Turk Traktor

Overview
Project Summary Document
Environmental and Social Documentation
Procurement
Complaints

Project ID 44173

Status Complete

Location

Türkiye

Business Sector

Manufacturing and Services

Notice Type

Private

Project timeline

Exploratory
Passed Concept Review
Passed Structure Review
Passed Final Review
Board Approved
Signed
Implementing
Completed

Project ID 44173

Status Complete

Location

Türkiye

Business Sector

Manufacturing and Services

Notice Type

Private

Environmental Category

Approval Date

12 Mar 2013

Disclosure date

13 Mar 2013

As per section 1.4.2 (iii) of the Directive on Access to Information: "For Projects approved by Bank management where the Board of Directors has delegated the approval authority, the PSD shall be disclosed at the start of the relevant no-objection notification period to a member country of the Bank in accordance with Article 13 (iii) of the Agreement Establishing the EBRD."

Translated version of this PSD: Turkish

Project Description

The EBRD provided a EUR 75 million long-term loan to Turk Traktor ve Ziraat Makineleri A.S. in May 2013 to finance the construction of a tractor assembly plant in Sakarya and investments in R&D, engine and transmission projects in the existing facilities in Ankara.

The EBRD is also considering a separate EUR 20 million long-term loan to finance construction of additional units in the tractor assembly plant in Sakarya.

Transition Impact

The Project supports innovation through R&D activities which will be transferred from CNH Industrial to Turkey, promotes energy efficiency and has a strong indirect impact on the development and efficiency of agriculture industry.

Transition Impact of the Project is foreseen to be realized as:

Transfer of skills

The Project involves the transfer of the R&D function (for all new products in the 55-110 HP tractor segment) from CNH Industrial to TurkTraktor. This means the transfer of the know-how about product innovation, research and development, product and manufacturing process engineering of all future engines and tractors to the local staff.

Expansion of competitive market interactions

The local suppliers will be directly involved throughout the R&D phases by actively contributing to testing, prototyping, development and production set-up of the new parts and products. Consequently, the suppliers will benefit from the close relation with TurkTraktor, by receiving support for improving their manufacturing procedures and quality standards to meet the new technical requirements.

Setting standards for business conduct

The Project entails financing a number of energy and process efficiency investment components (e.g. high-efficiency motors, variable-speed drives, upgrade of ovens and furnaces, automation and synchronisation of production departments, improvement of the energy performances of the buildings etc.), including a comprehensive Energy Management System.

The Client

TurkTraktor, which is an open joint stock company incorporated in Turkey, manufactures farm tractors and trades other agricultural machinery. The majority shareholders are Koc Holding (37.5%) and CNH Industrial Osterreich GmbH (37.5%); while 25% of the shares are traded in Borsa Istanbul with market capitalization of USD 1.6 billion as of 9th May 2014.

Koc Holding is the leading industrial conglomerate in Turkey, with strong competitive edge in four core industries of energy, automotive, durable goods and banking.

CNH Industrial Osterreich GmbH is a subsidiary of CNH Industrial, a part of the Fiat Group, which is a global company in the agricultural and construction equipment industries.

EBRD Finance

In May 2013, the EBRD arranged a EUR 75 million senior unsecured A/B loan; of which EUR 30 million for the EBRD’s own account (A-loan) and EUR 45 million syndicated to other lenders (B-loan).

The EBRD is also considering a separate EUR 20 million senior unsecured loan.

Project Cost

EUR 107 million.

Environmental Impact

The project has been Categorised B in accordance with the EBRD’s Environmental and Social Policy (ESP) and independent E&S due diligence (ESDD) was commissioned by the bank. ESDD concluded that adverse environmental and social risks associated with the Project are site specific, readily identifiable and can be addressed through mitigation measures.

The company has international standard management systems in place at the existing facilities and intends to implement these at the new build facility and to then synergise the systems under a single corporate management structure. A number of issues were identified by way of the ESDD that require corrective measures, although most of these are minor in nature. Any residual risk issues have been addressed by way of a project specific and client agreed ESAP, the salient items of which include:

formal commitment to submit updated permitting documentation to the Turkish regulators in a timely manner
implement an integrated EMS at the new facility and adopt corporate management procedures that consistently apply to both facilities
develop a contractor management plan for expansion and construction related activities
address minor residual risks associated with current environmental management procedures
review internal H&S and community safety procedures to manage risks associated with traffic management
develop an external grievance mechanism and information disclosure policy

Due to the relatively low risk profile of the project, monitoring will be undertaken by way of company disclosures and annual reports and follow up interviews. Site visits will be undertaken if considered necessary, or in the event of a significant issue occurring.

Technical Cooperation

None.

Company Contact

Memet Kamber
CFO, Turk Traktor
Phone: (+90) 312 233 33 33
Email: memetk@turktraktor.com.tr

Transition impact

ETI Score:60

PSD last updated

01 Feb 2019

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

Environmental and Social Documentation is not available for this project.

Selected procurement notices related to this project may be shown below. Further procurement opportunities related to this and other projects, if available, maybe be viewed in the EBRD Procurement Portal.

The EBRD's Environmental and Social Policy (ESP), Access to Information policy (AIP) and Project Accountability Policy (PAP) enable sound and sustainable development in its projects. The Independent Project Accountability Mechanism (IPAM) deals with complaints about environmental, social and disclosure matters related to the Bank’s investments.

View complaint case for this project

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