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

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

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

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

5. Table 1: Premium Paid Amount of Milk YearsMilk Production (Tone) Total Amount of Milk Paid Premium (%) 199510.601.55022.863.4642,15 199610.760.9151.516.618.23714.09 199710.076.5261.785.911.92417.72 19989.970.531994.409.0329.97 end of August

6. Table 2:Dairy Firms in Turkey Which Get Confirmation Number from EU for Exporting to EU Name of InstitutionCity 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 Tic.A.Ş. Tekirdağ Source: DPT, 8. BYKP, Gıda Sanayii ÖİK Raporu,Süt ve Süt Ürünleri Alt Kom. Raporu

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

8. 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 ) 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 Additive stuff is usually imported from abroad Dairy industry machines are imported Dairy industry machines are imported

9. CONSUMERS in the INDUSTRY Calcium Calcium Consumption is rather low Consumption is rather low

10. Table 3: Per Capita Milk Consumption (kg/person) COUNTRYCONSUMPTION Turkey6 Saudi Arabia14 Greece43 Italy61 Germany67 USA88 Switzerland98 Spain104 England107 Sweden120 Norway138 Finland158 Source: ITO, Dairy products Industry, ITO Publication no: 65, İzmir,1999

11. Table 4: Consumption Amount of Dairy products (1000 ton) Products1995199619971998 Milk230257305325 Yoghurt637680735775 White Cheese168180190195 Cheddar Cheese41434749 Other Cheese3841 45 Butter119122126129 Milk powder11121413 Total3.0753.2973.5303.700 Source: DPT, 8. BYKP, Gıda Sanayii ÖİK Raporu,Süt ve Süt Ürünleri Alt Kom. Raporu

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

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

14. Table 5: Export of Dairy products (Tone) 19961997199819992000 Cheese43695770433846764571 Butter3961888310380 IceCream11181254161610841554 Other7478394688551048 Source: DEMİRBAŞ,KARAGÖZLÜ, AKBULUT,(2002), Dünya ve Türkiye’de Süt ve Süt Ürünleri Sanayiinde Gelişmeler.

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

16. Table 6: Dairy products Import of Turkey (Tone) Product NameYears% Change 1995199619971998199619971998 Milk & Cream2073079915148-6853 Milk Powder6.2558.3868.2287.743342-6 Butter3.2073.4443.8215.32271139 Cheddar127960.002558-92-100 White Cheese1.9211.485202336-23-8666 Other Cheese8522.4821.0692.041191-5791 Source:DPT(2000) Süt ve Süt Mamulleri Özel İhtisas Komisyonu Raporu, VIII. Beş Yıllık Kalkınma Planı

17. Table 7: Import of Milk Powder from Important Country Groups (Tone) CountriesYears% Change 1995199619971998199619971998 EU(15)5.0085.8515.7805.16316-2-11 ICC9861.4631.02658448-30-43 USA24425560844-7731 S. Africa---100--- Poland603099251294,5199-86 Czech Republic -325-60--- New Zealand--375---- Romania--1912---37 Source: DPT(2000) Süt ve Süt Mamulleri Özel İhtisas Komisyonu Raporu, VIII. Beş Yıllık Kalkınma Planı

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

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

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

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

22. MERGERS Structural problems such as high cost and low demand 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 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

23. 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

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

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

26. Table 8:TS EN ISO 9001 Certificated Dairy Firms in Turkey FirmContent of CertificateCertificat e Date Pınar Süt Mamulleri Sanayi A.Ş.Dairy Products1998 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 Cream1999

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

28. Table 9: Increase in Demand of Dairy products (%) ProductsYears 1995-961996-97 1997-98 Milk11,718,76,6 yoghurt6,88,15,5 White Cheese6,94,24,3 Cheddar67,35 Other cheeses7,10,510,2 Butter2,62,9 Milk powder9,411,5-5,7 Total7,27,14,8

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

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

31. Thanks for Listening Thanks for Listening