Investor Presentation. as of

Transcription

1 Investor Presentation as of March 2014

2 Disclaimer The information and any opinions contained in this document have been compiled in good faith, but no representation or warranty, express or implied, is made as to their accuracy, completeness or correctness. Save to the extent (if any) that exclusion of liability is prohibited by any applicable law or regulation, Egeli & Co., its officers, employees, representatives and agents expressly advise that they shall not be liable in any respect whatsoever for any loss or damage, whether direct, indirect, consequential or otherwise however arising (whether in negligence or otherwise) out of or in connection with the contents of or any omissions from this document. This document does not constitute an offer to sell, purchase, subscribe for or otherwise invest in units or shares of any fund referred to in this document. The value of any investment in any vehicle may fall as well as rise and investors may not get back the amount originally invested. Past performance is not necessarily a guide to the future. This document does not constitute and may not be relied upon as constituting any form of investment advice and prospective investors are advised to ensure that they obtain appropriate independent professional advice before making any investment. This document is issued by Egeli & Co. Corporate Support Services on behalf of Egeli & Co. Financial Services Group.

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4 Group Overview Established in 2002, Egeli & Co. is an independent financial investments group licensed and regulated by the Capital Markets Board of Turkey ( CMB ). Three companies of the group are listed on the Borsa Istanbul ( BIST ) Egeli & Co. Investment Holding ( EGC Investment Holding, BIST:EGCYH) Egeli & Co. Agriculture Investment Trust ( EGC Agri Capital, BIST:EGCYO) Egeli & Co. Investment Trust ( EGC InfraEnergy, BIST:EGLYO ) 4

5 Group s Structure Egeli & Co. Agriculture Investment Trust (EGCYO) Egeli & Co. Investment Holding (EGCYH) Egeli & Co. Investment Trust (EGLYO) Investment Theme Agriculture Generalist Energy Market Capitalization * TL 10.6 milion TL 24.0 million TL 60.4 million Book Value * TL 15.9 million TL 35.9 million TL 40.1 million Total Assets * TL 19.8 million TL 41,5 million TL 40.7 million Shareholding Structure * Free Float 61.03% EGCYH 27.62% EGLYO 5.75% Tan Egeli 3.49% EFYAŞ ** 2.11% Free Float 54.72% ECIM *** 39.13% EPYAS **** 4.00% Tan Egeli 1.95% EFYAŞ ** 0.20% EGCYH 91.68% Free Float 8.32% EPYAŞ **** * As of ** EFYAŞ = Egeli & Co. Finansal Yatırımlar A.Ş. (Egeli & Co. Financial Investment) *** ECIM = Egeli & Co. Investment Management SA *** EPYAS = Egeli & Co. Portföy Yönetimi A.Ş (Egeli & Co. Asset Management) 5

6 BIST Ticker: EGCYO ISIN:TRAEVREN91Q7

7 Company Overview Listed on the Borsa Istanbul (BIST), Egeli & Co. Agriculture Investment Trust (EGCYO) is the first Turkish closed-end structure focusing solely on agriculture investment theme. Paid-in capital and registered capital of the company are TL 22 million and TL 200 million, respectively. Management Harvest Your Investment Assets and liabilities of EGCYO are managed/advised by Egeli & Co. Asset Management (EPYAS) which is authorized and regulated by the CMB of Turkey. EGCYO has also a well established corporate governance system, which ensures efficient control of management s execution of strategic decisions. Listed on the BIST, EGCYO provides investors with a unique opportunity to utilize the growth potential in agriculture industry, through a transparent investment platform, regulated and monitored by the CMB. EGCYO aims to provide sustainable returns in the longterm with its value-based approach, which entails identification of and investing in the best occasions in agriculture industry. According to Turkish regulations, firms are exempt up to 10 percent of their incomes from income tax based on funds invested in venture capital investment trusts, which allocate financial sources to entrepreneurial firms, according to the new regulation. It enables firms to deduct a particular rate of venture capital funds from earnings and profits. Dividends from venture capital investment trust shares and partners in venture capital trusts are exempted from corporate income tax. Resident and non-resident tax payers stock trading gains on BIST are not subject to declaration and withholding tax. Yet investors should check their own jurisdictions while calculating their tax payments over the capital gain. 7

