Ökkeş Homak: “Africa offers important opportunities to the Turkish business world…”
“Africa offers important opportunities to the Turkish business world…”
The share of European Union countries in Turkey’s exports of 168 billion dollars in 2018 corresponds to 45%. However, the recent decline in the growth momentum of the countries in the old continent has led Turkish exporters to alternative markets.
“Black Continent Africa” is one of the geographies that are first focused on in search of alternative markets. The income levels of countries in Africa, which have a population of approximately 1.3 billion, are increasing every year. Exports to African countries, which offer very important opportunities for Turkish companies, are only 14.5 billion dollars as of the end of 2018. This export figure, which corresponds to only 9 percent of Turkey’s total exports, is far behind Turkey’s potential.
LUCKY SECTORS
Limak Group, which has been operating in different sectors in Africa for many years, stands out as a company with very important experiences at this point. Ökkeş Homak, Purchasing Director of Limak Cement Group, is one of the professional managers who know best the investment opportunities and difficulties encountered in Africa.
Evaluating the investment opportunities in Africa for Sintek Plus, Homak stated that the modern building and housing needs of all countries in the continent are very high; He said that Turkish companies stand out with their overseas experience and competent staff in meeting needs such as infrastructure, bridges, roads and stadiums. Noting that there are such state projects in Mozambique and the Ivory Coast, where cement factories affiliated to Limak Cement Group are located, Ökkeş Homak said, “We are personally experiencing the need for other industries apart from our cement sector and we feel the supply shortage. Industry and chemistry sectors stand out as the sectors we need. In these sectors, we can see that we may have problems in supply and that equipment can be procured at significantly high prices. Due to the supply shortage and high prices of these equipments, we usually go for the supply of our needs from our own country. In the light of our own sector, I think that the automotive and automotive sub-industry is among the investment opportunities.” said.
ATTENTION TO TYPE PROCESSES
Noting that there are villa type residences among the residences needed in Africa, Homak emphasized that all kinds of needs of the residences, including infrastructure and interior equipment, are an investment opportunity for companies in Turkey. Ökkeş Homak pointed out that there is a high need for electrical and plumbing works and the equipment for these works, and made the following assessment:
“The use of cooling systems in houses, indirectly due to climatic conditions, is almost indispensable among housing needs. I think that the opportunities for doing business in this sector are quite high. About GTIP (Customs Tariff Statistics Pos Numbers) Although the World Trade Organization tries to provide all its members around the world with a uniformity for standardization in equipment, there may still be problems with material definitions and their translation into the languages of the respective traded countries. In order to eliminate such problems, our investors should resort to universal equipment as much as possible, see the unit as a complete GTIP and not deal with the detail equipment of the unit. While the investment incentive lists are being formed, I think it is important to reduce the document to the basis of complementary units in terms of preventing possible problems.”
THINGS THAT COMPANIES WANT TO INVEST IN AFRICA
Ökkeş Homak, Purchasing Director at Limak Cement Group, also gave important warnings to companies that want to invest in Africa. Homak said that a comprehensive feasibility study should be carried out for the investments to be made, regardless of the sector, and expressed the following views:
“In order for an investment to be realized in Africa in the desired direction, the following three components are not different from each other in terms of importance: ‘Comprehensive feasibility’, ‘Customs Tax, Income Tax and legal regulations’ and finally ‘reliable agencies and companies.’ Feasibility The study is an important study that can shed light on many areas, from cost elements to market prices, sales prices and ultimately your company profitability. It is the most effective data source for the maturity of the investor’s decision. For this reason, it is important to complete the factors that may affect the feasibility in detail, without leaving any incomplete data as much as possible. Taxes and legal regulations are important data sources that can affect the future and fate of the investment. For example, customs duty is a cost element that will increase the price of investment material. In the country of Ivory Coast, the customs tax on the GTIP codes of some products is more than 25%. Legal regulations determine the status of the steps to be taken about the investment. For example, the difficulties of foreign currency deposits and foreign currency transfers and good knowledge of the legislation in this regard
may cause problems in equipment procurement. The realization of the investment, ultimately, the functions of agencies and companies are quite high. Although the other two titles almost reflect the documentary and theoretical part of the investment, agencies and companies are actual and real elements at the center of the business. These realities consist of elements such as physical documentation, physical equipment, containers, open cargo ships. Jobs in which we can easily live the real elements and provide the machinery-equipment, which are indispensable for investment, are in this field. In works with companies and agencies, it is important that the documents are prepared in a timely sequence, in harmony with each other. For example, we assisted our subcontractors in the preparation of documents in order to ensure compliance with documents in our investments and to avoid any additional problems. We have established various models in the supply of equipment. We checked the documents of us and our subcontractors together and we were in constant communication with our agents.”
ECOWACS COUNTRIES STAND OUT IN INVESTMENT POTENTIAL
There are 54 diplomatically recognized independent states, 9 regions and 3 limited recognized states on the African continent. Countries with high investment opportunities in the region stand out as the states that meet under the umbrella of the Economic Community of West African Countries, whose short name is ECOWAS (Economic Community of West African States). ECOWAS includes Benin, Burkina Faso, Ivory Coast, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone, Togo, Cape Verde. Ökkeş Homak, Purchasing Director at Limak Cement Group, pointed out that ECOWAS countries stand out when both creating investment opportunities and the support given to projects are taken into account. Emphasizing that they will be determined to ensure the continuation of the union structure and stability in their countries, Homak said that in addition to these countries, countries such as South Africa, Cameroon and Mozambique are among the countries that can be invested in.
OUR FOREIGN TRADE VOLUME WITH AFRICA IS 21 BILLION DOLLARS
(*) BILLION DOLLARS
YEAR EXPORT IMPORT
2008 9.1 5.6
2009 10.1 3.9
2010 9.3 4.8
2011 10.4 6.8
2012 13.3 5.9
2013 14.2 6.0
2014 13.7 5.9
2015 12.5 5.1
2016 11.4 5.4
2017 11.7 7.2
2018 14.4 7.0