Hüseyin Yavuz Papila, the managing director of the Bagci trout farm, one of the Papila group’s newest acquisitions.
While Turkey is now well known for its seabass and seabream farming operations, production from which exceeds even that of Greece, the country also has a huge trout industry. Annual volumes of trout dwarf those of seabass and seabream and amount to almost three fifths of total EU trout production.
Rainbow trout was among the first species to be cultivated in Turkey back in the 60s together with carp. It was only two decades later that marine cage farming of seabass and seabream, now well established species, became widespread. While some big corporations are involved in trout farming many of the operators are in fact relatively small, family-run operations.
Feed based on Black Sea anchovies
The farming is typically using raceways, long cement basins, to which water is supplied from a river, stream, or spring. Some companies are also farming trout in cages moored in reservoirs or dam lakes. Among the companies that have been involved in trout farming for at least two generations is Liman, a company that started farming trout at the beginning of the 70s. Founded by Hasan Papila, one of the pioneers of Turkish trout farming, Liman started cultivating trout in ponds. Despite setbacks which caused many of his contemporaries to give up, Hasan Papila persevered. The first farming site was in Bozüyük some 300 km south east of Istanbul and close to the city Eskisehir. In 1974 Mr Papila decided to set up a fish feed factory in order to supply his fish with good quality feed. This led to further backward integration. To supply the feed factory with fish meal, he invested in a vessel, the first factory vessel in Turkey, to produce good quality fishmeal and fish oil.
The vessel operated in the Black Sea, where at the time, anchovy was plentiful for six months of the year between November and April, and was used to produce fishmeal and oil. In the 1990s the situation changed. The catching season for anchovies became shorter and shorter, falling first to four months and then to three and catches of anchovy were declining. First a fishing vessel and then the factory vessel were sold off and the family decided to wind down its interest in fishing and concentrate instead on fish farming. New farming sites were constructed, one in Konya and another in Kütahya, and a processing plant was established in Bozüyük, which conveniently, was equally close to both the country’s main fish markets, Istanbul and Ankara. Before the processing plant was constructed the fish was only being sold on the domestic market. With the onset of processing operations fish also started to be exported.
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New acquisition increases capacity by a third
As the farming and processing operations increased, the family diversified into other activities, but aquaculture and processing continued to play an important role. In 2013 the family bought an existing trout farming site, this time in Köycegiz near Mugla. The farm was bought from a company called Bagci, a well-known name in the Turkish trout farming industry. It comprised a hatchery, a nursery, on growing basins, and a processing unit. Bagci was one of the first companies to produce hot-smoked trout fillets in Turkey. The new owners have continued with this production, which is being exported to Europe as within Turkey there is no tradition for eating smoked products and demand is virtually non-existent. Yavvuz Papila, a son of Hasan Papila, who is responsible for the new trout farm, says that the smoked fillets are exported frozen to Europe except to Bulgaria, where they are sent freshly smoked. Prior to the acquisition of the Bagci farm, capacity at the other sites amounted to about 3,000 tonnes and production was about half that volume. The Bagci site adds another 1,000 tonnes to the capacity and production today is about 60 percent of the total capacity. There are different reasons for not producing at capacity, sometimes the water conditions impose constraints, at other times the markets may be down. Liman’s expansion plans have not reached their limit. Earlier this year it acquired another company that also farms trout, but in cages in a dam reservoir in the north-west part of the country. This is the first exposure Liman has to cage farms and will allow the company to build up its experience in this kind of production preparatory to establishing a cage farm in the north-eastern part of the company, where there is a big dam reservoir. The plan is to grow large trout at this new site. This interest in big trout is partly a result of the anti-subsidy investigation by the European Commission into Turkish trout exports to the EU, which targeted fish up to 1.2 kg and fillets up to 400 g. Fish grown at this site will be aimed at markets in the east such as Georgia and Azerbaijan, where there is a market for large trout with red meat. Japan too is a potential market for these fish. We know the quality of our fish is very high, says Mr Papila, because it is being raised in potable water and the feed is also very good quality. The five farms and two processing sites afford Liman a degree of flexibility. The farms send fish to the different sites depending on the demand and the products that are required. For example, smoked products are only manufactured at the Bagci processing facility. Both factories are certified to the IFS (International Featured Standards) and BRC (British Retail Consortium) standards and the farms are certified by Global G.A.P.
High dollar causes problems
Liman uses a combination of its own broodstock and imports to meet its requirement of eggs. When the value of the dollar went up last year the company separated some of the fish out in order to raise them as broodstock. This year at least half the requirement for eggs will be met from this broodstock. However, on the Bagci farm there is currently no broodstock and Liman will buy the eggs needed to stock the tanks, either from the US or from Turkey. The high dollar makes other inputs such as feed also more expensive. Because many of our inputs are dollar denominated, while our sales are in euros, the high dollar is hurting us, says Mr Papila.
| Bagci Balik Gida ve Ennerji Üretimi San ve Tic. AS | |
| Beyobasi Beldesi Merkez Mah. 3 Nolu Bulvar No. 367 Köycegiz, Mugla Turkey Tel.: +90 216 442 1272 Fax: +90 216 442 1273 hypapila@papilagroup.com www.papilagroup.com Managing director: Hüseyin Yavuz Papila | Activity: Farming and processing trout Facilities: Five trout farms, two processing facilities Volumes: 4,000 tonnes (capacity), 2,400 tonnes (production) Products: Fresh, frozen, smoked fish and fillets Markets: EU, Turkey Certifications: Global G.A.P., IFS, BRC |
Canned fish is the next product
The countervailing duties imposed by the European Commission earlier this year as a result of an anti-subsidy investigation have had an impact on Liman as well. As the duties made the fish more expensive we were unable to increase our prices even though the cost of our inputs had increased, states Mr Papila. On the other hand it also discouraged new companies from entering the EU market. Partly as a result of this trout producers are trying to develop new markets and in this context the economic situation in Russia is a cause for concern. Russia has a lot of potential particularly as it is no longer importing from the EU, but the fall in oil prices and the weakness of the currency have made it more difficult for Turkish trout exporters. To compensate for these developments trout producers are trying to increase domestic demand. There is certainly scope to do this, as on average annual per capita consumption of fish in Turkey is only 8 kg (in the EU it is 21 kg). Increasing this by a kilo would increase demand by 80,000 tonnes, which would be a big help to producers. Generic promotion programmes prepared by the producers organisations is one way in which producers are trying to increase domestic demand, but they are also increasing the selection of ready-to-eat products. Liman, for instance, is thinking to produce cans at its processing facility in Köycegiz. This will call for an expansion of the space and the installation of machinery, but towards the end of the year Mr Papila expects to start churning out easy-open cans for the local market. The next generation of the family is clearly as dynamic as the last.