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UMIT GUVENC PRESENTATION TURKEY A MAJOR PLAYER IN THE WORLD PROCESSING TOMATO MARKET FOODNEWS TOMATO FORUM ROME JUNE 2009

UMIT GUVENC PRESENTATION TURKEY A MAJOR PLAYER IN THE WORLD PROCESSING TOMATO MARKET FOODNEWS TOMATO FORUM ROME JUNE 2009

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  • 1. FOODNEWS TOMATO FORUM UMIT GUVENC EXPORT MANAGER, TAMEK TURKEY - MAJOR FORCE IN TOMATO PASTE EXPORT MARKET
  • 2. TURKEY (in a nutshell) Turkey processes approximately 2 million tons of industrial tomatoes per processing season t t i Annual capacity of Turkish paste production is approximately 0,5 million tons as 28/30 brix t.paste basis. There are 7-8 main companies and their plants (up to 40) operating during the (northern hemisphere) processing season (July – September) Turkey supplies most of its exports to its neighbouring countries countries, Iraq, GCC, Japan, East Europe and other European destinations, which Europe used to be Turkey’s traditional t.paste market for several decades up until 1997. Turkey has been in talks with the EU for increased access all the time
  • 3. TURKEY EXPORT FIGURES ’93 – ‘08 TURKEY'S TOMATO PASTE EXPORT (SOURCE: IGEME) TON 1000 USD 1993 109.939 83.142 1994 132.807 104.101 1995 106.987 94.513 1996 148.898 148 898 122.954 122 954 1997 159.523 126.010 1998 169.897 135.376 1999 171.870 123.973 2000 172.692 92.499 2001 123.353 74.933 2002 124.125 77.233 2003 149.801 149 801 100.238 100 238 2004 183.254 133.770 2005 155.083 126.679 2006 102.303 92.748 2007 87.002 90.774 2008 105.331 150.578
  • 4. TURKEY’S PASTE EXPORT FIGURES ’93 – ’08 200.000 200 000 QUANTITY(TON) ( ) AMOUNT (1000 USD) 180.000 160.000 160 000 140.000 120.000 120 000 100.000 80.000 80 000 60.000 40.000 20.000 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
  • 5. 2007 GLOBAL T.PASTE TRADE EXPORT SHARES OF COUNTRIES 35,0% 30,0% 25,0% 20,0% 15,0% 10,0% 5,0% 0,0% 0 0% IT ALY CHINA SPAIN PORT UGAL USA GREECE T URKEY Series1 31,2% 26,4% 10,7% 6,8% 5,0% 3,5% 2,8%
  • 6. LOGISTIC ADVANTAGES OF TURKEY SHALL IT BE ABLE TO CHANGE TRENDS IN MOVEMENT OF GOODS ?
  • 7. PASTE EXPORTS EX TURKEY TO MAIN DESTINATIONS 2008 TON 1000 USD IRAQ 28.595 45.764 GCC 22.507 30.064 OTHER 18.906 27.865 JAPAN 15.915 20.155 RUSSIAN FEDERATION 9.029 10.714 AFRICA 6.648 10.454 GERMANY 3.731 5.562 TOTAL 105.331 105 331 150.578 150 578
  • 8. 160.000 140.000 120.000 100.000 80.000 2008 (T ON,) 2008 (1000 USD,) ( ,) 60.000 40.000 20.000 0 JAPAN AFRICA EDERATION GERMANY IRAQ TOTAL GCC OTHER RUSSIAN FE
  • 9. ALGERIA GERMANY NIGERIA LIBYA SUDAN EUROPE MOROCCO AFRICA MIDDLE EAST SAUDI ARABIA KUWAIT UAE IRAQ Q BAHRAIN SYRIA QUATAR OMAN TURKEY JORDAN ISRAEL GCC FAR EAST RUSSIAN FEDERATION EAST EUROPE JAPAN UKRAINE
  • 10. EUROPE -EU played a big role in the establishement of the turkish industry back in ’60’s 60 s -80’s: Quotas for turkish paste: 12 EU members, + the following 3 EU members trade of quotas, rather than of paste ? Difficult times and a lot of activity/ trade going on -Quotas for dices 8.500 tons -EU does not keep Turkey on the bay, trade activity may go up to 60.000 tonnes -Main buyers: UK, Germany, Holland, Austria, Sweden, Finland, mainly y , m y, , , , ,m y northern Europeans incl. Norway and to some extend Switzerland -Those countries don’ta have any processing activity, they are merely users of paste, and turkish paste is one of their favorites turk sh s the r fa or tes
  • 11. EUROPE -Apart from the quotas and quantity limitations this was a real l l cooperation, Northern EU member states mainly (tax payeers, as well?) buy the paste they need -Turkish industry supports the TR - EU talks under 97/1, which increase the paste quota (Tariff Contingency) from somewhere (which was a very limited quantity to 30 000 tonnes (’97) 30.000 ( 97) -Big surprise same year this quota not used at all turkish paste plus retaliation in the form of 14.4 % duty on turkish p f f y paste, surprisingly , p gy however dices remain to acces duty free under the 8.500 tonnes quota -14.4 % remains same as it is even today, after Turkey trying to be part of EU since 1963
