Case study - Igus Turkey: The currently small turkish market raises great expectations

Whether it is slide bearing or energy chains, when it comes to plastics, Igus GmbH from Cologne is always there. The company was founded 50 years back and today it is the world market leader in these areas. The company is represented by 2400 employees in 80 countries around the world, mostly via dealers. In 36 of these markets Igus is focussing on their own branches, recently even in Turkey.

Artur Peplinski, general manager of the Igus International Group Development says, “Turkey has been our focus for a long time, for eight or nine years we considered opening a branch there”. Reasons for it are the dynamic economic development in Turkey as well as the observation that many Igus customers from Germany were opening a production house in Turkey.

The variety of products tipped the scales for the involvement of Igus in Turkey

In the end the decisive factor was that the variety of products became too big for the local dealer Hidrel with whom Igus has been working since 20 years in Turkey. The company from Cologne specialising in plastics is still looking forward to long successful cooperation: A task of the branch is to support the dealers on-site, explains Peplinski. The Igus branch also supports their own key customers and new industry fields. The goal is to grow together with the dealers in this important market.

Igus has entered the Turkish market with a lot of drive even if the market there is still comparatively small for the company. “Currently Turkey makes for under 1 % of the international turnover of Igus”, says Peplinski.

The variety of products tipped the scales for the involvement of Igus in Turkey

In the end the decisive factor was that the variety of products became too big for the local dealer Hidrel with whom Igus has been working since 20 years in Turkey. The company from Cologne specialising in plastics is still looking forward to long successful cooperation: A task of the branch is to support the dealers on-site, explains Peplinski. The Igus branch also supports their own key customers and new industry fields. The goal is to grow together with the dealers in this important market.

Igus has entered the Turkish market with a lot of drive even if the market there is still comparatively small for the company. “Currently Turkey makes for under 1 % of the international turnover of Igus”, says Peplinski.

The future of the Turkish market is critical

However the following question is much more important: “What will happen in the future?” This is where Turkey is high on the agenda for Igus: The reason is not just the comparatively young and rapidly expanding population but also well educated engineers. “A lot is happening there and I expect that we will see a lot more value creation in Turkey in the coming years.”

In Istanbul, Igus has established important customer branches on the Asian side. “There are clusters for automotive, packaging, machine tools and a little further the textile industry. All of these are big industries in which Igus is generally very active”, says Peplinski. “We can find every industry in Turkey in which Igus works intensively.”

Igus is deliberately refraining from making schedules for Turkey

For further development of the Turkish markets Igus is deliberately refraining from making fixed schedules. “Step by step we are seeing what we can do for the customers.” It is also applicable for other work like packaging or engineering apart from distribution. “We are taking the time and we want to get to know the local market”, says the Igus manager.

For the position of managing director in Turkey, Igus is intentionally looking for a local. “In Germany it is surely possible to find qualified employees who also know the Turkish culture very well”, says Peplinski. “I really want someone who has grown up in Turkey because I think that cultural sensibilities are very important in the long run.” The understanding of local conditions and customers is so important to him that Peplinski admits it is more work if you have to deal with another culture.

He is even more excited if he can pick up ideas from the foreign markets. “Many innovations are born at Igus because of direct suggestions of customers. We probably would not get such information if we didn’t go so deep in the market.” There is a massive advantage for a company in opening its own branch as compared to market development through dealers: “A dealer has its own interests and that is normal and he may not give all the information to us. With our own branch we have our eyes and ears in the market.”

Local expertise in Turkey is important

Even for preparations Peplinski relies on the local expertise: “I would recommend starting with a local consultancy firm to look for personnel as well as for establishing the company.” Especially the bureaucratic conditions in Turkey are not so simple. He explains with the help of an example: “In Turkey the tax authorities work differently from those in Germany. One or two weeks after the company is founded an inspection is conducted and they check if the office is really equipped like an office. We reported the opening online and the revenue office was there in two hours.” Since nobody at Igus reckoned with such a fast response, the office was not ready which is why the approval got delayed at first and we got it only after a second inspection. On the other hand some bureaucratic processes can take longer than expected according to Peplinski.

In Turkey you need to have a lot of patience and time, he says. “From the six branches that we opened in the last twelve months, this was the most complicated. However, when the official tasks are complete everything works 100 %.”

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