MILK and MILK MILK and MILK PRODUCTIONSPRODUCTIONS

Prepared byPrepared byNazmiye ULUNazmiye ULU 20014310352001431035Çiğdem Deniz DALAKLIOĞLU Çiğdem Deniz DALAKLIOĞLU 20024310102002431010

HISTORY OF DAIRY PRODUCTS HISTORY OF DAIRY PRODUCTS INDUSTRYINDUSTRY

• A mosaic frieze A mosaic frieze was was foundfound

• First milk users are First milk users are nomads from nomads from Central Asia. Central Asia. ((Mongolians, Persians Mongolians, Persians and Turkishand Turkish))

• Louis Pasteur discoverLouis Pasteur discovered ed pasteurizationpasteurization in 1860in 1860

• Atatürk Forest FarmAtatürk Forest Farm

MARKET STRUCTURE of DAIRY MARKET STRUCTURE of DAIRY PRODUCTS in TURKEYPRODUCTS in TURKEY

• INSTITUTIONS in the INDUSTRYINSTITUTIONS in the INDUSTRY • THREATS FOR NEW ENTRANTS OF DAIRY THREATS FOR NEW ENTRANTS OF DAIRY

INDUSTRYINDUSTRY• INSTITUTIONS in the INDUSTRYINSTITUTIONS in the INDUSTRY• SUPLIERS in the INDUSTRYSUPLIERS in the INDUSTRY• CONSUMERS in the INDUSTRYCONSUMERS in the INDUSTRY• GOVERNMENT POLICIES in TURKEY for GOVERNMENT POLICIES in TURKEY for

DAIRY INDUSTRYDAIRY INDUSTRY• EXTERNAL TRADE of TURKEY in DAIRY EXTERNAL TRADE of TURKEY in DAIRY

PRODUCTS INDUSTRYPRODUCTS INDUSTRY

INSTITUTIONS in the INSTITUTIONS in the INDUSTRYINDUSTRY

--divided into 3 groups divided into 3 groups

• their sizetheir size

• their capacitytheir capacity

• their technologytheir technology

--Encouragement Premium Encouragement Premium

Table 1: Premium Paid Amount of Milk

Years Milk Production(Tone)

Total Amount of Milk

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 Tic.A.Ş.

Tekirdağ

Source: DPT, 8. BYKP, Gıda Sanayii ÖİK Raporu,Süt ve Süt Ürünleri Alt Kom. Raporu

THREATS FOR NEW ENTRANTS OF DAIRY THREATS FOR NEW ENTRANTS OF DAIRY INDUSTRYINDUSTRY

• unregistered production and saleunregistered production and sale

• 8% value added tax rate8% value added tax rate

• highly priced and inefficient bait highly priced and inefficient bait

• instability in raw milk prices.instability in raw milk prices.

SUPLIERS in the INDUSTRYSUPLIERS in the INDUSTRY

• several actors several actors ((Livestock farms, milk marketing Livestock farms, milk marketing cooperatives, additive stuff production firms, dairy industry cooperatives, additive stuff production firms, dairy industry machines production firms, construction firms, energy machines production firms, construction firms, energy suppliers, package producing firms, transportation suppliers, package producing firms, transportation vehicles vehicles ))

• Additive stuff is usually imported Additive stuff is usually imported from abroad from abroad

• Dairy industry machines Dairy industry machines are are importedimported

CONSUMERS in the INDUSTRYCONSUMERS in the INDUSTRY

• CalciumCalcium

• Consumption Consumption is rather lowis 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 1995 1996 1997 1998

Milk 230 257 305 325

Yoghurt 637 680 735 775

White Cheese 168 180 190 195

Cheddar Cheese 41 43 47 49

Other Cheese 38 41 41 45

Butter 119 122 126 129

Milk powder 11 12 14 13

Total 3.075 3.297 3.530 3.700

Source: DPT, 8. BYKP, Gıda Sanayii ÖİK Raporu,Süt ve Süt Ürünleri Alt Kom. Raporu

GOVERNMENT POLICIES in TURKEY for GOVERNMENT POLICIES in TURKEY for DAIRY INDUSTRYDAIRY INDUSTRY

• help industries to increase their help industries to increase their income income

• The premium The premium can be given can be given over 1000 over 1000 tones a yeartones a year

• 1300 milk firms 1300 milk firms get the premiumsget the premiums

EXTERNAL TRADE of TURKEY in DAIRY EXTERNAL TRADE of TURKEY in DAIRY

PRODUCTS INDUSTRYPRODUCTS INDUSTRY

1)1) ExportExport• Low export because of inefficiency and quality Low export because of inefficiency and quality

standardsstandards• Main exportable products are cheese and butter Main exportable products are cheese and butter • ‘‘tulum’ and ‘white cheese’ tulum’ and ‘white cheese’ are exported to are exported to

Saudi Arabia Saudi Arabia • a great decrease in export of butter because of a great decrease in export of butter because of

the economic crisis in Russia the economic crisis in Russia and and herbal herbal nutrition tendencynutrition tendency

• ice cream ice cream export started to increaseexport 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

IceCream 1118 1254 1616 1084 1554

Other 747 839 468 855 1048

Source: DEMİRBAŞ,KARAGÖZLÜ, AKBULUT,(2002), Dünya ve Türkiye’de Süt ve Süt Ürünleri Sanayiinde Gelişmeler.

2) 2) ImportImport• directly related to cattle farming directly related to cattle farming

• climatic change or a government climatic change or a government decision decision affectsaffects

Table 6: Dairy products Import of Turkey (Tone)

Product Name Years % Change

  1995 1996 1997 1998 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 % Change

  1995 1996 1997 1998 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

Source: DPT(2000) Süt ve Süt Mamulleri Özel İhtisas Komisyonu Raporu, VIII. Beş Yıllık Kalkınma Planı

CONDUCT of FIRMS in DAIRY CONDUCT of FIRMS in DAIRY INDUSTRYINDUSTRY

A.A. PRICING POLICYPRICING POLICY

B.B. MARKETING ACTIVITIESMARKETING ACTIVITIES

C.C. R&D ACTIVITIES AND PRODUCT R&D ACTIVITIES AND PRODUCT DIVERSIFICATIONS OF FIRMSDIVERSIFICATIONS OF FIRMS

D.D. MERGERSMERGERS

PRICING POLICYPRICING POLICY

• There is not a stable pricing policyThere is not a stable pricing policy • Arguments between the milk producers Arguments between the milk producers

and manufacturersand manufacturers..• Manufacturer:Manufacturer:-High price of raw milk, low demand-High price of raw milk, low demand• Producer:Producer:-High cost & risky production -High cost & risky production -High bait prices-High bait prices• StreetsellersStreetsellers

MARKETING ACTIVITIESMARKETING ACTIVITIES

• Different types of marketing Different types of marketing activitiesactivities

--Big firms Big firms

-Medium Sized-Medium Sized

-Small seasonal or family firms-Small seasonal or family firms

R & D ACTIVITIES AND PRODUCT R & D ACTIVITIES AND PRODUCT DIVERSIFICATIONS OF FIRMSDIVERSIFICATIONS OF FIRMS

• To increase consumption level of DairyTo increase consumption level of Dairy

• Introduce new productsIntroduce new products

-no lactose milk, different age group milk.-no lactose milk, different age group milk.

• Traditional products with modern techniquesTraditional products with modern techniques

-Ayran, Kaymak-Ayran, Kaymak

• Foreign productsForeign products

-Fruity milk & yoghurt,dairy for digestion.-Fruity milk & yoghurt,dairy for digestion.

• Ice-CreamIce-Cream

MERGERSMERGERS

• Structural problems such as high cost Structural problems such as high cost and low demandand low demand

--need mergers to finance their activitieneed mergers to finance their activitiess• having a dynamic market is having a dynamic market is an an

advantage in long-termadvantage in long-term -Foreign firms’ -Foreign firms’ main strategy is to main strategy is to

capture the market by using big firms capture the market by using big firms namename

-Danone -Danone

V.V.PERFORMANCE OF FIRMS in PERFORMANCE OF FIRMS in

DAIRY INDUSTRYDAIRY INDUSTRY

A.A. TECHNOLOGYTECHNOLOGY

B.B. QUALITY STANDARDS OF PRODUCTS QUALITY STANDARDS OF PRODUCTS

AND SERVICE AND SERVICE

C.C. GROWTH OF SALES & CONSUMPTIONGROWTH OF SALES & CONSUMPTION

D.D. GROWTH of CAPACITY GROWTH of CAPACITY

TECHNOLOGYTECHNOLOGY

• A lot of unsA lot of unsrreeggiisterstered firms mostly ed firms mostly using primitive techniquesusing primitive techniques

• institutional firms in the industry institutional firms in the industry achieve state-of-the-art dairy achieve state-of-the-art dairy technology technology

QUALITY STANDARDS OF QUALITY STANDARDS OF PRODUCTS AND SERVICE PRODUCTS AND SERVICE

• ISO 9000 series were created as ISO 9000 series were created as internationally accepted standardinternationally accepted standard

• Turkey applies Turkey applies the standards as TS the standards as TS EN ISO 9001EN ISO 9001

• 4 firms certificated with TS EN ISO 4 firms certificated with TS EN ISO 9001 and 28 firms with ISO 90029001 and 28 firms with ISO 9002

Table 8:TS EN ISO 9001 Certificated Dairy Firms in Turkey

Firm Content of Certificate Certificate Date

Pınar Süt Mamulleri Sanayi A.Ş. Dairy Products 1998

Mis Süt sanayii A.Ş.-GönenTesisleri

Milk, Aromatic Milk,Other milks (mother, children calcium plus ect), Ayran,

Butter, Cheese, Milk Powder

1999

Mis Süt sanayii A.Ş.-İstanbulTesisleri

Pasteurized milk, Ayran, Yoghurt, milk, Butter, Milk Powder

1999

Unilever Sanayi ve Ticaret TürkA.Ş.- Algida

Ice Cream 1999

GROWTH OF SALES & GROWTH OF SALES & CONSUMPTIONCONSUMPTION

-Higher income level-Higher income level

-Higher education 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 2,9

Milk powder 9,4 11,5 -5,7

Total 7,2 7,1 4,8

GROWTH of CAPACITY GROWTH of CAPACITY

• Government subsidiesGovernment subsidies

• Capacity usage ratio is increased Capacity usage ratio is increased from 17% to 28%from 17% to 28%

VI. VI. CONCLUSIONCONCLUSION

• Confused structure by comprising the Confused structure by comprising the most modern and most primitive most modern and most primitive techniques togethertechniques together

• Dilemma obstructs the dairy sector of Dilemma obstructs the dairy sector of Turkey to achieve EU quality standards Turkey to achieve EU quality standards and to compete in international areaand to compete in international area

• Inefficient and Unhealty consumptionInefficient and Unhealty consumption• Policies mainly tries to obstruct Policies mainly tries to obstruct

unregistered productionunregistered production • It will take a long time to achieve It will take a long time to achieve

efficiency and qualityefficiency and quality

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