Since 2001, safety and security issues have gained a considerable amount of attention all around the globe, creating one of the fastest growing industry sectors. The situation in Turkey is no different. After a relatively long period of political stability and economic growth averaging 7.2 percent over the past five years, Turkey has become an attractive emerging market for security equipment. Since 2001, safety and security issues have gained a considerable amount of attention all around the globe, creating one of the fastest growing industry sectors. The situation in Turkey is no different. After a relatively long period of political stability and economic growth averaging 7.2 percent over the past five years, Turkey has become an attractive emerging market for security equipment.
Modern Turkey was founded in 1923 from the Anatolian remnants of the defeated Ottoman Empire by national hero Mustafa Kemal, who was later honored with the title Ataturk or ¨Father of the Turks.〃 Under his authoritarian leadership, the country adopted wide-ranging social, legal and political reforms. After a period of one-party rule, an experiment with multi-party politics led to the 1950 election victory of the opposition Democratic Party and the peaceful transfer of power.
Since then, Turkish political parties have multiplied, but democracy has been fractured by periods of instability and intermittent military coups (in 1960, 1971 and 1980), which in each case eventually resulted in a return of political power to civilians.
Although Turkey has been dealing with issues of terrorism and political violence for decades, the rapid increase in crime, private and commercial fraud, fires and other safety hazards has rendered security a prime concern for private citizens as well as for industry and commerce. Thus, the demand for safety and security equipment and services has been at an all-time high, and the sector is experiencing remarkable growth.
AN UNTAPPED MARKET
According to International Herald Tribune, the main risk in Turkey these days is still the political situation. External factors, such as the Iraq war, renewed attacks by Kurdish PKK militants quartering in northern Iraq and statements by E.U. politicians opposing to Turkeyˇs accession and membership have all contributed to a new wave of nationalism and socio-political movements.
Luckily, the political confusion so far has had little impact on the overall Turkish economy. The new lira remains bullish, at 1.22 to the dollar; and foreign investorsencouraged by the start of European convergence and the prospects of a largely untapped Turkish market continue to pour unprecedented amounts of capital into the local economy. In 2006, US$20 billion worth of international investment was attracted, said former Prime Minister Erdogan in a recent investment advisory council meeting.
Aside from the numerous mergers and acquisitions in the financial industry, other sectors like telecommunications, energy, food manufacturing, retail and real estate have also been found attractive: foreigners have spent, over the past three years, some $4.5 billion on properties and privatized entities in Turkey.
The total market for safety and security equipment and services in Turkey was estimated, by U.S. Commercial Service, to be around $2.8 billion in 2006 and is expected to climb to $3 billion in 2007. In 2007, physical security services, meaning private security guards, patrols and security training services, are expected to capture $2.5 billion of the total market, electronic security methods $360 million and cash-in-transfer services $165 million.
¨The size of the Turkish electronic security market is estimated to be at least $300 million per year,〃 seconded Ekrem Ozkara, Chairman of Okisan, ¨with 50 percent of this allocated to video surveillance and 30 percent access control.〃 In terms of revenue turnover, Okisan is the largest distributor of camera and alarm systems in Turkey, representing brands such as VIVOTEK, YOKO, VGuard, Fuho, CNB, D-Teg, Kocom, TMvideo, OKIDA, ViSage, tecnosec, Fujinon and Teletek.
At the end-user level (including installation costs), high-end government security projects are valued at $400 to $500 million, said Murat Kemal Akay, General Manager of system integrator intermas technology, and the total security market in Turkey is about $2.5 to $3 billion. ¨Turkish system integrators are also active in neighboring countries like Azerbaijan, Bulgaria, Ukraine, Syria, Libya and Gulf nations,〃 Akay went on, ¨working on airport, stadium and shopping complex projects.〃 Feridun Bayram, General Manager of event organizer Marmara Fair Organization, added that Turkish presence can also be seen in Poland, Iran, Iraq, Greece and Kosovo.
