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Market environment » Agricultural machinery for harvesting » Market of Combine Harvesters in Turkey


Market of Combine Harvesters in Turkey


Agricultural Sector
Agriculture is one of the most essential branches of the Turkish economy. The share of agriculture in the national economy makes nearly 15%. In 2007 8.9% of the economy (national income) was developed on the basis of agricultural sector, which employs 28% of the population.
The branch gets a substantial support from the government as donations. The Turkish agriculture received 9.5 bln. USD as donations in 2007. For comparison, 2007 saw the volume of donations in some other countries amounting to:
    Australia – 1 bln;
    Canada – 5.6 bln;
    Czechoslovakia – 1.1 bln;
    Hungary – 1.6 bln;
    Mexico – 6 bln;
    Norway – 3 bln;
    Poland – 1.22 bln;
    Switzerland – 5.5 bln;
    Japan – 44 bln;
    The USA – 38 bln.

In terms of production and export of agricultural products the country takes the 1st place among the Middle East and North American countries, and the 7th one in the world ensuring its food security to the full extent.  

The basic prerequisite for combine harvesters’ market development is the fact that the leading branch of the Turkish economy is presented by crop growing, with the main crops being hard wheat and barley.

The area of croplands used for wheat growing makes 8.6 mln. ha, for barley growing – 3.6 mln.

Yielding capacity of cereals doesn’t demonstrate the highest indicators in the region and amounts to 23hwt/ha of wheat and 27hwt/ha of barley.  

The two recent agricultural years have seen a serious weather’s influence on the Turkish yields. In 2007, due to unfavorable weather conditions (droughts, floods), overall cereals’ yields dropped 13% as compared to the year before and made 16 mln. tons of wheat and 7.6 mln. tons of barley.   

The weather of 2008 hasn’t been favourable either: it has been lost 22% of wheat plantings and 31% of barley ones.

A high level of agricultural sector development predetermined the formation of a strong branch of agricultural engineering numbering nearly 1000 enterprises, 13500 workers manufacturing the whole range of agricultural machinery including combine harvesters. The major manufacturing and trade companies of the branch (224 in total) form the Turkish Association of Agricultural Machinery and Equipment Manufacturers.

Vehicle Park
As of 2008, the park of combine harvesters in Turkey amounted to 12500 units, with 16% of which being new machines (operating life to 5 years). At the same time 35% of the Turkish combines have been in operation over the period 21 years, 30% - 11-20 years.

Sales Volumes 
The sales of combine harvesters in Turkey have been growing steadily for the recent several years due to the aging of vehicle park. 

For the period of 2002-2007, due to the necessity to purchase new equipment, the Turkish market of combine harvesters sees a notable increase in sales volumes. For this period, there have been sold nearly 1000 new combine harvesters both produced in Turkey and abroad.   

The growth of combine harvesters’ sales is likely to continue in future. In mid-term perspective an increase in demand for combines will be connected with the commissioning of 1.7mln. ha of virgin lands in crop rotation in the southeast part of the country in 2010-2013. 
Leasing deals for a term to 48 months at a 20% interest rate are widely spread while selling combines in Turkey.  

Players
The Turkish market of combine harvesters may be characterized by a high level of competition. 

The local market of combine harvesters is divided between two major players manufacturing this kind of equipment – the “ERTUGRUL” and “UZEL” Companies. Since 2002 they have manufactured the products of their own proprietary design.

The Turkish market has a large assortment of combine harvesters belonged to the world’s leading brands such as “John Deere”, “Laverda”, “Claas”, “Case New Holland”, “Sampo”, “Deutz”. Their sale is carried out both via own distribution facilities and the local dealers. The majority of imported combine harvesters to Turkey is delivered from plants located in Italy, Germany, Poland, and Belgium. 

Competition 
 
2006-2007 saw a significant increase in the share of the Russian combine harvesters’ manufacturers on the Turkish market. These are: “Rostselmash” OJSC and “Krasnoyarsk Combine Plant” included in “AgroMashHolding” OJSC.

Sales of “Don 680 M” forage harvester of “Rostselmash” OJSC are conducted by a large Turkish “Tosun” possessing a branched dealer network in Turkey. The Russian manufacturer provides guarantee service maintenance of delivered equipment, which is an obligatory condition while launching new dealer centers in Turkey.

“Krasnoyarsk Combine Plant” promotes its grain harvester “Enisey 950” and “Enisey 954”, and also “Enisey 324” forage harvester via its official dealer in Turkey, the company “Uchgen”.

The marketing strategy of the Russian manufacturers on the Turkish market includes the following activities:
- arrangement of enterprises visiting by delegations of large Turkish agricultural manufacturers, in the course of which the ability of plants to produce agricultural equipment, carry out service and  supply maintenance is demonstrated;
- holding of equipment performance demonstrations in the country’s fields providing the Turkish farmers with an ability to test the work of the machines;
- presentation of machines pieces at the most important Turkish agricultural exhibitions.

The following factors are taken into consideration by a Turkish customer while choosing a combine harvester:
- familiarity of the brand, which determines liquidity and cost of  a combine harvester on aftermarket;
- productive capacity in conditions of work on the fields with a high crop yield;
- availability and cost of service and spare parts;
- price;
- reliability, sensitivity of engine to the quality of fuel and its consumption.

Market’s Peculiarities
The specificity of the agricultural machinery market is determined by the fact that the country’s agricultural sector is almost completely ran by private entities (the share of state-owned croplands amounts to 10%) and consists mainly of small farming enterprises, which do not possess enough funds to acquire such expensive equipment as harvest combines. Combines are acquired by large farm enterprises specializing in rendering of services on harvesting, including the ones outside Turkey.   

Import
In accordance with the import mode, customs duty for harvest combines import is not levied in 2008, however an obligatory condition is the presence of CE marking. First of all, it is necessary to carry out an obligatory certification of each combine harvester model at the Ministry of Industry and Trade of Turkey, to establish two own service centers in two different regions of the country, and also to conclude agreements with 12 service companies located in all seven basic regions of Turkey.

Service centers are entitled to maintain the equipment of only one manufacturer. Moreover, importers shall have agreements with six more service centers in the different regions of the country with no strict attachment to a certain brand. The importer of equipment is obliged to import spare parts to the amount not less than 3% of imported combines’ cost, FOB.

The main exporting countries of combine harvesters to Turkey are the following: Italy, Germany, Poland, and Belgium.  

Source: IRUE "National center of marketing and price study"


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