Tomato producer eyes investments in Turkey
Güncelleme Tarihi:
by Reeta Paakkinen
Oluşturulma Tarihi: Şubat 26, 2009 00:00
ISTANBUL - Rising tomato consumption around the world has a Turkish tomato paste producer thinking that this is the right time to purchase a new plant in the country. Merko’s chief says these are good days to invest. The appreciating dollar is also working to Turkish tomato producers’ advantage this year
A Turkish tomato paste producer is preparing to take advantage of the worldwide increase in tomato consumption.
Merko is considering acquiring a Turkish tomato processing plant and conducted its first trials for growing tomatoes in the southeastern city of Mardin last year, said Duncan Blake, Merko's chief executive officer.
"The consumption of tomatoes is increasing by some 3 to 4 percent a year worldwide. Turkey has a good opportunity to benefit from this growth. Our long-term goal is to expand either through acquisition or organically," Blake told Hürriyet Daily News & Economic Review earlier in the week.
In 2009 Merko will utilize its maximum capacity, which currently is 210,000 tons of raw materials a year. "This year we will also conduct further trials because the existing tomato growing areas may be saturated in a few years. If Turkey wants to take part in the growth trend this will require new growing areas," Blake said.
Blake, who is currently the president of the Mediterranean International Association of Tomato Producers, or AMITOM, said several trends were backing growing tomato consumption worldwide.
"The new European Union member states are playing an important role as they are adapting to European diets and ready foods, while their standard of living is going up," he said. "We are also seeing growth in many Western countries because of the pressure by governments to reduce salt contents in processed foods. There is increasing awareness of the health benefits of processed tomatoes," he said.
The total consumption of tomato products worldwide stood at approximately 38 million tons of raw material in 2008. Turkey produced some 2.5 million tons of this, California produced 10 million tons and EU countries produced approximately 9 million tons.
Recession feeds comfort foods
The ongoing turbulence in the global economy and changing consumer habits are increasing the use of comfort foods, including tomato products, Blake said. "Tomato-based products are good value for money these days. They are healthy." He also said tomatoes added a bit of taste and color. "In the United Kingdom, for example, baked beans and tomato sauce are diet staples and a very economic way to feed children. So in a recession you find the demand for tomato products increasing," Blake said.
People have also grown more hesitant in spending money at up-market restaurants and have moved toward fast food outlets. "In Britain, McDonalds, KFC and Pizza Hut are in fact investing in new restaurants because people are not going to fancy restaurants anymore. They order pizza, which contains tomato products. So we can identify an underlying growth in tomato demand, which is increasing through the recession," Blake said.
The currently strong U.S. dollar is also working to Turkish tomato producers’ advantage this year. "When the dollar is weak it is easy for Californian producers to export tomato paste to countries near the Eurozone. But if the dollar is strong it complicates the situation for Californians and works for the benefit of Europeans," Blake said.
"Our 2009 figures are likely to show a substantial increase," Blake said.
Merko’s turnover totaled 55 million Turkish Liras in 2007.
Currently some 95 percent of Merko’s produce is exported. The main export markets include Gulf Cooperation Council, or GCC countries, Russia, Central and South America, Japan and the Far East. Blake believes Turkish tomato producers will have an important role to play also in European markets in the future.
"At present, Turkey is not an important player in the European market because there is import duty on Turkish tomato products in the EU. However, the EU is likely to reduce the subsidies for growing tomatoes in the future and this will lead to reduced production and higher local prices," Blake said.
The EU may also reduce duty on tomato products or introduce a tomato duty free quota, which will make Turkey more important player in the market, he added. "Thus we can say that world tomato producers have a bright future ahead, despite the current market turbulence. Turkey will have notable opportunities to play an important role in this market in the future."
Merko is considering acquiring a Turkish tomato processing plant and conducted its first trials for growing tomatoes in the southeastern city of Mardin last year, said Duncan Blake, Merko's chief executive officer.
"The consumption of tomatoes is increasing by some 3 to 4 percent a year worldwide. Turkey has a good opportunity to benefit from this growth. Our long-term goal is to expand either through acquisition or organically," Blake told Hürriyet Daily News & Economic Review earlier in the week.
In 2009 Merko will utilize its maximum capacity, which currently is 210,000 tons of raw materials a year. "This year we will also conduct further trials because the existing tomato growing areas may be saturated in a few years. If Turkey wants to take part in the growth trend this will require new growing areas," Blake said.
Blake, who is currently the president of the Mediterranean International Association of Tomato Producers, or AMITOM, said several trends were backing growing tomato consumption worldwide.
"The new European Union member states are playing an important role as they are adapting to European diets and ready foods, while their standard of living is going up," he said. "We are also seeing growth in many Western countries because of the pressure by governments to reduce salt contents in processed foods. There is increasing awareness of the health benefits of processed tomatoes," he said.
The total consumption of tomato products worldwide stood at approximately 38 million tons of raw material in 2008. Turkey produced some 2.5 million tons of this, California produced 10 million tons and EU countries produced approximately 9 million tons.
Recession feeds comfort foods
The ongoing turbulence in the global economy and changing consumer habits are increasing the use of comfort foods, including tomato products, Blake said. "Tomato-based products are good value for money these days. They are healthy." He also said tomatoes added a bit of taste and color. "In the United Kingdom, for example, baked beans and tomato sauce are diet staples and a very economic way to feed children. So in a recession you find the demand for tomato products increasing," Blake said.
People have also grown more hesitant in spending money at up-market restaurants and have moved toward fast food outlets. "In Britain, McDonalds, KFC and Pizza Hut are in fact investing in new restaurants because people are not going to fancy restaurants anymore. They order pizza, which contains tomato products. So we can identify an underlying growth in tomato demand, which is increasing through the recession," Blake said.
The currently strong U.S. dollar is also working to Turkish tomato producers’ advantage this year. "When the dollar is weak it is easy for Californian producers to export tomato paste to countries near the Eurozone. But if the dollar is strong it complicates the situation for Californians and works for the benefit of Europeans," Blake said.
"Our 2009 figures are likely to show a substantial increase," Blake said.
Merko’s turnover totaled 55 million Turkish Liras in 2007.
Currently some 95 percent of Merko’s produce is exported. The main export markets include Gulf Cooperation Council, or GCC countries, Russia, Central and South America, Japan and the Far East. Blake believes Turkish tomato producers will have an important role to play also in European markets in the future.
"At present, Turkey is not an important player in the European market because there is import duty on Turkish tomato products in the EU. However, the EU is likely to reduce the subsidies for growing tomatoes in the future and this will lead to reduced production and higher local prices," Blake said.
The EU may also reduce duty on tomato products or introduce a tomato duty free quota, which will make Turkey more important player in the market, he added. "Thus we can say that world tomato producers have a bright future ahead, despite the current market turbulence. Turkey will have notable opportunities to play an important role in this market in the future."