ISTANBUL — Japanese companies are increasingly using Turkey as a steppingstone leading to the resource-rich markets of Central Asia and the Caucasus.
The region boasts a wealth of natural gas, minerals and other resources, and its economies are growing fast. Azerbaijan, Kazakhstan, Turkmenistan and Uzbekistan logged growth of 6-10% last year. Kazakhstan’s gross domestic product per capita stands at about $12,000, above the $10,000 mark indicating affluence.
Confirmed natural gas reserves in Central Asia and the Caucasus total roughly 80% of those in Middle Eastern gas giant Qatar, according to BP.
Mitsubishi Corp. and Turkish conglomerate Calik Holding received a $1.3 billion contract Monday from a state-run Turkmenistan chemical company for a large fertilizer plant in Garabogaz, on the shore of the Caspian Sea. Gap Insaat, a unit of Calik, will build the facility, and Mitsubishi Heavy Industries will handle design and procure machinery and materials.
The plant will process natural gas from Turkmenistan to make urea, and its entire output will be exported. Its daily capacity is expected to come to roughly 3,500 tons, likely making it one of the world’s largest urea plants. Production is slated to begin in 2018.
Eight countries in Central Asia and the Caucasus boast a total population of 84 million, larger than that of Turkey, whose exports to the region between January and June reached an estimated $4.1 billion.
The region is close to Turkey ethnically as well, with five countries there speaking Turkic languages. Turkish businesses have connections in the region and know how to secure workers.
The Turkish arms of a growing number of Japanese companies are starting to develop markets in Central Asia and the Caucasus.
Sales at air conditioner maker Daikin Industries’ Turkish unit jumped 34% last fiscal year to 695 million lira ($321 million). Exports grew 21% overall, but shipments to Central Asia and the Caucasus swelled 58%. Mitsubishi Electric has used Turkey as a base to expand elevator sales, supplying elevators for the Flame Towers in Baku, Azerbaijan.
Toyota Motor’s Turkish subsidiary began exporting the Corolla sedan to Central Asia and the Caucasus in July of last year. It expects shipments to grow 36% next year to around 4,000 units. It had positioned Turkey as a production base for exports to Europe, but it will make an effort to cultivate nearby emerging markets as well.