Dutch seed potato company market leader in Turkey

Jan Muijsers is director of the Zeeland company C. Meijer, the market leader in seed potato production in Turkey. He provides an overview of the Turkish potato sector and the latest developments in the relationship.

What exactly does Meijer do in Turkey?
'We have had a joint venture with a Turkish company since 2010, with which we produce basic seed potatoes for the local market. Every year we produce seed potatoes on approximately 375 hectares. The vast majority is intended for the chips and fries industry. In addition, for the table potato market. That is also the largest market in Turkey. Our company in Turkey employs 21 people and the seed potato production is between 12.000 and 14.000 tons.

How is the potato sector organized in Turkey?
'The market has boomed due to the construction of chip and chip factories. Turkey has 7 French fries factories and 3 chip factories. The largest French fries producer, Atakey, needs 150.000 tons of raw material annually. The other lots total 300.000 tons. The chips involve 3 larger producers and also small local factories. The total raw material requirement for chip processing is 225.000 tons. Turkey is not experiencing a shrinkage of the table segment, as is happening in Western Europe. It is not potato consumption per capita that is growing, but the population itself. Due to the flow of refugees to Turkey, there has been a huge increase. As a result, the table market is growing in the East and processing in the West, where behavior and eating patterns are changing. Now frozen chips are also available at supermarket level and chips can be bought on every street corner.'

How professional is potato cultivation?
'The technical level of agriculture has increased considerably in the last decade. As a result, there has been significant yield growth over the last ten years and yields are still rising. The area is around 80.000 hectares. The seed potato factor was always the critical point. The law states that imported seed potatoes must be recultivated at least once. As a result, export figures also fluctuate. If the propagation is disappointing, import is necessary. If it works out well, they can live for years to come.'

What opportunities are there for the Netherlands?
'There are indeed many opportunities and challenges. However, many efforts by Dutch companies to set up a chip factory in Turkey have been halted. The culture is the reason for that withdrawal. Setting up a business here is not easy. The Turks want to be as self-sufficient as possible. The processors there are Turkish companies. In fact, there is only room for foreign companies in seed potato propagation. Processing production is growing strongly, especially the fast food segment. Every year a new line is built somewhere, factories are upgraded and lines become more efficient.'

What are the biggest threats to the Turkish potato sector?
'The attacks mean fewer tourists. The chip industry, which was very focused on all resorts and grew rapidly in the previous years, is now stagnating because, among other things, the Russians no longer come en masse. Another major problem is the currency. The Turkish lira has been devalued by more than 20 percent in six months. For imported seed potatoes this means that they will become 20 percent more expensive. The result is that more growers are focusing on local seed potatoes. However, at some point they will have to import seed potatoes again. However, the most critical factor is the political factor.'

We also feel Erdogan's politics in the Netherlands. Before that, the Turks were in conflict with Russia and then with the EU. How do you see that?
'An understanding such as this currently exists brings more uncertainties for the business community. The government is trying to be independent of foreign countries by continually adjusting the phytosanitary criteria and subsidizing the local seed potato industry. That is part of the culture and that is why the international industry is not represented there. What Erdogan has been doing in recent weeks is purely rhetoric. Now that the elections in the Netherlands are over and the referendum will soon be held in Turkey, things will calm down again. I do think that Turkey is increasingly isolating itself due to this policy, while at least half of the population wants an international position and just wants to do business with everyone. It's quite a big problem and you don't know how it will end. Turkey's import duties have also created a problem. The current situation can accelerate the process of developing a local seed potato system. For example, there are now incentive measures to develop the mini tuber into usable seed potatoes.'

Can you, as a foreign company, prepare yourself sufficiently for this?
'Not really. As a company you have to make choices and you are confronted with matters over which you have no control. Our response is to do even better locally and stay within the boundaries. We also want to be less dependent on imports. Also make sure that you have the right contacts who can guide you in these types of processes. Our staff in Turkey knows their way around at all levels, including within government. In this way, little can be done to you, because internally the need for product is certainly there. The agricultural sector is a very important one and we are very welcome with our knowledge. They need us. '

C. Meijer is the third largest seed potato trading house in the Netherlands in terms of volume. From Rilland it manages growers and its sales offices in Emmeloord and two in France. Meijer sells seed potatoes (table potatoes, French fries and potato chips) all over the world. In Turkey they produce basic seed potatoes themselves.