8 Executive Summary Despite the volatility of the factors that it is exposed to, the agriculture sector has the potential to create attractive returns in the long term. EGCYO serves as the only transparent and regulated platform for the institutional investors who are interested in investing in rapidly growing agriculture industry in Turkey. EGCYO is an investment company established under the VCIT Communique of CMB Turkey, granting all tax benefits of an Investment Trust. Egeli & Co. investment team performs an active management of EGCYO in accordance with its strategic priorities. EGCYO will focus investing in agriculture companies with growth potential, increasing profit margins and management teams with a proven track record. 8

9 Sector Overview Despite the volatility of the factors that it is exposed to, the agriculture sector has the potential to create attractive returns in the long term May-04 Feb-05 Nov-05 Aug-06 May-07 Feb-08 Nov-08 Aug-09 May-10 Feb-11 Nov-11 Aug-12 May-13 Feb-14 Source: Bloomberg S&P North American Agribusiness DAX Global Agribusiness S&P 500 MSCI World High-volatility / high-return relationship applies in the global agriculture sector Some of the reasons underlying this relationship; population growth, increasing income level, changes in supply dynamics, natural conditions As Turkey s first listed closed-end fund with a focus on the agriculture sector, EGCYO offers an attractive opportunity to invest in privately-owned companies with substantial growth potential in this sector 9

10 Sector Overview EGCYO serves as the only transparent and regulated platform for the institutional investors who wish to invest in rapidly growing agriculture sector in Turkey. Supported by the government policies, the Turkish agriculture sector is in a transition stage Turkey has begun its transition up the value chain in the food sector. The shift from export of raw foodstuff to processed food products continues (total exports increased >5x between 2000 and 2013) Sustainable food supply has become a priority for policy makers The transition stage leads to high future growth expectations for the sector As of , Turkey moved to first place in Europe and 7 th place in world in terms of agricultural revenues. Turkey aims to become one of the top five producer countries in the agriculture sector by 2023 (1) : Agricultural export will exceed USD 40 billion Agricultural GNP will reach USD 150 billion from USD 62 billion There are a limited number of investment alternatives within the sector aiming at institutional investors As of 31st of December 2013, Borsa İstanbul ( BIST ) food index consists of 21 companies. However, the index is heavily influenced by a small number of companies. Anadolu Efes has generated 41.4 % of the BIST food index companies' total revenues on a standalone basis at the end of The company s weight in the BIST food index is around 43,5 From an investor perspective, there is a limited number of investment alternatives for risk diversification purposes in the sector. EGCYO provides institutional investors with the opportunity to invest in privately-owned agriculture companies with substantial growth potential in Turkey (1) Republic of Turkey Prime Ministry, Investment Support and Promotion Agency 10

11 Structure Egeli & Co. Agriculture Investment Trust Bati Agriculture (w/senyayla Farm) % Doga Agriculture % Tolina Agriculture % 11

12 Investments Explanation Investment Date EGCYO Share Project Size (TL m) EGCYO Investment Size (TL m) BATI AGRICULTURE Temporary crop cultivation 130 hectares of land by the end of December 2013 Land acquisition continues (targets to reach 400 hectares) June % SENYAYLA FARM Sheep breeding Farm will be fully operational in April 2014 TL 1.6m grant application was approved for 500 dairy sheep farm by EU supported IPARD* as of July 2013 Phase 1 includes establishment of 500 milk sheep farm, Phase 2 includes establishment of 400 meat sheep farm Ultimate target is to reach a crowd of 2,700 sheep December % 3.4 (TL 1.6 m is financed by IPARD grant) 1.8 DOGA AGRICULTURE Dairy farm One of the European Union approved dairy farms in Turkey, allowing to sell with a premium Holding a Certificate for Free From Disease and Infections and Environmental Impact Assessment (EIA) Report. Milk sales to a national brand, Aynes Gıda Ongoing operations with c.300 wet cows With the completion of on-going investments will reach full capacity of 600 wet cows by the first quarter of 2014 June % TOLINA AGRICULTURE Organic dairy farm w/250 wet cow capacity The number of total animal is 268 in the farm as of 31 December planned that organic milk production shall start at the by the beginning of April 2014 Egeli & Co s operating partner served as Project Developer and General Manager in Dogan Holding s organic milk production project in Gumushane Expansion works are ongoing October % EGCYO, has invested TL 14.9 million as of in greenfield investments with an average expected return of over 20% since June

