May 16, 2019 / 5:39 PM / 7 months ago

Chinese firms seek Turkish partners in Africa: Turkish contractors' chief

ISTANBUL (Reuters) - Chinese firms are eyeing partnerships with Turkish construction firms in Africa and are also looking to take stakes in Turkish companies, the head of the Turkish Contractors Association said.

Mithat Yenigun said he had discussed possible acquisitions by Chinese companies with a Chinese business representative, without giving details of which firms could be involved.

“They asked if we could sell stakes or cooperate,” he told Reuters. “They want to partner up with us, they are very willing to work with us. They also have unlimited money. That is what we lack.”

Turkish firms, which thrived in a domestic economy fueled for years by cheap credit and a construction boom, are now faced with economic recession at home. Those that took out foreign currency loans have found their debts soaring as the Turkish lira slumped last year.

Turkish contractors are second only to Chinese companies in terms of international contracts, according to the Engineering News Record (ENR) which carries out annual surveys of the world’s top contractor companies.

Yenigun said Chinese firms had a 10-15 year headstart in Africa. They now see Turkish firms as potential rivals, he said, but are also looking for opportunities to work together.

He gave no specific examples of companies or projects but said that Chinese contractors want to work in projects in sub-Saharan countries with Turkish companies.

Turkish contractors had proved themselves in the region, Yenigun said, with large infrastructure projects which provide jobs by employing local workers during construction.

CONFLICT HITS CONTRACTS

At their peak, Turkish companies won around $30 billion worth of international contracts a year in 2012 and 2013, according to the contractors association. Business declined as conflict in Libya and Iraq cut back infrastructure projects there, and strained ties with Moscow affected business with Russia.

Last year Turkish contractors registered $19.4 billion of work abroad, with Russia accounting 25% of those projects and Saudi Arabia another 19%.

Since the killing of Saudi journalist Jamal Khashoggi, a critic of Saudi Crown Prince Mohammed bin Salman, in the kingdom’s consulate in Istanbul last year, relations between Ankara and Riyadh have deteriorated.

Approval processes for construction tenders won in Saudi Arabia now take longer than they used to, Yenigun said.

“We feel the coldness when it comes to the relations with the government. An official process that previously took three months, now takes a year over there,” Yenigun said.

Turkish companies now aim to reach an annual volume of $50 billion with potential business in Africa, Russia, and Iraq, where they hope Ankara’s pledge of $5 billion credit for the reconstruction will boost business.

Turkish contractors are expected to build roads, highways, railways, Mosul airport, a hospital as well as mosques and residence projects.

Writing by Ezgi Erkoyun; Editing by Dominic Evans

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