july 2010 no: 10 / 327

Another “first” from Arkas

Arkas has realized another first in Turkey with the regular container service it launched on the Cabotage Day at ports in Istanbul, Gemlik, Izmir and Mersin within the scope of Coastal Trade.

Recognized for its pioneering investments in the Turkish Maritime Shipping sector, Arkas Holding launched a regular container service line between domestic ports for the first time in Turkey on Cabotage Day on July 1st.

The project was implemented by Arkas Line, which is the shipping company owned by Arkas Holding, and Arkas Anadolu Logistics, which provides integrated transportation services, and will bring significant unused potential to domestic transportation in Turkey. Cabotage shipments provide an important advantage for both the Turkish economy and customers with freight. Advantages for the Turkish economy include reducing the amount of freight transported overland for long distances, support for manufacturers in Turkey regarding freight charges with the integrated use of different types of shipping, development of existing ports through the utilization of unused spare capacity and the encouragement of new port development. It also offers numerous advantages to the customer such as the price and capacity benefits provided by transporting large quantities of freight at one time as well as avoiding price changes related to seasonal fluctuations. In his remarks at the ceremony commemorating the first cabotage shipment which was scheduled for the Shipping and Cabotage Day on July 1st at Marport, Arkas Holding Executive President of the Chairman Bernard Arcas, said, “We first began talking about container transportation to domestic ports in 1996. It was during this same time that we laid the foundations for our fleet of vessels bearing the Turkish flag. When we were taking delivery of our ships, we were dreaming of the day when we would use them for transportation in domestic ports. On July 1st of this year, we made this dream a reality. With cabotage shipments, Turkish ports are connected to each other, and manufacturers in the hinterland of smaller ports far away from the primary ports are connected to foreign ports with cost-effective shipping possibilities. Our vessels provide regular weekly container service via cabotage shipments between the ports of Istanbul-Gemlik-Izmir-Mersin as well as offering import-export shipping by calling at the port of Gazimağusa in

TRNC. We will also be able to carry out feeder freight with this line. Having cabotage freight and feeder freight transported together no longer poses a problem.” Arkas Holding Executive President of the Chairman, Diane Arcas Aktaş, also spoke at the same ceremony. She noted how they had diversified transportation modes and offered industrialists rail and maritime alternatives for the purpose of providing logistics services in the most cost-effective manner from a single administrative point and that with the regular cabotage line, they had completed another leg of the intermodal transportation system that includes overland and rail transport. More tonnage in a single trip with lower costs

Arkas Anadolu Logistics carried out cabotage shipment with containers for the first time in Turkey by transporting freight from the factories of customers in Istanbul, Bursa, Izmir, Mersin, Adana, Cyprus and Gaziantep between ports and delivering it to the final destination via overland or rail transport. Now, it is reducing the company's workload in

heavy tonnage shipments by adding cabotage shipping between domestic ports. A shipment that would take 20-30 vehicles several days via overland transportation and with high tonnage can be delivered via ship to the desired port in a single shipment. The fact that the freight is transported in containers without spoiling or damage is another benefit to the customer.

United Ocean Lines expands in the Black Sea with Arkas

The 7th UOL Agency meeting was held in Bangkok.

Arcas Dacia, the Arkas company in Romania, and the logistics company of Arkas in Ukraine, Arlogic, have started

providing agency services for United Ocean Lines (UOL), which meets global criteria.

Arkas Dacia and Arlogic have been providing agency services for United Ocean Lines (UOL) since the agency meeting held in Bangkok in May. The expertise, experience and service quality developed by Arkas since 1997 in the Black Sea not only contributes to the powerful service network that UOL wants to develop in the region, but the fact that UOL has 70 offices in 47 countries with an extensive service network, and customer-oriented operations as well as accurate and rapid documentation management offer significant advantages for the services Arkas Dacia and Arlogic provide to their customers. Arkas Dacia has operated in Romania since 2008 and it provides agency services to Hanjin Shipping and Grimaldi Lines, which have some of the largest fleets of Ro-Ro vessels in the world. Arlogic is a logistics company that owns a fleet of 20 semi-trailers.

United Ocean Lines was founded in 2002 as an NVOCC* with international and objective criteria in the field of logistics. The company provides services around the globe as a subsidiary of NAXCO, which is currently headquartered in France. *NVOCC: Non Vessel Operating Common Carrier

Lucien Arkas receives the “Entrepreneur of the Year” award

Istanbul Chamber of Commerce Board of Directors Chairman, Murat Yalçıntaş (first on the right) presented the award to Lucien Arkas.