13 Milestones June 2011 EGCYO added Batı Agriculture to its portfolio June 2012 EGCYO bought 90.05% of Doga Agriculture s shares. July 2013 EGCYO bought rest of the shares. July 2012 EGCYO bought 43.57% of Tolina Agribulture s shares. July 2013 TL 1.6m grant application was approved for 500 dairy sheep farm under Doga Agriculture by EU supported IPARD*. Construction are completed as of December * Instrument for Pre-Accession Rural Development (IPARD) is a European Union-funded grant programme that aims to support agricultural infrastructure and production activities in countries with pre-member status.

14 Financial Highlights Denominated in TL Consolidated Consolidated December 31, 2013 December 31, 2012 Revenue (348,852) 949,244 Gross Profit / (Loss) (20,857,335) (557,836) Profit Before Tax (2,863,448) (557,836) Net Profit (2,578,140) (419,459) Earnings per Share (0.1172) (0.0191) Consolidated Consolidated December 31, 2013 December 31, 2012 Total Assets 19,808,932 22,990,644 Current Assets 7,454,644 12,566,391 Fixed Assets 12,354,288 10,424,253 Current Liabilities 1,553,769 1,139,722 Long Term Liabilities 2,309,551 2,975,911 Paid-in Capital 22,000,000 22,000,000 Shareholders Equity 15,945,612 18,875,011 Current Ratio Total Liabilities / Shareholders Equity Shareholders Equity/Total Assets Total Assets (TL mio) Dec Dec.2013 Net Profit (TL mio) Investment Allocation As of 31 December Agriculture Investments 48% Deposits 19% (0.3) Receivables 33% Dec Dec

15 Main Facts Financial Performance TICKER EGCYO ISIN Code TRAEVREN91Q Market Capitalization ( ) TL11 m 100 Paid-in Capital Registered Capital Equity TL22 m TL200 m TL16 m EGCYO BIST100 BISTFOOD Between and Shareholdering structure (December 2013) Egeli & Co. Asset Management 4.00% Tan Egeli 1.95% Egeli & Co. Financial Investments 0.20% Egeli & Co. Investment Management SA 39.13% Free Float 54.72% 15

16 Doğa Tarım Hayvancılık Gıda Paz. San. ve Tic. Ltd. Şti. Doga Agriculture 16

17 Doga Agriculture Investment overview Date June 2012 Sourcing Proprietary Investment size (1) Initial: TL 9.3 m Follow-on (2) : TL 5 m Deal type Buy-out Senior management Name Title Background Mr. Mete Hacaloğlu Mr. Atilla Yaylagülü Mr. Türker Çetinkaya Executive Board Member Farm veterinary Accounting & Reporting Ex-CEO and founding manager of Turkey s largest organic dairy farm run by Dogan Holding in Gumushane (northern Turkey) Veterinary Faculty, Ankara University Denizli Commerce High School EGCYO share 100% Mr. Serdar Sızman Advisor feed rationing Mr. Orsan Gungor Advisor animal health Proyem Feed Co. Veterinary Faculty member, S. Demirel University (1) Includes shareholders loans (2) Required for wet capacity expansion project Investment highlights c.300 wet cow farm with a free-from-disease license granted by the government Average daily production of 30 liters per cow One of the only 34 farms in Turkey that meets European Union standards of dairy farming practices Achieve premium rates when sales to the market Off-take agreement in place for the entire production from a leading local manufacturer, Aynes Gida One-year agreement on a rolling basis. Output prices indexed to the changes in milk prices announced by Turkish National Milk Council Investment to reach 600 wet cow capacity completed in March 2014 Medium-term investment phase to reach 1,200 wet cow capacity by the early 2016 Doga Tarım s share in total portfolio as of 31 December 2013 Other (1) 20% Tolina Agriculture 9% (1) Includes cash and marketable securities (by asset size) Bati Agriculture 21% Doga Agriculture 50% 17 17

