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  • 1. TURKISH CONSTRUCTIONINDUSTRY AT A GLANCE BANCO SABADELL Oficina de Representación Estambul November 2012
  • 2. Contents1. General Information related to the Sector................................................1 1.1 Growth Rate…………………………………………………………………………………………….…..1 1.2 Employment rate in the sectors………………………………………………………….………1 1.3 GDP and Construction Sector Growth Rates………………………………………….…..2 1.4 Construction Permits & Certificate of Occupancy……………………………………….2 1.5 Supply and Demand Factor in Construction Sector……………………………………3 1.6 Dynamics that will arouse the sector in Turkey………………………………………….42. Turkish Contracting in International Market……………………..……………….……..…..5 2.1 Brief Overview……………………………………………………………………………………………..5 2.2 History………………………………………………………………………………………………………....7 2.3 Turkish International Contracting Services in 2010 and 2011…………………14 2.4 Turkish International Contracting Services (1972 – 2011)……………………..163. Turkish Constractors Association……………………………………………………………………..19 3.1 TCAs objectives………………………………………………………………………………………….19 3.2 International Cooperation Agreements…………………………………………….………194. Forecasts for Construction Sector…………………………………………………………………….21ANNEXLIST OF MAIN CONSTRUCTION COMPANIES………………………………………….23SOME SAMPLE TENDERS FROM GOVERNMENTAL INSTITUTIONS.................24
  • 3. 1. General Information related to the Sector1.1 Growth RateThe construction sector showed 0,4% growth during the first quarter of the year andincreased it to 1,5% as of the first half of 2012. Although there is an increase in thesector it is still one of the four slowest growing sectors during 1H2012.One of the main reasons of it is the sector decreases faster than the economy. Theother main reason is the forecast of the sector during the first half of the yeardecreased the construction licensing and housing demand.Sectors Growth Rate (%)Electricity, Gas, Hot Water production anddistribution 7,1Real Estate, Renting 7,0Transportation, warehousing andcommunication 4,5Fishing 4,2Agriculture, livestock and forestry 4,2Financial Intermediaries activities 4,0Production Industry 3,1House Ownership 1,7Construction 1,5Mining 1,4Retail and Wholesale business 0,9Source: Turkish Statistical Institute1.2 Employment rate in the sectorsThe decrease on the growth in the industry also affected the employment in thesector. There was a 7,4% increase on employment rate compared with 2011 Julyand 2012 July in the construction sector where it is 26% in agriculture and 18,9% inindustry. Total 2011 July 2012 July Number % Number %Economical Activities 24,953 100 25,498 100Agriculture 6,705 26,9 6,638 26,0Industry 4,710 18,9 4,777 18,7Construction 1,879 7,5 1,882 7,4Services 11,659 46,7 12,201 47,9 1
  • 4. 1.3 GDP and Construction Sector Growth Rates Public investments during the first quarter of 2012 remained the same as last year but it decreased 6,3% during the second quarter and decreased 3,6% during the first 6 months of the year. Related to the private sector investments after having 3,1% increase during first quarter it just grew 1,9% during the second quarter and the over all growth during the first 6 months was just 2,5%.2520 18 .315 11.210 9.2 5.7 8.5 4.7 GDP Growth 5 3.1 Rate 0.7 1.5 0 2007 2008 2009 2010 2011 2012H1 -5 -4.8 Construction - 8 .1-10 Sector Growth Rate-15 - 16 .1-20 1.4 Construction Permits & Certificate of Occupancy The construction permits increased 37% and given certificate of occupancy decreased to 5,1% during the second quarter. 56,1% of the construction permits given to housing, 26,0% given to others and 17,9% is given to joint use areas Construction Permits Indicators Change ratio(%) between the first half of 2011 &2012 2012 2011 2010 2012 2011 Number of 47,299 43,632 50,905 8.4 -14.3 Buildings Area (m2) 72,176,471 52,674,678 60,451,484 37.0 -12.9 Value (TL) 49,615,698,592 33,322,512,025 34,259,065,045 48.9 -2.7 Number of 349,226 276,327 308,008 26.4 -10.3 houses Source: Turkish Statistical Institute 2
