Sugar factories against foreign investors

The government announced it will auction off and privatize six sugar production factories owned by Türkiye Şeker Fabrikaları, or Türkşeker, on Thursday, Nov. 19, which generated a bustle of activity and controversy in the sugar industry.

Local and international companies are getting ready to bid on the Kastamonu, Kırşehir, Yozgat, Turhal, Çorum and Çarşamba sugar factories. International participants in the auction are predicted to drastically change the industry.

Kayseri Şeker Fabrikası, another Turkish sugar factory, raised objections that the companies would be sold to foreign partners. In order to prevent such development, Kayseri Şeker Fabrikası joined forces with other sugar production institutions and foemd a joint venture called Kuzey Anadolu Şeker Fabrikaları Ortak Girişim Grubu.

“Our down payment for the sugar factories waits in our safe. We are currently holding talks with German and U.S. banks for loans. We may not even need a loan. As Kayseri Şeker we are strong enough to buy the factories on sale on our own. We are stronger than the Arabs,” said Vedat Ali Özışık, chairman of the Kayseri Şeker Fabrikası.

The sugar factories, which will be privatized by Turkey’s Privatization Administration, mostly drew attention of Gulf capital. Savola Group, which purchased Yudum Gıda, a Turkish cooking oil producer, from the National Bank of Kuwait for $53.3 million, is perceived to be the strongest candidate to purchase the factories. Company officials announced an aim to produce 2 million tons of sugar in Turkey. Savola will bid in all sugar factory auctions, according to the company’s officials.

Another Saudi company that revealed interest in the factories is Jidda-based Nesma Holding. The company has an extremely diverse business portfolio, from advertisement to electronic home appliances to fashion products to logistics among many others. Nesma Holding also established the Mawaddah International Group in Istanbul. Mawaddah provides hotel management, catering services and tour operations for the hajj and umrah pilgrimages.

According to the articles and conditions of the auction, the total amount of the factories must be paid off in four years. Some 20 percent of the total value will have to be paid following the auction.

Özışık, who is taking the auction preparation period very seriously, said Kayseri Şeker Fabrikası received many partnership offers from foreigners. Among them were French, Australian and Polish companies. Özışık said he refused the offers and chose to join forces with other local sugar institutions such as Amasya Şeker Fabrikası ile Turhal Pancar Ekicileri Kooperatifi, Kırşehir Pancar Ekicileri Kooperatifi, Kastamonu Pancar Ekicileri Kooperatifi, Çorum Pancar Ekicileri Kooperatifi, Samsun Pancar Ekicileri Kooperatifi and Yozgat Pancar Ekicileri Kooperatifi to establish the Kuzey Anadolu Şeker Fabrikaları Ortak Girişim Grubu, in a joint venture.

“We are not against foreign investments, but they should invest in other areas, and leave our land to us,” said Özışık. “We do not want foreigners in the sugar industry. They would not be able to meet the needs of our farmers.”

Factory workers at a sugar factory in the Sorgun district of the central Anatolian city of Yozgat, gathered to protest earlier in the month. A visit from Savola Group representatives on Nov. 7, drew some 200 workers to gather in front of the factory, preventing the delegation from entry. The gendarmerie arrived to help the group. Tensions eased after the representatives left the premises.

Workers said they were worried that similar to other privatized sugar factories, those purchasing the factory would shut it down, leaving them unemployed.

Bedrettin Yıldırım, director general of the Central Union of Turkish Agricultural Credit Cooperatives, criticized the mentality against foreign investments. “The capital cannot have a color. They should take a look at the operations of Türk Telekom and Petkim and learn.”

Factories to be sold

Kastamonu

Kırşehir

Yozgat

Turhal

Çorum

Çarşamba