New York - Istanbul - Dubai. October 2010

Transcription

1 Annual Meeting Exploring Investment Opportunities in Turkey s Agri-Food Sector by Mehmet Sami New York - Istanbul - Dubai October 21

2 Content Part I : Turkey Agriculture Country Profile Part II : Turkey- Current Picture 2

3 PART I Turkey Agriculture Country Profile

4 TURKEY / Country Profile- Global Position The share of agricultural production in Turkey s GDP is decreasing. CAGR nominal GDP of Turkey in TL basis is over CAGR of agricultural production, due to high growth in industry and the services sector Agricultural Production of Turkey& Share of Agricultural Production in GDP 1.1% 1.3% 9.9% 9.5% 8.8% 9.4% 8.3% 8.3% 7.6% 7.6% Production (bn TL)- LHS Share in GDP (%)- RHS 12.% 1.% 8.% 6.% 4.% 2.%.% Agricultural production Comparison of Countries- Share in World GDP & Share in Agricultural GDP in 29 amounted to 3.5 TRY 79 billion Brazil (US$51). 3. France Countries like Brazil, 2.5 Contribution Line Turkey Turkey and Ukraine 2. have a higher Egypt contribution to World 1.5 Germany agricultural GDP than 1. the contribution to total Poland Australia GDP, meaning that a.5 higher percentage of Ukraine their GDP comes from. agricultural activities l GDP (%) in Agricultural Share Share in World GDP (%) Source: FAO, TurkStat 4

5 TURKEY / Country Profile- Available Land About half of Turkey s total land area is devoted to agriculture, which is slightly above g (41%). In March 21 roughly 24% of the workforce was employed in agriculture that has been 36% in year 2. Comparing the arable land & permament crop, Turkey has a larger area than France and Germany. Land Usage 42.1% of the area is China 152,831 sown, 37.4% is USA 173,158 meadows and Brazil 66,5 8% pastures and 7.5% of 44,53 the area is permanent Australia 6% crops. Egypt 3,538 4% Turkey 24,837 32% Turkey has a potential 33,333 to increase arable Ukraine 58% area. France 19,519 % the EU-27 average Land area (1, ha): 76,963 1 Agricultural area(1, ha): 39, Pastures (1, ha): 12, Forest area (1, ha): 1, Germany 12,75 36% 35% Arable Land & Permanent Crop 16% 19% Land Area Arable Area Distribution 7.5% 2.1% 1.9% 37.4% Sown Area Fallow Area Vegetable Garden % Pastures Permanent Crop Source: FAO, TurkStat

6 TURKEY / Country Profile Share in World Production compared to Share in World Consumption Turkey has been 1.8 among the selfsufficient countries in Egypt 2 Net Germany China 1.4 terms of balance of Consumer Turkey Brazil USA food production and 1. France consumption. Ukraine China and Egypt are.6 Poland Net Producer net consumers, 4.4 Australia whereas Brazil, USA.2 and Australia are net. producers As the values of Share in Production (%) imports and exports are compared, Brazil Agriculture Imports compared to Exports in bn US$-27 % Australia are net exporters, China & Egypt are net importers and Turkey is balanced. Shar re in Consump ption (%) Ex xports (bn US$ 7 6 Exports/Imports ratio 5 of Turkey used to be in year 2, however it is.98 as of )USA Brazil Australia France China Germany Ukraine Turkey Egypt Imports (bn US$) 6 Source: FAO, TurkStat

7 TURKEY / Country Profile In 28 the production of cereals in Turkey was 34 million tones, which h represents around 12% of the EU-27. The average area occupied by a Turkish farm is 61, m 2. The number of farms in Turkey with sizes greater than 5 million m 2 is only 57. The average farm size in the EU-15 was 187, m 2. Efficiency is a big deficiency of Turkish agriculture; Turkey has more arable area & permanent crop area than many countries including Germany and France, however the value of production is much lower than mentioned countries. Agricultural Commodities Production of Turkey by Value & by Amount of Production- 28 Value of Production (mn $) Amount of Production (ths tons) 3,5 3, 2,5 2, 1,5 1, 5 Cow milk, whole, fresh Wheat Tomatoes Grapes Indigenous Chicken Meat Cotton lint Hazelnuts Indigenous Cattle Meat Olives Apples 2, 18, 16, 14, 12, 1, 8, 6, 4, 2, Production (US$ mio) Production (Thousand Tons) Source: FAO, TurkStat 7