  • 5. Certificate of Occupancy Indicators Change ratio(%) between the first half of 2011 &2012 2012 2011 2010 2012 2011Number of 40,417 44,467 37,040 -9.1 20.1BuildingsArea (m2) 46,225,485 48,712,555 39,063,413 -5.1 24.7Value (TL) 30,735,607,275 29,980,020,485 21,351,305,168 2.5 40.4Number of 239,460 251,643 190,098 -4.8 32.4housesSource: Turkish Statistical Institute1.5 Supply and Demand Factor in Construction SectorThe biggest problem of the housing sector is supply and demand imbalance. In otherwords the gap between the number of the house on sale and the sold ones aregetting higher.Because of the decrease on the sale of houses, the stock in the sector is above 800thousand and this number may reach to 1 million at the end of the year. The changeon the house sale as of August 2012 in total Turkey is 2,44%. The stock decreaserate was 6,06% on July 2011 where it is just 1,61% as of July 2012.Change (%) on the House sale, August 2012Source: REIDIN 3.5 3.11 3.06 2.9 3 2.44 2.35 2.5 2.29 2.14 2 1.5 1.07 1 0.5 0 Turkiye Adana Ankara Antalya Bursa Istanbul Izmir KocaeliStock Decrease Rate (%) 7 6 .0 6 6 5 4 .2 4 3 .4 3 3 .0 7 3 2 .5 6 2 .14 1.8 6 1.6 8 2 1.5 4 1.5 1 1.6 1 1.4 1 1.0 1 1 0 Jul-1 1 -A ug 1 -Sep Oct-1 No v- 1 -Dec Jan-1 Feb- 1 1 1 1 1 2 M ar- A pr-1 M ay- Jun-1 Jluy 2 2 3 11 12 12 12 2012
  • 6. 1.6 Dynamics that will arouse the sector in TurkeyUrban transformation project : It started on 5th of October 2012, first inIstanbul. The other cities included to project are Adana, Afyon, Ağrı, Amasya,Ankara,Aydın, Balıkesir, Bilecik, Bitlis, Bolu, Bursa, Çanakkale, Denizli, Düzce, Edirne, Elazığ,Erzurum, Gaziantep, Hakkari, Hatay, Đstanbul, Đzmir, Kahramanmaraş, Kırıkkale,Kırşehir, Kocaeli, Malatya, Nevşehir, Samsun,Sinop, Tekirdağ, Tunceli and Van. Thereare almost 19 million houses in Turkey. It was forested that 6-7 million houses willbe rebuild or strengthened. This mega project will be a impulsive force not only tothe sector but also the Turkish economy.Increasing the public investments, taking precautions in order to refresh thedomestic demand and private sector investments will be the other dynamics thatspur the sector. 4
  • 7. 2. TURKISH CONTRACTING IN THE INTERNATIONAL MARKET2.1 Brief OverviewConstruction plays a crucial role in Turkey’s economic development, accounting forwell over 6% of GDP and employing some 1.5 million people. When the direct andindirect impacts on other sectors are taken into account the share of the constructionsector in the Turkish economy reaches 30% and the employment rate (excludingagriculture) reaches %10.After a period of rapid growth in the 1980s, the Turkish construction sectorwitnessed a significant decline between 1993 and 2001; however, as a result ofpolicies adopted after the two economic crises of 1999 and 2001 the sectorexperienced the start of a recovery in 2002. Increased economic stability, decreasingexchange and interest rates and attractive long-term loans stimulated a demand forhousing, playing a major role in this process; and consequent growth rates of 13.9%in 2002, 7.8% in 2003, 14.1% in 2004, 9.3% in 2005 and 18.5% in 2006 madeconstruction the number one contributor to the economic growth of Turkey. By 2007the growth rate of the construction sector reached 5.7% for the year; however,Turkey and its construction sector, suffering under the effects of the global crisis,experienced a decrease of 8.1% in 2008, followed by a further 16.1% decline in2009. 2010 was a recovery period for both the construction sector and Turkisheconomy. In 2010, construction sector made remarkable progress and grew by18.3%. The growth trend in the industry continued in 2011 as well and reached11.2% by the end of the year. GDP Growth Construction Sector Rate (%) Growth Rate (%) 1999 -3.4 -3.1 2000 6.8 4.9 2001 -5.7 -17.4 2002 6.2 13.9 2003 5.3 7.8 2004 9.4 14.1 2005 8.4 9.3 2006 6.9 18.5 2007 4.7 5.7 2008 0.7 -8.1 2009 -4.7 -16.1 2010 9.2 18.3 2011 8.5 11.2The constantly growing global competitiveness of Turkish contractors andconstruction products and the foreign exchange revenues generated as a result,contribute significantly to the balance of payments of Turkey. 5
  • 8. Up until the end of 2011, Turkish contractors have undertaken almost 6500 projectsin 94 countries, with a total value of some 206 billion USD. On the other hand Turkeyis among the world’s top 12 producers of building materials such as cement, glass,steel and ceramic tiles.The research team that prepared “The Strategic Plan for The Turkish ConstructionIndustry” in 2004 noted in its final report that "In no other country with the sameper capita income is it possible to find a construction sector that is as competitive asthe Turkish construction sector".As is the case with many other export-oriented economic activities in Turkey, theunique geographical location of Turkey at the crossroads of three continents –Europe, Asia and Africa – contributes a great deal to the global competitiveness ofTurkish construction products and contracting services abroad. That said, Turkey’sstrength in the field is not only due to its location, as the country also boasts costeffective service at international standards, high client satisfaction, credibility inpartnerships, extensive knowledge and vast experience in a wide variety of projects,familiarity with the business environments in the nearby regions, qualified manpowerand a calculated risk-based approach to business.In 2011, 31 Turkish contracting companies ranked among “The World’s Top 225International Contractors" announced by the leading international industry magazine"ENR - Engineering News Record". With this number Turkey ranked second in theworld after China.COUNTRY 2011 2010 2009 2008China 51 54 50 51Turkey 31 33 31 23Italy 23 22 26 22USA 22 20 25 35Japan 13 13 15 16Spain 13 11 11 11S. Korea 11 12 13 11France 5 5 5 5India 5 3 2 2England 4 4 5 4Germany 4 4 4 5Other 43 44 38 40The investment environment in Turkey is becoming increasingly attractive for bothlocal and foreign investors, and a positive growth rate in construction is expected inthe years ahead.The Turkish construction sector companies are active in almost every country in theEurasian market of 580 million people, covering an area of 26 million km2. 6
  • 9. With a vast experience in international collaborations across 94 countries Turkishcontractors are open to building and enhancing international partnerships not only inthe field of contracting, but also in construction industry investments, ranging fromthe manufacture of construction materials to infrastructure, housing, industrial plantsand tourism projects. The extensive know-how and experience gained throughworking abroad for nearly four decades, in all kinds of challenging engineeringprojects and in all forms of business environments is among the distinctive strengthsof the Turkish contractors.2.2 HistoryThe Anatolian Peninsula, on which Turkey is located, has a history that dates back to8000 B.C., when the earliest human settlements emerged. The region has been thebirthplace of 13 major civilizations, which flourished and left behind manymagnificent sites and structures. The incredible richness and diversity of Turkey’scultural heritage is an important factor that fostered the maturity of a buildingtradition in Turkey that has developed over millennia – from the Hittites to theRomans, Byzantines, Seljuks and Ottomans.The development of the Turkish construction sector over the last 90 years since thefoundation of the Turkish Republic can be evaluated in five successive periods:Preparation, internal market activity, international activity, market and productdiversification and global competition. The first two periods continued until thebeginning of the 1970s.After the foundation of the Turkish Republic in 1923, and along with the ambitiousmodernization process that accompanied the political and social reforms, importantinfrastructural and industrial investments were made all over the country. In the1920s special measures, including the employment of foreign experts in publicagencies, had to be undertaken by the government to overcome the shortage of localengineers and architects. Under the influence of these public policies, and partly dueto the economic crisis witnessed in Europe in those years, many European engineers,architects and entrepreneurs came to Turkey; and in 1925–1926 at least one third ofthe 28 construction companies established in Istanbul were European in origin.The 1930s marked the arrival of the first generation of Turkish engineers, who in thefollowing decades founded many large-scale construction companies and had greatsuccess in the realization of many challenging projects, both in Turkey and abroad.The political change that Turkey experienced in 1950 and its accession to NATO in1952 were important milestones in the history of the Turkish construction sector interms of the infrastructure investments that followed. In the same period, the firstwave of Turkish engineers were graduating from universities and beginning theircareers in an environment that offered great opportunities for the establishment oftheir own companies; and it was those businessmen that founded the TurkishContractors Association (TCA) in 1952, making the organization one of the oldestNGOs in the Turkish construction sector.Water supply projects during the 1950s, and energy projects and the construction oflarge dams and power plants in the late 1960s and early 1970s provided manyopportunities to Turkish Contractors to develop their activities throughout Anatolia. 7
