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Turkish-Belgian Business Council boosts economic relations Paul Vanfrachem President of TBBC : "I'm charmed by Turkey, as a person and as a businessman" ü Mr. Vanfrachem, you are the President of the Turkish-Belgian Business Council. Can you explain why this organisation was founded and what its aims are? ü TBBC was founded in 1989 by the Federation of Belgian Enterprises (FEB) and DEIK, a consortium of Turkish employers organisations. The objective was to improve the business relations between Belgium and Turkey. In the first years, TBBC was working very well under the guidance of an enthusiastic president, but after this period it became inactive. In early 2003, our Turkish colleagues of DEIK asked the FEB to re-launch this council. The Belgian partner answered positively, thinking that it was a good idea to strengthen business ties between both countries. I have accepted to take up the presidency and used my experience with Turkey as a businessman to boost contacts. We have organised several meetings to present the Turkish economy and its growth potential to Belgian businessmen. Also, we participated in the economic mission led by Prince Philippe a few months ago, and organised a seminar which targeted Belgian businessmen who want to export to Turkey. Our aim is to organise similar seminars in Turkey in the near future to explain the Belgian economy. My co-chairman on the Turkish side is Mr Yuce. ü You had worked for the international cement company CBR for a very long time. During your career, you had close relations with Turkey and played an important role in CBR's investment there. Why did CBR decide to invest in Turkey? ü This investment can be placed in the framework of our general strategy. Cement is a local business activity and in Belgium, we have reached our maximum capacity as a market leader. The only option was to diversify geographically by acquiring cement companies in countries for which we have foreseen a growth in cement consumption. Turkey was clearly one of them. In 1995, we invested 300 million dollars to buy a plant in Canakkale. Afterwards, we merged it with a plant of the Sabanci group in Marmara. Since then, we are partners with the Sabanci group on a 50-50 basis. A third plant of our group is situated in the Black Sea region. The general turnover is 170 million dollars a year with a workforce of a thousand employees. We sell around 4 million tons of cement every year and we are currently the market leader in the Marmara region. ü You have chosen a well known Turkish company for business partnership. Was this important for you? ü To choose a good and reliable local partner is also part of our strategy. We are specialised in producing and selling cement. That is the know-how and expertise that we can offer to the countries where we invest. But we are also convinced that we should respect the local culture. Especially when that culture differs from your own, a local partner is always a good solution. Your counterparts know the local traditions, the way to handle things, the local network and the authorities. The drawback of such a partnership is that you are less free than if you were alone… just like in a marriage, you have to take the ideas of your partner into account too! However, our experience with the Sabanci group is very positive. ü After working intensively in Turkey for nine years, in your opinion, what are the most important assets of Turkey as an investment country? ü In the first years of our investment, we were very happy. Then, unfortunately the earthquake near Istanbul was a big shock and caused a slow down in the economy. The financial crisis and the devaluation of the Turkish Lira in 2001 was another economic slump which had a negative impact on our business. Despite these events, our company has never suffered a loss. We regard them as mere micro-economic disruptions and still believe in the great potential of the Turkish economy on the long run. It is undoubtedly a growing market and a developing country. Many of the population and infrastructural needs must be fulfilled. Do not forget that this is a huge market with 70 million people! When you leave the big cities in Turkey, you can see the needs everywhere around you… Another big asset of Turkey as an investment country is that Turkish people are hard workers at all levels, very professional and highly educated. You can find excellent and dedicated local managers. For instance, our company recruited nearly all its managers locally. Finally, I hope that the positive attitude of Belgian people and politicians towards accepting Turkey as an EU member state - like our minister of Foreign Affairs, Mr Louis Michel - will also be a reason to maintain good economic relations. The Belgian business community strongly supports Turkey's membership too since it would certainly facilitate trade even more between the two countries.ü However, there are surely some aspects that can be improved… ü Certainly, there are some. We still encounter some trade barriers. And the Turkish market is not a totally free market yet. Many state-owned companies are still active and they do not always comply with the same rules as the private sector, which lead to unfair competition. Furthermore, I would plead for more transparent laws, which I consider as the main obstacle for the moment. Energy supply today is not quite reliable and prices are high compared to other countries. There might even be a shortage of electricity in the forthcoming years. For the energy-consuming business like ours, this is another concern. ü You mentioned about the cultural differences in doing business and the importance of having a local partner to overcome them. Could you describe us those differences ? ü Whether you like it or not, the 'relations network' is of much higher importance than in the western countries like Belgium. Secondly, people are more emotionally involved while doing business, but that is the case not only in Turkey but also in all Mediterranean countries like Greece, Italy… Moreover, I have found out that Turks are highly flexible. These are the main differences. Personally, I was not confronted with great cultural differences. What might be problematic for the development of the Turkish economy is the deficiency in tax collection. And the black market is still very important, people should show more citizenship.