A Presentation by ASSOCIATION of TURKISH MACHINERY MANUFACTURERS Arslan SANIR General Coordinator

MIB ASSOCIATION OF TURKISH MACHINERY MANUFACTURERS IS REPRESENTING TURKISH MACHINERY SECTOR ALL AROUND THE WORLD AND ESTABLISHED IN 1990 AS NON GOVERNMENTAL ORGANIZATION. MIB INCLUDES ALL KINDS OF MACHINERY MANUFACTURERS. MIB IS MEMBER OF CECIMO (European Association for Machine Tool Industries) SINCE 1999 AND ALSO MEMBER OF PNEUROP (European Committee of Manufacturers of Compressors, Vacuum Pumps, Pneumatic Tools and Allied Equipments) SINCE 2005.

MACHINERY SECTOR IN TURKEY IS RATHER YOUNG, IN COMPARISON TO THOSE IN EUROPEAN COUNTRIES. THE FIRST INVESTMENTS IN MACHINERY MANUFACTURING INDUSTRY HAVE BEEN INITIATED IN 1950’S AS STATE ENTERPRISES. AT THE END OF 1950’S THE FIRST PRIVATE COMPANIES STARTED TO INVEST IN THIS SECTOR. HOWEVER NOWADAYS; THERE IS NOT ANY GOVERNMENT INVESTMENT IN MANUFACTURE MACHINERY. THE COMPANIES, THAT ARE MANUFACTURING MACHINERIE ARE 95% SMS’S AND ALL OF THEM ARE OWNED BY FAMILIES.

2011 SIZE OF MACHINERY MARKET 27,7 BILLION € PRODUCTION 18,3 BILLION € EXPORTS 7,6 BILLION € IMPORTS 17,0 BILLION € MACHINERY IMPORT FROM ITALY WAS 1,75 BILLION € ALTHOUGH THE MACHINERY MANUFACTURING SECTOR HAS SHOWN A SUCCESSFUL PERFORMANCE, THE VALUE OF IMPORTS IS STILL HIGH.

AS IT IS KNOWN THAT, IN DEVELOPED COUNTRIES QUALITY, RELIABILITY AND TECHNOLOGY OF MACHINERY IS MORE IMPORTANT THAN PRICE. 45% OF THE TURKISH MACHINERY EXPORT IS TO EU COUNTRIES, USA AND CANADA. WE THINK, IT SHOWES THAT TURKISH MACINERY MANUFACTURERS HAVE A REASONABLE COMPETITIVE POSITION IN THE WORLD MARKET

A REPORT, WHICH IS PUBLISHED IN EUROPE, SHOWS THAT TURKEY IS 6TH BIGGEST MACHINERY MANUFACTURER IN EUROPE (AS VALUE) AND ALSO ACCORDING TO CECIMO’S PUBLICATION; TURKEY IS IN THE 7’TH RANK IN EUROPE AS MACHINE TOOLS MANUFACTURER COUNTRY. IN 15. RANK AS TO THE MACHINE TOOLS MANUFACTURER AND EXPORTER IN THE WORLD ACCORDING GARDNER PUBLİCATION SURVEY 2011

BESIDES MACHINE TOOLS, SOME CONSTRUCTION MACHINERY, CRANES, LIFTING AND TRANSPORTING EQUIPMENTS, PUMPS AND COMPRESSORS, INDUSTRIAL FURNACES, AIR CONDITIONING INDUSTRIES ARE ALSO IN COMPETITIVE POSITION.

