The export volume of Turkey’s free zones has remained fairly stable over the past half decade. What steps can Kayseri Free Zone take to increase its annual export volume going forward?
Compared with last year our exports are at the same level. However, we would like to increase our exports further. To that end, we frequently invite investors to the free zone. When we invite them here, we present the various advantages of Kayseri Free Zone to them. These advantages include land acquisition and property ownership, which can be done very cheaply. Importantly, after the investment is made, the service charge rates offered to firms are almost zero. We hope that, as the economic environment improves and some of the problems that Turkey has been experiencing are resolved, substantial foreign investments will be made in Kayseri Free Zone. In fact, there are ongoing negotiations currently, and there will be new investments in the pipeline. We should achieve strong numbers in the years ahead.
Kayseri Free Zone has a strong emphasis on metal products and light industry such as textiles and household items. How did Kayseri Free Zone come to focus on these industries?
Kayseri has always been a commercial centre. Kayseri has an ancient history as a hub of commerce and one of the first regions in history where official contracts were recorded. This city has so much history. We are lucky to be from a city that loves trade in every aspect. Metals trade and metal industries has long been important in the city and the region, so it makes sense that this sector has a presence in our zone as well. In addition, Kayseri has had its share of natural improvement in the textile sector over the last 30-40 years in Turkey. Despite not being a very good centre of cotton production, enhanced technologies in textile factories in our region has brought a strong textile presence in the free zone. In the last 3-5 years we have begun to work with one of leading firms in global health, which was initially established with Turkish capital and later on 100% American capital in the free zone. We have also undertaken the work of building up the health sector through the endeavours of the local administration and prominent members of the city’s business community. This, I believe, indicates that the free zone’s health and medical sectors will take off.
How can Kayseri Free Zone provide a roadmap for other cities in Turkey that would like to industrialise on the back of strong local entrepreneurship as well as foreign investment?
Foreign investors are beginning to come to Kayseri Free Zone. Certainly the recent investment of American capital will be a big reference point for us going forward, as it will give confidence to other global investors. Stryker is a big recent investor, but in addition there are local and Middle Eastern foreign investors, and Europeans and Turkish-European joint ventures investing. Since in the essence of the free zone is exports, we have a lot of firms working with European partners. Because all of these firms here have European partners or clients, we have built good connections. In time, I believe that, on the back of our infrastructure and land sale conveniences, our free zone will be seen as a one-of-a-kind, cost-effective place to do business.
What kinds of technology transfer would Kayseri Free Zone like to attract from foreign companies?
Investors coming to our free zone from countries with advanced technology levels tend to provide support to the local industries. Stryker is one recent of the example to this: our local firms see what kinds of technologies and systems the American firm is using, and they adapt and even adopt those technologies in their businesses. There is also considerable technology transfer from our French firm and other international companies operating in Kayseri.
Do any barriers to entry exist for foreign companies looking to invest in Kayseri Free Zone?
Foreign companies have no barriers in coming to Kayseri. In this region we provide all kinds of facilities and support, even more than we provide our local firms. By providing land at extremely competitive prices, we offer a big initial advantage. Foreign firms face no transportation problems in Kayseri either. Our zone is very near the Kayseri city centre. In 15 minutes you are in the centre. It is a city without much traffic. Kayseri as a city has excellent tourism opportunities. Erciyes Ski Centre has a received very positive investments toward its further development. People coming to the ski centre from everywhere in Turkey. Foreign investors can really have a thriving social life in Kayseri, and that’s a consideration that every foreign investor makes when choosing a location. They ask: Which school will our children attend? Where can we visit on holiday (for example, the nearby Cappadocia attractions)? I think Kayseri provides positive answers to most such questions.
Can you define the kind of business community that investors can expect to find in Kayseri Free Zone, and the organization and services provided to them?
