In today's press release, SACE announced that it has guaranteed the USD 624 million loan granted by a syndicate of international banks to the Turkish company Tupras for the modernization of the Izmit refinery, near Istanbul. SACE's intervention will cover the supply contracts currently being awarded to various Italian companies.
The project, whose total value is USD 2,4 billion, will allow Tupras (which is part of the Koc Group, the first private Turkish group) to improve the efficiency and profitability of the Izmit refinery (the only one in Turkey) , by converting fuel oils with a high sulfur content and refined products with low margins, into Euro 5 diesel and other refined products with higher added value. The full text of the press release can be found at the link:
http://www.sace.it/GruppoSACE/export/sites/default/download/comunicati/2011/20111013_Operazione_Tupras_1.pdf
The operation confirms SACE's commitment to supporting Italian exports in high-potential markets such as Turkey, where it has its own office in Istanbul. Indeed, Turkey is becoming an increasingly important country in SACE's risk portfolio. As of last June, SACE's exposure to the country was the fifth largest in terms of volume of insurance commitments, apart from Italy, with an amount of over €1.362 million (after Russia, by far the first with over €5,5 billion , and United Kingdom, Argentina and Brazil); but it is probable that with this operation various positions will be climbed. Despite the permanence of some risk factors (the country risk Turkey is considered by SACE in the M2 category, the fifth out of nine, exactly in the middle of the risk scale of our ECA), SACE does not envisage any restrictions on the granting of guarantees, both for sovereign risk and for banking and corporate .
Moreover, the country is going through a good phase of growth. After the 2008-9 crisis, Turkey's GDP grew by nearly 9% last year, and is expected to grow at rates close to 5% in 2011-12. The flow of foreign investment has resumed at good levels, and the country enjoys a solid and well-capitalised banking system.
As far as trade with Italy is concerned, again SACE, in its risk profile on the country, writes that: "Italy is Turkey's fourth trading partner after Germany, Russia and China. In 2010 the trade balance between the two countries amounted to 2,9 billion euros, an increase of 133% over the previous year due to the international crisis. Imports, amounting to 5,1 billion euros, increased by 16%; while Italian exports, equal to 8 billion euros, increased by 42%. The products most in demand on the Turkish market were those of mechanical engineering (24% of total exports), motor vehicles and other means of transport (12%), metallurgy and metal products (12%). SACE forecasts that Italian exports of goods in value to Turkey will grow by 14% in 2011 and by 9,3% in 2012. In particular, the highest growth rates will concern the export of means of transport, metals and metallurgy products .” Further increases occurred in the first 7 months of 2011, in which our exports increased by 12,7%, imports by 20,4%. Our country is also in the top positions (fifth) among foreign investors, and our presence in the country is well qualified.
Given Turkey's importance to Italian trade and foreign investment, FIRST online has scheduled a series of additional articles on how to do business in this country in the coming weeks.
