Which Sectors Have Attracted The Most Foreigners?

Over the last five years, the shares of foreign companies have increased in every sector, from banking to insurance, logistics and fuel distribution. The sectors in which there have been the most rapid changes are insurance, retailing and banking; to the extent that the share of foreign companies in the insurance sector has increased eightfold, while in banking it has tripled. Capital studied how the shares of foreign players increased in 19 sectors between 2002 and 2007.

The Turkish economy grew by a record 48 percent in the years 2002-2007. Together with this growth, a total of US$57.4 billion in foreign investment entered the country over the last five years; to the extent that foreign companies became partners in 651 firms in 2007 alone. The total amount of direct foreign investment coming to Turkey reached US$21.9 billion.

Company mergers and acquisitions under the privatization programme account for a large proportion of these figures from the Treasury. As a result of all of these investments, the foreign shares of different sectors have increased. Companies with a majority foreign shareholding have increased their market share in every field from banking to logistics, foodstuffs and cleaning products.

The largest increases have been in the financial sector. In banking, the share of foreign banks has soared from 3 percent to 12 percent. In 2002, the figure stood at just 3.1 percent.

In the last two years, 70 percent of the insurance sector has come under the control of foreign companies. In 2001, foreigners held a 7.9 percent share of the insurance market. By the end of 2007 it had risen eightfold to 70.6 percent.

The Most Popular Sectors
In recent years, logistics and organized retailing have been areas in which foreigners have made the most investments. In logistics, the share of foreign companies has doubled and in retailing it has nearly tripled. In logistics, foreign companies are particularly dominant in international air freight where their share reaches 80 percent.

In organized retailing, the recent sale of the market leader Migros to PC Partners of the UK has shifted the balance in favour of the foreigners. According to CarrefourSa General Manager Guillaume Vicaire, CarrefourSa had a market share of 13.6 percent in 2007 and ranked second after the market leader Migros, which had 20.5 percent. When other powerful foreign companies, such as the Metro Group and Tesco Kipa, are included, the market share of foreign companies approaches 60 percent.

Elçin Cirik
ecirik@capital.com.tr