Turkey’s innovation champions compete in global markets

ANKARA

 There is a growing number of Turkish companies that can boast unique know-how, enabling them to compete in global markets.

This shouldn’t surprise us, experts say.

“Turkish culture has long been characterized by an inherent entrepreneurial nature, where necessity is undoubtedly the mother of invention and where things that need improving receive improvements,” commented Peri Kadaster, director of Strategy and Marketing at Monitise mobile technology consultancy, when the company acquired Turkish Pozitron last year.

If proof were needed, here are five examples of Turkish companies with real, world-class know-how, which enables them to compete in global markets: Grafen Chemical Industries, DYO, iyzico, armut.com.tr, and Blesh.

Turkey on top in advanced materials

An advanced material has engineered properties created through the development of specialized processes and synthesis. They weigh less than conventional materials, and they outperform them in strength, formability, conductivity, and in other key properties, according to the Victorian Center for Advanced Materials Manufacturing.

“Turkey’s well-developed construction industry has supported the creation and use of advanced materials, so that the country has a technology lead in this area,” explained Ozgur Seydibeyoglu, an assistant professor at the Department of Materials Science and Engineering at Izmir Katip Celebi University.

“Considering the limited number of producers of these products in the world, the presence of a number of major producers in Turkey gives the country an innovative advantage,” he added.

Graphene is one such product. It is a single, tightly packed layer of bonded carbon atoms, Seydibeyoglu said. Layers of graphene stacked on top of each other form graphite.

Graphene is the thinnest compound known to man at one atom in thickness, the lightest material known (with 1 square meter weighing around 0.77 milligrams), as well as the strongest compound discovered (between 100-300 times stronger than steel and with a tensile stiffness of 150,000,000 psi), the best conductor of heat at room temperature and also the best conductor of electricity known.

There are numerous applications for graphene in aerospace, electronics and biotechnology, just to name a few. One such is the use of graphene “ink”, which allows manufacturers to paint a microscopically thin layer on a surface that conducts electricity.

But graphene is expensive to produce, and successful manufacturers have to address this challenge.

The Ankara-based Grafen Chemical Industries has developed a unique approach to producing graphene at affordable prices.

“We use a unique production process for graphene which is based on microwaves and a special chemical process called fluidization.  We are the only company in the world using such a sophisticated production process, which provides excellent quality with minimum environmental emissions,” Grafene CEO Ibrahim Mutlay told Anadolu Agency on Monday.

The 38-year old Mutlay set up Grafen in 2004, and the company has seen rapid growth in its 10 years of existence, building a global customer base. It now partners with a Canadian producer on nanomaterials, and works with LUM in Germany, and Angstron Materials in the U.S.

“In my opinion, our international success is partly based on solid customer service. We offer among the best technical support in the market. Hence our customers find not only commercial products but also real solutions to their scientific and industrial problems,” Mutlay said.

Government supports nanotechnology

Among advanced materials, nanotechnology is a cutting-edge area, and it’s one that Turkey excels in, thanks to government support.

Nanotechnology is included in the National Science and Technology Policies, Vision 2023 Strategy Document. In the document nanotechnology is identified as one of the strategic technological fields with strategic focus areas; nanophotonics, nanoelectronics, nanomagnetism, nanomaterials, nanocharacterization, nanofabrication, nanosized quantum information processing and nanobiotechnology.

The government has set up 32 nanotechnology research centers like the National Nanotechnology Research Centre (UNAM) established in 2006 at Bilkent University in Ankara or the Nanotechnology Center at Sabanci University, which was launched in 2011.

Coatings are one area in which nanotechnology has become critical, as the most advanced products all make use of it.

Global demand for paint and coatings will rise 5.2 percent annually to 51.6 million metric tons in 2017, which is valued at $186 billion, according to Freedonia Group forecasts. Of this, Turkey is predicted to have a 2 percent market share.

DYO will have a large piece of that. DYO is an old, well-established coatings maker, but one that has moved significantly into nanotechnology.

In 2005, the company produced the first nanotechnology-based coating on the Turkish market. In 2006, it exported the coating to Europe. Now DYO has an entire line of nanocoatings.

One of these earned it a European patent in 2008. DYO produced a photocatalytic (self-cleaning) coating using the sol-gel method -- a means for producing solid materials from small molecules.

Since then, DYO has produced a unique, nanolacke varnish that an independent scientific study showed is superior to conventional ones. “It had dry film resistance properties of gloss, scratch resistance and surface resistance to cold liquids that were superior to these same properties for the conventional varnishes,” according to a 2009 research at Bartin University, Department of Forest Industrial Engineering.

DYO is now present in 40 countries. “We have been able to present our products combining quality and innovation to more than 40 countries crossing borders of Turkey. We have been one of the most powerful brands of Turkey and the geography in which we are located. We continue our improvement with the vision of an international company,” commented Serdar Oran, general manager of DYO Paint Factories -- based in northwestern Kocaeli pvovince -- in a recent (undated) note on the company website.

Making e-commerce pay

E-commerce is growing exponentially in Turkey. Total e-tailing was worth about $76 million in 2004, and has climbed to about $17 billion in 2014, according to statistics from consultancy A.T. Kearney. There are close to 2,000 e-commerce sites.

Arranging payment is a challenge for these e-businesses. “There are six banks through which payment can be arranged, but each bank has its own system for handling them,” explained Barbaros Ozbugutu, CEO of Istanbul-based Turkish e-payment specialist iyzico, told Anadolu Agency. 