Arkas Holding Chairman, Lucien Arkas, was presented with the “Entrepreneur of the Year” award at the “2010 Oscars” awards ceremony organized by the Turkish-French Trade Association for his contributions to trade relations between Turkey and France for over 25 years.

The Turkish-French Trade Association, which has contributed to the development of trade and economic relations between Turkey and France since 1885, brought together important names from the business community at an event it organized at Istanbul the Marmara Hotel on June 14th under the auspices of the French Ambassador to Turkey, Bernard Emie. Those who had contributed to successful economic relations between the two countries were recognized that night and Arkas Holding Chairman, Lucien Arkas, received the “Entrepreneur of the Year” award for the contributions he has made for more than 25 years. In his remarks at the ceremony, Bernard Emie said that it was important to strengthen ties of all kinds and work together in order to overcome the tremendous crisis being faced today. Emie said that their goal for trade between Turkey and France was 5 billion Euro by the end of 2010 and he emphasized the fact that after Germany, France was Turkey’s second largest customer. After the speeches were over, the “2010 Oscars” were presented. Apart from the "Entrepreneur of the Year Oscar" presented to Lucien Arkas, four companies, two French and two Turkish, were given “Foreign Trade and Investment Oscars.”

A Balkan country with promise: Croatia

1. Blue lagoon in Dubrovnik 2. Castle in the historic port of Dubrovnik

3. A street in Dubrovnik 4. Flower market in Zagreb 5. The medieval settlement of Tragir

The Republic of Croatia, in the northwest of the Balkan Peninsula, has attracted attention for its expanding

and stable economy, skilled and qualified workforce and significant purchasing power.

Turkish-Croatian relations go back to the 14th century and both countries began negotiations for

membership in the European Union in 2005. As their work as the only countries negotiating with the EU

continues, bilateral relations are growing stronger with each passing day.

The Balkan country of Croatia declared its independence from Yugoslavia in 1991 and faced severe challenges when

it was occupied by Serbia for four years. As privatization, the transition to a free market economy and construction

came to an almost complete standstill, the economic infrastructure and especially tourism suffered severe setbacks.

Croatia had been one of the richest Yugoslavian Republics but it was unable to take advantage of the wave of

investment tline swept through Central and Eastern Europe with the fall of the Berlin Wall in 1989. Between 2000 and

2007, the country’s GDP grew steadily but high unemployment, a growing trade deficit, imbalances in regional

economies and the global economic crisis are having a negative effect on the national economy.

The country’s GDP of 83.55 billion dollars in 2008 shrunk to 79.21 billion in 2009. Even though stability has been

largely achieved in the macro-economy, progress in privatization and structural reform has been inadequate.

Structural and financial reforms will be accelerated during the process of negotiations for EU membership. GDP grew

at a rate of 5.5% in 2007 and 2.4% in 2008 but shrank by 5.2% in 2009. Croatia is listed by the World Bank as a high

income country (having per capita income of over 11,906 dollars) but in 2009 per capita income fell 5.7 percent

compared with 2008 to 17,600 dollars.

Rovinij an old town in Croatia

Service sector sustains the economy

The national economy is divided by sectors as follows: agriculture 7%, industry 31.6%, and service 61.4%. The service sector is the lifeblood of the economy, providing the most revenue and employment (63.6% of the workforce). Croatia’s agricultural products include wheat, corn, sugar beets, sunflower seeds, alfalfa, olives, citrus fruits, grapes, soybeans and potatoes. Dairy products are also produced from the livestock sector. Industrial fields of endeavor, on the other hand, include chemicals, plastics, machinery parts, metal, electronic devices, lard and food stuffs, aluminum, paper and wood products, construction materials, textiles, ship-building, petroleum and petroleum refineries, food-beverages and tourism. Total exports in 2008 were 14.36 billion dollars but this fell 35.85% in 2009 to 10.57 billion dollars. Croatian exports include machinery and transportation vehicles, textiles, chemicals, food and fuel. Its primary export partners are Italy (19.1%), Bosnia Herzegovina (15.4%), Germany (10.8%), Slovenia (7.8%) and Austria (5.8%). Imports consisting of machinery, transportation vehicles, electrical equipment, chemicals, mineral fuels and food stuffs fell 37.65% from 30.42 billion in 2008 to 22.1 billion in 2009. Its primary import partners are Italy (16.9%), Germany (13.2%), Russia (10.3%), China (6.1%), Slovenia (5.5%) and Austria (4.9%).

