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Turkey 2014 | TRANSPORT & INFRASTRUCTURE | INTERVIEW

TBY talks to Markus Reckling, Managing Director of DHL Express Turkey, on its 2020 strategy, upcoming investments, and the country's growing SME segment.

Markus Reckling
BIOGRAPHY
Prior to being appointed Managing Director of DHL Express Turkey, Markus Reckling was Executive Vice-President, Corporate Development for the entire DP DHL Group and served in several other senior leadership positions within the Group. He started his professional career in 1993 and worked at the Otto Group and the Tengelmann Group in marketing, sales, and strategic market development. He holds degrees in European Business Administration from Middlesex University London as well as Reutlingen University in Germany. He also holds a Diploma of Marketing from The Chartered Institute of Marketing in London.

How is DHL's Strategy 2020: Focus-Connect-Grow being applied specifically to the Turkish market?

Actually, we are already on the finish line of Strategy 2015 and just recently announced our new Strategy 2020: Focus-Connect-Grow on April 2, a continuation of the positive momentum generated by the successful Strategy 2015, which defined the group's next phase of development. Due to the tremendous success of Strategy 2015, its key elements remain unchanged, but in addition a significant further expansion into emerging markets is a key aspect of the new growth strategy. Today, emerging market revenues contribute just over 20% of the group's revenues; by 2020, the group expects this figure to climb to 30%. Given the significant increase in revenues expected by 2020, this means a substantial increase in absolute revenue growth in the emerging markets. Turkey has great potential and growth numbers. We are very excited about this as it will enable DHL Express Turkey to shape the market even more effectively.

The CEO of Deutsche Post DHL, Frank Appel, has said that Turkey is a priority country for DHL's investment projects. Can you please elaborate on DHL's planned investments in Turkey?

As the market leader in Turkey, our mission here is to increase our investments in new trade lanes in parallel with Turkey's national objectives. Turkey has always been an important investment area for us and is a trusted and predictable partner with a strong investment climate and FDI framework. Additionally, Turkey's youth and economic structure open up new opportunities and entrepreneurialism. The rapid population growth offers a responsive workforce and a dynamic consumer market that positively affects the steady economic expansion in Turkey. To this point, we have made investments in order to contribute to the economy. In the upcoming years, we will also resolutely sustain our efforts to expand our infrastructure and, as part of our exporters' pursuit of new markets, we will continue to offer services aimed at facilitating Turkish exporters' access to new customers and markets. The group's target is to increase investments in developing countries, and Turkey is one of these countries; our target is to invest at least €25 million over two years in Turkey. By the end of 2014, we plan to increase our capacity at Sabiha Gökçen Airport with a second aircraft, aiming to cater for the increase in shipments there. Last but not least, we invest heavily in employee training. CIM training is one example of this, as almost 1,000 of our employees in Turkey have recently been trained as international specialists.

What are DHL Express Turkey's strategies to better serve the country's dynamic SMEs?

Some 60% of exports are accounted for by SMEs in Turkey. These enterprises also provide more than 78% of overall employment. With our special services, we intend to help SMEs, the engine of the Turkish economy, be more effective, and more responsive in international markets. We will increase our support to SMEs through our SME Express service. The SME Express package that DHL Express offers provides express shipping for export shipments up to 150 kilograms in weight and €7,500 in value under the Micro Export service. Over the last year, more than 15,000 packages have been processed. The service also provides consultancy services on market characteristics and customs to SMEs. By using our service, one SME delivered Iznik pottery to some of the world's most well-known people, such as former US President Bill Clinton and TV star Oprah Winfrey. Another DHL Express customer exports its brand exclusively to European countries, and emphasized that by utilizing DHL Express' Micro Export product, it can export more easily and much faster. It only takes a maximum of two days to export products and samples to Europe, and our customers do not need to pay any extra fees to manage the customs process. The majority of SMEs have increased their exports dramatically by using our services. DHL has also organized SME seminars to find the best solutions to expand their reach abroad and open up markets for export. These seminars explore the business process from an SME perspective and evaluate their needs in order to offer new services that fit. The sessions also provide a networking platform for each SME to develop its own business relations. Last but not least, to demonstrate our commitment to supporting the efforts of Turkish exporters and SMEs, with the aim of developing, enriching, and diversifying Turkey's export market, we have hosted the Stars of Exports competition for 12 consecutive years. This event recognizes the achievements of the firms that shape Turkey's push in exports. DHL Express Turkey is proud to connect Turkey to the rest of the world faster and more reliably than any other company.

What are your main targets or goals for 2014?

Unless the macro economy destabilizes, 2014 will clearly be a year of growth for DHL Express Turkey, where we could well see solid double-digit growth. It is much too early to give a detailed forecast for 2014 but, I can confidently say that, as an export-driven company, we have started the year in a strong position. Nevertheless, 2014 is a difficult year to forecast considering the numerous global and local uncertainties. The international express industry is an exciting industry to be in, as it has constantly outperformed GDP growth globally, and also in Turkey. DHL, the undisputed market leader globally and in Turkey, is very well positioned to leverage this attractive market position into superior growth rates. DHL aims to increase its investment in developing countries, as I have mentioned. To show our commitment, we'll continue to invest in increasing our capacity, supporting SMEs, the driving force of the Turkish economy, contributing new developments to the market in collaboration with local authorities, and, of course contributing to the country's 2023 export targets. We will also continue to invest in the green shipment area and in technologies to support the fast and efficient integration of our customers into global markets, including e-commerce solutions both on internet and mobile platforms.

Turkey's Vision 2023 includes establishing Istanbul as a major international logistics hub. What needs to happen to realize this vision?

Turkey has a unique geographic standing as a bridge between Asia and Europe. Specifically, the Istanbul area can rise to become a leading international logistics and transportation hub using the advantages of a dynamic economy, a growing population, and well-developed infrastructure. In order to offset the negative effects of European recession on the Turkish economy since 2011, Turkey has turned toward countries and regions such as Russia, the Middle East, North Africa, and Latin America. The divergence of shipment areas also creates new business opportunities for DHL. Turkey has the right dynamics to become a major logistics hub as long as the country keeps investing in infrastructure and increasing its economic and trade relations with neighboring countries and others. As the market leader in the industry, our mission here is to increase our investments in new trade lanes in parallel with Turkey's national objectives. Turkey needs to focus on the Customs Union deal through negotiations with the EU. Due to the existing free trade agreement (FTA) with the EU, any country that enjoys free trade with the bloc will be permitted to ship duty free to Turkey, but the country will not automatically have the right to ship without duties to these countries. The Transatlantic Trade and Investment Partnership (TTIP), for which negotiations have started between the US and the EU, is the latest agreement to deal a blow to Turkey, causing the resentment of many local exporters. Free trade deals between the EU and third parties enable other countries' goods to enter Turkish markets via Europe with zero duties, but the decision to provide the same privileges to Turkey is up to the third party. Global trade is bound for good growth potential in the coming decades. In this regard, Turkey needs to make further improvements in its customs procedures to facilitate and stimulate global trade for Turkish exporters and importers. At DHL Express, we strongly believe that international trade is the key to global stability and barriers or uneven rules block this stability. Whilst the FTA with Europe has increased the connectivity of Turkey to Europe, it also bears some current risks due to the upcoming agreement between Europe and us.