Cadbury injects $1 billion in capital into Turkish economy

Posted on 14 February 2011

Date: 23/10/2008
Cadbury injects $1 billion in capital into Turkish economy

Cadbury plc, the owner of one of Turkey’s leading confectionery makers, is aiming to boost its production capacity by expanding its already huge Kent Gida plant — located in the Gebze district of the northwestern province of Kocaeli — making it the third largest confectionery plant in the world, one of Kent Gida’s top executives has said.

Pointing to their new expansion, visible from his office window, Ömer Tasçi, deputy general manager of Cadbury subsidiary Kent Gida, told Today’s Zaman that Kent Gida will be a key regional hub for Cadbury’s worldwide operations. Tasçi, who is also responsible for Kent Gida’s corporate relations, shared his vision for the company in an exclusive interview with Today’s Zaman’s “Let’s Talk Business.”

Cadbury’s sales in Turkey in the first nine months of 2008 have increased. “Judging from the trend, we are expecting to realize our targets this year,” Tasçi says, stressing that this will further increase the importance of Turkey within the group. He is optimistic that Cadbury will maintain this trend in Turkey in the future, as well. “We are the largest company in our industry class,” Tasçi asserts.

Tasçi says the company achieved unbelievable progress in just six years. Kent Gida turned out to be one of the most rapidly developing Cadbury subsidiaries in the world. “We lead Turkey’s candy and gum markets with a 60 percent market share,” he notes. He explains that the company is now targeting $1 billion in revenue by 2012 and is looking for a spot among the top 50 companies in Turkey. “The performance and growth of the company caught the attention of the industry and the public really appreciates and values our investments,” he adds.

“Cadbury’s Turkish subsidiaries have become so pivotal for the company’s worldwide operations,” Tasçi stresses, confidently declaring, “Cadbury’s Kent is the best company in its category of business.” He attributes this success to a rich product diversity that is greatly appreciated by consumers.

As a matter of fact, Cadbury considers Turkey one of its top 12 markets, placing it amongst other countries such as the United States, France, China, Brazil, Austria, Mexico and the United Kingdom. With $140 million in exports, Kent Gida became Turkey’s second biggest exporter in 2007 in the category of food, beverages and tobacco, according to the Istanbul Chamber of Industry (ISO).

While Cadbury is strengthening its position in the market, its rival Wrigley has not lost time moving to counter the competition. Wrigley announced at the end of last month that its shareholders approved the company’s $23 million sale to Mars Inc., which with the acquisition has become the world’s largest candy maker. The deal, which bumps Cadbury out of the top candy-making slot, will offer gums such as Juicy Fruit and Big Red, M&Ms, Snickers and Skittles under the same corporate banner.

Turkey, among other emerging markets, represents an important market for confectionary manufacturers. While confectionery is growing at around 5 percent per annum globally, emerging markets grew at around 10 percent per annum between 2001 and 2006, with strong growth across all categories. Developed markets on the other hand, which account for around 67 percent of the global market, grew 3 percent per annum between 2001 and 2006.

Per capita consumption of confectionery in emerging markets is significantly below that in developed markets. Growth is being driven by increasing per capita consumption, which is closely correlated with per capita wealth increases and population growth. In that regard, Turkey represents an important market for Cadbury, Tasçi says, explaining that income levels have substantially grown for Turkish households in the last seven years. “If the income level of the average Turkish household climbs to the EU level, the consumption of confectionery products will add an extra $6 billion to the gross national product (GNP),” he adds.

Cadbury also experimented with new and innovative products in Turkey. One of its focus brands, Trident, had stellar performance in Turkey , as well as in Britain, when it was launched in 2006. It is now the company’s biggest brand and the largest gum brand in the world.

TODAY’S ZAMAN – 21 October 2008

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