LONDON–(BUSINESS WIRE)–Technavio analysts forecast the fabricated metal market in Turkey to grow at a CAGR of over 4% during the forecast period, according to their latest report.

The research study covers the present scenario and growth prospects of the fabricated metal market in Turkey for 2016-2020. The report provides data on the different segments of the market based on the type of products manufactured. In addition, the report also outlines the challenges faced by the vendors and the market at large, as well as the key trends emerging in the market.

Technavio chemicals and materials analysts highlight the following four factors that are contributing to the growth of the fabricated metal market in Turkey:

• Growth of manufacturing industry
• Growth of real estate sector
• Favorable government policies
• Increase in demand from automotive sector

Growth of manufacturing industry

The manufacturing industry in Turkey has been growing at a CAGR of 11% since 2004. The country’s proximity to Europe, Asia, the Commonwealth of Independent States (CIS), and Middle Eastern and North African countries has enabled it to become a trading hub and an attractive destination for manufacturing companies. It has also led to a significant increase in exports which grew at a CAGR of 7% between 2007 and 2012 to reach more than USD 143 billion in 2012.

Turkey’s export data from 2012-2014 reveals that basic metals accounted for the highest share of more than 20% of the total exports, followed by textiles and apparel at 18%. “As the fabricated metal products market supports other manufacturing industries, such as automotive industry, growth of these industries will provide opportunities for manufacturers in the fabricated metal products market,” says Chandrakumar Badala Jaganathan, a lead analyst at

Technavio for metals and minerals research.

Growth of real estate sector

Turkey’s strategic location, extensive urbanization, a well-established construction sector, population growth, increase in per capita income, and ease of doing business are some of the factors contributing to the growth of real estate sector in the country

Population growth and rapid urbanization are some of the factors that are contributing to an increase in urban renewal projects. It is estimated that around 6.7 million residential units will be demolished and rebuilt over the next 20 years in the country, and USD 400 billion has been allocated for this initiative. Technavio expects the growth of the real estate sector to lead to increased demand for metal fabricated products, such as metal structures and parts of structures.

Favorable government policies

Due to Turkey’s connectivity and trade agreements with neighboring countries, many multinational companies have either established their manufacturing bases in Turkey or moved their regional headquarters there. The Turkish government’s recent amendment of legislation related to FDI, allows foreign companies to establish regional management centers as liaison offices without paying corporate tax, VAT, income tax, or stamp duty. This has resulted in an increase in the influx of foreign investors.

Foreign companies such as Seimens and GE have already established their presence in Turkey through various collaborations in the lighting, energy, health, and urban infrastructure sectors in the country. “Such favorable government policies and the resultant inflow of FDI present potential growth opportunities for manufacturers of fabricated metal products in the market,” says Chandrakumar.

Increase in demand from automotive sector

Demand for fabricated metal products from the automotive industry in Turkey is driving the growth of manufacturers, as fabricated metal products are a key requirement of this industry. Taking advantage of factors such as the availability of cheap and highly-skilled workforce, dynamic local market, and the country’s favorable location, the automotive industry in Turkey enhanced the production of vehicles from 374,000 units in 2002 to over 1.17 million units in 2014, growing at a CAGR of around 10% during this period. This growth has resulted in Turkey becoming the 17th largest automotive manufacturer worldwide.

This rise in automotive production has contributed to the growth of manufacturers of steel profiles, steel pipes, and sheet metal products. Players like KMWE group and Hermes metal are some of the key suppliers that cater to the automotive industry in Turkey.

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