PRODUCTION, EXPORT, IMPORT AND CONSUMPTION x 1000 EURO CONSUMPTION Change %9,30-13,64-20,4937,6419,28 PRODUCTION Change %6,20-11,29-18,9839,5016,42 EXPORT Change %28,710,79-16,6621,4916,89 IMPORT Change %13,98-6,52-20,2427,8621,37

MARMARA REGION, INCLUDING ISTANBUL, KOCAELI, BURSA, AND THE CITIES OF IZMIR, ANKARA, KONYA, AFYON, ESKISEHIR AND GAZIANTEP ARE THE PLACES WHERE MACHINERY MANUFACTURING IS MAINLY OBSERVED. AS TO THE MACHINE TOOLS, THE PRODUCTION IS RATHER REALIZED IN ISTANBUL, BURSA, KONYA AND IZMIR. THE PRODUCTION OF AGRICULTURAL MACHINERY IS PERFORMED IN MANY CITIES, HOWEVER MOST OF THE COMPANIES ARE SMALL IN SIZE.

FACTORS WHICH GIVE COMPETITIVE STRENG TO THE TURKISH MACHINERY SECTOR ARE THE ABUNDANCE OF RAW MATERIAL, ITS GEOGRAPHICAL PROXIMITY TO DEVELOPING EXPORT MARKETS CULTURAL SIMILARITY AND ADVANTAGES AND DEVELOPMENTS IN LOCAL AND NEIGHBOURING COUNTRIES

ECONOMIC INDICATORS OF TURKEY GROSS NATIONAL PRODUCT IN ,3 BILLION EURO PER CAPITA INCOME EURO TOTAL IMPORT 172,9 BILLION EURO 38,8% FROM EU COUNTRIES TOTAL EXPORT 96,9 BILLION EURO 46,2% TO EU COUNTRIES

BRIEF INFORMATION ABOUT SOME SUB-SECTORS

MACHINE TOOL AS MENTIONED BEFORE TURKEY IS 7’TH BIGEST MACHINE TOOL MANUFACTURER COUNTRY IN EUROPE IN ,8 MILLION EURO EQUIVALENT OF MACHINE TOOLS PRODUCED 74% OF THIS PRODUCTION WAS SHEET METAL PROCEESING MACHINES WE HAVE WELL KNOWN SHEET METAL PROCESSING MACHINE MANUFACTURERS BUT LIMITED NUMBER OF METAL CUTTING MACHINE TOOL MANUFACTURER; LIKE MACHINING CENTERS, MILLING MACHINES, MULTY SPINDLE TURNING MACHINES, FORGING MACHINES,

IN 2011, VALUE OF IMPORTED MACHINE TOOLS WAS 790,7 MILLON € 70% OF THIS FIGURE WAS METAL CUTTING MACHINES LIKE; TURNING MACHINES, MACHINIG CENTERS, MILLING, GRINDING AND GEAR CUTTING MACHINES TURNING MACHINE AND MACHINING CENTER IMPORTATION WAS 326,4 MILLION € AND THIS IS 41,3% OF MACHINE TOOL IMPORTATION ACCORDING MY OPPINION, THIS PART OF THIS SUB SECTOR SHOULD BE INTERESTING FOR NEW INVESTORS MACHINE TOOL IMPORTATION FROM ITALY WAS 119,5 MILLION € 15,1% OF TOTAL IMPORT 20,4% OF IMPORT WAS FROM GERMANY, 19,7% WAS FROM TAIWAN ITALY IS IN 3’TH RANK

CRANES IN 2011 TURKEY IMPORTED 125,6 MILLION EURO EQUEVALANT OF CRANES IMPORT FROM ITALY WAS 16,7 MILLION € FROM CHINA 33,1 MILLION €, AND FROM GERMANY 31,1 € IMPORT OF TRANSPORTER CRANES, GANTRY CRANES AND MOBIL LIFTING FRAMES WAS 46,7 MILLION €, IMPORT FROM ITALY ONLY 515 THOUSAND € AND IMPORT OF TOWER CRANES WAS 28 MILLIO €, 8,7 MILLION € BELONGS TO ITALY WE HAVE SOME BIG SIZE COMPANIES FOR OVERHEAD CRANES BUT WE NEED NEW INVESTMENTS FOR GANTRY AND TOWER CRANES

