OUTLOOK. Turkey has a strong agriculture and food industry sector. 30,8. 1.1. 13,3. 2,5. 25,8. 35,3. 3,4. 17. 4,3. 32,8.
WHY INVEST IN TURKISH AGRI-FOOD INDUSTRY
AGENDA
Executive Summary Turkish Agri-Food Industry Outlook Growth Drivers in Turkey Opportunities in Turkish Agri-food Industry Success Stories
EXECUTIVE SUMMARY
Strengths of the Industry
Turkey has a strong and growing agricultural industry offering opportunities in many areas… • Agriculturally sufficient country with favorable climate, large arable lands, and abundant availability of water resources • Considered to be one of the leading countries in the world in the field of agriculture and food • Export opportunities thanks to Turkey’s proximity to regional markets • Strong food and agriculture sector, which employed about 20% of the active population of the country and represented approximately 6.1% of GDP in 2016 • Strong macroeconomic growth with increasing income per capita and a bourgeoning middle-class
Favorable Investment Environment
• Favorable demographics with a dynamic, young, and skilled labor force • Cost-competitive labor prices. Compared to Europe and the rest of the world, the labor costs in the sector are 70% -80% lower • Strong government support through incentives • Developed industrial and commercial infrastructure
Lucrative Opportunities Strong International Presence
• Geographically well-placed to take advantage of trade opportunities in Europe, Middle East, and former Soviet countries • With a growing population of more than 80 million, Turkey is one of the largest markets in the region • The government invests heavily in irrigation projects and improvements to infrastructure
• Global agri-food giants are present in Turkey with significant productive activities, using Turkey as a hub to access regional markets • Successful partnerships with local companies to grow in the region, capitalizing on locals’ experience and networks
AGENDA
Executive Summary Turkish Agri-Food Industry Outlook Growth Drivers in Turkey Opportunities in Turkish Agri-food Industry Success Stories
Turkish Agri-food Industry Outlook
TURKEY IS LARGEST COUNTRY IN
1
ST
EUROPE
IN TERMS OF AGRICULTURAL ECONOMY (2016)
LARGEST COUNTRY IN
9
TH
THE WORLD IN TERMS OF AGRICULTURAL ECONOMY (2016)
Source: Ministry of Food, Agriculture and Livestock
2
ND
LARGEST AGRICULTURAL ECONOMY AMONG
OECD COUNTRIES (WORLD BANK)
1
ST
FLOUR EXPORTER IN THE
WORLD
OUTLOOK
Agricultural land 25 million ha
Arable land 5.1 million ha
Basic economic indicators in agricultural sector (2016)
Number of agricultural enterprises 3,076 million
Total agricultural trade volume
Average enterprise size
Employment in agriculture
6 ha
Total exportation of agricultural products
Total importation of agricultural products
USD 16.9 billion
USD 15.6 billion
Source: TurkStat, Trademap and Eurostat
USD 32.5 billion
5.3 million people
Agricultural GDP USD 53.4 billion
The sector’s value has increased by 43% between 2002 and 2016
OUTLOOK
THE SECTOR’S VALUE BY CURRENT PRICES (billion USD) 60
50
43%
40
30 53,4 20
10
24,3
0 2002
2016
In 2016, 298 of the top 1,000 companies were agri-food companies Source: TurkStat
OUTLOOK
Breakdown of the available land and the vegetable production in main groups
(2016 - million ha)
VEGETABLE PRODUCTION IN MAIN GROUPS (2016-million tons)
18,6 17% 21,6
24 28,6 25%
67,1 58% Farm Plants Production
Agricultural land Meadows and pastures Forests
Source: TurkStat
14,6
Vegetable Production Food Products, Tea and Spice Plant Production
OUTLOOK
Turkey has a strong agriculture and food industry sector
PLANT PRODUCTS (million tons)
35,3
17
4,3
32,8
3,4
30,8
13,3
2,5
25,8
1.1
Cereal
Oilseed crops
Total Fruits 2002
Source: TurkStat
2016
Citrus
Total Vegetables
OUTLOOK