  • 12. EUROPE -Well, we both EU and TR need real sustainable, stable cooperation, don’t we ? Hope those days are nearer, by now, can only give advantage to both parties -Turkish industry will continue to support the EU and noneuropean buyers, whereever they need should they be in the north, and/or should they be i the south h ld th b in th th
  • 13. MIDDLE EAST GCC -Middle East & GCC is by far the biggest consumer of processed tomato, and it is growing -The region takes in turkish tomato paste with big interest, as also the cuisines are quite similar, too i i it i il t -There is almost unlimited potential for the MENA Region to take in much more turkish processed tomato maybe also declare self presence in the tomato, industry in Turkey -Maybe by now it is only a matter who will lead the entry as another question
  • 14. MIDDLE EAST GCC -Right now even during global crisis Turkey is explicitely declaring that Turkey may not need the IMF settlement very explicitely. l l l -Guess where the cash is coming from ? -Guess what a sustainable business esp. from eastern Anatolia to the next door neighbours (300 km.s ?)
  • 15. FAR EAST TAMEK BAHARU FOOD&CONCENTRATE CORPORATION IND.&TRADE INC.CO 4F Tabacco Center Nispetiye Mah. Hakki Building2-16-1 Sehithan Sok. No:35 II.Ulus Nishnishinbashi Minatoku Besiktas TOKYO/ JAPAN ISTANBUL/ TURKEY
  • 16. TAMEK FOOD&CONCENTRATE IND.&TRADE INC.CO RUSSIA Nispetiye Mah. Hakki Sehithan Sok. No:35 II.Ulus ? Besiktas ISTANBUL/ TURKEY
  • 17. TAMEK FOOD&CONCENTRATE IND.&TRADE INC.CO KSA Nispetiye Mah. Hakki Sehithan Sok. No:35 II.Ulus ? Besiktas ISTANBUL/ TURKEY
  • 18. FAR EAST -Japanese discovered the turkish tomato first in 1970’s p -In this case our Japanese fellows have been much more proactive, and it was more by their activity to promote the first HOT m y y p m f BREAK paste production in Turkey -They have been also leading turkish industry to produce the first aseptic tomato paste as one of the firstcomers (’81) and dices thislike (‘89) -There is a big similarity in between th both cultures, as well, good for any joint activity, incl. industry and trade
  • 19. FAR EAST -This will expand in the years to come for sure, and both Japanese p y p and turkish parties will grow -Turkish industry may be more proactive ym y m p
  • 20. TURKEY EXPORT HISTORY -1960’s modern t 1960’ d tomato paste i d t plants are b ilt and t t industry l t built d production is started, Turkey started its tomato paste export in 1967 with a symbolic figure as 3 tonnes. y g -1960’s Heinz Intervention in some establishments for export purposes -1970’s Japanese friends started to walk around to arrange some HB production d ti -1990’s Turkey took place as the third in the list of producers, y p p and later dropped down to 5th place after Chinese production and increased production of Portugal.
  • 21. - Until 1997, in year 1989 export figures excessed 150,000 tonnes, following year’s l ll figures are settled around 120,000 tonnes. - 1997 some big surprises ( from EU ) when top quantities were contracted there: -a) Rise of the free Non Zero Tariff Contingency for paste incl. EU 12+3 to 30.000 tons per annum -b) Abolish the same, and start to apply 14.4 % on turkish paste and other tomato products d t -c) Establish a 8.000 tons of ‘other tomato products’ tariff contingency - 1997 tomato paste export figures reached 160,000 tonnes. 160 000 tonnes - 1998 with a 6% increase exports figure became 170,000 tonnes, and hit 183,000 tonnes in 2004. - 2001 and 2002, tomato paste production is increased- especially in the Usa and China - prices are reduced accordingly, caused Turkish paste prices become above the market .
