What have been the most notable changes in Turkey’s approach to free zone trade during your time as CEO of the Mersin Free Zone?
Mersin Free Zone has an important role to play in Turkey. Mersin is an important city with a major port in East Mediterranean. I started working at Mersin Free Zone after it was established as Turkey’s first free zone. By bringing Mersin’s strong sides to the fore, especially its logistical advantages, a geographical position that allows transit to Middle Eastern countries, well-developed agriculture in its hinterland with export potential, and the high industrial capacity of neighbouring cities, we did important work to develop Mersin Free Zone into what it is today. In a short time after its creation – by 1999 – Mersin Free Zone was already 100% full. That was a benchmark achievement for us. After that, though limited to smaller spaces, we continued developing investment-ready plots of land. Today, Mersin Free Zone has been working with 100% full capacity for many years. With its geography and strong logistical connections, it continues to be a very positive contributor to the Turkish economy.
The Mersin Free Zone’s trade volume in 2015 was $3.5 billion USD, or roughly 15% of Turkey’s free zone trade volume. Is 15% where Mersin should be in relation to Turkey’s total free zone trade volume?
There are 19 free zones in Turkey as of now. Our percentage of trade is strong compared with other free zones. We are second overall in trade volume among all of Turkey’s free zones. However, in terms of size, we are one third of the Aegean Free Zone, which has the highest trade volume. Therefore the numbers we have achieved in Mersin Free Zone with relation to our size are excellent. We are continuing our work to increase our trading volume by making adjustments to increase efficiency within our 100% fully occupied space. We are also considering adding a 334,000 square meter land to the east of the free zone as an expansion area. If this happens, it will be possible to increase our annual trade volume another $1 billion USD. We are studying the matter and making progress.
Would Mersin Free Zone be well-served by adding a local airport? Are any local infrastructure development plans in the cards?
Current capacity in Mersin is a result of good sea transportation. Railroad links have also been added. An airport with strong capacity will also add value to our free zone. If such an airport is built soon, low-weight, high-priced goods can also be produced and/or traded, and exported to other countries. This will play an important role in increasing Mersin Free Zone’s trade volume. The construction of a new international airport is being planned in Yenice, between Adana and Mersin, within a year. If this becomes a reality, it will be possible to process low-weight, high-priced goods in the free zone. This will foster an increase in trade volume in the free zone, in Mersin, and in the country.
How have fluctuations in the strength of the lira in recent years affected investment in free zones?
One of the most important characteristics of free zones is that transactions are made in foreign currency. Fluctuation in Turkish lira does not directly affect the activities in free zones. That is why we define free zones as inflation-free areas. Fluctuations in the country’s currency do not affect free zones. This is another advantage free zones offer, and Turkish free zones successfully utilise it.
What are you most proud of from your time overseeing Turkey’s free zones? What are you most hopeful for in the future?
What is important for us is the success of Turkey’s free zones and for me, of course, particularly of Mersin Free Zone. To solve the issues we faced in the initial stages of free zone development, we put a lot of effort into Mersin Free Zone. We overcame a lot of these issues via amendments to the procedures. The first five years alone, between 1987-1992, trade volume reached over $1 billion, from an initial volume of $150 million, in a very short amount of time. Today it is $3.5 billion per year. With our earnest efforts, proper coordination, and efficient dialogue with ministries in Ankara, we have been able to consistently make good assessments, come up right with the right solutions, make correct decisions, and provide direction for procedural revisions. All of this has led Turkey’s total free zone trade volume to reach roughly $20 billion annually. We expect that to increase in the coming years. This is of course a source of pride for us.
Companies around the world do research on where to invest. Mersin Free Zone, like all free zones in Turkey, presents sources which can be used in feasibility studies. We undertake voluntary projects to this end. We are ready to help investors by providing sources for feasibility studies for their investments. This is important for investors. I would like to emphasise that we are eager to collaborate in this regard. In addition, to provide alternative solutions and suggestions, we work closely with related ministries for certain specific types of investments.