Kayseri Free Zone has the biggest and area, scope, and investment field in Turkey. We have an excellent mix of public administration and private sector integration. Investments toward the future are constantly being made made. Kayseri Free Zone has, in a relatively short time, attracted substantial investment in many sectors and built an excellent infrastructure. I do not believe that at present there are any legal or technical hindrances facing our zone. Investors can buy their land and get started without having to worry about infrastructure and services. We think of ourselves as investors in the zone first and foremost, and take a long-term view. There are no issues with access to cost-effective electricity, energy, water, natural gas issues. Qualified personnel are abundant in the area. The local government of the city provides us with great support in this regard. If we have a personnel need in any occupation, under the guidance of the municipality, committees are directed, private training courses are opened for female, young, new personnel, and these courses and focus on getting an education with an employment guarantee. All of this addresses the main questions that our investors encounter.
In terms of its geographic location, what are the strategic advantages of Kayseri Free Zone in terms of accessing important international markets? Can you provide some information or examples of prominent trade routes?
Naturally, our biggest strategic advantages are that we are in the heart of Anatolia, and that outside of the free zone there is such a well-built industrial infrastructure in the region. We are the region with the biggest furniture industry in Turkey. Beyond Turkey, perhaps even in Europe, we have an infrastructure to compete with the biggest and most favoured furniture cities. We have a region that has no supply chain problems in terms of equipment pool and spare parts, as well as semi-finished goods, raw materials, and so forth. This is certainly the advantage of Kayseri being an industrial and production hub for many years. Kayseri has been brought to its present excellent position through, among other things, three or four large government factories, such as the tank factory in the defence sector, the air supply maintenance centre, Sumer Bank, and Taksan. Such big state institutions’ long-term presence here for years has built up an experienced workforce. Strategically speaking, we are not right on the seaside, but nevertheless we have transport solutions reach the sea inside of five hours, and convoys from Kayseri unload at the harbour daily. So in my opinion we are in a really attractive situation.
What sectors do you see as growth areas that are prime for investment in Kayseri Free Zone? What kinds of companies do you envision taking advantage of new investment opportunities?
We want to focus on specific sectors. There is the health sector, which we initially chose as a target. There are three firms in our free zone related to the health sector, chief among them Stryker. And Kayseri, together with the surrounding cities of Middle Anatolia, is an important centre for the health sector. All the nearby cities benefit from health services in Kayseri. We want to see the products the health sector produces here distributed all over the world.
Also Kayseri has taken very important steps in the furniture industry for many years. Our many big companies can sell their products all over the world. In fact, Kayseri-based companies have a presence in many foreign countries. We also want to reach our full potential in this sector in the free zone. There are some obstacles to overcome in producing furniture in the zone, if you are not exporting all of your products. If you completely export to overseas there is no problem, but for some furniture types – not all – the requirement for certain certifications to sell to the Turkish domestic market is a real obstacle. However, for exclusively exporting firms, the zone is especially advantageous.
Kayseri produces many mainly metal products as well. We have many metal manufacturers in the free zone. We mainly focus on four areas: those mentioned above, and we must not forget textiles, as we have numerous small and large textile firms producing here. We want to expand our exports. Kayseri Free Zone already accounts for 18% of Kayseri’s total exports at the moment, and we will continue to grow.
What are the soft incentives, such as access to skilled local labour, language training facilities, and a positive social and family environment, that Kayseri Free Zone provides, or could provide, to new investors?
Mehmet Özkantar: Firms occasionally contact us from abroad and outside of Kayseri inquire about the potential and costs of our local labour force. Because Kayseri is home to many different branches of industry, well-trained, qualified labour is readily available. As Metin mentioned previously, the municipality offers excellent educational and training opportunities. There are also four universities in Kayseri which provide foreign language education, and many other institutions related to language training, such as the American Cultural Centre. In these places, any kind of language education is provided. So Kayseri is an up-and-coming city that is ready for international businesses to arrive; after all, Kayseri is often called the Istanbul of central Anatolia. It is a city with a very high quality of life: orderly, healthy, stress-free, and inexpensive. Anyone can find a comfortable life here.