Miller Magazine Issue: 154 October 2022

INTERVIEW 83 MILLER / OCTOBER 2022 lower. This is because there are still crises in the world and the pandemic is not over yet. There is a fear of war. Do you foresee the possibility of wheat prices falling be- low $300? Wheat prices’ falling below 300 dollars is also dangerous because if it goes down further, the farmers may refrain from wheat production. In the past, we have seen examples of this both in our country and in the world. In particular, the prices should not fall under a certain level which may discourage the farmer from production. Sometimes low prices can lead to a decrease in the production of the following years. I want to talk about flour export. You are exporting 60 percent of your production. So, you are following the world flour trade very closely. Turkey has been the world flour ex- port champion for the last 8 years. But about half of this ex- port goes only to Iraq. However, Iraq has focused on wheat imports and a policy of milling the wheat in its country in- stead of flour imports. Do you foresee a danger for the Turk- ish flour industrialist, such as the shrinkage of the export market? What should the Turkish market do to maintain its position in the market? This risk you are pointing out is something that all our col- leagues in the industry should think about. A very good ques- tion. Total flour export in the world is 10 million tons. This cor- responds to 13-14 million tons of wheat. Turkey meets a large proportion of this with 30-35%. Other countries such as Iraq, which imports flour from Turkey, want to both create employ- ment and produce the product in their own country by buying wheat instead of the final product. In other words, when you im- port flour, you buy the flour and sell it at the groceries. But when you import wheat, you run factories and create employment. You develop livestock industry with the bran of the by-products. For this reason, this is a serious risk in the near future. When you think about the established capacity of Turkey in the flour sector, there are currently about 500 flour factories. Turkey’s total capacity is equivalent to milling 25-30 million tons of wheat. In other words, even if Turkey supplies 10 million tons of flour, which is the total amount traded all over the world, there is still a serious excess of capacity. There is a serious surplus capacity in Turkey. Especially the factories in the South- east meet the exports to Iraq almost alone. The flour factories in that region have enough capacity for almost all of Turkey’s exports. There is a large wheat milling capacity especially in Mardin. This is a very serious risk. If you pay attention to the investment projects that we, as Doruk Un, take for the coming periods, you will understand that we see these risks. Because I think that there will be shrinkage in the flour market in the future, we will use the flour we pro- duce as noodles and pasta in our own factory. In addition, I can say that we took a precautionary measure by entering the retail sector with our Panpan brand in order to make our flour more value-added. PANPAN WILL BE OUR STRENGTH IN RETAIL When will we see Panpan on the shelves and in which cat- egories? We developed products for domestic consumption with our retail brand Panpan. We will take our place on the shelves in a month. We are continuing our negotiations with Turkey’s two big market chains, of which names I cannot say at the moment, for Panpan. Currently, there are 2-3 flour brands dominating the market shelves in Turkey. We aimed to be in the top three when we first hit the shelves. That’s the level we position ourselves and that’s where our price policy targets. Thus far, you have supplied flour to mostly industrial com- panies. However, you are entering the retail market with Panpan brand, your new investment. Does the risk of market shrinkage in global flour export play a role in your decision? This factor has a share for sure. And frankly, our colleagues in Turkey have very large factories, they export and import. But they lack leading brands. We are not far ahead in creating brands. We want to create a brand in the sector with Panpan. With reference to the increase in fast-food consumption in the world, perhaps we can expand into the domestic market and abroad under the name Panpan both in noodles and pasta. In other words, Pan- pan is an investment that we dote on not to be affected by the possible contraction in domestic and foreign markets, as well as due to our desire to create a brand. With the pandemic, people are now spending more time and consume more food at home. Considering these, we have developed Panpan brand. The pan- demic has somehow encouraged us for this brand.