Turkey: Fruit Production Runs Short of Meeting Demand From Fruit Juice Industry

The fruit juice industry is growing by double digits but the fruit production cannot support such an expansion, according to Metin Yüksel, the chief executive of local Tamek. The firm plans to invest in foreign countries to overcome the problem

Turkey’s fruit production runs short of meeting the demand by the fruit juice industry, according to head of Tamek, a producer.Turkey’s fruit industry is running out of fresh produce and needs to expand through local and foreign acquisitions in a rapid-growing fruit juice sector, which is expected to double next year, according to a top company.

The fruit juice market grows by nearly 16 percent annually, but the fruit sector falls short with only a 3 percent expansion, according to Metin Yüksel, the chief executive of Tamek, an established corporation also active in several other food businesses.

“The supply for fruits is limited, which means we will have to buy fruits from other countries,” Yüksel said during a press meeting Wednesday to present a new product line by his company.

“The amount of fruit produced in Turkey is not growing. We produce fruit juice and jam. If we want to grow, we should acquire [companies] that will allow us to buy fruit [from abroad],” he said.

The fruit juice demand in the Turkish market differs from the European market, said the company’s Supply Chain and Operations Director Serdar Özakar. “Turkish people usually prefer peach juice, while Europeans rather drink orange juice,” he said, adding that the oranges grown in Turkey are not ideal for juice-making.

Following peach juice, apricots, sour cherries and apples are the most consumed fruits in the juice industry, Özakar said. “This year there will be problems in the sour cherry supply. Turkey is the top sour cherry producer in the world and Poland follows.”

Due to a lack in supplies, acquisitions will be a part of Tamek’s plans to expand in other countries, Yüksel said: “We will acquire [companies] that will create new markets for us. We have already reached an agreement with a foreign trade company in the İzmir [the Aegean province] Free Trade Zone. We will announce it once the contract is signed.”

The company also plans to grow in the domestic market, he said, adding that Tamek has contacted several companies that produce types of fruit that Tamek lacks.

“Another method for growth is by contracting with local companies in product development,” Yüksel said. “The company is also in contact with some private equity companies to fund acquisitions.”

According to data provided by the company, Tamek grew 47 percent between 2002 and 2011. The company’s 2016 target is to reach an additional 30 percent growth in a bid to raise its annual revenue to 1 billion Turkish Liras. Its revenues, which stood at 290 million liras in 2010, hit 400 million liras last year. “Some 10 percent of our total revenue comes from exports. When we reach 1 billion liras, our forecast for the share of exports is 25 percent.”

The company’s newly announced product “Kahvaltım” (Breakfast) is a combination of three products: fruit juice, jam and cocoa hazelnut spread.

July 13, 2011
SOURCE: Hürriyet Daily News