Trade balance in Turkey’s favor

After the free trade agreement was concluded between Turkey and Croatia in 2002, trade relations improved, especially Turkish exports. Turkish exports totaled 42 million dollars in the year tline the agreement was signed but in 2004, the year after the agreement was published in the Official Gazette, exports rose to 118 million dollars. However, export figures started to decline in 2008. Exports fell 8.17% in 2008 when compared to the previous year to 328.68 dollars and declined another 48.66% compared with 2008 to 221.09 million dollars. Export figures for the first 4 months of 2010 have increased 41.15% compared with the same period last year to 93.4 million dollars.

Turkish exports include iron-steel, land transportation vehicles, electrical machinery and devices, apparel and accessories, textile fibers and products, communication devices, coal tar and products made from raw unrefined petroleum, final products made from metal, vegetables, fruit and their products. Imports in 2008 were 105.67 million dollars but rose to 107.38 million dollars in 2009. In the first four months of last year, total imports were 31.07 million dollars but in the same period this year, the figure was 38.95 million dollars. Turkey imports metal ores, scrap, waste, castoffs, fertilizer, coal tar, products made from unrefined petroleum, plastic and its products. The balance of trade with Croatia is currently in Turkey’s favor.

Investment Opportunities

Even though a large portion of the country's revenues come from tourism, there is very little foreign investment in this sector. Other sectors tline offer opportunities for foreign investors include banking, construction, cement, pharmaceuticals, energy, telecommunications and certain infrastructure projects. The cost of doing business in this region is lower than other EU countries. The Croatian Trade and Investment Promotion Agency, which promotes

Ban Jelacic Square in Zagrep

the country's economy and investment potential, supports domestic and foreign investors in the implementation of investment projects and makes recommendations for improving the business climate. Foreign investors have the same rights, responsibilities and legal standing as Croatian investors and can obtain tax exemptions depending on their area of operation and the type of investment.

Turkey is one of the more than 50 countries with which Croatia has a bilateral investment agreement. Croatia imports household textiles, food, machinery, mineral oils-fuel and chemicals, offering opportunities to Turkish entrepreneurs, and cooperation and information transfer is possible, especially in the fields of ship-building, tourism and related infrastructure projects.

Sources:

• Office of the Foreign Trade Undersecretary for the Prime Minister,www.dtm.gov.tr • CIA World Fact Book, www.cia.gov • www.wikipedia.org • Export Development Research Center, www.igeme.org.tr • Foreign Economic Relations Board (DEIK), www.deik.org • www.internationalliving.com • www.hfp.hr The Croatian Privatization Fund • www.apiu.hr Trade and Investment Promotion Agency

FOREIGN TRADE BETWEEN TURKEY- CROATIA (2005-2010) ( Million $)

Year Exports Imports Total Foreign Trade

2010* 93,4 38,95 132,35

2009 221,09 107,38 328,47

2008 328,68 105,67 434,35

2007 355,52 77,44 432,96

2006 213,88 60,56 274,44

2005 167,99 85,57 253,56

*2010 January - April Source: TÜIK

Arser acquires representation for the Combilift brand

New model C25.000 has been launched in April

Arser provides sales, leasing and after-sales service in the stacking equipment sector and now it has increased the number of brands it represents by acquiring the Turkish representation for Combilift Ltd. and Combilift Srl.

Arser, which provides sales and leasing of forklifts with its well-equipped equipment yard, is offering its customers new alternatives by expanding its product range. Combilift vehicles ensure maximum mobility in a minimum amount of space with their ability to move in four ways and are manufactured with carrying capacities that range from 2,000 kg to 25,000 kg and feature diesel, LPG/gas and battery-powered models. Based in Ireland, Combilift Ltd. has the distinction of being the first company to manufacture a forklift with four-way movement capability and an internal combustion motor. Combilift develops new products to meet the needs and demands of customers and in April, it unveiled its newest release: the C25.000 model with a carrying capacity of 25 tons. Combilift Srl., on the other hand, is headquartered in Italy and manufactures electrical fork-lifts capable of four-way movement.