WOOD WORKING MACHINERY WOOD WORKING MACHINERY IMPORT WAS 134,7 MILLION EURO IN ,4 MILLION OF THIS, CAME FROM ITALY 24,8% IN TURKEY THERE ARE TREE MEDIUM-BIG SIZE COMPANY THEY ARE PRODUCING: EDGE BANDING, SIRCULAR SAW MACHINES LOG SAWING LINES SAWMILLS LOG CARRIAGE BAND SAW PARALLEL BOARD EDGERS, BOARD RESAWING MAHINES RIPSAWS TRIMMERS OTHER COMPANIES ARE MOSTLY SMALL IN SIZE BIGGEST IMPORTED GROUP WAS BENDING AND ASSEMBLING MACHINES (35,1 MILLIO €)

HS CODE 8429 BOLDOZERS, ANGLEDOZERS, GRADERS, LEVELERS, EXCAVATORS, SHOVELS, SCRAPERS, TAMPING MACHINES, ROAD ROLLERS IN 2011 TOTAL IMPORT OF TURKEY FOR THIS GROUP WAS EUROS EUROS OF THIS FIGURES CAME FROM ITALY BIGGEST EXPORTER TO TURKEY WAS JAPAN WITH 242,1 MILLION € WITH 144 MILLION (BOTH) SOUTH KOREA AND BELGIUM FOLLOWED 533,4 MILLION EURO OF TOTAL IMPORT WAS EXCAVATOR SHOVEL LOADERS SECOND BIG IMPORT ITEM WAS FRONT END SHOVEL LOADER WITH 210,5 MILLION EURO IN TURKEY THERE ARE EXCAVATOR AND FRONT END SHOVEL LOADER MANUFACTURERS, THEY ALSO EXPORTING THEIR PRODUCTS EXCAVATOR AND FRONT LOADERS EXPORT WAS APRR. 100 MILILON EUROS

OTHER CONSTRUCTION MACINERY THERE ARE ASPHALT PLANTS ASPHALT RECYCLING PLANTS CONCRETE BATCHING PLANTS, MIXERS CRUSHING-SCREENING-WASHING-STCKPILLING PLANTS CONCRETE PUMPS MANUFACTURERS. MOST OF THEM ARE MEDIUM OR MEDIUM-BIG SIZE COMPANIES

BOILERS TOTAL IMPORT OF BOILERS WAS 293 MILLION EURO IN MILLION OF THIS WAS STEEM OR OTHER VAPOR GENERATING BOILERS 192 MILLION EURO FOR CENTRAL HEATING BOILERS 59 MILLION EURO FOR AUXILIARY EQUIPMENTS AND COMPONENTS ALTHOUGH THERE ARE BOILER MANUFACTURERS IN TURKEY IMPORTED BOILERS ARE LEADING THE MARKET

COMPRESSORS THERE ARE SOME COMPRESSOR MANUFACTURERS THEY ARE MEDIUM SIZE COMPANIES BIGGEST IMPORT ITEM IS TURBOCOMPRESSORS AND FROM THIS GROUP SINGLE STAGE TURB0 COMPRESSORS TOTAL IMPORT OF TURBO-COMPRESSORS IN 2011 WAS € 84,1 MILLION € OF THIS FIGURE IS SINGLE STAGE TURBO COMPRESSOR AND € VALUE OF TURBOCOMPRESSOR CAME FROM FRANCE FROM ITALY IT WAS 9,6 MILLION € PRODUCTION OF THIS TYPE COMPRESSORS IN TURKEY IS LIMITED AMOUNT

INVESTMENT IN TURKEY FOR DIRECT FOREIGN INVESTMENT IN TURKEY YOU CAN FIND ALL NECESSARY INFORMATION AND LEGISLATION AT AS ENGLISH ALSO

ON BEHALF of ASSOCIATION of TURKISH MACHINERY MANUFACTURERS THANK YOU.