8 TURKEY / Country rank in the world, by commodity 1 st Largest Producer of Hazelnuts, with shell / Apricots / Cherries 2 nd Largest Producer of Figs / Watermelons / Sour cherries / Cucumbers and gherkins /Leeks, other alliaceous veg / Natural honey 3 rd Largest Strawberries Producer of Sheep milk / Spices /Other melons /Vetches /Chillies and peppers /Pistachios / Chick peas / Walnuts / Beans / Strawberries 4 th Largest Spinach / Olives / Tomatoes / Eggplants (aubergines) Producer of 5 th Largest Apples / Berries Nes / Sugar beet/ Onions, dry/ Tea / Producer of Apples / Berries Nes / Sugar beet/ Onions, dry/ Tea / Vanilla Turkey is the 1th largest wheat and12th largest barley producer of the World. 8 Source: FAO, TurkStat

9 PART II Turkey- Current Picture

10 TURKEY / Current Picture - Potential In 29, Turkey s total t Population Demographics, 29 (%) population reached % million, increasing with a 6+; 1% 1.17% CAGR of 1.4% since -14; 26% 1.15% 24. The average age is 28.8 and the share of the -34 age group among total population is 61%. Currently, there are 16 million households, where an additional 5. new residences are needed each year. This population dynamic, coupled with 28 million annual tourist inflow, makes Turkey a large consumer market. F&B expenditures constitute a significant portion of yearly household expenditures across Turkey ; 15% 35-44; 14% 25-34; 17% Population by Age Group ; 17% % 1.2% 1.11% 1.15% 1.1% 1% 1.6% 1.6% 1.1% 1.3% 1.% 1.5% E 1E 11E 12E 13E 14E 15E 3E Population (mn) Growth (%) Household Consumption by Types of Expenditure (mn TL) % 5% 4% 4% 4% 7% 7% 6% 6% 5% 6% 6% 6% 6% 6% 8% 7% 7% 8% 8% 12% 12% 13% 13% 12% 18% 19% 18% 18% 18% 17% 18% 19% 2% 22% 27% 26% 26% 26% 26% Recreation and Culture Clothing and Footwear Restaurants and Hotels Furnishing and Home Care Other Transport, Communication Housing, Rent, Utilities Food, Beverages and Tobacco Source: TURKSTAT, Ata Research 1 1.%.95%.9%

11 TURKEY / Current Picture FDI Agriculture In the agriculture, forestry, hunting and fishery sectors; US$ 43 million worth of FDI was attracted t in 29, which has been only US$ 9 million in 27. The number of companies has risen to 368. There is increasing interest t especially from the Middle Eastern investors. Antalya, Istanbul and Izmir attracted more than 5% of the foreign investors and Germany &H Holland origined i investors have invested in more than 1 agricultural businesses Foreign Direct Investment & Number of Foreign Capital Companies % 5.6% 4 35 # of Investors By City # of Investors By Origin 27.9% 21.4% 38.6% % 15.1% FDI (mn US$) # of Companies 15.4% 24.6% 5.6% 56% 3.3% 5.% 3.6% 4.5% 3.6% 4.7% Adana Ankara Antalya Germany Holland UK USA İstanbul İzmir Other Italy France Greece Azerbaijan Russia Other Source:TOBB Union of Chambers and Commodity Exchanges of Turkey, Turkish Treasury, TUIK 11

12 TURKEY / Current Picture Processed F&B Companies According to Union of Chambers and Commodity Exchanges, there are 17,391 companies engaged in processed food & beverage production. Breakdown of Processed Food & Beverage Companies by Major Segment 1.9% 2.2%.9% 4.3% 4.2% 6.8% 7.5% 23.7% The number of people employed in food & beverage companies is nearly 1 million. According to the Turkish Treasury data the number of foreign companies in the sector is 42, which was 167 in year % 1.2% 1.2% 19.5% Fruit & Vegetable Proc. Bakery Goods Other Food Dairy Products Flour Confectionery Edible Oil Meat & Meat Products Feed Sugar Processing Fishery Products Beverage 1,4 1,2 1, FDI & Number of Foreign Capital Companies FDI to food& beverage 6 1,252 sector has been US$ mn in 29, which 2 68 has been US$ 1,252 mn in FDI (mn US$) # of Companies Source:TOBB Union of Chambers and Commodity Exchanges of Turkey, Turkish Treasury, TUIK

