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U.S. Companies in Turkey: Success Stories 2010-2011

This is the first in an occasional series of profiles on U.S.-Turkish business success stories

U.S. and Turkish firms have generally proven very successful in a range of business and sectors, including agent/distributor relationships, joint venture partners, and other representation arrangements. Small, medium and large size American firms have made strong and lasting partnerships with qualified Turkish firms. A selected overview is provided below:

The world's leading aerospace company, Boeing is a principal manufacturer of commercial jetliners and military aircraft. Boeing exports to over 90 countries worldwide with some 160,000 employees both domestic and offshore. Dating back to the delivery of the first DC-3/C-47 aircraft to Turkish Airlines in 1945, the Turkish-Boeing relationship continues to lead technological innovation, industrial partnerships, education, arts and culture, human services and international investment in Turkey.

Today Boeing collaborates with Turkish aerospace industries in commercial and military aviation programs, such as the Peace Eagle and 787, to grow local capabilities and provide secure, high-value jobs. “Today we are not only a provider of commercial airplanes to the airlines of Turkey and a supplier to the Turkish armed forces but we have become a trusted partner of the Turkish aerospace industry and a good Corporate citizen of Turkey with more than 70 education programs in 30 cities that have helped educate over 125,000 students in the past 10 years alone," said Greg Pepin, President of Boeing Turkey. More at: http://www.boeing.com/

Chevron is one of the world's largest integrated energy companies and recently acquired a 50 percent interest in a western portion of Black Sea License 3921, an 8,700 square mile (22,505 square km) offshore block located 220 miles (350 km) northwest of the capital city of Ankara. Türkiye Petrolleri Anonim Ortaklığı (TPAO) holds the remaining 50 percent interest in the license. TPAO was the operator of the initial exploratory well which was drilled in 2010. Future exploratory activities are currently being reviewed by the partnership. TPAO would also be the operator of a second exploratory well and Chevron would become operator during any future development phase of the project. Chevron’s other interests in Turkey include marine transportation and pipeline operations. More at: http://www.chevron.com/

Cummins, a US-based designer and manufacturer of diesel and natural gas engines, has announced an investment plan to establish a production base in Izmir, Turkey. The roughly 70 million Greenfield investments involve the production of filters for motor vehicles as well as generators. Cummins’ establishment of a production plant in Turkey will create roughly 800 jobs over five years, while roughly 85 percent of the manufactured goods will be exported. The company aims to utilize Turkey’s favorable geographical location for easy access to markets in surrounding countries. More at: http://www.cummins.com/cmi/

ExxonMobil affiliates and predecessor companies had continuous business involvement in Turkey for more than 100 years. ExxonMobil is involved in the upstream sector in the deepwater Kastamonu, Samsun, and Sinop sub-blocks offshore Black Sea, Turkey. ExxonMobil has a 50 percent interest in the Kastamonu and Samsun sub-blocks and the Turkish national oil company TPAO has the remaining 50 percent. ExxonMobil also has a 25 percent interest in the Sinop sub-block, with Petrobras having 25 percent and TPAO having the remaining 50 percent.

ExxonMobil has contracted a world-class drillship called the Deepwater Champion (DWC) for use in ultra-deepwater areas like the Black Sea. DWC has arrived in the Black Sea and is expected drill the first ExxonMobil operated well in the Turkish Black Sea in the 2Q2011. ExxonMobil also produces and sells a wide range of finished lubricants in Turkey. More at: http://www.exxonmobil.com/Corporate/

Ford Otosan is currently investing an additional USD 630 million in its existing factory in the northwestern province of Kocaeli. With this investment, Ford Otomotiv will start producing new generation Transit vans in Turkey. According to Turkey’s Automotive Industry Exporters’ Association, in the first nine months of 2010, the total volume of car exports rose by 19.3 (for passenger car) percent compared to the previous year, to USD 11.6 billion from USD 10.2 billion a year earlier. Nearly 561,000 vehicles were exported from Turkey in the first nine months of the year, which represents an annual rise of 28.9 percent. More at: http://www.fordotosan.com.tr/

GE Transportation, a unit of General Electric Company (NYSE: GE), and Tülomsaş have reached a significant milestone in their partnership with the assembly of the first GE PowerHaul™ in Eskişehir, Turkey. Under the terms of agreement established with the signing of the Memorandum of Understanding (MOU) in 2008, GE has provided Tülomsaş with the necessary technology and material to assemble GE’s PowerHaul series locomotives in Turkey for the European, Middle East and North African markets. Lorenzo Simonelli, President and CEO of GE Transportation said: “We're investing in Turkey because of its strategic proximity to the customers we wish to serve and its advanced technology and manufacturing skills. Finally, we hope to leverage GE’s longstanding expertise and global reach to be a true partner in the economic development of the country.” Although the locomotive will function exclusively under a test program for the next year, GE and Tülomsaş also will continue to work collectively to expand market opportunities throughout the region. More at: http://www.getransportation.com/

