Turkish construction firm to carry out housing project in Saudi Arabia

Published 08.08.2017 22:18

Having received an offer from Saudi Arabia, which wants to build 2 million houses in five years, Sinpaş, one of Turkey's leading housing manufacturers, has begun working on dismantling two ceramic lines in Bilecik and moving them to Saudi Arabia.

Invited by the Saudi Arabian administration together with Istanbul Residence Development Plan Industry and Trade Co. (KİPTAŞ) and the Mass Housing Development Administration (TOKİ) for the housing project, Sinpaş reached an agreement for the housing construction, and the ceramic needs of the houses to be built will be met with the factory established there. Sinpaş, which has been sending mining exports to Saudi Arabia for a while, will reinforce this cooperation with housing production. Sinpaş Holding Chairman Avni Çelik said that the two lines will be dismantled in Turkey and moved to Saudi Arabia due to the low cost of labor and energy there.

"The Saudi Arabian administration had invited us for housing projects. We will also build a factory for the ceramics to be used in these projects," Çelik said. "We cannot supply enough goods in the field of ceramics. Our Bilecik factory is coming back in two months. That is why we decided to establish the fifth line to the factory. We will increase capacity by 5 million square meters. In addition, Sinpaş agreed to dismantle the two facilities and establish them in Saudi Arabia."

Citing that the Saudi Housing Ministry had invited them for the housing project, Çelik said that Saudi Arabia wants to build 2 million houses in five years. "They called us for it. We agreed and established a company named Sinpaş Saudiya with a local partner," he said, adding that the large number of houses will be sold only to Saudi citizens. "The Saudi administration will grant 150,000 Rials, or $45,000, per house for the infrastructure. A loan of $120,000 per house will be granted to the buyer. This money will be repaid in 25 years without interest," he said.

Çelik said that they receive a share of 2.5 percent per annum from the houses sold in Istanbul and Ankara and that they are not in an aggressive effort to increase this rate, explaining that they have chosen to grow cautiously. Giving figures that 130,000 houses in Istanbul and 40,000 in Ankara are sold each year, Çelik said they get a share of close to 4,000 units per year from this market, which corresponds to a market share of 2.5 percent. "Even if the total market narrows by 30 percent, we plan to sell these 4,000 units again thanks to our brand and service," he said.

Condition of $1 million should be loweredÇelik said that Saudi businesspeople want to acquire Turkish citizenship, but find the $1 million investment condition to be too high. "When I join the family councils in Saudi Arabia, they tell me that this condition should be lowered to $500,000. They say that the conditions of the countries in the Schengen zone are more appropriate and that Turkey's [lowering to] this figure will increase demand," he said.

Foreign residential sales as foreign exchange earning serviceÇelik said that foreign residential sales should be included in foreign exchange earning services. Underlining that this sector provides net foreign exchange inflow to Turkey, but it is not included in the scope of foreign exchange earning services, Çelik said that it is very important for the sector to benefit from the Economy Ministry's incentives in promotion and marketing: "Foreign residential sales should be regarded as a foreign exchange earning service. Support for promotion and marketing should be given, as well. If this happens, we will be able to reach wider masses, which will increase housing sales."

Share on Facebook Share on Twitter