18 Process Until Deal Closing Date Description February - March 2012 Initial contact with the vendors Preliminary information gathering phase using local relationship network 29 March 2012 Investment Committee discussion with supporting internal documentation April - May 2012 Third party real estate valuation report by Industrial Development Bank of Turkey (TSKB) Financial, tax and legal due diligence on the company 22 May 2012 Summary reports on due diligence findings circulated to the Investment Committee 23 May 2012 Investment Committee meeting to discuss due diligence findings and deal structure 5 June 2012 Investment Committee meeting to discuss transaction structuring steps to signing 27 June 2012 Board approval, including independent board members Signing and closing 18

19 Strategic Initiatives Taken Since Closing Initiative Description Management team A new management team was put together to operate the asset on a day-to-day basis with on-site presence Experienced CEO Operations manager Advisor Feed rationing Advisor Animal health Expansion capex and improvements Completed investments aiming to increase capacity from 300 wet cows to 600 Undertook investments to improve efficiency Negotiations to import 200 wet cows is on-going MIS improvements Established management reporting standards Improved budgeting and financial management Increased efficiency in cash management Extention of incentive certificate Secured one-year extension for Turkish Government incentive certificate for tax and customs duties in relation to the ongoing investments until November 2013 No VAT payable for equipment purchased No customs duties payable for imported animals 30% break on corporate tax + no obligation to pay employer s portion of worker s social security premium payments for three years (kicks in when the minimum investment requirement is met) 19

20 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Doga Agriculture KPIs Milk output per lactating animal Wet and dry cow trend Wet Cows Dry Cows Source: Company accounts Source: Company accounts Milk production and sales Herd Development Total herd Wet Dry Milk production Milk sale Source: Company accounts Source: Company accounts 20

21 Tolina Tarım Hayvancılık Gıda Ürünleri Tic ve San. A.Ş. Tolina Agriculture 21

22 Tolina Agriculture Investment overview Date July 2012 Sourcing Investment size (1) Deal type Proprietary EGCYO share 43.6% Current: TL1.8 m Follow-on (2) : TL 4.5 m Growth equity (1) Includes shareholders loans (2) Required for wet capacity expansion project Investment highlights Organic dairy farm with c. 250 wet cow capacity, located in a prime location from a logistics perspective Cows exported from the Czech Republic on 11 Jan 2013 Egeli & Co. teamed up with an experienced operational partner, Mr. Mete Hacaloglu Senior management Name Title Background Mr. Mete Hacaloğlu Mr. Ulaş Seçer Mr. Mete Ekerbicer Executive Board Member Head of Operations Advisor feed rationing Mr. Can Baklacı Advisor animal health Ex-CEO and founding manager of Turkey s largest organic dairy farm run by Dogan Holding in Gumushane (northern Turkey) Experience in farm & dairy operation Ekerman Farm Advisory Co. Veterinary Faculty Tolina Agriculture s share in total portfolio as of 31 December 2013 Other (1) 20% (by asset size) Bati Agriculture 21% Organic milk production to commence in April 2014 premium prices for organic milk in the market Entire milk output to be sold to milk-producers cooperative association in Tire/Izmir Second investment phase entails building/acquiring another farm of 1,000 wet cow capacity in the vicinity Tolina Agriculture 9% (1) Includes cash and marketable securities Doga Agriculture 50% 22 22

23 Process Until Deal Closing Date 21 March April 2012 Description Investment Committee discussion with supporting internal documentation. The investment case was made for Mr. Hacaloglu to provide his non-operating farm as in-kind equity into a new entity along with Egeli & Co. s cash equity and bank financing Investment Committee meeting where the decision was to move forward with a two phased project. 1st phase: Tolina will become operational with 200 dairy cows; 2nd phase: acquisition of nearby land for an additional farm of 1,000 wet cow capacity 05 April 2012 Preparation of third party appraisal report by TSKB, a leading local bank s real estate appraisal subsidiary 18 April 2012 Investment Committee meeting to evaluate the real estate appraisal results and transaction valuation. 10 May 2012 Investment Committee s review of the total investment budget of Tolina July 2012 Investment Committee meeting to increase cash equity commitment from TL1.2 m to TL1.4 m Total valuation remained unchanged. Two days later the Shareholders Agreement is signed. 16 October 2012 EGCYO is registered as 43.6% shareholder of Tolina in Trade Registry 31 January 2013 Tolina has been converted into a joint stock company from limited liability company 23