Utilized in a variety of different operations, these forklifts are preferred by companies which manufacture or ship products such as lumber, metal profile, pipe, panels, glass, concrete block, aluminum and PVC profile or work with long or bulky cargo.

Functional advantages:

• Safe transport of long materials • Maneuverability both indoors and outdoors • Ability to work in narrow spaces normal forklifts cannot reach

New Arkas company: Box Logistics

Founded in the German city of Bremen, Box Logistics GmbH and its expert team provide custom freight-forwarding services to those who want to export to Germany or import from Germany to any destination around the world.

Box Logistics was founded in the German city of Bremen for the purpose of meeting any request related to transportation with a customer-oriented, solution-focused approach for global service. The company develops logistics solutions for transportation from Germany to any destination around the world, including Turkey, and from Turkey to Germany, utilizing the Arkas service network and, in this regard, it offers custom service especially for Turkey. This includes maritime shipping, LCL/FCL (Less than Container Loads and Full Container Loads) container and general freight transportation, preliminary and final shipping, bonded warehouses, product processing and storage as well as value-added services.

A solutions partner for those engaged in trade with Germany

Germany occupies an important place in the Turkish foreign trade. In this sense, Box Logistics, an Arkas company in Germany, is an excellent solutions partner for importers and exporters. Imports from Germany mainly consist of land transportation vehicles, machinery and devices used in various industrials fields, as well as machinery and devices that produce or operate on electricity while products exported from Turkey to Germany include apparel and accessories, land transportation vehicles, textile fibers and products, as well as fruits, vegetables and their products.

Services offered by Box Logistics:

• Maritime shipping LCL/FCL • Air cargo • Bulk freight • Project shipments • Value added services

Turkey’s Railway Stations

A historic building that reflects the architecture of the

Republican era: Erzincan Station

Erzincan Station

The railway reached the city in 1938 long after the proclamation of the republic and today railway investments are still being executed and planned for the city. The city is also in the spotlight for the Kars-Erzurum-Erzincan-Sivas high-speed train project, the application phase of which has been completed.

The Erzincan Station building in the city center was recognized as a historic monument with a decision from the Erzurum Board for the Preservation of Culture and Natural Heritage in 1991. It is one of the city’s most important structures both for its functionality and its history. It is a three-storey structure, including the basement, and the date of construction is unknown, but there are numerous historical records for the year 1938 in Turkish State Railway plans and blueprints. In the center of the structure, which was constructed of rubble and yellowish cut stone, is a waiting area with a tall ceiling. Though somewhat damaged, the building survived the earthquake of 1939, which brought massive destruction to Erzincan. In recent years, Turkish State Railways has carried out improvements including cleaning, landscaping and environmental compliance for the station and other businesses. As a result, the Erzincan Station has been renovated after many years and landscaping has been added. Night-time lighting specifically designed for the characteristics of the historic building’s exterior has been installed. There are 243 kilometers of railroad in the province of Erzincan. Passenger transportation is provided on the Orient Express with connections in Kars and Haydarpaşa. Freight shipments, on the other hand, are conducted with six freight trains based on demand. Service is provided to the Tanyeri, Demirkapı, Mercan, Çadırkaya and Erbaş stations between Erzincan and Erzurum and to the Alp, Kemah, Eriç, Iliç, Bağıştaş and Çaltı stations between Erzincan and Divriği. The Erzurum Express provides round-trip service between Kars and Ankara. Railway investments in Erzincan

Erzincan is also in the spotlight for the Kars-Erzurum-Erzincan-Sivas high-speed train project, the application phase of which has been completed. Thanks to this 710-kilometer line, the trip from Sivas to Kars will be reduced to five hours. A factory that manufactures railway connection components was established last year in Erzincan by a German company operating in the railroad sector. The fact that these components, which are fundamental to railroad maintenance and renovation efforts, are manufactured here is an advantage to Turkish State Railways both in terms of cost and the fact that transportation is quicker than imported products. The factory also exports to approximately 20

countries, including England, France, Spain and Japan.

