“There is great potential, we shall grow rapidly in agriculture”

Tekfen was one of the first major groups in Turkey to make investments in agriculture, The group started in the 1970s with the fertilizer company Toros Gübre and is now continuing to expand road. Esin Mete, who is vice president responsible for the Agro-industry Group sums up their current situation as follows: “We closed 2005 with a turnover of $ 350-400 million and increased our market share.” He notes that further growth may come from new investments and partnerships.

In recent years many investors and major groups have begun to become interested in the ‘agriculture’ sector. One of the reasons for the increase in interest in the sector is optimism about the impact that negotiations for membership of the EU will have on the sector and on helping it realize its full potential. In recent years one of the leading groups which has come to the fore as a result of its initiatives in agriculture and agro-industry is Tekfen Holding.

Tekfen Holding is well-known for its investments in the construction sector and in recent years it has been closely following opportunities and developments in the agriculture sector. In fact, the group’s activities in the field go back a long time. Tekfen entered the agriculture sector at the beginning of the 1970s with Toros Gübre. It has remained quietly upbeat about agriculture for many years. But in recent years the group has expanded its field of activity in agriculture. After entering the seed business it bought the Samsun Fertilizer factories under the privatization programme.

We spoke with Esin Mete, who is vice president responsible for the Agro-industry Group at Tekfen Holding, about agriculture and Tekfen’s investments in the sector.

* Tekfen Holding’s first investment in the agriculture sector was Toros Gübre wasn’t it? How did Tekfen enter the agriculture business?
When I began to work at Tekfen Holding in 1973 it had just entered the fertilizer sector. Toros Gübre was still not an established company. I was involved at every level from feasibility studies to the procurement of equipment. We established a plant in Ceyhan and began production of fertilizer. It was an extremely difficult process.

The reason for Tekfen entering the business was that this is what Turkey needed. At that time, it received an incentive for its investment in fertilizer. The state used to offer support in order to develop sectors which provided inputs for agriculture. We benefited from this and made an investment that was needed by the country. Later in 1986, when the fertilizer sector was liberalized, unlike our rivals we concentrated on marketing. Marketing activities played a key role in the growth of the company.

* Since the mid-1990s Tekfen has begun to concentrate more on agriculture. The holding now includes a specific group specializing in agriculture. Would it be possible to say that agriculture is now Tekfen’s second main field of activity after construction?
We can say that Tekfen’s need for growth and Turkey’s agriculture potential have converged. We took the strategic decision to expand in agriculture as the result of these two factors. Agriculture is a sector which needs to be developed. We see a great potential here. But, at the same time, it is a sector which progresses very slowly. This means that growth also takes a little time.

* How big a share does agriculture have in Tekfen’s total operations?
The construction business is Tekfen’s backbone. But it is possible to describe agriculture as its second main field of activity. Construction accounts for 55-60 percent of our total turnover, compared with 30-35 percent for agriculture.

THE SIZE of THE FERTILIZER SECTOR
$1.2 billion
“The total size of the fertilizer market is $1.2 billion. There is potential for an increase of at least 50 percent.”

Fadime Çoban
[email protected]