24 Strategic Initiatives Taken Since Closing Initiative Description Cost Payback/Gain Extensive repair and maintenance The farm has gone through an extensive repair and maintenance process to cover the entire facility including mud protection system at the wet-cow resting area and animal tracking system for productivity increase TL 200k Expected pay back in less than two years Modernization Investment New silages, depots have been constructed that will significantly lower the long-term feedstock losses, the milk pumping capacity has been increased to reach an optimum cold storage and delivery capacity TL 400k Expected pay back in two years (minimized feed losses and optimized production) Pregnant heifer purchases & feedstock Holstein breed pregnant heifers have been imported from Czech Republic on the basis of optimal cost / quality combination Improved management decision making process to optimize feedstock purchases (from a timing and volume perspective) and ration planning TL1.1 m investment for heifers TL700k m spent for feedstock Hedging against feed price volatility Securing production yield by breed herd Vertical integration efforts Tolina management seeking exclusive relationship with local manufacturers to develop organic dairy products for retail customers TBD TBD 24

25 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Tolina Agriculture KPIs Milk output per lactating animal Wet & dry cow trend Source: Company accounts Source: Company accounts Wet Cows Dry Cows Milk production and sale Herd development Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Milk production Milk sale Total herd Wet Dry Source: Company accounts Source: Company accounts 25 25

26 Batı Tarımsal Yatırımlar A.Ş. Bati Agriculture 26

27 Bati Agriculture Investment overview Date June 2011 Sourcing Proprietary Investment size (1) Current TL3.8 m Further land acquisition: TL 3.2 m Deal type Greenfield EGCYO share 100% Senior management Name Title Background Mr. Ugur Ozkan Operations Manager Sales and marketing background with multinational companies Mr. Alptertunga Erkun Agro-technician Faculty of Agriculture, Adnan Menderes University Mr. Buğrahan Ocaklı Agricultural Engineer Faculty of Agricultural Engineering, Adnan Menderes University (1) Includes shareholders loans Investment highlights Agriculture is one of the leading sectors in the Turkish economy: rich land sources, biological diversity, good climate and geographical conditions Underutilized potential due to small parcel land ownership that restricts efficiency Bati Tarim consolidates small, unused lands to create scalable and fertile cropland. So far 130 hectares have been collected. Aim to reach 400 hectares by end of hectares and 72 hectares have been cultivated in and seasons, respectively season target is 90 hectares February 2013: kick-off for a 500 capacity milk sheep and 400 capacity meat sheep farm investment in a portion of the land Received an EU-backed government grant (Instrument for Pre- Accession Rural Development ( IPARD ) Programme grant) of EUR 1 m for the capex April 2014: Commercial operations on farm will commence Bati Agriculture s share in total portfolio as of 31 December 2013 Other (1) 20% Tolina Agriculture 9% (1) Includes cash and marketable securities (by asset size) Bati Agriculture 21% Doga Agriculture 50% 27 27

28 Strategic Initiatives Taken Since Closing Initiative Description Cultivation Required team for the cultivation has been put together Equipment purchase completed Land improvement process commenced During the first seasons c. 30 hectars have been cultivated As a result of on-going land improvement efforts, the cultivated area increased to c. 72 hectars Qualification for IPARD grant Instrument for Pre-Accession Rural Development (IPARD) is a European Union-funded grant programme that aims to support agricultural infrastructure and production activities in countries with pre-member status On July 9th 2013, Bati Tarim was approved for a TL 1.6 m grant for the Senyayla Sheep Farm project This amount accounts for about 38% of the total investment in the project Completion of farm investment Farm investment has been completed in January 2014 First tranch livestock (c.260 sheeps and c. 250 lambs) has been purchased in February 2014 Test productions have been realized between February March 2014 Commercial operations will be started in april

