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Cablegate: Turkey: Bimonthly Southeast Economic Newsletter

VZCZCXRO9664
RR RUEHDA
DE RUEHDA #0004/01 0151608
ZNR UUUUU ZZH
R 151608Z JAN 10
FM AMCONSUL ADANA
TO RUEHC/SECSTATE WASHDC 4837
INFO RUEHAK/AMEMBASSY ANKARA 1380
RUEHIT/AMCONSUL ISTANBUL 1143
RUEHDM/AMEMBASSY DAMASCUS 0209
RUEHDA/AMCONSUL ADANA 1447

UNCLAS SECTION 01 OF 02 ADANA 000004

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E.O. 12958: N/A
TAGS: ECON ENRG TU SY
SUBJECT: TURKEY: BIMONTHLY SOUTHEAST ECONOMIC NEWSLETTER

GAZIANTEP - ALEPPO RAILWAY INAUGURATED THROUGH COBANBEY BORDER
GATE

The completion of an extensive demining project in Kilis
province's Elbeyli district allowed for the establishment of
Turkey's third railway gate with Syria at the Cobanbey border
post, reopened on December 22, 2009, after 28 years. The
Cobanbey gate will be used for rail transportation only, and not
for vehicular or pedestrian border crossings. Kilis Chamber of
Commerce and Industry Secretary General Murat Sakar said trains
now run twice a week between Gaziantep and Aleppo, a journey
that takes about three hours one way. The reciprocal lifting of
the visa requirement between Turkey and Syria has stimulated
tourism in Mersin, Adana, Hatay and Gaziantep provinces.
Chambers of Commerce and local tradesmen are seeking ways to
promote shopping as a tourism product for visiting Syrians, as
well as increase rail cargo services to boost exports to the
Middle East.

BESIKTAS GROUP ABANDONS SHIPYARD PROJECT IN ADANA'S FREE ZONE

Citing the effects of the global economic crisis, Besiktas
Group, a company active in shipbuilding, repairs and maintenance
services, abandoned its ambitious shipyard project in the Adana
Free Zone. Adana's Yumurtalik Free Zone Manager Muharrem Pusat
said the Group had rented an area of 320,000 square meters in
early 2008 and had concluded a costly environmental impact
assessment in what would have been the largest maintenance and
repair shipyard in the Mediterranean. This is the fourth
shipyard project in as many years to be cancelled in the
Yumurtalik Free Zone, after a reported total of $2 million was
spent on environmental assessments. Pusat said the Ugursan
Shipping Group and Tersan Tersancilik companies continue to
pursue investments in the zone, however. Mersin Chamber of
Shipping President Cihat Lokmanoglu said the cancellations are
not surprising given high costs associated with the investment,
in particular when the shipyard market in Turkey is saturated
and existing enterprises are struggling. Lokmanoglu noted
shipping and shipbuilding are the first sectors to be hit in a
global economic crisis.

KILIC HOLDING OPENS TURKEY'S LARGEST FISH-PROCESSING FACILITY IN
KAHRAMANMARAS

Kilic Holding, a Mugla province-based company, has opened
Turkey's largest fish-processing facility in Kahramanmaras
province. According to local reports, the investment cost 14
million euro, employs 80 people and has a daily production
capacity of 50 tons. Kilic Holding Kahramanmaras Director Cenk
Arzuman said the facility is the second largest in Europe.
Kahramanmaras Industrialists and Businessmen Association
President Kadir Kurtul said the province managed to increase its
year-on-year exports 12 percent in 2009, thanks to alternative
markets. Kurtul said Italy ranks first with $116 million,
Brazil ranks second with $32 million, followed by Germany, Syria
and Poland.

MERSIN TECHNOPARK LAUNCHES HIGH SCHOOL ENTREPRENEURSHIP PROGRAM

Mersin Technopark's "grow with your idea" contest, aimed to
foster entrepreneurialism in youth between ages six and 14, is
among the invitees to the European Year of Innovation and R&D.
Technopark Manager Ozgur Durmaz said her team travelled to
Sweden on December 15 to talk about their contest, noting hers
was the only project at the event. Mersin's Technopark is
currently working to expand the project to include all high
school students in Mersin province.

DUTCH NOBLE GROUP PLANS PORT AT CEYHAN

After conducting feasibility studies in Greece and Libya, Dutch
Noble group has chosen Ceyhan in Adana province to build a new
port on 3,000,000 square meters of land in the Energy Specialty
Zone. The projected facility would have an oil storage capacity
of 1 million tons. Feasibility studies will conclude in the
next month, according to a business contact, resulting in an
investment of 2 billion euros that would create employment for
1,000 people.

DIYARBAKIR BUSINESS CHAMBERS DISAPPOINTED INCENTIVES LAW NOT
RENEWED

Despite public promises made by Prime Minister Tayyip Erdogan,
State Minister Ali Babacan announced January 14 the government
would not extend the "5084 incentive law," a financial incentive
package for companies in "priority" regions in the southeast.
Law 5084 came into effect in 2004 and expired on December 31,
2009, and covered 49 provinces in Turkey with a per capita
income below $1,500. The law included special advantages such
as reductions in income taxes as well as social security
premiums for employees, energy support, and free allocation of

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land. Babacan said despite the cost of $1 billion to the
government, social security premium support for new employees
would continue until 2013, but the government would no longer
subsidize energy costs. Land grants would continue on a
case-by-case basis under the new law. Diyarbakir business
leaders are disappointed the law was not extended, citing it as
a major factor in the development of the province's nascent
industrial sector. Diyarbakir Industrialists and Businessmen
Association President Raif Turk said almost 30 businesses had
been established under 5084 and predicted a halt in progress
under the current legal regime. Southeast Industrialists and
Businessmen Association President Sahismail Bedirhanoglu said
Diyarbakir deserves extra support given its ranking of 63 out of
81 provinces in terms of socio-economic development.

MERSIN CHAMBER OF COMMERCE TO HOST PROMOTIONAL FAIR IN DAMASCUS

Aiming to develop trade with new markets and neighboring
countries, Mersin has set its eyes on Damascus. Mersin Chamber
of Industry and Commerce President Serafettin Asut said he is
organizing the first "Mersin Days" promotional fair in Damascus
in February 2010. A special committee has been convened to
identify the market potential and Syrian import opportunities.
The fair will advertise the cuisine and natural resources of
Mersin province, as well as economic advantages such as the port
and Free Zone.
DARNELL

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