Goodrich Corporation (NYSE: GR) and Turk Technic, Inc. have signed all appropriate agreements related to the formation of a joint venture company to provide maintenance, repair and overhaul (MRO) services in Istanbul, Turkey. The facility will initially employ about 20 people with plans to expand to more than 70 employees within 10 years. The facility is expected to be operational early in the third quarter 2011. The Goodrich Turkish Technic Service Center will meet the needs of Turkish Airlines by providing a local maintenance solution for the airline's growing fleet. More at: http://www.goodrich.com/Goodrich

Hilton Worldwide has had a presence in Turkey since 1955, with the iconic Hilton Istanbul. Hilton Worldwide has nominated Turkey as a strategic development market for the growth of its multiple brand portfolios and sees opportunities in major city locations, such as Istanbul; regional centers; and coastal resorts. Across the country, recent openings have included the DoubleTree by Hilton Istanbul – Old Town; as well as Hilton Garden Inn Konya; and DoubleTree by Hilton Avanos – Cappadocia. According to a senior Hilton Worldwide representative, Turkey is one of the leading countries in Hilton's strategic global growth plans. More at: http://www.hiltonworldwide.com/

International Electronic Machines (IEM) is the leader in hardy instrumentation design with its unique multispectral imaging and sensor solutions. The company specializes in integrated systems development ranging from custom design of specific cameras, optics, and sensors, to specific software solutions for safety or security monitoring. With the help of the US Commercial Service in Turkey, IEM identified a Turkish partner, with whom it was able to bid on projects of the Turkish State Railways (TCDD). With continual advocacy assistance, IEM signed an agreement with the Turkish State Railways (TCDD) receiving their first contract with the IZBAN Railway to supply and install a state of-the-art transit railway monitoring system. Partnering with companies both domestic and abroad, founder Zack Mian has worked to expand IEM business in the global market with products in use in over 15 countries, distributing through a dedicated network of 32 countries. More at: http://www.iem.net/

Minnesota-based Mattracks Incorporated produces one of America’s top-ranked track conversion systems, providing vehicles up to 25 thousand pounds with greater floatation mobility, rotation and access to areas with difficult terrain. Mattracks produces 66 different types of durable products for numerous commercial and recreational industries mainly in areas subject to high snowfall. These rubber-track conversion systems and four-wheel drives assist in transporting passengers, supplies, as well as plowing and maintaining winter roads.

Founded by Glen Brazier in 1992 and incorporated three years thereafter, Mattracks’ international sales outside US and Canada have matured from 15% to over 50% between 2000 and 2011 now employing over 40 people from its initial 9 in 1992. The company exports to over 72 countries such as Chile, Kazakhstan, South Africa, China and Russia with buyers on seven continents. With the assistance of the U.S. Commercial Service in Turkey now stands as one of Mattracks’ primary clients with commercial and military buyers. During a U.S. Senate sub-committee hearing, the Mattracks Director of International and Government Sales noted “International sales growth is integral to the Mattracks’ plan for success…these services and resources offered by the Commercial Services locally and around the world have been extremely valuable to the growth of Mattracks’ international business.” The company was awarded the ‘Faces of Trade Award’ in 2009 by the U.S.

Chamber of Commerce recognizing Mattracks’ success and expansion of exports in the international market. More at: http://www.mattracks.com/

Aircraft engine manufacturer Pratt & Whitney and Turkey’s Kale Group have established a joint venture to compliment Pratt & Whitney’s American-based production facilities. Pratt & Whitney, a United Technologies Corp. company, established the joint venture with 51 percent of the shares belonging to the Kale Group. In a separate action by Pratt & Whitney, the company has opened the Turkish Engine Center, located adjacent to the Sabiha Gokcen International Airport in the Anatolian peninsula, as a location for maintenance, repair and overhauls of CFM56 and V2500 engines within the region. More at: http://www.pw.utc.com/

Prepared by Gregory Taevs, Principal Commercial Officer with Juliayn R. Lake

Summer-Fall 2011

Source: US Mission Commercial Service in Ankara, Istanbul and Izmir

Comments and other U.S. success stories welcome to Manoj.Desai@trade.gov

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