  • 22. -Turkey exports tomato paste and processed tomato products to more than 85 countries, in particular to Japan and Russian Federation. Export to these two countries’ share was 34% in year 2002, 31% in 2004, and 24% in 2005. - 2 of Turkey’s traditional export destinations Algeria and Libya (S.P.L.A.J) had some domestic market difficulties which effected their import figures in negative way. -Among other countries, Iraq became the biggest tomato paste importer in Turkey’s T k ’ export countries in 2006. i i 2006 -Japan was the second and Saudi Arabia was the third. In 2008 Turkey exported 46 million $ valued tomato paste to Iraq which was appr. 30% of the whole tomato paste export value.
  • 23. TURKEY vs. WORLD TRADE - Most known tomato paste producer Usa, China, Italy, Turkey, Greece, Chile, Portugal. g -USA a big net importer of tomato products untill 90’s (100.000 tonnes per annum. -After 90’s new production plants are set, production increased at the same time After 90 s, set increased, China started producing tomato products and offered high quantity, relatively cheap prices to the market. Production in these two countries unbalanced USA’s domestic market as well as World trade market. -Chinese penetration into tomato paste market caused excess of tomato paste stocks which made prices decrease dramatically. Importers use this price and carried their import level one step up up. -In 2007 Italy the biggest tomato paste exporter, followed by China, Spain third, Portugal fourth, Usa fifth and Turkey 7 th. Turkey have been in top ten tomato paste producer and exporter in the world, even though Italy, Greece, Spain, and d d h ld h h l d Portugal is in EU and using all known advantages of being a part.
  • 24. TURKEY vs. WORLD TRADE Turkey’s Competitive Power - Beginning of the century, there was no tomato paste consumption in China, at all however according to some Chinese colleagues, consumption of fresh tomatoes would be around 1,5 million tonnes in 2008. 15 2008 - Most top 10 exporters and Turkey badly hit by the severe competition, everybody is after Chinese Paste - Turkey’s production potential can be increased depending on right and efective policies, subvensions which will drive investors to agricultural investments as well as farmers to produce more. - GAP (Southeast Anatolian Project) project is one of the project which will double fresh tomato production in Turkey under which conditions ! - Where will this extra paste go ? To the EU ? Well Turkey has - 30.000 tons of non duty Tariff Contingency, could not open EU yet, but Turkey pays 14,4% tax in the move of its products into the EU. Will it change over time ? Which time ?
  • 25. TURKEY vs. WORLD TRADE Turkey’s Competitive Power cont’d - EU is 10 million or whatever tonnes big and it has to i illi h bi di h consistently continue the 10 million tonnes, the consumption is there. How will EU do it ? Somebody here whispering: Will it be with a shift to Turkey, as a main alternative ? Why ? Why not ? y y y - In Eu industrial fresh tomatoes subsidy average € 30 + can be varied by the years, in Turkey similar policy does not apply at all, which limits Turkey’s competetive power ? Is it true. Well, your Turkey s true Well presentor does not think so. - Policies applied between 1978 and 2007 have provided benefits to t growers and processors i th EU, what about Turkey d in the EU h t b t T k growers and processors, a shift from EU here, as well ?
  • 26. TURKEY vs. WORLD TRADE Turkey’s Competitive Power cont’d ARE THE FOLLOWING SENTENCES MEANING A DEFENSE POSITION ? - Changes in 2001 and 2008 and both have been billed as CAP reform - Changes between 2008 and 2011 will phase out the € 34.50 per ton payment and replace it with income support that is approximately equal to current expenditures (€300 million) (€ - Implications in Europe and in other regions that produce processing tomatoes - Moreover, in Italy, the provisional aid is fixed for farmers in 1300 , y, p f f f m euros per hectare in 2008, while the final will be determined at the conclusion of the campaign and checks required by regulation.
