Owner of the biggest aquaculture facility in Europe, Turkey’s leading fish producer Kılıç Deniz, part of the Kılıç Holding conglomerate, has expanded 1,600x in 25 years and continues to expand through increased exports and maximizing offshore areas, while maintaining a careful environmental balance. Chairman of Kılıç Holding Orhan Kılıç discusses the rising demand for seafood and the potential for new markets.
For the past few years the economy has been growing at a rate of 2.5–3%. While relatively high compared to the sluggish rates in many eurozone countries, there appears to be consensus among the business community that this rate should be higher. If Turkey is to reach its ambitious 2023 targets, what can be done to stimulate the Turkish economy back towards the growth levels necessary to escape the middle-income trap and achieve Turkey’s full potential?
When our current President Recep Tayyip Erdogan set these targets as Prime Minister two years ago, I had full confidence that, with the dynamics of this country, we could reach these targets by the year 2023, and I truly believe that this was a good move on his part.
The main reason that I believe this is because our people, the Turkish people, have a special talent for being entrepreneurs and getting involved in entrepreneurial businesses as long as there are no blockages in front of them.
If there’s no blockage ahead of us, I don’t see any reason why we cannot reach these targets, no matter how high they may have been set. I will give you an example: in 25 years my company grew 1,600 times.
Therefore, there are a lot of opportunities in this country as long as there is stability in the political arena. If Germany exports $2 trillion, why should Turkey not be able to export $500 billion?
Let me state on record that I have 100% confidence that Turkey will develop into one of the world’s most powerful economies and external factors cannot hold us back.
Turkey is ranked as the number one producer of sea bream in Europe but only fourth in terms of the total value of production [all species]. In line with the new branding campaign for Turkey “Discover the Potential” – how do you assess the potential of Turkey to emerge as the dominant force in aquaculture in Europe?
There is a very high demand for Mediterranean fish. Our average growth potential is somewhere between 22–23% to meet the demand.
Every day the demand is increasing at high levels. The most important factor is that the fish need to be produced in deep, fresh and clean waters, therefore it doesn’t affect the cost in a negative way.
As long as we have clean water in our territory there’s a lot of potential for growth.
The need for Turkey to transition to more value-added, high technology production is well known. How is Kılıç leading the way in the seafood sector, both in terms of high technology production facilities and value-added seafood products?
Because of the fact that Bodrum is also considered a highly touristic area, we have to do our production in deep waters.
The depth of the sea where we produce the fish has to be approximately 80 to 100 meters. The only country in the world that limits the production of fish close to the shoreline is Turkey.
Therefore, you have to be very innovative with technology when you’re dealing with offshore production. I’m certain that in every aspect of technology and innovation we are equal or better than Norway.
For the final product, we also concentrate on our value-added line to increase fish consumption from 6kg to 15kg in Turkey.
Kılıç has been the star performer in exports in your sector for the past five years, with exports of more than $100 million in 2014. What are your targets and strategies for increasing exports further in 2015 and beyond?
Our leadership in exports will continue without a doubt. We have started producing not only in our country, but also abroad.
Right now we have facilities in Turkey, we have just started in Albania, next year we will start in Tunisia, and also we have been working on finding a solution to produce in the US.
We have a group of engineers going to the US to meet with a big group there to hopefully introduce the Americans to the real aquaculture industry.
We will also have a meeting in Cuba next year and we’re closely following the latest improvement in relations between the US and Cuba, as we want to position ourselves prior to the full normalization of relations between them.
In terms of Africa, we don’t have any significant amount of exports at this time.
However, we bring substantial amounts of our raw material from Africa, because we try to use a lot of natural ingredients for our fish feed, so we bring in a lot of raw materials from there.
We see big potential in Africa, not in the immediate future but it will come.
The Minister of Economy Nihat Zeybekci told us about the importance of growing Turkish brands to increase exports. What are you doing here at Kılıç to grow your brand name in these markets?
We are already a big brand in our industry around the world. We have a lot of different plans and strategies to increase our production.
We try to do our best to introduce people to seafood and increase fish consumption. We have started opening retail fish markets to attract people into the stores.
We also have a lot of frozen and ready-to-eat, value-added products which can easily be purchased and consumed so that people eat healthy snacks without much need for preparation at home.
In this aspect, we are going to be a marketing company and we would like to meet our customers’ needs in the fish business.
Furthermore, we have positioned our company for an IPO, hopefully in the year 2018.
These products you are talking about are not available only in Turkey, they’re available internationally as well?
We started very recently to export them. We are expanding our packaging facility to handle both exports and products for the domestic market.
Fish farming doesn’t always have the best reputation environmentally. We know that Kılıç takes this very seriously, so I’d like to ask you how you lead by example in the industry here in Turkey in terms of promoting best practices?
I believe that we have overcome that image in Turkey. The main reason is because we moved offshore, and we were the first company to move offshore.
We do not allow the water to get polluted. In the past we used to spend about 3kg per fish on feed, now that number is down to 2kg, so the effectiveness and efficiency of feeding the fish has improved quite significantly.
We have a number of domestic and international certifications and we also use other countries’ regulations, for example IFS, BRC, GLOBAL GAP etc.
We are also trying to minimize our carbon footprint in multiple ways, such as using solar power and effective transportation rules.
Kılıç has its foundations here in Bodrum and the bulk of your 2,000-strong workforce is based here. How would you assess the contribution of Kılıç Deniz to the local Bodrum economy and do you have any plans for further investment in the region in the near future?
We contribute approximately $150 million to the economy of the area, of which approximately 50% directly affects the local people.
We have about 1,700 people on our payroll plus, with all the independent contractors, we basically support the employment of 2,300 people, and their families of course.
Also, when you add our other group companies, we have been the number one taxpayer in the region in the past 10 years.
Like your company, you have grown and invested in Bodrum, where you were educated and where you have spent your working life. When you eventually decide to take a back seat and retire – or semi-retire – many years from now, how would you like the people of Bodrum to remember your career and commitment to the region?
I want to be recognized as a very unique man that had a very different, bold vision.
And I want to be remembered also as hard working because I have always been discouraged by people who told me what I was doing was impossible at every level.
I am the man who achieves the impossible. And I continue to be the first in many things, and I accomplish things despite a lot of opposition to the ideas I have.
I want to be known as a good man and hardworking man with a great vision.