Ancient crossroads: Konya seeks upgrade links for its industry

Financial Times (UK) November 22, 2011, p. 4
Special Report: Investing in Turkey

By Daniel Dombey

Viewed from the hills overlooking the Anatolian plateau, the city of Konya seems to go on for ever – a mixture of houses, factories and industrial works in progress that sprawls towards the horizon.

It hardly seems a picture of industrial success – the nearest port is more than 200km away and the city’s leaders make it clear the current freight links with the rest of the region fall well short of their hopes.

Still, they add, the story of Konya is the story of Turkey, but more so. While the country has been booming, the 1m-strong city, 200km south of Ankara, has also been doing exceptionally well, selling $1bn worth of goods to more than 100 countries, with exports increasing by a quarter in the first nine months of the year.

« This is a multidimensional city, » says Ahmet Davutoglu, Turkey’s foreign minister, who hails from Konya and emphasises the advantages of its location at the heart of the country.

« We are talking of a city that is a cultural, historical centre of Anatolia, an agricultural centre of Turkey with a rising industrial entrepreneur class. » Local industrialists add that Konya is important not only for its trading links and its production for the growing domestic market, but also as a key part of the modern Turkish experience.

« To understand the development of Turkey, understanding Istanbul will no longer be enough, » says Tahir Büyükhelvacigil at the Konya chamber of industry. « You need to observe Anatolia. »

All the same, realising Konya’s ambitions depends to a great extent on foreign financing at a time of turbulence in the international economy and slowing growth in Turkey. It also rests on attracting more big international companies to an area that is still largely populated by small and medium-sized Turkish companies.

« We want to produce more and we want to do it quickly. That’s why we need foreign direct investment, » says Selçuk Öztürk, the head of the local chamber of commerce. This year, Unilever chose Konya as the site of its eighth factory in Turkey, a $100m ice-cream making facility. The city hopes others will follow.

The move tapped into Konya’s millennia-old tradition. The 13th-century Muslim mystic Mevlana Celaleddin Rumi settled and died in the city, where his followers founded the order of the Whirling Dervishes.

St Paul preached in what was the Roman city of Iconium. Centuries before him, peoples such as the Phrygians and the Lydians, who minted the first known coin, lived there.

Today, it is known as one of Turkey’s more devout cities. Indeed, the rise of Konya and of Kayseri, the Anatolian city most often bracketed with it, are sometimes seen as representing the rise of a new, more religious middle class, an entrepreneurial elite with a powerful work ethic that has helped to transform Turkey’s politics and economy.

But Tahir Akyürek, the city’s mayor, emphasises instead the city’s historical continuity. « We have had a tradition of production here for thousands of years, » he says, also stressing Konya’s large expanse of land – its territory is bigger than that of any other Turkish city – and its incentives for investors.

Mr Öztürk also takes pains to define the limits of the city’s religious conservatism. « I don’t think it is very different from the Turkish average or the Anatolian average, » he says.

« Konya is not a fundamentalist city, otherwise it wouldn’t have developed so much. » Indeed, in the 1970s Konya became one of the first cities in Turkey to establish an industrial zone to get the local automotive and car parts industry off the ground.
Today, it has three large industrial zones, is planning a fourth and has developed clusters in sectors such as agricultural machinery, casting and shoes. But it wants to do much more.

While its two biggest export markets last year were Iraq and Syria – unsurprising given Konya’s location and its history as a stopping point on the Silk Road – the city wants to strengthen its links with Europe. For passenger traffic, that work is largely done: a high-speed train has cut journey times from Ankara to Konya from 10 hours to less than two, and the link will soon go all the way to Istanbul.

But conditions still have to be improved for the freight sector. The mayor lists a welter of plans and programmes, such as an expanded line to the busy Mediterranean port of Mersin, a new line to the port of Antalya and a separate rail network that would make Konya the logistics hub of a group of Anatolian cities.

« There are lots of projects, there are lots of things to do, but how to finance them? » says Mr Öztürk. « It is not that easy to find a full bag of money. »