13 TURKEY / Current Picture M&A and IPO The number of announced M&A transactions in Food & Beverage sector between has been 47. Beverage and readymade foods segments attracted t most amount of investors, whereas agriculture segment was neglected. #of M&A Transactions Breakdown by Segment 2% 19% 23% 9% 9% 17% 8% 13% Agricultural Food Beverage Confectionery & Biscuits Edible Oil Flour Products Meat Ready Made Foods Other There are 26 food& beverage companies traded in ISE that have a total t MCap of fus$ bn. Public Food & Beverage Companies # of Companies MCap of Companies (bn US$) 26 8% % Being one of the largest field of economic activity it of Turkey, food& beverage companies 31.7 shall take more share 38 from financing. i ISE Food ISE Food Source: Capital IQ, Thomson OneBanker, Matrix 13

14 TURKEY / Current Picture Value of Food Chain Agriculture Production Distribution Conversion Farming Animal Husbandry Poultry Farming Bread and Cereal Meat Fish and seafood Dairy products Edible oil Fruit & vegetable Confectionary Beverages Exclusive distributors Direct producer sales to convertors Wholesalers Cash & carry retailers Food service companies Full service restaurants Cafes & bars, Fast food (FF) restaurants, Self service cafeterias Other Agricultural Production US$ 51 bn Final Consumption Expenditure Food & Beverage US$ 121 bn Final Consumption Expenditure US$ 36 bn 14 Source: Turkish Treasury, TUIK

15 TURKEY / Current Picture Food Service Food Service (FS) sector in Turkey is composed of full service restaurants, cafes & bars, fast food (FF) restaurants, t self service cafeterias, 1% home delivery/takeaway restaurants and street stalls &ki kiosks k where the last t3 are compiled in Other. As of 28, FS sales reached TL 43 billion ($ 35.8 bn), increasing i with a CAGR of 9.1% since 23. The fastest growing subsector of FS is the FF sector, where sales increased with a CAGR of 16% since 23. FS sector in Turkey is fragmented and not branded d - 95% independent players. FF segment represents the only subsector where chains dominate independents. 52% FS Sales by Subsectors (bn TL) Other Fast Food Cafes&Bars Full Serv. Rest. FS Restaurants by Subsectors ( units) Other Fast Food Cafes&Bars Full Serv. Rest. 117 Source: Euromonitor 15

16 TURKEY / Current Picture Opportunities in Agriculture Land Consolidation Irrigation Institutionalization Long-Term Land Lease The Land Consolidation Project will change the current scattered structure The total number of agricultural enterprises add up to 2,6 million Bigger farms will be established. 12,5 million ha of the agricultural land is irrigated, but 8,5 million ha could be added to the amount Irrigation increases the value of production by up to five times per hectare. Value of production will increase. Some of the major investments in the farming industry in recent years include investments made by Ata-Sancak, Söktaş, Banvit, Doğan Organik and Korel. The trend is supported by several programs of Ministry of Agriculture and Rural Affairs F&B producers form platforms to procure raw material, that also leads to organized markets. TIGEM (The General Directorate of Agricultural Enterprises) owns 38 farms of which 12 farms are longterm leased and 2 farms were assigned as participations. The farms managed by TIGEM has a total land of 3.5 milllion decares. More M&A / JV / IPO Source: TurkStat, TIGEM, Ministry of Agriculture and Rural Affairs

17 New York - Istanbul - Dubai THANK New YOU York - Istanbul MEHMET - Dubai SAMİ New York Istanbul Dubai New York 25 West 45th Street Istanbul Emirhan Cad. No: 145/A Atakule Kat: 11 Dubai DIFC, Gate Village 5, 2nd Floor Office: 25 New West York 45th NYStreet 136 Emirhan Balmumcu Cad. No: 145/A İstanbul Atakule Kat: DIFC, Gate Village 5, 2nd Floor Office: 26 New USAYork NY TurkeyBalmumcu İstanbul P. O.Box 5679 Dubai USA Turkey U.A.E. Tel: Tel: Tel: Tel: Fax: Tel: Fax: Fax: