market, where there are businesses and large companies in our field, and there are readily available essential raw materials for us to use. Of course, it helps us that low carbon and the circular economy are taken seriously here and it is understood that financial interests are also in favor of them, says Janne Rauramo , Betolar's European Business Director .
He equates Türkiye's opportunities with developing markets in general – the potential for big profits is huge, but there are also risks. The number one thing here is contacts.
- The role of state actors is particularly emphasized in significant business operations. You have to talk to the right people here. It is a big advantage for us that we were able to talk with both the Turkish Minister of Transport and Communications and the Minister of Energy. It immediately increases our credibility in the eyes of the locals, Rauramo observes.
Technology has its place in everything
The last day of the visit also included a large technology fair on the edge of Istanbul. Nokia is a partner of the fair and is also a current name here. During the visit, Nokia's big 5G deal to Türkiye was confirmed, another sign of the demand for digital know-how.
Minister Ville Skinnari is being transported from one stall to another at a large technology fair on the outskirts of Istanbul.
- We are very excited about the cooperation with Türkiye. 5G, energy, logistics, chemistry, textile, actually any industry has its place for technology. Change is happening now and we can't wait. I believe that Türkiye is also a great platform for such innovations, Minister Skinnari answers questions from a local journalist.
After the fair, all that's left of the visit is the closing dinner and then the trip home. Many are already waiting for that, because the schedule has been tight, and there has been enough speed and new people. The country has shown its dynamism, everything happens sooner rather than later.
At the dinner, Business Finland's Marika Ollaranta gives important advice:
- Contact the people and companies you meet immediately. You won't have to wait long here.
The textile industry also needs innovations
One of the companies participating in the textile sector meetings of the visit is Yeşim Textile, which is worth about half a billion euros and employs 16,000 people. Its customers include several global, well-known brands.
The company also has a strong need for green and digital solutions, and strategies for reducing energy use, wastewater treatment and material recycling can already be found there.
- This is a hot topic in our industry. Carbon footprint, recycling and waste water management have become top priorities and we invest heavily to promote these, says the company's CEO Şenol Şankaya .
According to him, the change has been fast and has hit through the entire textile industry. This has been influenced by the fact that there are innovations and technology in the production of new ones for the use of recycled fiber, so the quality is improving.
- This is a great opportunity for cooperation. There are great innovations and achievements in Finland, textile manufacturing in Türkiye is a 30 billion euro business. We need innovation, automation. We could find investors together, which would bring greater opportunities for both and a way to scale Finnish solutions.