Turkey Food and Drink Report Q1 2009

Buy Now

General Information

The Turkish government has been working hard to attract more foreign direct investment (FDI) into thecountry, hoping to bolster domestic consumption as well as capital investments over the long term and, asdiscussed in the body of this report, the food and drink sector has been central to these efforts. Recentmonths have witnessed two major international investors announcing their intentions of investing heavilyin the Turkish economy, with the agriculture and food and drink sectors the focus of these investments.In November 2008, the European Bank for Reconstruction and Development (EBRD), which hasbeen instrumental in developing small and medium sized businesses in emerging economies, announcedthe historic move to start funding projects in Turkey, a country that had previously been outside of its areaof operations. This decision to start investing in Turkey represents the EBRD’s first move outside of thecountries of the former Soviet bloc, as shareholders were convinced that it was time to shift the bank’sfocus further east, with Turkey’s strong trade links with countries in the Balkans, the Caucasus andCentral Asia a key factor in convincing shareholders to start Turkish funding. Turkey has been ashareholder in the EBRD since the bank was founded in 1991 and had requested a change of status tobecome a country of operations earlier on in 2008. Initially, the request was resisted by both the US andEU shareholders, before they eventually came around to the idea. Of the EUR5.95bn (US$7.67bn) thatthe bank plans to invest in 2009, EUR150mn (US$193.3mn) has been earmarked for Turkey, mainly to beinvested in municipalities, small businesses and agribusiness, which would rise to EUR300mn in 2010,with further increases in subsequent years, making Turkey one of the EBRD's largest countries ofoperation. The funding could have a transformative effect on small- and medium-sized food and drinkproducers, as well as for the agricultural sector.This was followed by an announcement by a Gulf investment vehicle consisting of the Bahrain-basedIthmaar Bank and Gulf Finance House and the UAE's Abu Dhabi Investment House stating its plansto invest at least US$150mn in Turkey's agricultural sector in 2009. Operating under a strategic alliancecalled Vision3, the deal has opened the way for almost US$9bn worth of investment opportunities,particularly in Turkey's agricultural sector. The Turkish government was keen to portray the investmentas a vote of confidence in the country's economy and a reflection of the strength of the agricultural sector.Indeed, such investments in the Turkish economy are sorely needed, particularly given the country's largecurrent-account deficit and the current financial climate. With the government coming under increasingpressure to reduce its agricultural subsidies, it has been looking to support the sector through other means,such as infrastructure and irrigation projects. Turkish government representatives have recently said thatthey have decided to make substantial infrastructure investments in agriculture in order to makeinvestment in the real economy more desirable for potential investors, with these investments by theEBRD and Vision3 precisely the type of FDI that it has been hoping to attract.


Business Monitor International
List Price
Number Of Pages
Product Group
Product Type Name
Publication Date
Turkey Food and Drink Report Q1 2009
Release Date
Download: PDF


There are no comments to display.

Item information

Added by
Last update

More in Coffee & Tea

More from CvP

Share this item

Top Bottom