New €150 million loan to Turkey’s top carmaker
In a new boost to the Turkish automotive industry, the EBRD is providing a €150 million loan to Ford Otomotiv Sanayi A.S., (Ford Otosan) to finance improvements to the carmaker’s commercial vans.
A joint venture between Ford Motor Company and Turkey’s Koç Holding, Istanbul-based Ford Otosan manufactures and sells motor vehicles and spare parts.
The EBRD’s loan will enable the company to introduce styling changes and add current technology features to its commercial vehicles and improve production processes.
Under the project, Ford Otosan, one of the leading industrial companies in Turkey and the largest employer in the country’s automotive industry, will also strengthen its focus on employment and training of young people. The company will partner with educational institutions to develop a model for vocational education, including skills standards, to address the skills mismatch in the labour market. The company is committed to offering greater employment and training opportunities for graduates at a time when youth unemployment is on the rise.
The EBRD’s cooperation with Ford Otosan dates back to 2010 when the Bank financed the development of new commercial vehicle models as part of the firm’s “new Transit project”. The EBRD has also financed the development of a high-tech truck engine, Ecotorq, and the expansion of Ford Otosan’s truck production capacity, while providing greater employment opportunities for women. To date, the Bank has supported Ford Otosan with loans worth a total of €290 million, more than half of which has been mobilised from commercial banks under the EBRD’s A/B loan structure.
These investments have strengthened the competiveness of the company, the Turkish automotive sector and the wider economy of Turkey. The EBRD believes that successful economies should be competitive, well-governed, green, inclusive, resilient and integrated.
Jean-Patrick Marquet, EBRD Managing Director for Turkey, said: “We are very pleased to continue and deepen our cooperation with Ford Otosan. It will build on the fantastic results we have achieved so far and we aim to take this renewed partnership further, combining our finance with a special emphasis on economic inclusion in order to address labour market challenges. In addition, we applaud Ford’s commitment to sharing its vocational training practices across the industry.”
Haydar Yenigün, General Manager of Ford Otosan, commented: “With the support of our partners the EBRD, Ford Otosan will be able to undertake ongoing investments as well as planned capital expenditure for commercial vehicles. The €150 million financing to be provided will not only enable Ford Otosan to meet demand from domestic and international markets, it will also increase capacity utilisation at our production facilities. We continue to invest in many areas, including human resources and working conditions, occupational health and safety as well as the efficient use of resources, and the prevention and control of pollution.”
Turkey’s top exporter, Ford Otosan was established in its current form in 1997 and is the largest production hub for Ford commercial vehicles in Europe (81 per cent of Transit range vehicles sold in Europe in 2016 were manufactured by Ford Otosan). The firm operates from three main locations (plants and R&D centres) across the country and employs more than 10,000 people.
The EBRD started investing in Turkey in 2009 and currently operates from offices in Istanbul, Ankara and Gaziantep. The country is a top destination for the Bank’s finance, with €1.9 billion invested in 2016 alone. To date, the Bank has invested over €9 billion in Turkey through more than 220 projects across many sectors and has mobilised nearly €20 billion for these ventures from other sources of financing. Some 98 per cent of the Bank’s investments in Turkey are in the private sector.