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Turkey Looks East for Support in Growing Maritime Logistics Sector

Opportunities and optimism cited as key aspects of Turkey's burgeoning shipping sector, although many acknowledge that mainland support and know-how may be key to allowing the under-resourced industry to reach its full potential.

Photo: ZPMC: A Chinese company picking up business in Turkey.
ZPMC: A Chinese company picking up business in Turkey.
Photo: ZPMC: A Chinese company picking up business in Turkey.
ZPMC: A Chinese company picking up business in Turkey.

The success of one Chinese heavy equipment specialist and the huge number of opportunities opening up in Turkey's shipping logistics sector rightly dominated proceedings at the Third Black Sea Ports and Shipping Conference in Istanbul. Speaking at the opening of the event, Sean Pierce, Chief Executive of sponsors Yilport, one of Turkey's largest container terminals, spoke of the "optimism and opportunity" now prevalent in the Black Sea region. He also highlighted the opportunities offered by Turkey's economy, the 17th strongest in the world, with a GDP of some US$820 billion in 2013.

Addressing the delegates, he said: "Many new companies are setting up, especially in construction – a sector where Turkey is right behind China. The rate of containerisation is strong and we are heading down a really good path."

One company that attracted particular attention at the event was the Shanghai Zhenhua Heavy Industry Co Ltd (ZPMC). The Shanghai Stock Exchange-listed company was founded in 1992 and has established a robust reputation for the quality of its heavy lifting gear. According to the company, its success is based on its completive delivery times and relatively low prices (around 1 million euros per crane).

One clear fan is Erdim Şengün, Commercial Manager of the Kumport terminal, to the west of Istanbul He said: "To date, we have bought seven ship-to-shore (STS) cranes from ZPMC and eight rubber-tyred gantry cranes (RTGs).

"At Kumport we have seen a massive increase in traffic from 2006 to 2013, with growth averaging 22% per year. In 2013, we handled 1.3 million 20-foot unit containers (TEUs) and in 2014 we increased that to 1.4 million.

"Istanbul is a vital hub for the Black Sea region. Ships offload at Kumport so that feeder vessels can take cargo on through the Bosphorus to destinations in Bulgaria, Russia, Georgia and Ukraine."

Another testimonial came from Otto Lodder, Sales Engineer for Dutch specialist crane cabin manufacturer Merford. He said: "A few years ago ZPMC tried to copy our cabin, but that didn't work. Now it is one of our customers and we have forged a genuine partnership.

"In the early days, some 10 years ago, there were problems. We would deliver the cabins, but they were not correctly assembled. ZPMC has improved its skills base and we have worked out a system of quality control so that the end users – the ports – are always satisfied."

Looking at the broader picture, writing in a recent edition of Port Technology International magazine, Uno Bryfors, Vice-president of Sweden's ABB Crane Systems, predicted that, over the next decade, shippers will demand shorter door-to-door transport times at no extra cost. Terminals will, therefore, have to become more efficient and flexible, avoiding bottlenecks and be capable of ramping up quickly to handle differing container flows. He sees the future as being far more about automation, with cranes being able to handle multiple containers in one move.

With this in mind, one firm about to enter the Turkish market is Rainbow-Cargotec Industries Co Ltd (RCI), a giant joint venture between the Finnish company Cargotec and China's Jiangsu Rainbow Heavy Industries Co Ltd (RHI). RCI will focus on building and supplying STS cranes, RTGs, rail mounted gantry cranes and marine specialty cranes.

Photo: Koq: “Forced to upgrade”
Koq: “Forced to upgrade”
Photo: Koq: “Forced to upgrade”
Koq: “Forced to upgrade”
Photo: Lodder: “Genuine partnership”.
Lodder: “Genuine partnership”.
Photo: Lodder: “Genuine partnership”.
Lodder: “Genuine partnership”.

 

Explaining the rationale behind this new partnership, Mustafa Koç, a Sales Manager with Turkish partner firm Toyota Istif Makineleri Aş said: "RCI is building new RTGs. Its machines will be plug-and-play, assembled at the ports with no welding or difficult engineering required. They are being transported from China in three different ways, fully erect, flat, and completely disassembled, but they can be operational very quickly.

"Turkish ports are being forced to upgrade because of the country's unique geography – 90% of the ports back onto a large hill or mountain range, limiting their options for expansion. The ports have to be very sophisticated and innovative if they want to grow, so they need the latest technology in cargo handling. When it comes to Chinese products the mentality to some extent is still ‘look out, check the quality', but they are improving year-on-year. Turkey now offers the perfect opportunity for the Chinese to do business."

Analysing the expansion in port traffic, Murat Savut, General Manager of the Turkish office of China Shipping Container Lines. said: "There is a lot of co-operation at government level. The Chinese Consul-General held a reception last October to celebrate this business growth.

"China Shipping's first vessel arrived in Turkey in 1999. We launched a joint venture in 2005 and, last year, we handled 65,000 containers (TEUs) in and out. This year alone we will grow by 50%. There is a lot of attention on Turkey and, especially, on the Black Sea Region."

Despite the overall level of good will towards Chinese manufacturers in the region, some players still have reservations. According to Arno Logman, a Projects Manager for Dutch STS rail specialists Bemo, mistakes still happen. He said: "Recently we ordered six or seven containers of rails and, although we had provided the exact specifications, the inter-connecting design was wrong. They all had to go back."

Logman said while Chinese products are still cheaper, the price differences are narrowing, with rail millers supplying rail 10-20% cent cheaper than their EU counterparts and clips about 30% cent lower.

Again on the negative side, Mustafa Çetin, Sales Manager of Blane, a Turkish escalator and elevator firm, recalls once ordering a shipment of plastic granules from China but, instead, taking delivery of bags of soil.

He said: "Those days are largely over. You have to be careful and provide detailed specifications, but there is a will in China to do business and to find profits. Ten years ago hardly anyone spoke English. Now it is far easier to communicate."

 

Photo: Yilport: Benefitting from a boom in Black sea trade.
Yilport: Benefitting from a boom in Black sea trade.
Photo: Yilport: Benefitting from a boom in Black sea trade.
Yilport: Benefitting from a boom in Black sea trade.

The Third Black Sea Ports and Shipping Conference was held in Istanbul, Turkey, on 3-4 September 2014. There were 29 exhibitors and 339 participants from 16 different countries, including Turkey Egypt, Italy, the US, France, the UK, Greece, UAE, Greece, Netherlands, Romania, Spain, Germany, Georgia, Malaysia, and Sweden.

George Dearsley, Special Correspondent, Istanbul

Content provided by Picture: HKTDC Research
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