Turkey attracted a new investment valued at $510 million by India’s Aditya Birla Group, a $35 billion multinational company, to establish a viscose staple fibre (VSF) plant in the southern province of Adana, company officials told a press conference Thursday in İstanbul while they said the group mulled over new investments in the country.
The plant is the latest in a series of foreign investments to contribute to minimizing Turkey’s current account deficit (CAD) this year. The Turkish government earlier this year announced a strategy plan that envisages boosting domestic production in six specific sectors which have the highest imports -- thus increasing the CAD –- and the textile sector is one of them.
Aycı said they had been in talks with Aditya for the past two years and thanked the group for finally choosing to invest in Turkey among a few other options in the region. He earlier said the agency expects to announce two more prominent investments from Asia in Turkey before the end of this year but did not elaborate on details. Çağlayan separately on Thursday said they expect to announce a new investment in the chemical industry, another high importer sector, in January. The second company to follow Aditya in Turkey would be Japanese bearing-producer NTN Corporation, sources within the Ministry of Industry, Science and Technology earlier told Today’s Zaman.
‘Plant could cut CAD by nearly $1 bilion in 5 years’
Delivering a speech at the meeting, Çağlayan said the plant could help cut Turkey’s CAD by as much as $1 billion following its completion. Considering that Turkey’s VSF demand will continue to increase we expect the amount of money allocated for this material will reach $750 million in five years time. ... This amount, plus an expected $100 million in exports, means we will initially save $850 million,” he noted. Çağlayan said the government was determined to work hard to encourage investments particularly aimed at minimizing the CAD.
The total size of new foreign investments in Turkey this year with an aim of minimizing the country’s CAD nears $9 billion. The most important of them was a $5 billion joint oil refinery investment between Azerbaijani state-owned oil company SOCAR and Turkey’s Turcas (SOCAR-Turcas) in İzmir. A steel investment made by South Korea’s POSCO in İzmit and another one by Russian Magnitogorsk Iron and Steel Works (MMK) in Hatay, totaling $2.5 billion, along with a recent $1 billion carbon fiber investment by the American chemical corporation Dow Chemical Company are other examples of “anti-CAD” investments successfully attracted by Turkey this year.
Thanks to a number of sector-specific incentives to be introduced in 2012, the government expects investments in this category will continue being made in the years to follow. Separately, Turkey received a total amount of $11.5 billion in foreign direct investment (FDI) in the first 10 months of this year, 82 percent more than it did during the same period a year ago.
Making mention of bilateral trade with India, the minister said trade with this country was below a desired level. “We could solve this problem with mutual investments and partnerships in third markets.” After he called on Indian entrepreneurs to expand their presence in Turkey, Çağlayan said Indian markets also presented serious opportunities for Turks.
Maheshwari on his part said the group expected to raise its global VSF production to 1.1 million tons by 2015 and that the Turkish plant is a crucial investment in this regard. Underlining that they look forward to a long-term presence in Turkey, the company official told Today’s Zaman that they currently conduct comprehensive market research in Turkey. “It is too early to cite a specific sector where to make our next investment in but I can clearly state that we examining new investment opportunities in this market, the most promising one in this region.” Maheshwari’s statements suggest a possible cluster of investments in Turkey by the company which is also active in the sectors of retail, telecommunications, cement and financial sectors in 36 countries.
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