Interview with Chairman of Turkish Flour, Yeast and Ingredients Promotion Group Mr. Turgay ÜNLÜ On Bloomberg HT TV


Ms. İpek Köseoğlu: Turkish Flour Yeast and Ingredients Promotion Group was established by the Central Anatolian Exporters Union, as in the case of Hazelnut Promotion Group, Machinery Promotion Group, Ceramics Promotion Group, and Turkey is a major flour supplier in the world. We will be talking with Mr. Turgay Ünlü, Chairman of Turkish Flour Yeast and Ingredients Promotion Group. What kind of other activities could be carried out by the Promotion Group? Mr. Ünlü, welcome to our program.

Mr. Turgay Ünlü: Good day, Ms. İpek.

Ms. İ.K.:  Now, let us start immediately if you like. The Promotion Group was established by Central Anatolian Exporters Union within the body of Turkish Exporters Assembly(TİM) with the purpose of promoting the flour produced Turkey-wide, wasn’t it?

Mr. T.Ü.: Its name is Flour Promotion Group, but it actually covers 13 products. Flour accounts for 66% of the exports of the Promotion Group. Flour is very important. The worldwide flour trade amounts to USD 4 billion 600 million, of which 49% is met by Turkey. That is, Turkey’s annuals exports amounting to approximately USD 900 million accounts for 49% of it. But our Promotion Group covers other products as well, which are also important; namely: yeasts, baking powders which have a worldwide trade volume of USD 2 billion 15 million, ranking second in the world in this respect. There are also oats, cracked wheat, maize grains, other grains, which are called processed cereals grains, whose worldwide trade amounts to USD 1 billion 681 million, ranking 6th among 13 products in the world exports. But of course, flours, yeasts and ingredients enjoy top priority among the principal activities of the Promotion Group. But our goal is to bring not only flour, but also the other products covered by the Group to the place they deserve.

Ms. İ.K.: That is, bread, meal, starch, baking powders, soups, broths…In fact, there are many sub-product lines here.

Mr. T.Ü.: Yes.

Ms. İ.K.: We are exporting to some one hundred countries. Which countries come to the fore in this respect?

Mr. T.Ü.: Iraq, which is our close neighbor, occupies the first place naturally, accounting for 40% of Turkey’s flour exports, followed by Indonesia, Libya, Philippines, Thailand and other countries.

Ms. İ.K.: Let us look at the current export figures for the year 2012. I think we can consider the matter parallel to the production figures as well. Turkey-wide cereals exports increased by 12.6% in the first seven months of the year to USD 3 billion 381 million. On the basis of quantity, there was as increase of 7.4% in quantity, reaching 1 million 190 thousand tons for wheat flour alone. Its value, on the other hand, decreased by 8.5% to USD 478.7 million. In this period, the biggest exports were made to Indonesia and Libya. When we look at the other items, were there countries to which exports increased, decreased, and were there countries where our market shares increased or decreased? What is the change?

Mr. T.Ü.: The basic duty of our Promotion Group will naturally be geared towards bringing about a change: to maintain the existing markets, then to get firmly established in the markets we have entered, and to form new markets. There will be ups and downs, of course. Price movements, raw material price movements carry a big importance here. Serious fluctuations are likely to occur in relevant transitional periods. In the current period, there is a difficulty in harvesting, in wheat, in production in general. Parallel to the difficulty, the transitional period is reflected in tables. I would like to give a simple example. Take starch, for example, whose annual trade volume amounts to USD 3 billion 790 million, in which our share seems nil at present. I am carrying out the task of sectoral leadership in connection with cereals, pulses and oil seeds under 2023 export strategy. Our target for the year 2023 is USD 3 million for the products covered by the Promotion Group. The aim is to bring about a stability in these markets and to gain a foothold in the markets. You have already mentioned flour. We have carved out a serious place for ourselves for flour, with Turkey’s exports of flour increasing from 200 thousand tons in 2002 to 2 million tons in 2011, which has not been easy to attain. This is the fruit of the efforts made for over ten years. In the year 2002, Turkey exported to only 2 countries, namely, Iraq, followed by Libya.

