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Turkey guiding Russian investors that escaped the crisis with extensive plans

Why Turkey is Russia's best friend for greenhouse development

Turkey and Russia; two big players in regards to the current development in the global greenhouse industry.  The warm relationship between Russian President Vladimir Putin and his Turkish counterpart PM RecepTayyip Erdoğan not only results in a very stable partnership in regards to trade and energy, but also in the exchange of knowledge for greenhouse development. 

At the GrowTech Eurasia we had a chance to learn more about this from Mehmet Sait Gucin and Ertugrul Sahin of Artcan; a Turkish company that is involved in the realization of a lot of greenhouse enterprises in the Caucasus. They guide the many Russian investors that want to enter the greenhouse industry; starting from scratch by designing a complete blueprint that includes marketing strategies, a greenhouse structure & technology and even the total greenhouse management.

Mehmet Sait Gucin and Ertugrul Sahin of Artcan at the GrowTech Eurasia last week in Antalya Turkey.

"We realize complete projects that have a guaranteed ROI for the investors", said Artcan's Mehmet Sait. "As you know, a lot of Russian capital has been invested in greenhouse projects over the past few years. But in some cases, investors pulled back because of the fact it is not easy to run a greenhouse operation; knowledge is important and a greenhouse comes with a lot of things to think about. We want to help investors relieve the burden and deliver a project that stands by itself, as well as growers and marketers that can take care of everything."

Turnkey solutions, including marketing and trade

The strategy of Artcan has proven to be very efficient; in the past they have realized complete projects in Russia that are now operating very successful; they did not only build top notch greenhouse operations, but also took care of the marketing strategy of the production, including the realization of contracts with major retailers. They maintain close connections with premium seed breeders and guarantee a quality crop and harvest.

Exports increase, and so do the investments

But why is it that the Russian investors are so affiliated with Turkey when it comes 
down to these projects. According to Mehmet Sait of Artcan, this is a direct result of the trade between Russia and Turkey;  With Moscow blocking imports of food from several European and western countries in response to sanctions placed on Russia, Turkish food makers see an opportunity for boosting their exports. Turkey plans to increase food supplies to Russia to $3.0 billion in 2015 from $1.2 billion in 2013.

Mehmet Sait: "Russia has become Turkey's main export country for greenhouse vegetables. There are more than 61,000 hectares of production in our own country, but this is simply not enough to fulfil the demand from Russia. The connection between Russia and Turkey is very strong, especially on the greenhouse market. That is why investors are contacting Turkey if they want to invest in domestic greenhouses. On top of this we are used to doing business with Russians, we know what to expect from each other, we have a mutual understanding."

Russian crisis

But does the fall of the Ruble have an effect on the investments in greenhouse projects? At the show we heard that some investors pulled back some plans, but this doesn't say anything apparently : According to Mehmet Sait, "There might be less economical growth, but there is not a real crisis. Many investors have a different mentality, and a crisis does not always have a direct effect on their decisions. They look at investments on the longer term, and greenhouse horticulture is a long term investment."

Dutch Technology

Artcan has connections with the best suppliers. "Our goal is to work with the best companies and supplies, and in this case the Dutch are the best manufacturers of greenhouse technologies, hence we work with companies as the VB Group (Verbakel), Luiten, Berg Hortimotive and Agrolux."

"The main target of the investor is to grow produce and sell this to the right market. We study hard and work on all possibilities to find the right market that which we can deliver a unique product. In order to reach this target we need to have the best supplies in order to achieve the best result for the investors."

Nature of the investors

But where is all this investor money from? According to Mehmet Sait, Russian investors from all kinds of industries are interested in entering the greenhouse business, and a lot of governmental support and subsidies are involved.

"Russia wants to become self sufficient. The market is very big and will not be saturated yet, the  market is an interesting place to invest right now. The greenhouse industry is a very innovative industry, it is not the same as traditional agriculture. A greenhouse can be seen as a factory, it's an industrial business. Hence there is a lot of trust in the business that it is a good investment; if it is not competitive enough they can always improve the growing techniques in order to produce more efficiently."

For more information:

Artcan Agriculture Limited Company
H. Ertugrul Sahin 
Project Consultant

One of the projects realized by Artcan last year; a 13 hectare project in Volgorad, Russia. Click here to read the article we published earlier this year.

Publication date: 12/11/2014
Author: Boy de Nijs



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