29 Appendix

30 Key Points of the Venture Capital Investment Trust (VCIT) regulation VCITs are regulated by CMB based on CMB s Communiqué Serial VI. No: 15 Excessive indebtedness, undertaking third party risks and investment risk concentration are not allowed VCIT foundation is subject to CMB s approval. VCITs conduct their commercial activities under controlling shareholder s authority and responsibility In addition to quarterly financial reporting, VCIT s are also required to disclose their portfolio breakdown, including investment allocation and fund sizes Whereas the portfolio value of investments are adjusted according to inflation, its financial statements are prepared in accordance with IFRS accounting standards VCITs are exempt from corporate tax Full and limited tax payer real persons are exempt from withholding tax for the returns realised through VCIT trading activity on ISE. Dividends are paid based on gross = net calculation (without withholding tax) Corporates enjoy tax exemptions for allocations to VCITs from taxable income(1) Pension funds are allowed to invest up to 20% of their funds in VCITs (1) The article 325/A that has been added to the Tax Procedure Law 30

31 Turkish Agriculture Sector Increase in the annual protein consumption in developing countries is between 11% and 15% (1) Turkey s food production has an annual average increase of 15% (2) United Nations forecasts that the demand for agricultural products will be 60% more than current demand by 2030 (3) OECD and FAO forecast that upward trend of agricultural commodity prices will continue (1) CBA, Commonwealth Research (2) Food and Agriculture Organization of the United Nations ( FAO ) (3) FAO World agricultural commodity prices index forecasts Weighted average oilseed price, European port 2 Weighted average meat price, European port 3 EU average beef price lb lw, Nebraska - conversion factor from lw to dw World unit value of aquaculture fisheries production (live weight basis) Oilseeds (1) 10x USD/t Meat (Beef & Veal), EU (3) USD/t dw Aquaculture (5) USD/t Protein meals (2) 10x USD/t Meat (Beef & Veal), USA (4) USD/t dw Source: OECD-FAO Agricultural Outlook

32 Turkish Agriculture Sector In Turkey, agricultural commodity prices showed an important upward trend during 2000 s Upward trend in agricultural commodity prices is expected to continue in line with population growth during the next 10 years Turkey producer price index (USD) Correlation between wheat price increase and population increase Eggs Primary Fibre Crops Primary Fruit Primary Population Meat, Total Oilcrops Primary Vegetables Primary Producer prices, World, T/USD Producer prices, TR, T/USD Population Source: FAOSTAT Source: OECDSTAT, FAO Agricultural Outlook , Turkstat, Egeli & Co. 32

33 Cow's Milk Cattle's Meat Wheat Tomatoes Chicken meat Hen eggs Pome fruits Stone fruits Barley Olive Hazelnuts Grapes Turkish Agriculture Sector Turkey has realized USD1 billion production by value for twelve leading agricultural products and globally ranked within the first eight producers in nine out of twelve of these products (1) Arable land per capita in the world contracted by 52% compared to 50 years ago (2) The share of arable land area in total agricultural land area fell from 60% to 55% in Turkey between 1999 and 2009 (1) While arable land has decreased, the need for capital-intensive investment has increased World Rank (Value) Product 1 Hazelnut 3 Pepper 3 Apple 5 Sugar beet 5 Tomato 5 Olive 6 Grape 7 Cotton 8 Wheat Source: FAO (1) FAO (2) Population Reference Bureau (PRB) World Population Clock 2010 Datasheet The share of arable land area in total agricultural land area in Turkey (%) Turkey s leading agricultural products (TL m) 60% 58% 56% 54% 52% 50% Source: FAO Source: TurkStat, value of crop production and animal products,

34 E 2011E 2012E 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E Turkish Agriculture Sector Regardless of demand and price increases; inefficient agricultural operations are carried out because of low technology usage, lack of capital-intensive investments and scale problems (low capacity, fragmented lands, lack of integrated structures etc ) In Turkey, agricultural subsidies are still an important income and incentive item within the total agricultural production Milk production yield (tons/cow/year) Total agricultural production and incentives in Turkey (USD m) 12, , , , ,0 2,0 0, Source: World Developing Countries Industrial Farm (Egeli & Co. Portfolio) OECDSTAT Developed Countries Turkey Total Incentives Total Agricultural Production Source: FAOSTAT 34

35 Thanks 35 Abdi Ipekci Cd. No.40/10 Nisantasi 34367, Istanbul / Turkey Tel: Fax: