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Turkish milling machinery sector seeks export funding boost

10 June 20244 min reading

One of our significant visits at the IDMA Expo was Çift Kartal, a stalwart in the milling machinery industry with over half a century of experience. We engaged in a discussion with Cihangir Fikri Saatçioğlu, the Chairman of the Board of Directors at Çift Kartal Foreign Trade, delving into the company’s operations and the Turkish milling machinery sector.

Saatçioğlu stated that Çift Kartal, renowned for manufacturing flour mills, semolina mills, feed mills, silos, handling-loading-unloading equipment, and drying systems, exports its products to over 80 countries. He emphasized that the company has embraced a strategy aimed at enhancing technological advancements within its production spectrum, particularly amidst the pandemic-induced disruptions in supply chains. “We are continually innovating our product line and prioritize expertise,” Saatçioğlu remarked. He further elaborated that the company currently boasts nearly 100 diverse machines and equipment in its production portfolio, ranging from flour and feed mills to seed cleaning, organic product technologies, and grain storage solutions. Saatçioğlu highlighted the introduction of the new horizontal roller mill and vertical roller mill, which commenced mass production last year, to visitors at the IDMA Expo. He emphasized the significant demand for these products in Europe, particularly in Spain, Greece, and Ukraine.

TURKEY’S FLOURISHING MILLING MACHINERY INDUSTRY

Saatçioğlu shared that Turkey boasts nearly 300 companies operating within the milling machinery industry, encompassing its sub-components, and highlighted that the sector achieves approximately $5 billion in annual exports. He underscored Turkey’s robust standing globally within this sector, emphasizing that the country holds a formidable position. Saatçioğlu emphasized the stark difference in export values, noting that while the average export value in Turkey stands at $1.5 per kilogram, it significantly escalates to $15 in the milling machinery sector.

FINANCIAL HURDLES IN EXPORT MARKETS

Observing the sector’s significant export potential, Saatiçoğlu emphasized the challenges investors face in securing financing, particularly in African and Asian markets post-pandemic. He remarked, “These financial hurdles hinder the advancement of our milling machinery sector’s investment and export capabilities.” Highlighting the emergence of Chinese companies in these markets, backed by state-supported financing and credit facilities, he explained, “Chinese firms aim to entice investors with competitive pricing and reduced profit margins, notably in the Asian and African markets. They present enticing financial packages, including long-term credit facilities and state-backed financial instruments.” To address financing needs for projects in these regions, Turkish Milling and Sector Machinery Manufacturers Association (DESMÜD) has engaged with Turk Eximbank and various public banks. Saatçioğlu affirmed their ongoing efforts in this regard, stating, “Given China’s support for its enterprises through various privileges, the Turkish milling machinery sector requires state assistance to boost its exports.”

DIGITAL TRANSFORMATION DRIVES EFFICIENCY IN MILLING INDUSTRY

Saatçioğlu emphasized the sector’s exceptional competence in closely following technology and adapting it to production processes, highlighting that they save at least 20 percent in labor costs by leveraging the opportunities offered by Industry 4.0 amidst increasing labor costs. Noting the sector’s alignment with the global digital transformation, he stated, “We have already implemented a digital transformation that can activate the roller mills in a flour mill and nearly 50 related equipment from a PLC or with a tablet or phone. Turkish milling machinery manufacturers are now able to deliver projects with the same quality as their European competitors but at more affordable prices.”

Cihangir Fikri Saatçioğlu is a prominent figure, recognized for both his academic credentials and extensive industry experience. His recently published book, “Competition in the Global Market,” written subsequent to completing his PhD, has garnered attention. The book illuminates the intricate dynamics of the business landscape and shares insights into the nuances of competition. Describing his journey in writing the book to Değirmenci, Saatçioğlu expressed his aim to provide guidance that would elevate Turkish companies in international competition: “The import-to-export ratio in Turkey stands at approximately 60%. While Turkish delight and weaving were once renowned, today Turkish drones, our machinery industry, textiles, and white goods brands have gained prominence. However, to achieve the target of a 500 billion dollar export volume, we must engage in more value-added production. As mentioned earlier, Turkey’s average export value per kilogram is 1.5 dollars. By increasing this to 3 dollars through value-added products, Turkey’s current export volume of 255 billion dollars can reach 510 billion dollars. This necessitates the establishment of more free zones and state support for knowledge transfer. In my book, I offer insights into what measures are required for Turkey to become a stronger player in the global competitive arena. Each market possesses unique dynamics, and my book endeavors to outline which marketing models are applicable in different markets. Drawing from my business experiences and nearly two decades of involvement in non-governmental organizations, I trust that my book will serve as a guiding resource for entrepreneurs in the business world, inspiring them toward success.”

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