MILK and MILK PRODUCTIONS Prepared by Nazmiye ULU

MILK and MILK PRODUCTIONS Prepared by Nazmiye ULU 2001431035 Çiğdem Deniz DALAKLIOĞLU 2002431010

HISTORY OF DAIRY PRODUCTS INDUSTRY • A mosaic frieze was found • First milk users are nomads from Central Asia. (Mongolians, Persians and Turkish) • Louis Pasteur discovered pasteurization in 1860 • Atatürk Forest Farm

MARKET STRUCTURE of DAIRY PRODUCTS in TURKEY • INSTITUTIONS in the INDUSTRY • THREATS FOR NEW ENTRANTS OF DAIRY • • • INDUSTRY INSTITUTIONS in the INDUSTRY SUPLIERS in the INDUSTRY CONSUMERS in the INDUSTRY GOVERNMENT POLICIES in TURKEY for DAIRY INDUSTRY EXTERNAL TRADE of TURKEY in DAIRY PRODUCTS INDUSTRY

INSTITUTIONS in the INDUSTRY -divided into 3 groups • their size • their capacity • their technology -Encouragement Premium

Table 1: Premium Paid Amount of Milk Years Milk Production Total Amount (Tone) Milk of Paid Premium (%) 1995 10. 601. 550 22. 863. 464 2, 15 1996 10. 760. 915 1. 516. 618. 237 14. 09 1997 10. 076. 526 1. 785. 911. 924 17. 72 1998 9. 970. 531 994. 409. 032 9. 97 end of August

Table 2: Dairy Firms in Turkey Which Get Confirmation Number from EU for Exporting to EU Name of Institution City Yörsan Gıda Mam. San. ve Tic. A. Ş. Balıkesir Mis Süt A. Ş. Balıkesir Teksüt Mam. San. ve Tic. A. Ş. Balıkesir Tarım Taç A. Ş. Edirne/İpsala Mamsan Gıda San. Ve Tic. A. Ş. Edirne/Havsa Mis Süt. San. A. Ş. İstanbul Pınar Süt Mam. San. A. Ş. İzmir Kiraz Süt Mam. San. A. Ş. İzmir Bahçıvan Gıda Süt Mam. San. ve Tic. A. Ş. Kırklareli Tikveşli Mak. San. ve Tic. A. Ş. Kırklareli Yaşar Don. Gıda Mad. Kahraman Maraş Unilever San. Ve Tic. A. Ş. Tekirdağ Kars Karper Peynir ve Gıda San. Ve Tekirdağ Tic. A. Ş. Source: DPT, 8. BYKP, Gıda Sanayii ÖİK Raporu, Süt ve Süt Ürünleri Alt Kom. Raporu

THREATS FOR NEW ENTRANTS OF DAIRY INDUSTRY • unregistered production and sale • 8% value added tax rate • highly priced and inefficient bait • instability in raw milk prices.

SUPLIERS in the INDUSTRY • several actors (Livestock farms, milk marketing cooperatives, additive stuff production firms, dairy industry machines production firms, construction firms, energy suppliers, package producing firms, transportation vehicles ) • Additive stuff is usually imported from abroad • Dairy industry machines are imported

CONSUMERS in the INDUSTRY • Calcium • Consumption is rather low

Table 3: Per Capita Milk Consumption (kg/person) COUNTRY CONSUMPTION Turkey 6 Saudi Arabia 14 Greece 43 Italy 61 Germany 67 USA 88 Switzerland 98 Spain 104 England 107 Sweden 120 Norway 138 Finland 158 Source: ITO, Dairy products Industry, ITO Publication no: 65, İzmir, 1999

Table 4: Consumption Amount of Dairy products (1000 ton) Products Milk Yoghurt White Cheese Cheddar Cheese Other Cheese Butter Milk powder Total 1995 230 637 168 1996 257 680 1997 305 735 190 1998 325 775 195 41 38 119 11 3. 075 43 41 122 12 3. 297 47 41 126 14 3. 530 49 45 129 13 3. 700 Source: DPT, 8. BYKP, Gıda Sanayii ÖİK Raporu, Süt ve Süt Ürünleri Alt Kom. Raporu

GOVERNMENT POLICIES in TURKEY for DAIRY INDUSTRY • help industries to increase their income • The premium can be given over 1000 tones a year • 1300 milk firms get the premiums

EXTERNAL TRADE of TURKEY in DAIRY PRODUCTS INDUSTRY 1) Export • • • Low export because of inefficiency and quality standards Main exportable products are cheese and butter ‘tulum’ and ‘white cheese’ are exported to Saudi Arabia a great decrease in export of butter because of the economic crisis in Russia and herbal nutrition tendency ice cream export started to increase

Table 5: Export of Dairy products (Tone) 1996 1997 1998 1999 2000 Cheese 4369 5770 4338 4676 4571 Butter 396 188 83 103 80 Ice. Cream 1118 1254 1616 1084 1554 Other 747 839 468 855 1048 Source: DEMİRBAŞ, KARAGÖZLÜ, AKBULUT, (2002), Dünya ve Türkiye’de Süt ve Süt Ürünleri Sana

2) Import • directly related to cattle farming • climatic change or a government decision affects

Table 6: Dairy products Import of Turkey (Tone) Product Name Years % Change 1995 1996 1997 1998 Milk & Cream 207 307 99 151 48 -68 53 Milk Powder 6. 255 8. 386 8. 228 7. 743 34 2 -6 Butter 3. 207 3. 444 3. 821 5. 322 7 11 39 Cheddar 12 79 6 0. 002 558 -92 -100 White Cheese 1. 921 1. 485 202 336 -23 -86 66 Other Cheese 852 2. 482 1. 069 2. 041 191 -57 91 Source: DPT(2000) Süt ve Süt Mamulleri Özel İhtisas Komisyonu Raporu, VIII. Beş Yıllık Kalkınma Planı

Table 7: Import of Milk Powder from Important Country Groups (Tone) Countries Years 1995 1996 1997 1998 EU(15) 5. 008 5. 851 5. 780 5. 163 16 -2 -11 ICC 986 1. 463 1. 026 584 48 -30 -43 USA 244 255 60 84 4 -77 31 S. Africa - - - 100 - - - Poland 60 309 925 129 4, 5 199 -86 Czech Republic 325 - 60 - - - New Zealand - - 375 - - Romania - 19 12 - - -37 - % Change Source: DPT(2000) Süt ve Süt Mamulleri Özel İhtisas Komisyonu Raporu, VIII. Beş Yıllık Kalkınma Planı

CONDUCT of FIRMS in DAIRY INDUSTRY A. PRICING POLICY B. MARKETING ACTIVITIES C. R&D ACTIVITIES AND PRODUCT D. DIVERSIFICATIONS OF FIRMS MERGERS

PRICING POLICY • There is not a stable pricing policy • Arguments between the milk producers and manufacturers. • Manufacturer: -High price of raw milk, low demand • Producer: -High cost & risky production -High bait prices • Streetsellers

MARKETING ACTIVITIES • Different types of marketing activities -Big firms -Medium Sized -Small seasonal or family firms

R & D ACTIVITIES AND PRODUCT DIVERSIFICATIONS OF FIRMS • To increase consumption level of Dairy • Introduce new products -no lactose milk, different age group milk. • Traditional products with modern techniques -Ayran, Kaymak • Foreign products -Fruity milk & yoghurt, dairy for digestion. • Ice-Cream

MERGERS • Structural problems such as high cost and low demand -need mergers to finance their activities • having a dynamic market is an advantage in long-term -Foreign firms’ main strategy is to capture the market by using big firms name -Danone

V. PERFORMANCE OF FIRMS in DAIRY INDUSTRY A. TECHNOLOGY B. QUALITY STANDARDS OF PRODUCTS AND SERVICE C. GROWTH OF SALES & CONSUMPTION D. GROWTH of CAPACITY

TECHNOLOGY • A lot of unsregistered firms mostly using primitive techniques • institutional firms in the industry achieve state-of-the-art dairy technology

QUALITY STANDARDS OF PRODUCTS AND SERVICE • ISO 9000 series were created as internationally accepted standard • Turkey applies the standards as TS EN ISO 9001 • 4 firms certificated with TS EN ISO 9001 and 28 firms with ISO 9002

Table 8: TS EN ISO 9001 Certificated Dairy Firms in Turkey Firm Content of Certificate Certificat e Date Pınar Süt Mamulleri Sanayi A. Ş. Dairy Products 1998 Mis Süt sanayii A. Ş. -Gönen Tesisleri Milk, Aromatic Milk, Other milks (mother, children calcium plus ect), Ayran, Butter, Cheese, Milk Powder 1999 Mis Süt sanayii A. Ş. -İstanbul Tesisleri Pasteurized milk, Ayran, Yoghurt, milk, Butter, Milk Powder 1999 Unilever Sanayi ve Ticaret Türk A. Ş. - Algida Ice Cream 1999

GROWTH OF SALES & CONSUMPTION -Higher income level -Higher education level

Table 9: Increase in Demand of Dairy products (%) Products Years 1995 -96 1996 -97 1997 -98 Milk 11, 7 18, 7 6, 6 yoghurt 6, 8 8, 1 5, 5 White Cheese 6, 9 4, 2 4, 3 Cheddar 6 7, 3 5 Other cheeses 7, 1 0, 5 10, 2 Butter 2, 6 2, 9 Milk powder 9, 4 11, 5 -5, 7 Total 7, 2 7, 1 4, 8

GROWTH of CAPACITY • Government subsidies • Capacity usage ratio is increased from 17% to 28%

VI. CONCLUSION • Confused structure by comprising the most • • modern and most primitive techniques together Dilemma obstructs the dairy sector of Turkey to achieve EU quality standards and to compete in international area Inefficient and Unhealty consumption Policies mainly tries to obstruct unregistered production It will take a long time to achieve efficiency and quality

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