  • 10. 1970–1979 PeriodIn the 1970s Turkish contractors began pursuing business opportunities in foreignmarkets for the first time, launching projects first in Libya in 1972, for which theywould import the necessary technology from European countries; and in less than 10years their activities had extended to countries in the Middle East. With a share of72.53% in the overall business volume it was Libya that was by far the number onemarket for Turkish contractors in this initial period of international business, followedby Saudi Arabia (15.45%), Iraq (7.25%), Kuwait (4.71%), Greece (0.06%) and Iran(0.01%).The major field of activity in this period was housing (32.1%), followed by seaport(%18.1), industrial plant (15.6%), road/bridge/tunnel works (11.7%), and urbaninfrastructure projects (8.2%).Distribution of International Works by Country (1972-1979)1972-1979COUNTRY (%)Libya 72.53S. Arabia 15.45Iraq 7.25Kuwait 4.71Greece 0.06Iran 0.01TOTAL 100.00Distribution of International Works by Nature of Work (1972-1979)1972-1979FIELDS OF ACTIVITY (%)Housing 32.1Seaport 18.1Industrial Plant 15.6Road/Bridge/Tunnel 11.7Urban Infrastructure 8.2Irrigation 4.0Treatment Plant 2.9Administrative Building 2.7Power Plant 1.6Other 3.0Other: Military Facilities, Soc. Cult. Facilities, Commercial Centers, Airports, DrinkingWater 8
  • 11. 1980–1989 PeriodThe 1980s was an important decade in the restructuring of Turkey’s economic status.Starting in 1983, the country passed through a major change from the closedeconomy of the 1970s to a market economy, which had been introduced only veryrecently in some Western countries. Together with the convertibility of Turkishcurrency and the termination of many restrictions on the economy, new agencies,such as the Mass Housing Administration and the Public Participation Administration,were founded, and new concepts, such as privatization and the liberal economy,were integrated into the country’s economic system. In the same period Turkeycommenced with its own substantial infrastructure investments. Ataturk Dam (2400MW) the Turkish Motorway Program (more than 2000 km) and telecommunicationinvestments provided excellent opportunities for Turkish firms to cooperate withinternational partners, and thus improve their technical and managerial skills andbecome acquainted with the global finance system.At the end of the 1980s the political change in Eastern Europe provided furtheropportunities to Turkish contractors. Many companies oriented themselves moretowards the Russian Federation and the former Soviet states, given the country’sstrong cultural relationships with its Central Asian neighbors. In the same periodthey extended their activities to other markets, including Jordan, Yemen, Iran, SaudiArabia, the United States, Tunisia, the United Arab Emirates and Kuwait.Despite a relative decrease in proportion (55.2%), the majority of foreign businesscontinued to be in Libya, with Saudi Arabia (23.4%) and Iraq (11.5%) rankingsecond and third, maintaining the position they had occupied during the first decade.The emergence of the former Soviet states as a potential market was a newdevelopment that occurred at this time (3.8%).During this period the shares of housing (36.7%) and urban infrastructure projects(17.2%) increased, as well as road/bridge/tunnel (7.0%) and irrigation projects(5.4%).Distribution of International Works by Country (1980–1989)1980-1989COUNTRY (%)Libya 55.2S. Arabia 23.4Iraq 11.5Russian Federation 3.8Yemen 1.5Jordan 1.4Other 3.2Other: TRNC, Iran, Kazakhstan, Georgia, United States, Ukraine, Tunisia, UnitedArab Emirates, Algeria, Kuwait 9
