Leading port operator looks for new investments in Turkey
Güneş Kömürcüler - ISTANBULAPM Terminals, a port operator owned by AP Moeller-Maersk, is looking for new ports to invest in Turkey, where the container business offers huge growth potential in the long-term, said the company’s Turkey chief.
At the same time, APM Terminal’s Turkey chief Mogens Wolf Larsen also requested that Turkish authorities ease bureaucratic processes for foreign investors by launching a special agency to help them.
The Hague-based APM Terminals and Petkim, owned by Azerbaijan’s SOCAR, are together investing more than $400 million in the APM port in the Aliağa district of İzmir, which will have an annual container handling capacity of 1.3 million 20-foot equivalent units, or TEUs, making it the largest of its kind in the Aegean region, when it is completed.
“We have been looking for new investments in Turkey because it is a very interesting market for us. The fundamentals of the Turkish market with the respect of population growth, the share of the young population, the growth pace of the Turkish GDP and Turkey’s geographical location as a potential hub for Central Asia make Turkey very interesting for us and for our industry. We want to invest more in Turkey in this vein,” Larsen, also APM Terminal İzmir’s managing director, said in an interview with the Hürriyet Daily News on Oct. 26, one day before the ninth Investment Advisory Council Meeting in Istanbul.
The ninth Investment Advisory Council Meeting was organized by the Turkish government with the attendance of the top chiefs from 21 large global companies to discuss suggestions about what Turkey can do to lure more investment and hear what Ankara can offer.
Larsen said they had mainly been looking for opportunities in three regions in Turkey.
“We are very much interested in the whole Sea of Marmara. On the European side, Ambarlı for instance, and another in İzmit Bay. We are in dialogue with most of the current port operators and also with the potential promoters of new projects. We are also interested in the Mediterranean side of Turkey, somewhere from Mersin to İskenderun. İzmir, where we are today, Istanbul and the Mediterranean side are the places we want to invest more in,” he said, adding that their position in Turkey was long-term.
Asked whether they had made any changes in their investment plans due to increased uncertainty in Turkey, including the failed coup attempt, Larsen said they did not.
“The type of our investments are long-term infrastructure investments,” he said. “And we say that for the next 30-40 years at least, Turkey is the right place to be.”
Port ‘to open soon’
He also noted that the construction of the first phase of the Aliağa port was completed and that the second phase would be completed next year.
“For the first phase, there is an adequate size of capacity. Once the second phase is completed, we will have a lot of area to operate. We have made everything ready and now we have been in commercial talks with customers and potential customers to open the terminal. Once we agree on the conditions, we will set the exact date. We could open it this year,” he added.
Operating under a 28-year concession agreement with Petkim, the APM Terminals İzmir facility will have 700 meters of quay and a 16-meter depth, with the ability to make an annual container handling capacity of 420,000 TEUs before a further expansion in a second phase next year.
Complex bureaucratic processes
APM Terminals, meanwhile, recommended the establishment of a special agency to help newcomers navigate Turkey’s bureaucratic processes.
“The government and authorities have to follow their own processes and there are checks and balances, as is the case in all countries. They need to make sure that everything is in place. We don’t propose that requirements be removed,” Larsen said. “But as a foreign investor, when you want to make sure everything is in right place, it is not easy to find out what to do. So it would be nice if there would be a special body to help and us navigate in coordinating the processes.”
Turkey in need of ports to host large ships
There is huge potential for containerized trade to grow in Turkey, and the more Turkey opens up and starts accepting large ships, the more its trade costs will decrease, according to APM Terminal İzmir’s managing director, Mogens Wolf Larsen.
“Global trade has now focused on large ships, but very few of them are coming to Turkey, as most of the ports in Turkey cannot host them. This needs to change,” Larsen told the Hürriyet Daily News.
“Turkey’s import and export prices will escalate unless it builds ports to serve them. Turkey ships its exports to Europe with small ships first to Piraeus or even Malta and then offloads to larger ships there. The Piraeus port has the capacity to serve such ships, unlike many ports in Turkey. The shipping lines which choose larger ships with lower costs will prefer other ports like Piraeus or Malta over Turkey,” he added.