¨Growing demand for secur i ty measures,〃 commented Ozkara, ¨can be seen in verticals such as transportation [especially railway systems], manufacturing [textile and automobile factories], education and buildings [both government and private].〃 Other projects mentioned by industry sources include city surveillance, mountain watch (for gas pipelines) and homes (with telecoms providing bundled packages). Can Gurcan, General Manager of SBS, added military bases, hospitals and offices to the mix.
¨After the British Consulate bombing in 2003,〃 said Bayram, ¨the government has heightened security measures in critical buildings and structures. Airports are also being renewed and upgraded.〃 With the new government and national assembly (elected in July 2007), securityrelated bills are expected to be signed, making security and safety mandatory in all buildings. Annual growth will then be 35 to 40 percent, for at least three to five years, Bayram predicted.
Although privatization of state enterprises started 20 years ago, the rate has only been picking up in recent years. Ownerships of oil refineries, telecoms, airports and mines have changed hands in the last four to five years, and multinational corporations are working with local companies more to form consortia for investment purposes or to bid on large-scale projects. Automobile plants, such as Toyota, Renault, Hyundai, Fiat and Mercedes-Benz, are the prime examples, and they all require an unprecedented amount of security equipment and services.
With an annual GDP growth of 7 percent, said one government source, the Turkish government is acutely aware of the importance of comprehensive transportation networks for further, sustainable development. Aside from the Ankara- Istanbul and Ankara-Konya high-speed rail projects, the Marmara undersea tunnel project and Kars-Tbilisi (Turkey-Georgia) project have been discussed extensively in the international locomotive industry as they willupon completionconnect London to Beijing with railways.
There are also numerous metro and tramway projects being planned for or taking place in Ankara and Istanbul, as these two major cities house roughly one third of the Turkish population. According to one government engineer, 11 public transit lines are currently in operation in the two cities, and 7 new ones are under construction. It is estimated that by 2023 (the centennial anniversary of the establishment of the Turkish Republic) there will be 561.66 kilometers of metro, tramway and light-rail lines in Istanbul alone.
PRODUCTS IN DEMAND
Electronic security technology requirements vary according to sector and company needs. For instance, the primary objective in industrial sectors might be security of manufacturing areas/ investments and workplace safety, whereas in retail the priority might be solutions for theft detection and prevention. Currently, the most popular systems in Turkey are listed as follows:
Electronic Surveillance Systems
Access Control Equipment and Systems
Sales Point POS/EM Data Software
RFID Product Safety Labeling
X-Ray Screening Equipment
Fire Detection and Warning Systems
Ozkara of Okisan pointed out that the Turks watch for the latest technology but are quite sensitive about price. ¨Right now, price is still the first thing buyers ask about,〃 seconded Gurcan of SBS, ¨but quality will prevail in two yearsˇ time as more people benefit from clear images.〃
Burglars and robberies have increased dramatically in recent years, and as a result, city surveillance and home protection are two of the largest sectors these days, said Ali Yildiz, General Manager of Oncu. The companyˇs best-selling products are DVRs, speed domes and infrared/night vision cameras. Yildiz thinks Asian products could use more features with better software platforms, and providing better technical support should be on everyoneˇs to-do list.
When asked about Asia-made products, Ozcan Demir, General Manager of Genet, provided an interesting view: ¨Even though Korean products are a bit pricy, Turkish people still like them the mostespecially given the emotional connections from the Korean War 40 years ago.〃
Biometrics is a relatively new concept in Turkey, which started to surface about three years ago. Aykko, a distributor of access control and biometrics, products has almost 99 percent of the market share, cashing in $3 million per year. ¨Other verticals demanding security and biometrics include factories, government offices, financial institutions, office buildings, international schools and home users,〃 said Ozhan Kurkcu, Marketing Manager. ¨Because more than 20 percent of the Turkish population (total more than 71 million) is in Istanbul, most security companies start testing waters in this city first.〃
As for IP, Turkey is just in its infancy but will start to pick up soon as more and more system integrators and installers are inquiring about it. For example, the popular ADSL connection two years ago was 256k; now, 2 to 4M is the norm.