  • 12. Distribution of International Works by Nature of Work (1980-1989)1980-1989FIELDS OF (%)ACTIVITYHousing 36.7Urban Infrastructure 17.2Road/Bridge/Tunnel 7.0Irrigation 5.4Health Facilities 4.1Pipe Line 3.6Industrial Plant 3.5Seaport 3.4Dam 3.3Soc. Cult. Facilities 3.0 Other 12.8Other: Drinking Water, Commercial Centers, Tourism Facilities, Treatment Plants,Administrative Buildings, Depots, Airports, Petrochemical Plants, Power Plants,Energy Transmission Lines, Military Facilities1990–1999 PeriodIn the 1990s, economic depressions and political uncertainties in the countries of theMiddle East and Libya forced Turkish contractors to turn their attention to othercountries in the nearby regions, with the new focus being predominantly on theCommonwealth of Independent States, Eastern Europe and Asian countries. Manylarge-scale projects in the Russian Federation, Ukraine, the Caucasus, Central Asia,Germany and Pakistan were realized at this time.In the 1990–1999 period the projects completed in the Russian Federation and in theother CIS states accounted for almost 60% of the country’s international business.Market diversification was the major trend that characterized this decade. While theshare of the Russian Federation increased (to 34.5%), Libya’s share saw a drasticdecrease (to 13.7%), followed by Kazakhstan (7.8%) and Turkmenistan (6.7%);while Pakistan (6.6%), Uzbekistan (3.9%), S. Arabia (3.1%), Azerbaijan (2.6%),Bulgaria (2.6%), the United States (2.5%) and Croatia (2.2%) emerged as newmarkets. Other important developments were the considerable decrease in theproportion of works in Saudi Arabia and the disappearance of Iraq from the scene.Despite a decrease in the share of housing works (24.9%) compared to the previousperiod, housing continued to be the number one activity in this period as well. Thiswas followed by road/bridge/tunnel works (12.7%), industrial facilities (9.0%) andcommercial centers (8.1%). 10
  • 13. Distribution of International Works by Country (1990-1999)1990-1999COUNTRY (%)Russian Federation 34.5Libya 13.7Kazakhstan 7.8Turkmenistan 6.7Pakistan 6.6Uzbekistan 3.9S. Arabia 3.1Azerbaijan 2.6Bulgaria 2.6USA 2.5Croatia 2.2Kuwait 2.0Germany 1.8Belarus 1.7Ukraine 1.1Israel 1.0 Other 6.2Other : Egypt, Kyrgyzstan, Jordan, TRNC, Romania, Georgia, Moldova, Poland, Chile,United Arab Emirates, Latvia, Ethiopia, Syria, Bosnia-Herz., Malaysia, Lebanon,Tajikistan, Morocco, Sudan, Armenia, Algeria, Philippines, Ghana, Albania, Mexico,Kosovo, Malawi, Thailand, Iran, Indonesia, LithuaniaDistribution of International Works by Nature of Work (1990-1999) 101990-1999FIELDS OF (%)ACTIVITYHousing 24.9Road/Bridge/Tunnel 12.7Industrial Plant 9.0Commercial Center 8.1Tourism Facilities 5.9Soc. Cult. Facilities 5.7AdministrativeBuilding 5.3Health Facilities 5.2Petrochemical Plant 5.0Power Plant 3.3Urban Infrastructure 3.0 11
  • 14. Seaport 2.3Airport 2.1Pipe Line 2.0Irrigation 1.9Other 3.9Other: Depots, Energy Transmission Lines, Treatment Plants, Dams,Telecommunications, Military Facilities, Railways2000–2011 Period: "Booming Global Competitiveness"During the last decade, the annual volume of business undertaken abroad increasedfrom 2.4 billion USD in 2002 to 25.0 billion USD in 2007. In the following years,under the effects of the global crisis, this figure decreased to 19.3 billion USD in2011. Turkish International Contracting Services 30.0 25.0 24.3 25.0 22.6 22.3 20.6 19.3 20.0 15.0 11.3 11.2 10.0 4.2 5.0 2.4 0.0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total Project Value (Billion USD $)During 2000 – 2011 period, the internal and external forces and factors that havecontributed to this rapid development can be grouped under the following threecategories: The attractiveness of business opportunities abroad; reduced businessopportunities in Turkey; and the increasing competitiveness of Turkish contractors:• Domestic investments decreased significantly after the crisis in 2001. Furthermore, the "abnormally low tenders" in bids created unfair competition for qualified companies and forced them out of the internal market, eventually turning their attention to the international market and pursuing aggressively business opportunities in other countries. 12
  • 15. • Having realized large-scale infrastructure projects in cooperation with foreign partners in Turkey between 1985 and 2000, Turkish contracting firms had gained significant experience in the fields of project management, contract management and production to international standards.