Hauni Maschinenbau is a recent addition to the list of international companies with a physical presence in Turkey. A branch staffed with a service and sales team opened in Izmir late last year. Hauni machinery is used in cigarette making, filter production and tobacco processing.
“Turkey is not only among the top 10 producers and consumers of worldwide tobacco products worldwide,” Hauni said in a statement announcing the new Izmir location. “With its stable political system and a rapidly expanding economy, Turkey also plays a key role in the region and enjoys close cultural and commercial relationships with many of its neighbouring countries. It was a logical step for Hauni, as the leading supplier to the tobacco and cigarette industry, to move a step closer to its customers in the country,” the Germany-based company said.
Hauni is among the industry suppliers that will exhibit at the World Tobacco Turkey trade fair in Istanbul this May. Under the motto Joining Europe and Asia, World Tobacco is putting together the fair to be held at the Lutfi Kirdar Convention and Exhibition Centre near the business and cultural centre of Istanbul from 29 to 31 May. Visitors from more than 35 countries are expected.
“Exhibiting at an event such as World Tobacco Turkey 2013 is an extremely cost efficient way to place your products in front of your customers and potential customers in a highly prestigious environment,” says World Tobacco. “Istanbul is a vibrant successful international city ideally situated between the Mediterranean and Black Sea, which will attract visitors from the surrounding region including countries such as Greece, Turkey, Syria, Ukraine, Bulgaria, Romania, Turkmenistan, Albania, Serbia, Kyrgyzstan and Russia.”
Lutfi Kirdar offers easy access to transportation, with more than a dozen hotels within walking distance.
Philip Morris International (PMI), British American Tobacco (BAT) and Japan Tobacco are global players with a stake in the Turkish market. KT&G, the dominant player in the Korean cigarette market, opened its first overseas manufacturing plant near Izmir in 2008.
With its Marlboro, Parliament and Muratti brands, PMI is the dominant cigarette maker in Turkey, according to Euromonitor International. BAT gained a strong market presence when it bought the cigarette business of Tekel, the former state tobacco monopoly. KT&G built its plant to service regional demand for its super-slim Esse line, but also to have a production site closer to the European Union.
For the reasons cited by Hauni and World Tobacco, Turkey is a natural choice as a production site for companies seeking a strong base from which to supply markets easily reached from the geographical crossroads that is Turkey. Yet another reason is that the rapidly growing Turkish economy is spawning substantial investment to improve infrastructure. One such investment is what has been advertised as the world’s largest airport.
Six runways and 90 million passengers annually are planned for the new airport outside Istanbul. Completion date for the project is 2017. When it does come into service, the airport can be expected to provide another boost to what in recent years has been Europe’s fastest growing economy.
Tobacco long has played an important role in the economy. Sailors introduced the tobacco plant to Turkey in the 17th Century. Not long thereafter, farmers in the Balkans (then part of the Ottoman Empire) began to cultivate the plant. It didn’t take the government long to realize tobacco products could be taxed, a realization that eventually led to Tekel and state control of the growers.
Growers are concentrated in the Aegean region with Izmir, 330 kilometres (205 miles) south of Istanbul, as the major metropolis. Izmir is the country’s third largest city in terms of population. The province of Bitlis in southeastern Turkey is known for its tobacco. Leaf is grown in other regions, including the Black Sea and Marmara regions, the latter with Istanbul at its core.
Production last year rebounded to about 80,000 tons after a disappointing 45,000 tons in 2011, Turkstat said in December. The overall production trend is down, including the aromatic Oriental tobacco that is Turkey’s best export variety. Turkey's production record was 339,000 tons in 1993.
Stricter regulation and changed smoking habits have cut use among a population once known for heavy smoking. Turkey in 1996 began banning smoking in enclosed public spaces and it is now prohibited almost anywhere indoors where people congregate. This January use of a nargile, or water pipe, was added to the ban.
In 1988, some 44 per cent of the adult population, defined as persons 15 years and older, were smokers. Most smokers were men. Sixty-three per cent of the male population smoked, in contrast to only 24 per cent among females.
By last year the percentage had dropped from 44 to 27 per cent of the population; and to 41.4 per cent among males and 13.1 per cent for women. The use of tobacco products is most common in the age group 25 to 44 years, according to the Turkish government statistics office, Turkstat. It is a young country. The median age is 28.9.
There are more than 74 million Turks and the population is projected to grow by another 20 million to nearly 95 million by 2050.
Cigarettes are the most common tobacco product. For most of the last Century, the only brands on the market were those of the state monopoly Tekel. Foreign cigarettes and cigarette makers gradually established a foothold in Turkey after the Ankara government allowed foreign tobacco imports in 1984.
In the 1990s, Turkey granted foreign cigarette companies local distribution rights, and Philip Morris and RJ Reynolds began domestic production. A decade later, Tekel’s former iron grip on the domestic market was crumbling. From almost 70 per cent of the market in 2001, Tekel’s share by 2007 had fallen to less than 31 per cent. The company was put on the privatization block. In 2008, cigarette maker Tekel was auctioned off to BAT, closing out an era of state control.