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THE TURKISH DAIRY INDUSTRY HASAN GİRENES – Yaşar Group, Turkey. Turkey – Netherlands Business Forum 17 April 2012, Amsterdam. DAIRY FARMING in TURKEY. Investing in Turkey. “Turkey will be one of the best countries to invest in over the next three years”
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THE TURKISH DAIRY INDUSTRYHASAN GİRENES – Yaşar Group, Turkey Turkey – Netherlands Business Forum 17 April 2012, Amsterdam
Investing in Turkey... “Turkey will be one of the best countries to invest in over the next three years” “If I was an investor with a huge sum of money with me, I would definitely invest half of my money in one of the emerging economies. For example, investing in a farm in Turkey, I would personally not even think for a minute.” Marc Faber – Investment Guru, December 16, 2010
Dairy Farming in Turkey • Blessed with one of the very best climates for dairy farming • Many large-scale dairy farms established or rapidly increased in scale • Many of state-owned farms being privatized • Joint ventures and foreign investors • Seasonal milk production: rises from January, decreases from June • Demand following an opposite trend to production • Production-demand imbalance: price instability WDS Report-2011
Dairy Population • Number of bovine animals: 11,4 million heads • Number of dairy cows : 4,2 million heads • Av. milk yield/year : 2.803 kg/cow • Breeders Ass. Members : 6.000 kg/cow • Modern farms : 10.000 – 12.000 kg/cow • Number of animals recorded in pedigree: • 2002: 178.000 heads • 2011: 2.682.000 heads • Number of sheep & goats: 29,4 million heads
Milk Production - 2011 (tons/year ) Total Milk Production 13.6 milliontons/year COW MILK • 12.480.416 - 91,7% SHEEP MILK • 816.832 - 6,0% GOAT MILK • 272.811 - 2,0% BUFFALOES MILK • 35.487 - 0,26% Consumed in Farm • 2.745.691 - 22% Animal Feeding & Loose Milk 2.496.083 - 20% Modern dairy establishments • 3.244.908- 27% Mandıras 3.993.733 - 32% Source: National Milk Council
The most dynamic countries are expected to be China (3,5%), TURKEY (3%) and Argentina (3%) in the next decade...
Comparison: Turkey / The Netherlands (2010) WDS Report-2011 • Milk production volumes are similar • Cow herd in TR is 2,5 times the size compared to ND; differences in average yield due to: • Fragmented production base • Cow genetics • Feeding patterns • Varying management systems
Dairy Processing • One of the world’s major milk processing countries • Rapid growth in capacity, technological infrastructure and number of modern dairy plants • Amount of milk collected by integrated dairy facilities in 2011: 7 mln tons • 1,2 mln tons processed to drinking milk • 519.000 tons to cheese • 1 mln tons to yoghurt • 459.000 tons to yoghurt drink
Drinking Milk Production (tons) Cheese Production (tons) Source: National Milk Council
Yoghurt Production (tons) Yoghurt Drink Production (tons) Source: National Milk Council
Dairy Consumption • Milk is consumed mainly as white cheese, yoghurt drink and yoghurt • 26 grams/capita/day of animal protein consumption: 51% from dairy products • Drinking milk consumption is low: 26 lt/year • Pastorised milk constitutes of 10% of processed milk • Demand for UHT milk and low fat milk is rising • 75 % of the milk consumed by children • Ready-to-drink flavored milk consumption growing with an annual av. of 20 % WDS Report-2011
Strenghts & Opportunities • One of the largest markets in the region with a young population of 70mn • Rising incomes and changing consumer habits fuel domestic consumption • Favorable ecological conditions and climate; one of the world's strongest livestock sectors • Government made development of the sector a priority, ensuring continued levels of investment • Food industry is better developed than many neighbouringcountries, creating strong export opportunities • Good location for trading with EU and Middle East countries • Benefits from a large pool of cheap labour
Challenges and Critical Success Factors for Turkish Dairy Industry • Boosting supply for growing population combined with economic development: availability of sufficient milk • Fragmented production base • Land ownership and regulations • Feed price and water resources/availability • Logistics • Availability of cows/heifers • Quality issues (raw milk&processing) • Animal diseases • Stronger cooperation in the chain
Profile • Initiation of today’s YAŞARdates back to 1945 • One of leading and most respected consumer products group in Turkey • 22 companies, 2 foundations, 18 facilities, 6,500 employees • Consolidated Revenue of TRY 2.03 bnin FY10 • Food &beverage net sales 1,5 bn TL • Core businesses “Food & Beverages” and “Coatings” • Well established and widely recognised leading brands: PINAR and DYO • Six companies listed on the Istanbul Stock Exchange with a combined market cap of TRY 1.5 bn** • Joined the UN Global Compact, world’s largest corporate citizenship initiative, in 2007 *EBITDA is operating profit before depreciation and amortisation expenses, and other non-cash/non-recurring income and expense items ** as at 31 May 2011
PINAR SÜT – Dairy Business • Founded in 1975 – two production plants • Production and sale of dairy products , fruit juices, mayonnaise, ketchups, powdered products • Introduced the concept of wholesome milk and dairy products in Turkey • Raw milk processing capacity:400.000 t/year • Net sales in 2010 : 577 million TL • Works with 250 farms based on contracted farming model • Market leader in milkand specialty cheeses • Exports to 20 countries with 29 million USD export earnings
Agribusiness Division of Yaşar Group • Founded in 1983 as a dairy feed company • Main activities: Feed production, dairy farming, turkey farming, fish farming and processing, plant nutrition • Net Sales : 150 million USD • Export value: 10 million USD
THE TURKISH DAIRY INDUSTRYHASAN GİRENES – Yaşar Group, Turkey Turkey – Netherlands Business Forum 17 April 2012, Amsterdam