Opportunities for Italian Companies

2.7 Opportunities for Italian Companies

As detailed in Section 2.3, Turkey needs to spend a minimum of €58.5 billion between 2007 and 2023 for the EU environmental harmonization programme, and yearly €2.5 to €3.0 billion between 2009 and 2012 for the improvement of the environment. The majority of the funding will be through local administrations. For that reason, following the tenders of the 16 Greater City Municipalities as well as the projects of the Bank of Provinces is crucial for environment sector companies. Water and solid waste sectors will be the key investment areas in the future.

In the 1980s, Turkey started to use the turnkey method as a means of financing infrastructure investments including in environment. With the advent of this, well-financed foreign contractors and engineering companies obtained a clear advantage over their Turkish counterparts in winning public tenders. Projects won by foreign companies became captured markets for foreign consultants and equipment producers. EMIT SpA and Culligan Italiana cases (mentioned in Section 2.2.2) are excellent examples of this trend.

IBS suggests Italian companies establish a registered company or a joint venture and work closely with a local partner which could create an important advantage in marketing and cost minimisation. This is also regarded as an asset and appreciated by the Turkish end-user of consultant services for three reasons:

• 
  Designs prepared abroad have to be adapted to local conditions incorporating local data;
  
• 
  Project owners like to keep in touch with the consultants even after the project is over;
  
• 
  A permanent office is useful for marketing purposes.
  

In terms of project development, Italian companies need to be more proactive according to the interviews IBS carried out with several engineering firms. Domestic engineering companies underlined that companies from Germany, France, and the Netherlands are more active, especially in projects funded by the EU and other international bodies.

As the market develops, there will be an increasing demand for high tech products. Many local firms in Turkey have already collaborated with foreign companies in an effort to promote new products and services, including advanced biological treatment, membrane technology, bacterial treatment and electro-deionization.

Water, wastewater and solid waste treatment systems offer opportunities especially in three aspects:

• 
  Although these systems primarily comprise customised systems design and installation by local firms, Turkey must still import the more advanced variety including air filtration and purifying machinery, blowers, diffusers, dust collectors, low and high capacity pumps, transportation-handling and transfer equipment and incinerators.
  
• 
  Provision of operation and maintenance services to water, wastewater and solid waste facilities is an emerging market and local companies are interested in cooperating with foreign companies.
  
• 
  Cooperation in specialised technologies such as treatment of chemical pollutions, heavy greases, solvents and refinery wastes is among areas where Turkish firms are interested in.
  

Recovery and recycling is also another untapped market segment offering broad opportunities. Currently, there is intense competition in but lack of advanced technologies in Turkey.

It is almost essential for companies to supply financing as well as technology and services, in particular when applying for state tenders. Firms that provide financial packages along with their bids have a better chance of securing business. Unlike in many other countries, municipalities in Turkey do not issue municipal bonds to fund construction projects and are still highly dependent on funds derived from national sources. Major infrastructure projects are funded either by international financial institutions or supplier credits. In that respect, German, Spanish, Japan companies and governments are more active compared with their Italian counterparts.

The sector companies underline that the Italian equipment and engineering companies have opportunities especially for large size infrastructure and industrial projects due the need for advanced technologies and engineering, because in such systems the quality of the solutions become more critical. In small size residential, tourism sector and industrial projects, due to their higher prices, US and EU origined (thus Italian origined) equipment have limited chances as compared with their Far Eastern competitors. For that reason, a key area of competition for Italian companies is large scale projects as well as projects that require advanced technologies and solutions.

Italian companies can also benefit by cooperating with Turkish contractors to develop projects in countries other than Turkey such as Russia, CIS and Middle East countries, where Turkish contractors have well rooted and wide ranging activities.

ıII Key Contacts, Journals & Faırs