Promising Verticals Fuel Bullish Growth in Turkey
a&s Turkiye | Date:
The pick-up in the construction sector accelerated growth in the private sector with new residential, retail and health care projects. There were also many security projects in finance and education.
However, the largest budgets this year came from the public sector. Projects at the fore were city surveillance, transportation projects (airports, undergrounds, tunnels, et cetera.) and public buildings.
The most attractive projects of 2011 were for Turk Telekom, Zorlu Center, Sabiha Goksen Airport, and the National Archives.
In addition to the large projects, there were also many medium scale projects, which were mostly integrated projects that include fire detection and extinguishing systems, video surveillance, access control and intrusion detection.
In 2011, an increased number of projects required IP-based HD video surveillance systems and card access systems, and demanded integration between the systems, said Bilgecanan Bilgis, Marketing Manager at Ateksis. “Antalya Airport, Medipol Hospital, Bursa Hilton and Hampton by Hilton, and Fenerbah?e Ulker Arena are projects in Turkey which we would like to be part of and concentrate on, and Malabo Congress Center Haydar Aliyev Center abroad.”
Levent Yildir?m, Director of Siemens Substructure and Cities Sector Building Technologies, said that Siemens surpassed their goals in 2011, citing numerous projects that are worth more than $100,000 in value: Buyaka Complex (shopping center, residence, office), Hilton Hotels, Erdemir, Sandoz, Magnesia Shopping Center, Tarsu Shopping Center, Habom (Aviation Maintenance Center), Marmara Park, Zorlu, Safir, Aliaga Prison, Bodrum Airport, Izmir Special Provincial Directorate of Administration KGM. He also stresses the contributed part of the accomplishment to foreign projects, most of which are located in neighboring countries like Iraq, Russia, Algeria, et cetera.
Gurani Kilic, Country Sales Director for Bosch Security Systems, mentions projects that were conducted in collaboration with their partners and are worth more than $500,000 in value: Sorgun, Soke, Didim Surveillance Cameras Projects, Highway Tunnels Projects, Turkiye, Kirazli – Olimpiyatkoy Subway Line Project, Istanbul, Antalya Airport Domestic and International Lines Terminal 2.Section, Antalya, Republic of Turkiye Central Bank, Bursa, BSH Factory, Istanbul, Bagc?lar Medipol Hospital, Istanbul, Hilton Hotel, Bursa, Cumhuriyet University, Sivas, Archaeology Museum, Hatay, Ma?ka Residence, Istanbul, European Residences, Istanbul, Terrcity Shopping Center, Antalya.
Bulent Cobanoglu, GM of Senkron Guvenlik, mentioned two important bank projects by Honeywell: Standardizing systems for the merged Fortis and Turkiye Ekonomi Bank, as well as a card access system for Garanti Bank that covered 50 management buildings.
2012 and Crystal Ball
Although 2012 will be a difficult year, the consensus is that growth in the security industry will continue despite the economic slowdown, said Tarkan Tuncel, GM of Kekova.
The recession prospect in the world economy in 2012 weakens the prospect for growth in Turkey, Kilic said. “In 2012, there is a 4-5 percent growth prospect in the general economy and 6-7 percent in the construction sector. We can say that the security systems sector will indirectly be affected by this conjuncture in 2012."
“In addition, the pick-up in Libya and the neighboring countries in the last quarter of the year is good news for our sector,” Kilic continued, saying that the continuation of public investments and the mega projects into 2012 suggests that the security industry will continue to grow, albeit at a slower pace.
Yusuf Ziya Oncel, Sales Manager at Pelco Turkey, predicts that 2012 will be a year when no one will be able to conduct aggressive enterprises, but that “we will keep a wary eye so that we can maintain our stability.” According to Oncel, the next 10 percent of growth will be achieved via digesting the growth that occurred in 2010 and 2011, while also stabilizing the total sales at the same levels.
Hidayet Yilmaz of NFS Guvenlik also agrees that the security market will continue growing in 2012, although at a slower pace. According to Yilmaz, the city transformation that will be carried out in 2012, especially in big cities, will have a positive impact on the market.
Cobanoglu shares the consensus. “If there is a crisis, we have to conduct business is different ways. We have to hold fairs and seminars to continue to educate the market. Otherwise, it is hard to hold on.”
In terms of products, industry experts agree that sales for IP-based systems and megapixel cameras will continue to grow. Yildiz has high hopes for network cameras and regularly expands their IP-based product groups. IR cameras and mobile DVR's also show similar potential.
Green buildings will play a key role for the security industry in 2012. Green buildings make extensive use of automation technologies to make them easily manageable, traceable and intelligent, and are great investments in terms of ROI. Especially big cities, green buildings will begin to flourish and; companies that operate and develop products in this field will be able to perform well even in bad economies, according to Kilic."
Additionally, Profilo Security Systems Sales Manager, Ertan Gedik predicts that the alarm system projects will increase for gas leak, fire and flood detection.
Although 2011 evaluations and 2012 predictions point to growth and development for the security industry, there are a few problems that need to be solved.
Products and companies must form and adhere to standards. “Although Turkey is among the few countries that will grow, compared to other nations in Europe and the Middle East, regulations and standards are still not what they should be,” Ozan Demirel, Region Manager, Controls and Security Systems, UTC Climatel said.
Cobanoglu believes that the lack of certification for security companies is a problem, saying that there is no selection process or evaluation even though there are more and more companies entering the market.
Cobanoglu continues to talk about another issue: there is no specialty customs for the security sector in Turkey. “Unfortunately, we still pay Special Consumption Tax (SCT). Video surveillance cameras are taxed as luxury items, following the footsteps of the digital camera found in everyone's pocket. However, these systems are not luxury — they are a necessity. Cancelling the SCT and lowering VAT would directly affect the end user and increase our sale, while also preventing illegal activities regarding security equipment, such as counterfeiting and bootlegging."