Machinery Industry

Since 1990, Turkey’s machinery industry has grown at a speed of nearly 20% per year. The expansion of this sector is supported by extremely competitive and flexible small and middle-sized enterprises (SME) which, together, establish the bulk of the country’s industrial production. Turkey has a large potential of skilled workers, and the sector provides ample employment – currently for 114, 500 employees.

A favourable combination of competitive factors

The combination of having the technical capacities needed to compete in an international market and reasonable labour costs enables Turkey’s machinery industry to offer a wide range of high-quality products and components at affordable prices. Another fact that contributes to the strength of this line of industry is that approximately 85% of its input comes from domestic resources. This not only reduces the sector’s dependence on overseas’ (re)sources, it also contributes to the growth and development of other local industries.

With a share of 8.3% in national exports (2010), the machinery industry occupies a major position in Turkey’s economy. The total value of exports of this sector amounted to $ 9.4 billion in 2010. The main destinations for machinery exports are Germany, France, the UK, Italy and Iran. On the other hand, Turkey also imports machinery, mainly from China, Germany, Italy, France and the USA. In spite of Turkey’s strong national production in this line of idustry, exports are outweighed by imports ($ 21.3 billion in 2010). This is largely due to the ever increasing domestic demand for machinery.

Turkey’s machinery industry has set itself the ambitious goal of acquiring a 2.3% share in the world market by 2023, the year of the Republic’s centennial anniversary. To achieve this goal, which implies exports to rise to a value of $ 100 billion, the sector will need an annual growth of 17.8%, until 2023. By that time, the sector’s share in Turkey’s total exports is expected to have risen to 18%.

The machinery industry is also successful in attracting direct foreign investments. Over the past ten years it managed to attract over $ 771 million worth of foreign capital.

Recently, the Minister of Economic Affairs declared that between January and June 2012, $3.1 billion worth of direct international investment has been recorded in the machinery industry sector.

The increasing demand for housing, cars and other products such as white goods leads to an increase in the demand for iron and steel. Turkey is a major exporter of steel products and the world’s leading supplier of rebar (reinforcing bars, e.g. for concrete constructions). In spite of the current economic decline elsewhere in the world, international demand for Turkish steel remains strong. In 2010, $ 12.2 billion worth of steel products was exported, such as semi-manufactured goods (bars, beams, pipes, etc.), construction materials and machinery, to a total volume of 17.3 million tons.

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