  • 27. TURKEY vs. WORLD TRADE Turkey’s Competitive Power cont’d - The farmer will suffer a proportional reduction in hectares in case of delivery less than 70% of regional productivity as by decree enacted productivity, enacted, except owing to a cause beyond control. - Other Countries, as Spain, will have a coupled aid less than the Italian one, one whereas others, as France, will have a notable higher aid (2500 others France €/hectare). - In order to increase Turkey’s competetive power, the idea of improving agriculture under contract system grower s organisations is in agriculture, grower’s discussion, is Turkey ready to this ? - Turkey in your presentor’s view n perception is ready to many things including a big turn in the industry
  • 28. TURKEY vs. WORLD TRADE Turkey’s Competitive Power cont’d - About the European field, the pursuance of this reform has been quite standardized: - Portugal, the partially decoupling system will l t 4 years, with th P t l th ti ll d li t ill last ith the coupled aid percentage equivalent to 50 - Greece, the system will last 3 years, with the coupled aid percentage equivalent to 30% - France, Italy and Spain, the system will last 3 years, with the coupled aid percentage equivalent t 50% id t i l t to
  • 29. TURKEY vs. WORLD TRADE Turkey’s Competitive Power cont’d - Anyway, Turkey’s first step is 4 – 10 million tons, probably to realise within 5 years ? - What will happen thenafter ? Is a good question - DEFENSIVE POSITIONS IN EU TO BE REPLACED WITH OFFENSIVE POSITIONS IN TURKEY ? WILL TURKEY BE THE NEW CHINA ? WELL TURKEY DOES NOT TO BE THE NEW CHINA, TURKEY NEEDS TO BE THE NEW TURKEY PROBABLY !
  • 30. TURKEY vs. WORLD TRADE Turkey’s Competitive Power Turkey s WHAT MAY IT BE TO USE FOR ? - DEFENSIVE POSITIONS IN EU TO BE REPLACED WITH OFFENSIVE POSITIONS IN TURKEY ? WILL E TURKEY BE THE NEW CHINA ? WELL TURKEY DOES NOT TO BE THE NEW CHINA, TURKEY NEEDS TO BE THE NEW TURKEY PROBABLY !
  • 31. WORLD PRODUCTION VS. APPARENT CONSUMPTION Consumption Production 40000 35000 30000 25000 20000 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 SOURCE:SOPHIE COLVINE (WPTC GENERAL SECRETARIE)
  • 32. PER CAPITA CONSUMPTION acc. to REGIONS Per Capita Consumpt ion 25,00 20,00 15,00 annum 10,00 1989 - 1990 C 5,00 5 00 kg/a 0,00 68% 25% 26% 24% 23% 2002-2003 A % CHANGE IC 15 12 25 IC IF ER EU EU EU C PA P AM IA TH AS U SO Regions
  • 33. TURKEY A FULL MEMBERSHIP OF AMITOM WELL NOT OF EU YET DESPITE TO BE IN THE FIRST TO COME LIST (45 YEARS) Source: Amitom
  • 34. AMITOM VS. WORLD TOMATO PROCCESSING INDUSTRY PRODUCTION SHARES 100% 80% 60% 40% 20% 0% 2001 2003 2005 2007 Other YEARS China California Source: Tomatoland AMITOM
  • 35. TRENDS IN INVESTMENT IN TURKEY -- NOMIKOS -- MORNINGSTAR IS THIS A TREND ALREADY OR PROBABLY INCIDENCE AS OF TODAY ? WHY MORNING STAR AND NOMIKOS THERE IN TURKEY ? IS IT A FIRST INDICATIONS OF A REAL TREND WHEN WILL THE REAL TREND BE THERE ? AND AS THE TREND STARTS HOW CAN WE FIND THE RESULT NOT TO DEVIATE FROM THE MEAN SUBJECT DUE TO AGLOMERATION ?
  • 36. WHAT’S AHEAD FOR TR ? -Will Turkey attract the 1 million tons of consumption increase / annum ? To what extend ? -Turkish industry will continue to support the EU and noneuropean buyers, whereever they need. Should they be in the north, and/or should they be in the south doesn’t matter -There is almost unlimited potential for the MENA & GCC Region to take in much more turkish processed tomato, maybe also some of them to declare self presence in the industry in Turkey -Maybe by now it is only a matter who will lead the entry as another question -Guess what a sustainable business esp. from eastern Anatolia to the next door neighbours (300 km.s ?) -This will expand in the years to come for sure, and both Japanese and turkish sure parties will grow -Some players may be more active in Russia ? Don’t they ? p y y y
  • 37. THANK YOU FOR LISTENING MR. UMIT GUVENC, , EXPORT MANAGER TAMEK FOOD& CONCENTRATE / TURKEY

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