GÜVEN SAK > Why Amgen chose Singapore over Istanbul

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Amgen is a U.S.-based multinational biotechnology company known for its clinical and commercial manufacturing of biotechnology-based medicines. The company started its Turkish operation in 2010.

Last April it bought 95.6 percent of a rare research-oriented Turkish pharmaceutical company, Mustafa Nevzat, for $700 million.

That is the sort of thing we would like to see more of in Turkey. Amgen was signaling that it wanted to have a manufacturing and research and development facility in Turkey – a good sign perhaps, for a new wave of biotechnology investment. Then, about two weeks ago, Amgen announced plans to build a new manufacturing facility in the Tuas Biomedical Park area of Singapore. Not in Istanbul.

Are you following the growing number of multinational offices in Istanbul? It looks good on the face of it. It certainly helps the ongoing construction boom. Yet all those fancy offices focus on marketing.

Turkey is considered a good pharmaceutical customer, not a manufacturer. Nobody considers research and development investment here. One absent sector could be a blip, two a coincidence but more than that could only be a trend. It is a trend now, if you ask me. Now with the new 10th five-year development plan period, we have got to change our attitude. Developing countries are getting an increasing share of research and development investment, and Turkey cannot afford to be left behind.

Let me explain.

In terms of biotechnology and pharmaceutical FDI into Turkey, the numbers doubled between 2003 and 2006 and again in 2007-2010. But the figures are still in the millions of dollars here, and not in the billions seen in China, India and Singapore. Those three come right after the U.S. in attracting bio-investments. So the direction in biotechnology is toward developing countries. When it comes to biotechnology investments in China and India, one-third to one-half of investments are in research and development. Not so in Turkey, though we desperately need biotechnology investments to upgrade our production capacity. Look at the export sophistication level of Turkish industry: If Switzerland is 100 in terms of sophistication, Turkey is at 69 in comparison to the 80+ rankings of China and India. Why do China and India have more sophisticated production facilities? It’s thanks to investors like Amgen.

So what is wrong with Turkey? Why is our investment environment not conducive to high-tech choices? First, a few rankings from the Global Competitiveness Report between 2006 and 2012: Our justice system declined from 56th to 83rd place, our tax regime from 95th to 117th and our education system fell from 58th to 74th place. All this indicates a general deterioration in Turkey’s global competitiveness.

Secondly, look at the public procurement priorities of the government, which is the largest buyer of medicine. The government allows price increases only for generic products. This has pushed Turkish companies to divert their activity from research to generic production. Bad incentive. Thirdly, the Ministry of Agriculture has made biotechnology research impossible by yet another misguided communiqué. That was the unintended consequence of another populist move. Just follow TEPAV’s Life Sciences and Health Policy Institute bulletins to get updates.

Why does Turkey obstruct investment despite its desperate need for it? It is the silent effect of an uncoordinated and misguided industrial policy. Time to enhance coordination.


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Notice on comments

B Medic

1/28/2013 12:33:39 PM

Another reason is that Singapore is situated closer to huge markets like China, Indonesia and other Asian countries . Turkey has some work left to do in the pharmaceutical field: Most Turkish drug companies make their money on the cheap generics instead of more profitable new innovative drugs and the pharma sector's share of the total economy is relatively small. But Turkey is making progress in its research so who knows 10 years from now?

B Medic

1/28/2013 12:27:03 PM

I am not saying Mr Sak and other comments are wrong, but another important reason why Amgen started up a factory in Singapore is that there are a lot of know-how in pharmaceutical manufacturing. Most big pharma companies have factories in Jurong technology park and there are plenty of educated chemical/pharma engineers in Singapore. Turkey's pharma industry is also growing fast and there will probably open up new pharma factories here soon too.

Coskan U

1/28/2013 3:55:53 AM

So far most of the Turkish/foreign investment has been based on quick bucks via privatization. Investment into any kind of high end tech business requires local foundation in education, attitude and dedication. This government spent more time and emphasis on covering up the girls at schools than quality of research at universities. Look at all the recent brutal treatment of students at ODTU. TBTAK/rectors have become tools. Check Turkish investment into research before expecting foreigners.


1/27/2013 8:06:31 AM

Maybe another factor played a role. Islamic countries do not accept evolution theories. This makes it difficult to do reseach in the field of medicine, biogenetics, physics, astronomy….etc. This is probably the reason why there are almost no nobelprize winners from islamic countries applying severe islamic laws


1/27/2013 5:04:52 AM

fewer imam hateps more ALs would be a start. The signals the government is sending would give me pause if I were making an investment in the educational and scientific future here.

mara mcglothin

1/26/2013 4:24:55 PM

Foreign investment from the West is further tested by how the rules are frequently manipulated in Turkey. Contracts and rules were made to be broken. Leases, loans and other instruments of business are not ever unbreakable/unchangeable. It is hard to write a business plan with none of your costs are constant and can change at the drop of a hat.

Optimist 23

1/26/2013 4:16:25 PM

Besides creatiing an attrative business enviroment it is availability of an educated and skilled labor pool. This is one of the greatest handicaps of modern Turkey, excellence in education. This is combination that women only make up 30 percent of the labor force, this is a waste of resources no modern state can afford.

Agnes Smith

1/26/2013 1:30:01 PM

Who within the ministry does this bad result lie? As for being a great customer until doctors stop issueing vast amounts of prescription drugs that will remain. The Turks love drugs instead of being encouraged to have a healthier life style and diet. Diabetes and blood pressure issues which are prevelent can be helped thus.

Blue Dotterel

1/26/2013 10:05:40 AM

Why does Turkey allow its potential R&D companies, like Mustafa Nevzat, to be taken over by foreign companies who have no concern for Turkey's national interests? Turkey's government is responsible for protecting the interests of the nation by requiring that companies, in order to do business in Turkey, invest in R&D, and any other positive actions to benefit the people. Instead, this government is destroying Turkey's assets, by allowing foreign companies, and countries to take over the economy

Red Tail

1/26/2013 7:50:46 AM

One reason could be the ability to attract international staff. 50% of the Turks do not want to have a Christian neighbour. I know example of that mulitnationals (among the biggest in the world) had to pay bribes to get work permits for foreign staff. It is difficult with good schools, difficult to manage without speaking Turkish, environment is rather poluted and traffic can go on your nerves. Rents are rather high in prime locatons. Well, these are the problems, but there are also nice things.
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