Being a Foreign Investor in Turkey: Experiences & Expectations

Saffet Karpat, Vice President

5th World
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Chambers Congress
July 2, 2007- Istanbul
P&G at a glance

1837 2006
Brands 2 300+
Employees 2 135.000
Countries 1 80 (operations)
160 (markets)
Sales ($M) 3,6 68,2MMM

The company is owned by 1,1

million shareholders including
employees and retirees.
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 P&G Turkey- History
1987 Entry to Turkish market with “Mintax Deterjanları San.A.Ş.”

1990 Forming of a JV with Eczacıbaşı (Sanipak Sağlık Ürünleri A.Ş.

1997 Establishment of the P&G Central Asian & Caucasian

Republics organization (C&CAR).

1999 Merging of all business activities in Turkey into P&G Tüketim

Malları San. A.Ş.

2000 Full integration of the C&CAR business to P&G Turkey.

2004 Wella acquisition

2006 Gillette acquisition

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P&G Turkey
Local Investments: Our People, Our Plants, Our Products
• 1 HQ + 3 plants + 1 distribution center

• 925 employees + more than 3000 indirect employment

• 23 brands

• Leading brands in the sectors of cleaning products and

personal care/cosmetics.

Total investment: $ 400MM+

Most favorite company in the cleaning
products/chemical industry and
personal care/cosmetics sectors since
2000. 4
 P&G Turkey
Local Investments: Our Plant
Total Area: 79,360 m2
Covered area: 38,500 m2
Capacity: Granule detergents 1000 tons/days

Diapers 5 million/day
Hygienic pads 5 million/day
Employees: 660 - 15% female, 85% male
30% contractor
Brands produced: Ariel, Alo, Ace, Tide, Bonux,Orkid,
Always, Prima, Pampers

Located at Gebze Organized Industry Zone 5

 Exports from TR
Romania, Russia
Bulgaria,
Hungary,
Albania,
Chech Rep.

Kiev

CAR / Caucasia

UAE, Iran , Iraq

Pakistan
Israel / West Bank 60% of diapers,
Turkey 30% of hygienic pads
South Africa 20% of granule detergents
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produced in Gebze are exported
 Export Performance

 $1,2 Bln exports in 12 years

 Rewarded as
#1 exporter of paper products for the last 7 years
and as

#1 exporter of cleaning products for the last 2 years

by the Undersecretariat of Foreign Trade

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Our brands in
Turkey

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How do we operate?
Assessing the Landscape
20 years ago Turkey:
 Internet
 Mobile phones
 Laptop computers, blackberries
 Private TV channels
 Multinational distributor channels
 Consumer and market research companies
 Sectoral industry associations

were almost or totally non-existent.

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How do we operate?
Assessing the Landscape

In the last 20 years:

 15 governments changed

 3 economic crises (’94, ‘98 Russian, ‘01) and

 1 big natural disaster (’99 eartquake) occured

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How do we operate?

 P&G is a local citizen – together in good and

bad times:

Sustaining investments both financially and socially

– Over $ 400 MM financial investments
– Investment on local workforce (60 managers
exported, 10 expats vs 900 locals in turkey)
– Over $ 3 MM yearly for social responsibility
programs for the welfare of public, specifically
children, youngsters and women on education and
health
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How do we operate?
 Compliant to all relevant industry governing local
laws and regulations; annual internal/external
audits assure compliance to global standards

 Operate with higher global standards in terms of

local safety, quality and environmental standards

 Prepared to comply with relevant laws and

directives due to EU harmonization

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 How do we operate?

 P&G is well connected throughout 20 years of

governmental changes with relevant bureaucratic
offices at local and central levels
 P&G is well recognized by various influential
professional associations as well as NGO’s and
academia.
 We hold board memberships or chair in key industry
and business associations, as well as represented at
TOBB Cosmetics, Paper and Chemicals Sectoral
Councils.
 We are a member of GOIZ Environmental Committee
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How to further improve investment environment?

 Simplifying the investment approval process

 Investments on local manufacturing facilities via
competitive incentives
 Provision of well organized industry zones like GOIZ
 Streamlining importation of raw / packaging materials
 EU regulatory harmonization with relevant industrial
sectors

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How to further improve investment environment?

 Protection of intellectual property rights

 In market control effectiveness

In general, unregistered economy deserves

being a priority of the political and economical
agenda of the governments to avoid unfair
competition

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Thank You!