General Electric Co. (GE) (GE) will invest $900 million in aviation, energy, health, transportation and infrastructure in Turkey over the next three years after the government offered incentives to investors.
The investment package will include production of wind energy equipment, Economy Minister Zafer Caglayan said today at a press conference in Istanbul.
“We have not announced specifics of the investment which will be defined over time and until then we have no further details to add,” the company said in an emailed statement.
The plan has “a focus on infrastructure and innovation,” GE Vice Chairman John Rice told reporters. The company will provide specifics “in the next couple of months” and is in talks with universities on plans for research and development, he said.
GE also set up a strategic partnership with state-run locomotive manufacturer Turkiye Lokomotif & Motor Sanayi AS, known as Tulomsas, in 2008 and expect its exports to be $1.5 billion over next 10 years, the company said in a statement handed to reporters.
Caglayan said GE will boost its cooperation in railway transportation business.
The Fairfield, Connecticut-based company, which sold an 18.6 percent stake in Turkiye Garanti Bankasi AS (GARAN) to Spain’s Banco Bilbao Vizcaya Argentaria (BBVA) SA for $3.78 billion in 2010, has a 46 percent stake in Turkish Aerospace Industries, the Ankara-based maker of aircraft parts known as Tusas, and owns half of Gama Enerji AS, a Turkish power producer, among its six units with 600 employees in Turkey. The U.S. company also makes health-care measurement and imaging devices, lighting equipment and power turbines.
Turkey’s electricity demand is increasing about 6 percent annually, compared with a government economic growth forecast of 4 percent, Caglayan said. “It’s only logical for an energy giant like GE to invest in Turkey’s energy,” he said.
GE, founded in the late 19th century by Thomas Edison, is one of the oldest major companies in the U.S. It’s the world’s biggest maker of diesel locomotives and airplane engines.
Local unit General Elektrik Ticaret & Servis AS may start manufacturing wind turbines and parts, with half the output likely to be sold within Turkey as the government targets a 20- fold increase in wind capacity by 2020, Mete Maltepe, head of GE’s local energy unit, said in an interview in 2010.
GE will benefit from a wide-ranging package of incentives offered to investors to boost local production as a way to narrow the country’s current account deficit, Caglayan said.
Turkey is looking to spur investment in industries that rely on imports to produce their goods to help narrow a current- account gap of about nine percent of its $772 billion gross domestic product, Prime Minister Recep Tayyip Erdogan said April 5. The government is focusing its efforts on industries including defense, automotive, rail and sea transport, pharmaceuticals, education, tourism and mining, Caglayan’s economy ministry said.