Ozbugutu worked in the banking and payments sector in Germany for many years, so he had vast experience in tying together banks and websites.

Ozbugutu and his partner came back to Turkey in 2011, and the pair saw an opportunity in the rapid growth of the sector in the country.

They started iyzico in 2012, creating a platform for payments to e-commerce sites that was carefully adapted to the Turkish market.

“For example, the platform manages integration with all the banks that handle such payments, so that the e-commerce site can accept payments from all its clients, regardless of where they bank. And the sites can take credit cards through the platform as well,” he said.

Offering access to credit cards is critical for e-commerce sites in Turkey, as it is by far the most-used form of payment in the country. But it can be very difficult for small startup e-commerce sites to persuade banks to provide this access, so iyzico fills another important gap.

“We have taken a substantial share of the market in Turkey,” Ozbugutu said. “This is because our platform is easy to integrate, and our services cost only a small percentage of sales.”

Such is the success of iyzico’s platform, that the World Bank’s International Finance Corporation invested $6.3 million in the company in May 2015.

“Iyzico provides comprehensive online payment solutions for e-commerce merchants and marketplaces. Iyzico-enabled merchants can offer consumers a broader choice of local payment options at lower cost and with improved security. We believe the company will be an important part of the infrastructure for Turkey’s fast growing e-commerce sector,” said Andi Dervishi, Head of IFC’s FinTech Investment Group, in a statement in May.

Services success

While retailing has been very successful on the Turkish web, services have been slower to develop.

Ms. Basak Taspınar Degim discovered this when she returned to Istanbul from working as a brand manager for Revlon in the U.S. in 2010.

“I had to deal with customs, movers, painters, and many others, and they were hard to find. It was really a hassle to find good quality services,” Degim told Anadolu Agency.

“In the U.S., I had become used to doing everything online, but that just wasn’t possible here,” Degim said. There are a large number of local search sites in the U.S., like tomcat or homejoy which track services in the consumer’s neighborhood.

“The experience gave me an idea for a new company,” she said.

About ten months later, Degim left her management job, pooled her savings, and started armut.com.tr.

The website pairs up local service providers -- like house painters and babysitters -- with consumers who are looking for them.

“But it’s far from being that simple. We have developed a slew of proprietary applications, all run on our own network, to analyze the offers and the bids for those offers, and to maintain the quality of both,” Degim explained.

“The issue is that a consumer needs to have trust in a service provider -- after all, you let this person into your home. At armut, we had to find a way to ensure that consumers could trust the businesses bidding to provide services. That is where our analytical software comes in.”

The armut software uses proprietary algorithms to control the quality from the painters, babysitters, gardeners -- among others -- who propose their services. Experience from previous work on the site is carefully graded, including user reactions.

“This is the innovative part of armut. There are no similar approaches to this kind of website anywhere,” Degim said.

International venture capital provider Hummingbird agreed, as, in January 2014, it made a substantial investment in the company (the amount was not disclosed).

With more than 1 million hits per month, and more than 50,000 service providers listed, armut is growing fast. Degim isn’t sure when the company will try to export the model, but the move is in the works.

Pioneering the “physical web”

You walk into a store, and you see an item that interests you. Normally, you might pick up and look closely at the item, or read what’s on the box, or ask a salesperson for more information.

But there is a high-tech approach to this as well. A signal from an electronic device near the item is sent to your smartphone. All the information you want to have about the item appears on your phone.

This kind of technology has been around for some time, using Bluetooth (a low-energy signal sent to and from your phone). The tech people call this proximity notification.

But Apple changed the whole universe of proximity notification when it released iBeacon in December 2013.

The iBeacon is a small, cheap Bluetooth transmitter. Apps installed on your iPhone search for the signal transmitted by these beacons and respond accordingly when the phone comes into range. Some Android phones now support iBeacon as well.

Enter the Istanbul-based Blesh. Starting in December 2013, Blesh began offering Bluetooth proximity services, and quite soon began working with iBeacon.

“We provide the technology, set up the beacons, and monitor the beacons for our clients,” explained Ugur Gokdere, CTO of Blesh.

Blesh is a real Turkish original. The seed investment was received from Lidya Ventures. Soon after, the startup got support from an angel investor network, including Turgut Gursoy, Kemal Ciliz, Ali Sabanci and Emre Berkin (Gokdere won’t disclose figures).

“Much of our work is at malls, or airports, or train and bus stations. Advertising beacons can then reach a large crowd of potential customers,” Gokdere said. “Our analytics also provide a breakdown of the types of potential clients in the area.”

Turkish companies have reacted well to the marketing potential, and Blesh now shares location data among 60 apps provided by clients. Blesh can also provide clients with a campaign management system.

But Blesh is taking proximity notification a step further. Now, using what techies call the “physical web”, a Google project, Blesh beacons can contact, and actually trigger the use of smart objects -- the classic example is a “smart” refrigerator that tells you when you need to go to the supermarket and stock up.

The Blesh Physical Web beacons are tiny, relatively low-cost stick-on devices that weigh less than an ounce. They broadcast via Bluetooth as well. 

This is all cutting-edge technology, but Blesh has gained enough market share to convince several angel investors to support it. The company is currently involved in its first round of venture capital investment, a surefire indicator of the strength of Blesh’s numbers.

It’s all part of the Internet of Things, which tech gurus tell us is the next wave. If they’re right, Blesh is well-positioned for rapid growth.