Ms. İ.K.: Yes.

Mr. T.Ü.: Turkey exports to 102 countries at present, with the quantity reaching 2 million tons in the year 2011. We believe the said figure will be exceeded in the year 2012, approaching USD 1 billion. Of course, when realizing the said exports, sectoral leadership in the world does not come easy. They start throwing stones at fruitful trees, which has been the case for Indonesia which tried to impose anti-dumping duty. We have prevented it with the superior efforts of both the President of the Republic and of the Prime Minister and of our Economy Minister. When one says Far East, a rice country comes to mind. Back in 2004, it was not a credible market. We, as the Central Anatolian Exporters Union set that strategy for ourselves, started implementing it in 2004, moving forward with our tours of Sri Lanka, Indonesia, Philippines, Thailand, Korea and Malaysia. They said: “Would a rice country eat flour?” We said: “Yes, they eat flour”. They said: “But, how will you overcome the freight?” We talked with ship-owners. We said: “How do you deal with it?” How are the containers from China returned?” They said: “They are returned empty”. When we employed them for the first time for flour exports, we started shipping flour for USD 5 per ton. What was the approach for selling flour to a rice country? In the Far East, they eat noodles, a kind of spaghetti macaroni made of bread flour. Consequently, we had discovered that market. At present, those markets are the existing markets of our Promotion Group, and we will be conducting activities to maintain those markets.

I would also like to mention briefly about the case of the Philippines. Stones were thrown again at fruitful trees, and defamation campaigns were conducted. We reacted promptly, conducting counter campaigns.

Ms. İ.K.: Let us give some information Mr. Ünlü. Let us express this more clearly: They say there are cancerogenic substances in the flours imported from Turkey, that is, substances such as aflatoxin. The flours are analyzed before being exported, aren’t they?

Mr. T.Ü.: Of course, of course. Said allegations belong to the year 2008. They are the products of a serious defamation campaign conducted in 2008 by the flour industrialists of the Philippines. They launched the campaign in 2008, then we prevented them with counter campaigns in the year 2009 and 2010. They made these allegations. When exporting flours, we furnished the Health Ministry of the Philippines with the analyses made both by independent supervisory firms and by our Health Ministry. They compared the results with their corresponding analyses, and encountered neither aflatoxin, nor ochratoxin. As I said, these were all examples of stones being thrown at fruitful trees. Serious efforts were made to counter them of course, visiting them 4 times a year. PR activities were conducted and press conferences were held there to maintain the market, and we were successful. This year, our figures will reach 140-150 thousand tons for the Philippines, amounting to USD 50-60 million per year. Only Turkey seems to be in a position to export flour to the Philippines.

Ms. İ.K.: Yes, all right. Now let us talk about the flours within Turkey. We have one minute left. In the last five years, a big portion of the wheat imported into Turkey was converted into flour. For example, 12-13 million tons of wheat was imported, which was converted into 8 million tons of flour, which, in turn, was wholly exported. Is there any difference between the quality of the flour consumed within Turkey and the quality of exported flour?

Mr. T.Ü.: I have to make a correction here. Turkey did not make imports of 12 million tons. Turkey’s domestic consumption was 12 million tons.

Ms. İ.K.: I have given the figure for the last five years.

Mr. T.Ü.: Turkey’s flour consumption is around 8 million tons. Consequently, there is no difficulty in the production of wheat. Turkey imports approximately 2-3 million tons. Turkey first produces her flour from her own wheat and exports the same, and then replaces it, which corresponds to her imports.

Ms. İ.K.: That is, we import wheat, and export flour. Is there a problem in wheat production?

Mr. T.Ü.: No. I am voicing these matters pursuant to a decision taken by the Economy Ministry. Firstly, flour is exported by Turkish wheat flour exporters. After the exportation, it is replaced. We have no problem. In fact, Turkey experiences quality problems in her wheat from time to time, due to a number of climatic factors and training of farmers. We know that the Ministry of Agriculture dwells on it. There are serious studies concerning quality. There is no problem in that sense.

Ms. İ.K.: Thank you very much Mr. Turgay Ünlü.