OCTOBER 2007 - 3

SCC NEWS ISSUED BY THE SWEDISH CHAMBER OF COMMERCE IN ISTANBUL, TURKEY

Editiorial by Anders Lindblad

Turkey: a market of the future

Mobile Broadband: The near Future

The bilateral relations between Sweden and Turkey remain strong and constitute a solid basis for the future, both in political and economic terms. Over the past months the democratic process in Turkey has been consolidated as a result of the impressive performance in connection with the parliamentary elections and the subsequent election of President Gül. The economy has stabilized after the turmoil on the international market in late Spring and we are now looking forward to a new parliamentary period of continued political stability. This sets the stage for a revitalization of the political and economic reform process in Turkey. An important element in this respect is the ongoing EU-negotiations. Indeed, the accession process has slowed down somewhat, but what is important is that the negotiations move forward. And they do, despite the occasional set back. The transformation of a country the size of Turkey will not be an easy task, but I am fully convinced that we are on the right tract, and it should be stressed that the commitment of the Turkish Government is reflected in the fact that impressive reforms have already been undertaken in order to meet the norms and values that underpin the cooperation within the family of EU Nations. As the process moves on, I do believe that the clear advantages of bringing Turkey into this family of nations will be increasingly obvious, be they strategic, economic or cultural. The Swedish Embassy we will continue to assist Turkey on this historical road, in any way we can. We will do this in close collaboration with the Trade Office in Istanbul and the Consulate General. And jointly, we will continue to assist Swedish companies already established on the expanding Turkish market, and those who are looking for new business opportunities in an economy that has the potential to be one of the most dynamic in the world in a few years time.

Turkey is one of the last countries in Europe still to introduce mobile broadband. The mobile broadband is well placed to bring big changes into our daily life being not only an access to Internet but also what made mobile phones so popular, personal. The fixed telephony has less than 20 million lines in Turkey; there are more than 50 million mobile phones. It's not only the music, video or just entertainment. It is the information at hand where ever we are that we want. So why has the success been relative in many countries across Europe? Well, according to me there are two simple answers; 1) technological maturity and 2) business environment. The first is pretty much resolved at network level with the latest releases of what is called HSPA (High Speed Packet Access), the capacity in the networks is reaching and sometimes surpassing that of fixed networks. On the consumer electronics side we can today easily plug in an object in our PC/LapTop and make it connected to the Broadband it's just a matter of time when we will actually have most of the LapTops readily equipped with a 3G-SIM card. When it comes to the Business Environment we can see signs in many European countries where a Mobile BB subscription actually is lower than that of a Fixed and in fact where this is true these operators already only a few months of after revising their tariffs experience a shift in their networks where the majority (up to 80%) of their traffic becomes internet. According to the results of Ericsson Consumer Lab research, the mobile phone subscribers in Turkey are highly interested in mobile internet services and they are ready to use the next generation services when launched. Mobile broadband is a gateway to a world of data. Turkey, one of the fastest growing countries with more than 30 million people below the age of 22, deserves mobile broadband for faster access and focus on driving new business opportunities. Ericsson being the leading telecom infrastructure provider in Turkey, are convinced that we have the mission to create awareness that will leverage the demand and drive competence, as well as building up close relations between technology companies and authorities. Researches forecast more than one billion broadband subscribers worldwide in 2011, with the majority using mobile rather than fixed. Digital divide is an undeniable fact and we're working to close the gaps with high priority. The fastest and easiest solution will come with the mobile devices.

Christer Asp Ambassador of Sweden

2 SCC June Meeting Wine tasting For three generations, Doluca has been a part of the Turkish winemaking industry, reflecting it's traditional and innovative character in its service and product quality. Beginning of the Adventure: In 1926, Nihat A. Kutman, returned to his home country after completing his education at the Geisenheim Wine Institute's program in Enology and Viticulture, soon after, he established a small bottling plant in Galata, Istanbul, called Maison Vinicole which later acquired the name Doluca. Nihat A. Kutman, in his early years, produced wines from domestic grape varieties such as Yapıncak and Karalahna, which he marketed under brands called Vinikol, Kara Elmas (Black Diamond), Sarı Elmas ( Yellow Diamond), becoming the first Turkish person to take part in this profession, dominated by non-muslims to that date. Believing in the need to constantly improve the quality of his wines, Nihat A. Kutman, after a lengthy research in Europe, brought grape varieties like Cinsault, Semillon, Gamay and Riesling to Turkey and began to grow them in various locations around Mürefte. He also played a major role, in spreading these varieties to the many wine growing regions of Thrace. In early 1940's, when wines made from these new varieties were introduced into market, under the name of Doluca, they met with great success, mainly due to the distinction of the varieties and the special care shown in their production. Thus, becoming the first person to produce wines from internationally renowned varieties, Nihat A. Kutman marked the dawn of a new era in Turkish wine-making while establishing the foundations of Doluca's lasting fame. Production facilities in both Istanbul and Mürefte were renovated from 1957 to 1963, bringing them up to date with modern technologies of the time, enabling Nihat A. Kutman to focus completely on high quality wine production. In 1985, starting the first investment of this magnitude in the Turkish private wine sector, Doluca, as a result of ongoing projects during the last 20 years, has today grown to become one of the few of its kind, in terms of both capacity and modern technology, as well as product quality by world standards. Doluca today, continues to present over 30 different products to consumers' liking, with a 14 million bottle annual capacity. Paying as much meticulous attention to consumer relations as to production quality, especially after Ahmet Kutman's daughter Sibel Kutman and son Ali Kutman, received his education in the field of Enology & Viticulture,

joined the company as a member of the third generation, Doluca has attained a broader contemporary outlook and embraced the mission of developing and enhancing the cultural awareness of wine in Turkey. Sauvignon Blanc: Grown in Thrace Region, the Sauvignon Blanc grape varietal of Bordeaux origin, yields refreshing, crisp and fruity wines. This grape is used to produce the following wines: Sarafin Sauvignon Blanc, Sarafin Fume. Cabernet Sauvignon: Known as "the king of reds" and of Bordeaux origin, the Cabernet Sauvignon grape with its characteristic tannic structure yields full bodied, fruity, dark colored wines. This grape is used to produce the following wines: DLC Cabernet Sauvignon-Merlot, Karma Cabernet Sauvignon-Öküzgözü and Sarafin Cabernet Sauvignon. Bo¤azkere: Boğazkere grapes grown in Denizli province are fruity and relatively less tannic compared to those grown in Diyarbakır, Elazığ, Malatya and Gaziantep provinces. This grape is used to produce the following wine: DLC Boğazkere. Öküzgözü: This is a variety grown in Elazığ and Malatya with fruity and floral aromas and lively bright red color. It generally makes wines which have high acidity with a strong characteristic taste and aroma. This grape is used to produce the following wines: DLC Öküzgözü, Villa Doluca Red, Kav Boğazdere-Öküzgözü and Karma Cabernet Sauvignon-Öküzgözü. Doluca Şarapçılık Paz ve Tic AŞ Contact: Sibel Kutman, [email protected] Tel: +90 212 698 98 30 Fax: +90 212 698 98 38 www.doluca.c

3 SCC September Meeting SAAB

dream, we made it a reality. A reflection of innovative thinking can be seen in the progressive design of the new 9-3, inspired from the award winner Aero-X concept. Innovations and Technical Highlights from Saab:

For 60 years, Saab has offered sporty, yet functional cars for drivers who are looking for an alternative to the mainstream, mass-marketed brands. Progressively designed and packed with clever features, Saab cars have long been associated with an intelligent, innovative approach. Aircraft Heritage: Ever since the first model was designed by a group of aircraft engineers, we've taken inspiration from the skies. With this, optimal efficiency in resource utilization and being sporty, driver focused, comes natural. Scandinavian Origin: Our birthplace has formed our thinking and a closeness to nature has given us a seamless marriage between beauty and functionality. The conviction to always put the user in centre has helped in creating a holistic view on safety for the driver and occupants in real life. Above all, it's our deep appreciation of nature that makes us think in a responsible way when producing cars. Innovative: There is a culture of creativity unique to Saab that has been with us from the start. When the world said that a workable turbocharger for a family car was just a

Modern Sweden Turkey has experienced a remarkable growth since 2001. This has been reflected in increased disposable incomes and consumer expenditure, which was demonstrated by the private consumption per capita that has increased with 158 % from 2000 to 2006. Retailing was the sector that benefited most from this positive development, even more so than sectors like travel, tourism and foodservice. Following the success of the Modern Sweden Exhibition in Riyadh December 2005 and Jeddah in December 2006, the Embassy of Sweden and the Swedish Trade Council is organizing Modern Sweden in Istanbul, Turkey. The main participants at the former events were Swedish companies already established on the market. However the aim of these companies was to further promote their brand name and in some cases launching new products. The purpose of Modern Sweden was to promote Swedish design and products and to provide a way for companies, organizations and designers to exhibit their products,

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Transverse engine & transmission Seatbelt as standard Diagonally split brake system Headlamp wash/wipe system Electrically heated seats Self-repairing bumpers Side-impact protection Saab Turbo 3-way catalytic converter Cabin air filter Asbestos-free brakes 16-valve turbo engine Saab Direct Ignition System Light Pressure Turbo CFC-free air conditioning Saab Trionic engine management Night Panel Saab Active Head Restraints Ventilated seats ReAxs CargoSET V6 Turbo BioPower BioPower Hybrid concept Two-stage turbo

Saab in Turkey: Saab is in the set-up and growth phase in Turkey. Our aim is to have sufficient and strong network all through Turkey. Currently, we have 5 dealers. 2 in İstanbul, and one in Ankara, İzmir and Bursa each. In about 3 months, our Denizli and Antalya dealers will be operational too.

services and ideas to the Turkish market. Modern Sweden took place on the 20-21st of October 2007 in Kanyon, a fashionable shopping centre in Istanbul, in order to reach as many consumers as possible. The following groups participated at the event: Swedish companies targeting consumers Swedish designers, architects, chefs and artists Tourism offices and agencies Schools and Universities Companies and organizations interested in further enhancing their presence at the event may choose to go for a sponsorship agreement. The exact costs and benefits of such an agreement will be settled between the organizers and the sponsoring entity. The Swedish participation organized through a Swedish Pavilion at the ground floor in Kanyon. In order to attract more visitors the event included a number of activities, for example visitors were offered Swedish food tasting and competitions. On the evening a Swedish reception with VIP's was organized in conjunction with the inauguration of the event. Further information about the event can be provided by the Swedish Trade Council in Istanbul. Contact: [email protected]

4 The Children´s Train - an exhibition with assistive devices for children and youth with disabilities.

The inauguration of the Children´s Train in Turkey, will take place in Ankara on Thursday, 22 November 2007. During the opening day a conference will be held with the theme: Swedish and Turkish disability policy. Several seminars on different themes will be arranged in connection with the event, such as alternative communication, assistive devices and support to children with different disabilities (developmental, learning, visual impairments, moving, walking, sitting and others).

This exhibition - the Children´s Train - was originally set up on a train travelling through Sweden by railway for 5 weeks during spring 2002. The exhibition was inaugurated by Crown Princess Victoria and attracted a lot of attention. Since 2002, the exhibition has been shown in Brussels (during the European Year of Persons with Disabilities), in St Petersburg (at the City´s 300 year jubilee), in Warsaw, Vilnius, Riga, Tallin, in Athens and Turin, during the Paralympics in the respective city, in Ukraine and in the Swedish Parliament. More than 35 000 persons have had the opportunity to see good, fun and functional assistive devices for daily life, education and playing. The Children´s Train will be shown in the cities of Ankara and Adana in Turkey during November and December 2007. The Swedish Handicap Institute is the producer of the exhibition. Swedish Sida is financially supporting the exhibition.

In order to improve and develop skills of children with different functional limitations, Computer Play Centers have been built up. The activities of such Centers will also be presented at the exhibition along with a workshop. Swedish staff with a great knowledge of special needs for children with disabilities, assistive devices, methods and special education will take part in the seminars and workshops in connection with the exhibition. They are also prepared to share their knowledge and experiences with their Turkish colleagues. Approximately 50 companies, representing Swedish producers of assistive devices, will present good, fun and functional products and tools for children with disabilities. The exhibition is interactive and both children and adults are welcome to take a close look and try the products shown. Further information about the event can be provided by the Swedish Trade Council in Istanbul. Contact: [email protected]

COOPERATIONS The Swedish Trade Council in Istanbul and Kreab Brussels, a leading European communications and public affairs consultancy, conducted several high level meetings with Turkish business leaders to discuss business implications of European Union policy and regulations. Among the companies visited were: Turkcell, Sabanci, KocBank, Zorlu. During the discussions it became apparent that companies take a great interest in the accession process, particularly the ways and means how they can monitor European legislation affecting their businesses. Turkey will have to implement and adopt the entire European regulatory system ranging from competition law, food,

pharmaceutical, financial services policies to energy policy and consumer protection and social legislation prior to becoming full member of the European Union. Kreab offers to assist companies in developing and understanding the European policy areas that affect businesses and to map the EU accession negotiating process. Most importantly Kreab helps businesses to establish key contacts with policy makers in Brussels in order to learn more about sector specific regulatory requirements for business, but also to facilitate communication between Turkish business representatives and Brussels EU decision-makers dealing with the Turkey membership project. For further information contact Georg Danell, Managing Partner, Kreab Brussels on +32 2 737 69 01.

5 Company Presentation KENTKART Osmanlı Yokuşu, Muhtar Kamil Sok, Basmacı Han 3/4 , 34437 Taksim ISTANBUL Tel: 00 90 212 249 67 20 Faks: 00 90 212 251 39 24 www.kentkart.com [email protected]

ABOUT THE COMPANIES OF BASMACI GROUPS 1989 Basel Elektronik San. Tic. Ltd. Şti. 1998 Kentkart Ege Elektronik San. Ve Tic. Ltd. Şti. 2004 Kentkart Marmara Elektronik San. Ve Tic. Ltd. Şti. 2005 Kentkart Işletme Elektronik San. Ve Tic. Ltd. Şti. 2006 Kentkart Çukurova Elektronik San. Ve Tic. Ltd. Şti. 2007 Basmacı İnşaat Dış Ticaret Turizm Ltd. Şti.

ABOUT KENTKART Co; KENTKART Ltd. was established in 1998 with the aim of providing and manufacturing Automated Fare Collection (AFC) and Vehicle Tracking System Solutions. The Company specializes in supplying, integrating and operating AFC and e-purse systems for Transport Operators and Retailers. At the 2000 Cartes Smart Card Exhibition in Paris, Kentkart Ltd won the prestigious SESAMES Award for Best Transportation Application involving Contactless Smart Cards. ABOUT BASMACI CONSTRUCTION Co; BASMACI INŞAAT Ltd. is active in the building and construction. It provides consulting services and assures contracting activities, mainly in Istanbul.

ABOUT BASEL Co; BASEL Ltd. was established in 1989, the company imports Electronic Toll Collection Equipment and devices to be used on Bosphorus Bridges and on the Turkish Highways. BASEL is the sole agent of the Swedish Company Kapsch Traffic. More than 1.000.000 transponders are sold in Turkey .

Swedish Invention

had been developed for children, as most of them could not withstand the forces they were supposed to.

Rear-Facing Child Safety Seat Professor Bertil Aldman (1925-1998) has made many pioneering contributions to traffic safety and biomechanics. He is internationally known, especially for his development of the world's first rear-facing child safety seat. The year was 1957 and Sweden's national research councils had organized a joint committee on traffic safety research. Traffic accidents were on the rise during this period and the committee was looking for a physician willing to devote himself to this type of research. Aldman registered his interest and was given the task of examining the problem. Studies were made on safety belts, traffic accidents and the treatment of the injured. Tests were made of all types of safety systems for both adults and children that could be found on the market. Very little was known about how much bodily stress children could withstand during an accident. The studies showed that existing safety systems were insufficient, especially those that

At a symposium in the USA, Aldman saw a proposal for how astronauts would be placed during takeoff and landing, when the forces of acceleration or deceleration can be almost as high as in a traffic accident. The astronauts would lie on their backs and absorb the force with their entire body and head simultaneously. The head and body were not to move in relation to one another during acceleration. Aldman thought this solution would also be good for children in cars, and in 1963 he developed a prototype which his youngest son got to test during trips around the Stockholm area. The child seat was soon put into production, and in 1988 Sweden passed its law regarding compulsory child safety seats for children in cars. As a result, injuries to children in car accidents have been dramatically reduced. In Sweden it is felt that other types of child seats are not suitable for children up to three years of age. Small children have weak necks in relation to the weight of their heads, making support for their heads during a collision very important. Bertil Aldman also collaborated on work to develop a seat belt cushion for somewhat larger children. Similar solutions were presented simultaneously in different pats of the world.

NEWS IN BREIF

6 NEWS IN BREIF High growth 'likely to continue' Sweden's current period of high economic growth is likely to persist into 2008, according to a prognosis by the Swedish Retail Institute. "Since 2004, growth has been around five %, which is strong by historical standards. This growth is expected to continue. Last year's growth of 5.4 % is expected to be followed by a further two years of growth at the five % level," the report said. The economic good times are thanks mainly to the fast-growing economies of Asia, particularly India and China, according to HUI. GDP growth in Sweden will increase from 2.4 % last year to 3.3 % this year and 2008. The growth in exports is expected to fall from 8.7 % in 2006 to 6 % this year and 5.5 % in 2008. Household consumption is expected to increase: it rose 2.8 % in 2006, and is predicted to reach 3.7 % this year and fall a little to 3.5 % in 2008. 3 July 2007, www.sweden.se Low Inflation, Unemployment Statistics Sweden reports that inflation was less than expected in August. The consumer price index was unchanged during the month. The Swedish Employment Service says open unemployment at the end of August was 3.4 %, 1.2 points less than during the same month last year. The agency says the number of available jobs in August was the highest figure for the month in several decades. But Swedish Enterprise is predicting that unemployment will reach 4.5 % this year, before dropping a full point by the end of 2009. In a new report the industry organization forecasts that the economy will continue to do well, despite troubles in the United States and a drop off in exports. 11 September 2007 Privatisations on the Way The Swedish government has announced that its planned series of privatisations, the largest in the country's history, have reached the "transaction phase". Financial Markets Minister Mats Odell says he has

appointed a panel to overseas the sell- Swedes Have Most Vacation in EU offs. According to the Reuters news agency, the planned privatisations are set to raise some 30 billion dollars for the Swedish Treasury. The round of sell-offs include telecoms operator TeliaSonera, the Nordea banking group and the makers of Absolut Vodka, Vin and Sprit. 10 September 2007 Budget Surplus Bigger than Expected Sweden looks set to enjoy a largerthan-expected budget surplus this year, according to the watchdog agency, the National Financial Management Authority (ESV). They've raised the predicted surplus figure to some 13.4 billion US dollars, up from the previous estimate of 12.9 billion. The authority credits strong economic growth with boosting tax revenues and lowering social spending demands. In a statement, ESV says that growth and "good development of employment" is having a positive impact on the state budget. However, as predicted in this week's Nordic Outlook financial report, the strong growth in Sweden has put pressure on the central bank to raise interest rates in a bid to prevent a rise in inflation. 31 August 2007 Consumer Confidence Growing A report from the National Institute of Economic Research reveals that Swedish consumers are growing in confidence, and businesses are finding it harder to hire staff. According to the Reuters news agency, the report signifies a possible rise in inflation is on the way. It currently hovers just below the 2% mark. Sweden's central bank, the Riksbank, is widely expected to raise interest rates again soon after an increase to 3.5 % last month. An economist at Nordea, the Stockholmbased Nordic banking group, says that the staff shortages some companies are experiencing could be seen as a sign of increasing inflation. The news comes as it is announced that retail sales in Sweden went up 1.9 % in June from May for a year-on-year rise of 8.5 % - well above the annual increase forecast in a Reuters survey. 27 July 2007

‹SVEÇ T‹CARET MERKEZ‹ DERNE⁄‹ SWEDISH CHAMBER OF COMMERCE Ayaza¤a Yolu ‹z -Giz Plaza No:4/58 Kat:16 34398 Maslak / ‹stanbul Tel: +90.212.329 82 20 - Fax: +90.212.329 82 10 Published by the Swedish Chamber of Commerce 3 times a year. We thank to Print Center for their support in publishing this issue.

A European Union survey shows that Swedes enjoy the most number of vacation days of all their EU counterparts. According to Eurofound, the European foundation for the improvement of Living and Working Conditions, Sweden comes a clear first with the number of annual vacation days --an average of 33. Two weeks more than Sweden's neighbour across the Baltic, Estonia, which also has fewer public holidays than Sweden. The survey shows that new EUmembers from eastern Europe, tend to have fewer vacation days than more established members of the bloc. The foundation also says that Swedes work the second fewest number of hours across the 27 member EU, with only the French being off more, due to the shorter work week in France. 24 July 2007 Swedish Interest Rates Up Sweden's Central Bank has raised its key interest rate by a quarter of a %age point, to 3.5 %. The repo rate was increased by the same amount in February and the Riksbank is signalling there could be further hikes this year to keep inflation in check. Economic growth slowed slightly in first quarter while wages, lending and house prices rose rapidly. The Central Bank's assessment is that GDP growth here will slow down somewhat, but that cost pressures are estimated to be higher than they have been in recent years. 20 June 2007