What investments has Assan made for its production facilities in the areas of robotics and automation?
Thus far, we have invested more than USD50 million in industrial investments. Two years ago, we invested EUR6 million in a fully robotic system and are the only food company in Turkey that has acquired such a modern and efficient system. This is because we have been growing by double digits for the last five years, and much higher than 10%. In 2018, we also experienced significant growth, and 1Q2019 was as successful as planned. We, therefore, have to invest in the production line, and not for machinery growth. We also focus on know-how, and this shows how the group believes in Assan Foods.
How have you vertically integrated to minimize some of the supply chain issues typically faced by food and agriculture operations?
We have been working with many international companies such as Heinz and Nestlé. The issue of general supply is important in food because of the ingredients. We invest significantly in ingredients like tomatoes and have been working with more than 450 contracted tomato farmers in the region. We give them seeds, fertilizer, and know-how. We have contracts with them to follow the entire process all the way to harvest. We also give them the necessary equipment to have great results. Two years ago, we started a smart farming project. We have a base on that farm that collects all the information from the ground and the plants. We measure 11 parameters, such as the wind and humidity, for example, and send updates to the farmer saying it is time for watering, and so on. In the first year, we saved 50% water and almost 60% pesticides. We are working with the Scientific and Technological Research Council of Turkey (TÜBİTAK) and would like to bring this technology all over the valley because at the end of the day it is good to have a smart farm and sustainability. We are part of a sustainability program with many other international companies in which we supply them with raw materials and products. We also produce their brands.
What is the breakdown of your revenue in terms of private label production and your own brands?
It is around 50/50. We have also been expanding our private label business into new markets. For example, in mid-2018 we signed an agreement with eight countries in East Asia. We entered countries such as Cambodia, Hong Kong, Singapore, China, and so on with their private label products.
How has Assan changed its product offering to adapt to consumer demands for healthier, more organic products?
It is important to have strong suppliers. We also certify them; the supply part is extremely important in the first stage. We also need to have a healthier way of producing all these products. We have all kinds of certification and have been checked by many international companies. As we develop, R&D becomes more important. We continue to develop this in a healthier way. For example, we started using sunflower oil in mayonnaise but are now also working on olive oil. Moreover, we do not add preservatives. Current trends are definitely moving toward healthier and cleaner labels.
What is the breakdown of your revenue from Turkey and your international markets, and where are you looking to grow?
Our revenues are 60% Turkey and 40% international. We have been in Europe for a long time, and a new market for us is East Asia. Our entry into Wal-Mart China was a large step with our own brand and recipe. GCC countries are also close, and we know their taste profiles extremely well, so we can supply many products. Not all are our products, as we also produce for international brands.
What new products are coming out soon as a result of your R&D efforts?
We have a marketing and R&D team whose target is to launch three new products every year. Our main focus right now is value-added products, such as sauces, mayonnaise, and ketchup. There are always 10-12 new products in the pipeline.