Miller Magazine Issue: 154 October 2022

85 MILLER / OCTOBER 2022 INTERVIEW private sector or free market economy understanding. It mustn’t be permanent. I want to ask two interrelated questions. First, Russia is planning to sell high value-added flour instead of wheat. How do you evaluate this? Secondly, as a prominent export- er and producer of the industry, do you plan to make an in- vestment in Russia? I can say that Russia and Ukraine’s idea to produce flour is currently one of the biggest risks for Turkey and the Turkish flour industry. First of all, let me say this: At the end of the day, Russia and Ukraine will definitely export flour. This is because they have the raw material. They impose a tax on wheat and no tax on flour. Therefore, they hold significant advantages in the market. However, this should not be overlooked either: Turkey has many advantages at this point. The first is that Turkey has a very large feed industry. While approximately 70-75% of the wheat is processed into flour, the remaining 25-30% is used as animal feed, which we call bran and cracked wheat. Since it is also used as animal feed, it is with higher added value in Turkey. This is because we are selling 25 kilograms of animal feed from 100 kg of wheat as a by-product almost more expensively than the wheat in Russia . Secondly, in fact, if Russia’s conditions were favorable, it would have already done this. The biggest disadvantage for Russia is that it can transport 3-5 thousand tons at most to Africa and other countries by channels and vessels. And this is not profitable due to freight prices. The biggest advantage of Tur- key at this point is the container line. Most of the container lines in the world can easily reach Turkish ports. We have Asyaport, Ambarlı Port, and Mersin Port… But you cannot bring these con- tainers all over Russia. As for your question about investing in Russia, indeed, we seriously considered investing in Russia. We had even deter- mined a location in Rostov before the Russia-Ukraine war. We went there and talked to the partners. But we still had question marks in our minds there because we couldn’t go there just by thinking about export. We were also making projections about the Russian domestic market. The biggest disadvantage there is containers and logistics. Therefore, I do not expect that Rus- sia will pose a threat to Turkish flour by entering the flour market in the short term. How much of its capacity does Doruk Un use? We use 100 percent of our capacity. We currently have two ac- tive production lines. We are going to establish a third production line at the factory for pasta and semolina, which are among our new investment items. Especially with the semolina line we are going to establish, we will produce the raw materials for pasta. Could you share with us your investment plans for the near future? At Doruk Un, we are planning a 1.1-billion investment in ag- riculture and seeds, noodle and pasta, energy, feed and feed raw materials, especially in retail, in the 5-year projection. With this investment move, we aim to grow by over 200% in flour and bakery products, and over 400% together with other in- vestment and business lines. We are carefully following the lev- el where energy prices have reached globally. With reference to the fact that energy is a major expense item, we will establish a solar energy facility, meeting our own consumption and mini- mize costs in this way. Is there anything else you want to add? We all have some responsibilities. That the work we do cre- ates added value and that it is beneficial to humanity as well as to our company and our family are among these respon- sibilities. We have a gluten-free flour type for celiac patients. Since this is completely gluten-free, we have to produce it on an extra line. We have executed trial productions. We are doing this as a social responsibility project rather than a profit motive. Another one is the milling school project. This is a shortcom- ing for Turkey. We carry out this together with my teammates as part of a social responsibility project with the aim of transferring our knowledge for skilled labor for the sector periodically. We want to prepare courses and bring friends together from certain regions and factories 3-5 times a year and transfer our knowl- edge. The knowledge and experience we have gained should not go up in smoke after we die. I want to share my experience and knowledge with the sector. DORUK UN INVESTMENT TARGET Pasta 275 million TRY Energy 275 million TRY Noodle 150 million TRY Seed/Agriculture 125 million TRY Storage/Logistics 125 million TRY Feed Plant 100 million TRY R&D 25 million TRY DORUK UN TURNOVER TARGET Noodle 4.03 Billion TRY Flour Industry 2.16 Billion TRY Pasta 713 million TRY Energy 100 million TRY Feed Plant 252 million TRY