Atatürk and Erzincan

Atatürk visited Erzincan four times. He arrived in Erzincan on his way to the Erzurum Congress on 1 July 1919 visiting villages and towns along the way and on the next day he left for Erzurum. His second visit was on the way back from the Erzurum Congress. After the proclamation of the Republic, he made his third visit to Erzincan on 29 September 1926 in a trip with Latife Hanım. The residents gave him a hearty welcome on the main boulevard as he entered the city and a torchlight procession was organized that evening. In the speech he made, Atatürk responded to the public outpouring of affection with these words: “I believe that Erzincan will, in a short time, become the source of light and progress that it deserves and that the Republic expects from it.” His last visit to Erzincan was again on his way back from Erzurum. However, none of these trips were taken by rail. The following was Atatürk's response to the telegraph from Prime Minister Celal Bayar regarding the arrival of the Ankara-Erzurum line in Erzincan on 9 October 1938: “I was deeply touched by the feelings you say the respected residents expressed for me as you related what they felt on this happy and important occasion.” The train was supposed to arrive in Erzincan in November 1938, when a ceremony would have been conducted. However, the opening ceremony was postponed due to the passing of Atatürk on November 10th. A story published in December in the Cumhuriyet newspaper stated that representatives for the Ministries of Public Works, National Defense and Foreign Affairs, along with many guests departed for Erzincan on December 9th in three convoys and that the ceremony was held on 11 December 1938.

View from the platform

Passenger waiting area

View from the platform

Erzincan Station opening ceremony Atilla Dündar, www.wowturkey.com

Sources:

• www.ataturk.de Atatürk’s Diary with Sources, Prof. Dr. Utkan Kocatürk • www.erzincan.gov.tr • www.devletdemiryollari.com/tren-gazetesi.htm • http://wowturkey.com • A Photographic Memoir of the Lost City of old Erzincan , Retired General I. Hakkı Akansel, 1999 We would like to thank the TCDD Directorate of Press and Public Relations, the Erzincan Directorate of Provincial Culture and Tourism and Yunus Reyhan Taşçıoğlu, Director of the Erzincan Museum, for the support they provided with archives and photographs

A new wine series: Smyrna

Last October, Lucien Arkas acquired a majority stake in Idol Wines, which is releasing its new wine series in July. Bearing one of the ancient names of modern-day Izmir, the “Smyrna” series consists of wines made from nine different grapes.

This new wines series derives its name from one of the ancient names for Izmir – Symrna, which has a rich heritage of wine-making and vineyards dating back to antiquity. The wines are produced from grapes grown in Idol Vineyards, Turkey’s largest single parcel organic vineyard spanning 250 acres. The smooth and fruity Symrna series employs a map of the Izmir Bay on its label in honor of its origins and will soon be available for wine aficionados. Made from organic grapes

Symrna wines are made from grape varieties such as Viognier, Chenin Blanc, Chardonnay, Shiraz, Cabernet Sauvignon, Merlot and Bornova Muscat, some of which have never been grown in Turkey before. Planting decisions were made at the conclusion of soil and climate analyses conducted by Prof. Atillio Scienza and his team from Milan University.Ecocert, which is the organization that certifies compliance of organic vineyards with European Union standards, certified Idol Vineyards, which does not utilize hormones or synthetic chemicals. As a result, the authentic fruity aromas of the grapes that are used to produce Symrna wines are a reflection of the terroir, which is naturally preserved. Furthermore, because organic vineyards are a production method that is friendly to nature and humans, it contributes to the rejuvenation of the natural balance that has been lost due to improper practices applied to the ecologic system.

This summer Smyrna wines are a hot item

• Dry Red Wines Cabernet Sauvignon, Shiraz, Merlot, Blend • Dry Rose Wine Shiraz-Grenache • Dry White Wines Chardonnay, Chardonnay-Chenin Blanc, Viognier • Sweet White Wine Passito

In brief...

150 people biked with DB Schenker Arkas on World Environment Day

Schenker Arkas offers air, sea and overland transport as well as comprehensive logistics solutions and global supply chain management and is continuing full-speed ahead with its efforts to increase environmental awareness in its

business processes. The second bicycle tour organized by DB Schenker Arkas to encourage the use of bicycles both to protect the environment and for a healthy lifestyle began at the Izmir Bostanlı ferry wharf on June 5th. The cyclists moved through crowds of curious Izmir residents and reunited at their destination, the Sasalı Picnic Area. The activity concluded with speeches about the importance of protecting the environment and the contribution that bicycles make

in this regard. The participants said, "Today, we were the world and we biked for the environment.”