In 2016, Turkey produced 18.4 million tons of milk, making our country the leading milk and dairy producer in its region
ANIMAL PRODUCTS (million tons)
18.4
1.1
1.8 0.2
8.4
Milk Source: TurkStat
0.7
0.06
Red meat
Aquaculture 2002
2016
0.7
Poultry meat
Global player in plant production and exports
Abundant production allows Turkey to maintain a significantly positive trade balance thanks to its position as one of the largest agricultural product exporters in the Eastern Europe, Middle East, and North Africa region
IN PRODUCTION (2016)
Hazelnut, apricot, fig, dried raisin and cherry
ONE OF TOP 5 PRODUCERS
Source: TurkStat
TOP PRODUCER
Melon, watermelon, cucumber, lentil, pistachio, quince, sour cherry, chestnut, pepper, honey, green beans
Apple, cotton, wheat, barley, almond, sunflower, tobacco
ONE OF TOP 10 PRODUCERS
Global player in plant production and exports
Turkey exports 1,690 kinds of agricultural products to more than 185 countries
IN EXPORTS (2016)
Hazelnut, dried raisin and apricot, fig, chickpea
ONE OF TOP 5 EXPORTERS
Source: TurkStat
TOP EXPORTER
Cherry, lemon, lentil, tobacco, olive oil, chestnut
Pepper, olive, pistachio, orange, tomato, cucumber, peach, grape
ONE OF TOP 10 EXPORTERS
EXPORTS
In 2016 the trade balance surplus for foodstuffs was USD 5.3 billion and for agricultural products was USD 1.2 billion
EXPORTS OF AGRICULTURAL PRODUCTS (billion USD) 18 16
16,8
14
73%
12 10
9,71
8 6 4 2 0 2006
Source: TurkStat
2016
ADVANTAGES
Turkey is a part of the Customs Union with the EU since 1996 and has signed Free Trade Agreements with 27 countries
• CUSTOMS UNION WITH EU COUNTRIES • FREE TRADE AGREEMENTS WITH 27 COUNTRIES • Albania
• Kosovo
• Palestine
• Bosnia & Herzegovina
• Lebanon
• Serbia
• Chile
• Lichtenstein
• Singapore
• Egypt
• Macedonia
• South Korea
• Faroe Islands
• Malaysia
• Switzerland
• Georgia
• Mauritius
• Syria*
• Ghana
• Moldova
• Tunisia
• Iceland
• Montenegro
• Israel • Jordan
• Morocco • Norway
Agri-food manufacturers in Turkey can access these markets without any custom restrictions Source: Ministry of Economy 2017 *Suspended
ADVANTAGES
Turkey is also very advantageous for maritime transportation, allowing agri-food producers to export easily
AGENDA
Executive Summary Turkish Agri-Food Industry Outlook Growth Drivers in Turkey Opportunities in Turkish Agri-food Industry Success Stories
Record growth and a bright future…
ADVANTAGES
13th LARGEST ECONOMY IN THE WORLD
REAL GDP GROWTH (INDEX: 2002=100)
2016 GDP ($ Trillion, PPP) 21,3
CHİNA (1) US (2)
240
Average Annual GDP Growth 2017-2019 %
5.6
3.4
3.7
3.3
ROMANIA
3.5
3.4
CZECHIA
2.6
2.7
1.8
2.4
TURKEY
18,6
INDİA (3) JAPAN (4)
Average Annual GDP Growth 2003-2016 %
8,7
220
5,2
GERMANY (5)
4,0
RUSSİA (6)
3,8
200
POLAND
180
B R A Z İ L ( 7 ) 3,1
Source: TurkStat, OECD, World Bank, IMF, PPP: Purchasing Power Parity
2019
2018
2017
2016
2015
2014
100
2013
2,0
2012
TURKEY (13)
2011
2,2 2010
ITALY (12)
120
2009
2,3
HUNGARY
2008
MEXİCO (11)
140
2007
2,7
2006
FRANCE (10)
2005
2,8
2004
UK (9)
160
2003
3,0
2002
INDONESİA (8)
Turkey’s economic growth has paved the way for the emergence of a sizeable middle-class…
BOURGEONING MIDDLE CLASS
TRIPLING INCOME PER CAPITA (GDP per capita, current prices)
GDP PER CAPITA IN COUNTRIES WITH POPULATION OVER 50 MILLION $10.807
US (1)
57.436
Germany (2)
41.902
UK (3)
40.096
Japan (4)
Among countries with population over 50 million, only 8 countries have GDP per capita over $10.000 $3.581
2002
38.917
France (5)
38.128
Italy (6)
30.507
Korea (7)
27.539
Turkey (8)
10.807
Russia (9)
8.929
Brazil (10)
8.727
2016
2002 1 million
INCOME GROUPS (Annual disposable income per capita)
3.3 million 17.8 million
High (>$55K) Upper-middle ($25K – $55K) Middle ($10K – $25K)
23 million
Low ($5K – $10K)
21.3 million
Poor (