• As a result of booming oil prices, investments increased in the oil and gas exporting countries. This process created attractive business opportunities for Turkish Contractors given their geographical proximity and their familiarity with local business environments, providing additional advantages in competition.The combination of above factors would drive the annual international businessvolume of Turkish Contractors to grow at a pace that far surpassed annual targets.In this period, market diversification and specialization in certain types of projectswere the major trends. The number of countries in which Turkish Contractors wasworking increased considerably, causing the percentage of work in each country todecrease relatively.In the aftermath of the interventions in Afghanistan and Iraq, the rebuildingactivities in these countries were closely followed by Turkish contractors, and as aresult, Iraq in particular has become one of the most important markets for Turkishcontractors in recent years.Top Ten Markets in the Last Three Years 2011 Project Value (USD Share (%) Russian Federation 3,415,989,629 17.7 Turkmenistan 3,270,248,734 17.0 Iraq 1,883,588,448 9.8 Kazakhstan 1,709,778,089 8.9 Saudi Arabia 1,294,933,645 6.7 Venezuela 1,093,234,222 5.7 Azerbaycan 955,778,258 5.0 Oman 739,130,897 3.8 Qatar 593,859,664 3.1 Afghanistan 507,534,656 2.6 2010 Project Value (USD) Share (%) Turkmenistan 4,252,048,273 19.0 Libya 2,460,471,259 11.0 Iraq 2,285,079,179 10.2 Russian 8.1 Federation 1,797,186,755 Oman 1,699,245,366 7.6 Iran 1,111,767,635 5.0 13
  • 16. Georgia 1,007,734,462 4.5 Qatar 907,181,946 4.1 Morocco 745,010,740 3.3 Azerbaijan 738,503,055 3.3 2009 Project Value (USD) Share (%) Libya 4,210,110,925 18.9 Turkmenistan 2,673,831,063 12.0 Algeria 2,392,501,250 10.7 Qatar 1,525,668,780 6.9 Kazakhstan 1,484,465,350 6.7 Iraq 1,272,140,254 5.7 Russian Federation 1,268,846,692 5.7 Jordan 1,008,628,659 4.5 Saudi Arabia 919,861,968 4.1 Poland 845,950,000 3.8Russian Federation, Turkmenistan and Iraq have continued to be the leading marketsfor Turkish contractors over the last three years, with the total share of these 3countries amounting to around 40%. In 2011, because of the affects of “ArabSpring” Libya and other Northern Africa markets shrinked drastically2.3 Turkish International Contracting Services in 2010 and 2011The year 2010 was full of challenges for the Turkish international contractors due tothe negative impacts of the global financial crisis on the world markets. In 2011however, they had to deal with new and more serious problems that followed thecivil upheavals in the North African and Middle East Regions where their internationalworks were heavily concentrated. The Arab Spring created serious negative impactson the Turkish contractors both in terms of decreasing business opportunities andthe losses encountered in the ongoing construction works in Libya.In 2010, Turkish Contractors have undertaken 577 projects in 50 countries, totaling22.3 billion USD, with Turkmenistan ranking first (19.0%), followed by Libya(11.0%), although Libya’s share has witnessed a dramatic decrease. These arefollowed by Iraq (10.2%), the Russian Federation (8.1%), Oman (7.6%), Iran(5.0%), Georgia (4.5%), Qatar (4.1%), Morocco (3.3%) and Azerbaijan (3.3%).Road/bridge/tunnel projects (12.6%), housing (12.4%), sport facilities (Olympiccomplexes, stadiums, ski centers etc.) (10.8%), energy projects (power plants,natural gas combined cycle power plants, wind turbines etc.) (7.1%) and tourismfacilities (6.4%) took an important place in the breakdown of the businessundertaken by the sector in 2010. 14
  • 17. In 2011 additional threats accompanied the growing negative effects of the globalfinancial crisis -such as the debt crisis in USA and Europe, the civil upheavals inNorth Africa and the Middle East that turned into a civil war in Libya and wasfollowed by the military operation carried out by the NATO , the overthrow of thegovernment and the establishment of the new one. All of these had substantialnegative effects on the Turkish contractors whose international works were heavilyconcentrated in the Middle East. Although to a limited extent, this also caused ashrink in the annual volume of new contracts of Turkish contractors abroad.However, considering the devastating impacts of the political instabilities thatprevailed across their major markets the new international contracting business of19.3 billion USD undertaken by Turkish contractors in 2011 is regarded as animportant achievement.In 2011, Turkish contractors have undertaken new projects totaling 19.3 billion USD.With a share of 17.7%, Russian Federation has been the leading market for Turkishcontractors, followed by Turkmenistan (17.0%), Iraq (9.8%) and Kazakhstan(8.9%). One of the most important new developments was Venezuela’s becoming anew market for Turkish contractors and ranking sixth among the top markets with ashare of 5.7% in the total annual business. Distribution of International Works by Country (2011) Country Total Project Value (USD) (%) Russian Federation 87 3,415,989,629 Turkmenistan 63 3,270,248,734 Iraq 43 1,883,588,448 Kazakhstan 24 1,709,778,089 S. Arabia 9 1,294,933,645 Venezuela 2 1,093,234,222 Azerbaijan 46 955,778,258 Oman 8 739,130,897 Qatar 13 593,859,664 Afghanistan 37 507,534,656 Other 120 3,797,872,023 Total 452 19,261,948,265Road/Bridge/Tunnel (13.8%) has been the number one activity in 2011 followed bythe Housing, Tourism Facilities, Transport (other) and Power Plant. Distribution of International Works by Nature of Work (2011) Fields of Activity Total Project Value (USD) (%) Road/Bridge/Tunnel 2,655,824,391 13.8 Housing 2,527,640,026 13.1 Tourism Facilities 1,600,871,702 8.3 Transport (other) 1,233,438,794 6.4 Power Plants 1,098,535,985 5.7 15
  • 18. Commercial Centers 922,867,860 4.8 Petrochemical Plants 839,740,350 4.4 Airports 752,626,357 3.9 Soc./ Cult. Facilities 714,679,809 3.7 Administrative 710,639,549 3.7 Building Other 6,205,083,442 32.2 Total 19,261,948,265 100.02.4 Turkish International Contracting Services (1972 – 2011)In the 1972–2011 period, with a share of 17.8%, the Russian Federation has beenthe leading market for Turkish contractors, followed by Libya (12.9%) andTurkmenistan (10.8%). Despite the fact that the Russian Federation share hasdecreased in recent years due to the negative effects of the global financial crisis, ithas maintained its position as the largest market for Turkish contractors in terms oftotal projects undertaken between 1972 and 2011 (first 9 months).1972-2011 (9months)Country Number of Total Project Value (USD) (%) ProjectsRussian Federation 1,373 37,191,894,135 18.0Libya 525 26,300,480,672 12.7Turkmenistan 722 23,613,414,163 11.4Kazakhstan 372 14,850,683,052 7.2Iraq 631 11,946,108,521 5.8S. Arabia 157 9,761,747,015 4.7Qatar 66 7,669,491,738 3.7UAE 95 7,427,771,878 3.6Romania 166 6,113,823,739 3.0Algeria 174 5,914,496,807 2.9Other 2,161 55,618,295,478 26.9Total 6,442 206,408,207,198 100.0Within the period between 1972 and 2011, the shares of CIS, Middle-Eastern andAfrican countries in the overall international business volume of Turkish contractorswere 44.1%, 24.5% and 19.7% respectively. In other words, the total share of CIS-Middle East-Africa countries reached almost 88%. 16
  • 19. In this period, significant progress was made in terms of the scope and size of projectsbeing undertaken. Market, product and business diversification continued unabated,while several companies started specializing in certain project types, such asinternational airports, railways and urban rail systems. In the neighboring regions,where local companies are far more experienced and thus more competitive in housebuilding, Turkish contractors tend to specialize on more sophisticated projects.Another important trend in recent years has been the growing interest of Turkishcontractors in direct investments and property management projects in the neighboringcountries.Throughout the period 1972- 2011, the share of housing projects in the overallinternational business of Turkish contractors decreased gradually whereas the shares ofprojects such as roads/bridges/tunnels, commercial centers, airports, industrial plants,increased significantly. 17
  • 20. 1972-2011 Fields of Activity Total Project Value (USD) (%)Housing 27,426,466,175 13.3Road/Bridge/Tunnel 23,620,602,121 11.4Commercial Center 14,014,030,352 6.8Airport 13,363,723,654 6.5Industrial Plant 12,213,268,055 5.9Tourism Facilities 10,887,427,067 5.3Petrochemical Plants 10,504,134,563 5.1Power Plants 9,271,340,706 4.5Administrative Buildings 9,146,900,623 4.4Education Facilities 7,671,425,084 3.7Other 68,288,888,798 33.1Total 206,408,207,198 100.0 18
  • 21. 3. TURKISH CONTRACTORS ASSOCIATIONThe Turkish Contractors Association (TCA) is an independent, non-profit professionalorganization based in Ankara-TURKEY. The association was founded in 1952 andrepresents the leading construction companies in Turkey. The business volume of itsmembers encompasses nearly 70% of all domestic and 90% of all internationalcontracting work done so far by Turkish construction companies.3.1 TCAs Objectives • To increase the competitiveness of its members in the national and international markets. • To contribute to the achievement of an economically productive, socially responsible and environmentally sound development in the construction industry. • To provide counsel to the government agencies on legal, economic and technical issues that are related to the construction industry. • To build and enhance strategic alliances with public and private bodies both within and outside Turkey. • To defend and promote the interests of its members. • To encourage cooperation and mutual support among its members. • To promote professional standards and business ethics. • To raise public awareness on industry related issues.3.2 International Cooperation AgreementsThe Contractors National Committee in the Concil of SAUDI ARABIA 25.12.2011Saudi Chambers - CNCEgyptian Federation for Construction and Building EGYPT 05.12.2011Contractors - EFCBCThai Contractors Association Under H.M. The Kings THAILAND 23.09.2011PatronageThe Singapore Contractors Association - SCAL SINGAPORE 07.05.2010The Master Builders Association Malaysia - MBAM MALAYSIA 07.05.2010Asociacion Empresas Constuctoras de Ambitio SPAIN 05.04.2009Nacional - SEOPANPolish Association of Construction Industry POLAND 16.09.2008EmployersChina International Contractors Association-CHINCA CHINA 17.06.2007Ethiopian Class-One Contractors Association ETHIOPIA 08.02.2007 Construction Contractors Association of Ethiopia - ETHIOPIA 24.06.2005CCAEBritish Consultants and Construction Bureau - BCCB UNITED 10.10.2003 19
  • 22. KINGDOMConfederation of Indian Industry-CII INDIA 16.09.2003China International Contractors Association-CHINCA CHINA 27.08.2003The Russian Federation Association of Contractors RUSSIAN FED. 16.10.2002All Pakistan Contractors Association PAKISTAN 28.02.2002The Romanian Builders and Contractors Association - ROMANIA 04.11.1999ARACOBulgarian Association of General Contractors-BAGC BULGARIA 20.10.1999Egyptian Federation for Construction and Building EGYPT 26.07.1999Contractors - EFCBCNational Association of Spanish Construction SPAIN 22.03.1999Companies - SEOPANGovernment of Punjab, Pakistan PAKISTAN 02.07.1998UAE Contractors Association - UAECA UAE 13.05.1998Kuwait Contractors Union-KCU KUWAIT 03.12.1997International Contractors Association of Korea-ICAK S. KOREA 28.10.1997China International Contractors Association-CHINCA CHINA 28.06.1995Malay Contractors Association-MCA MALAYSIA 28.09.1994From the beginning of the 1970s up to the present, Turkish contractors havecompleted almost 6000 projects in 89 countries. Their business volume abroad hasreached approximately 188 Billion US Dollars.In addition to offering contracting services at international standards both within andoutside Turkey, nearly 75% of TCA members are also active in various fields ofconstruction industry investments, manufacturing, engineering and consulting.Besides the TCA, 94% of its member companies operate with the quality systemcertificate. 20
  • 23. 4. FORECASTS FOR CONSTRUCTION SECTORThe growth during the coming 10 years will be seen on Asia Pacific, SouthAmerica, Middle East, Africa (mainly north Africa and below desert part of Africa)and East Europe. Especially in Nigeria, India, China, Vietnam and Russia. Alsowith the support of EU Poland will be in the list of 10 growing countries in theconstruction sectorThe locomotive of the growth will be the infrastructure. Housing will follow up itbecause of the increase on the population. In addition to that increase on the oilprices will positively affects the countries in order to fasten the investments. (e.g.Nigeria).The construction sector will remain on decreasing side in Western Europe. Themost effected countries are : Slovenia (-18,3%), Portugal (-18,2%), Spain (-16,1%) and Italy (-14,2%). The highest increases are seen in Hungary (7,7%),Bulgaria (3%), and Germany (2,2%) during July 2012On south Amerika side, because of FIFA World Cup on 2014 and Olympics on2016 construction in Brazil will be arouse. 21
  • 24. ANNEX
  • 25. LIST OF MAIN CONSTRUCTION COMPANIESEnkaGamaRönesansAnt YapıSTFATefkenTAVPolimeksYükselNurolKayıOnurCengizYapı MerkeziBayturGürişDoğuşYaşar ÖzkanGAPBetatekÇukurovaYenigünRasenSumaAtlasMakyolAlarkoMetagIC Đbrahim ÇeçenEser TaahhütLimakTML Öztaş 23
  • 26. SOME SAMPLE TENDERS FROM GOVERNMENTAL INSTITUTIONSGeneral Directorate of Highways Tenders: 1- Siirt Pervali motorway Tender dated 31.10.2012 2- Production and montage of traffic signs in North CyprusTurkish State Railways (TCDD) Tenders 1- Ankara Train Station Construction Tender date: 20.12.2012 2- Ankara-Istanbul 2. Stage High Speed Train Line Construction work of Karakoy-Bozuyuk and Vezirhan-Inonu Stations Tender date: 19.10.2012 24