Interview / Cemalettin Kanaş

Konya, the breadbasket of Turkey, is an industrial city where the machinery sector is highly developed mainly owing to agricultural production. Local producers, who first started to process the products grown in the fertile plains of the city with modest means, grew over time and became capable of exporting to many parts of the world. Atlas Yem Makinaları is among these companies. The current agenda of the company, which was founded by three entrepreneurs in 2004, is to add new generation machines with non-standard designs to its portfolio and to develop strategies that will expand its export markets. We had the opportunity to have a conversation with Atlas Yem Makinaları Sales and Project Consultant Mehmet Özgür Eroğlu about the markets, machinery industry, and export strategies. We also learned about his thoughts on popular yet controversial topics such as cultured meat.

Below you can find the answers of Mehmet Özgür Eroğlu of Atlas Yem Makinaları to our questions

The loyal readers of Feed Planet, particularly those with a retentive memory will remember Atlas Yem Makinaları and you. Can you briefly refresh our memory?

Established in 2004 by 3 entrepreneurs in a small workshop in Konya, Atlas Yem Makinaları has developed itself continuously since its establishment and has attained a reputable place in the sector today. With its years of experience in machinery manufacturing, it has been constantly adding new machines to its portfolio in the light of new ideas and has managed to become one of the leading companies in the sector. I am sure that it will continue to develop and grow with the contributions of our teammates.

If we ask your customers and other players in the market about Atlas Yem Makinaları, what would be the answers we will get? What are the points that differentiate you from your competitors? Why should feed producers prefer your company?

First of all, I would like to give an objective answer to your second question from an outsider's point of view. Although the priority of the investors may vary by location and region, it is mostly about cost. In order to avoid this, we focus on reducing these costs by discussing with our customers about the effect of quality on long-term costs. One of the first things that catch the eye as a common mistake in machine manufacturing is incorrect calculations and manufacturing is with short-lived equipment. Consequently, maintenance and spare parts costs increase in the long run. High-quality products, long-lasting equipment, and a robust design are invaluable factors for both machine and plant life. We inform our customers in this direction, we want them to make their choices with long-term consideration. Turning back to your first question, we try to influence their decisions by adding these parameters to the reasons for preference. When you ask our customers about Atlas Yem Makinaları, their answers will probably be long-lasting, high-quality, and robust machines.

The first things that the subject of technology brings to my mind are a dizzying competition and the pace of development. The connotation may be both positive and negative. How do you survive in this competitive environment when it comes to feed milling machinery? Do you have difficulties in keeping up with the ever-evolving technology? Can you answer with a focus on digitalization and industry 4.0?

We are all familiar with the dizzying pace of technology. Keeping up with this pace is only possible by working hard and efficiently. There is no limit to human imagination. And the state-of-the-art products that we now use in our homes, workplaces, or keep in our pockets have come into existence thanks to this imagination. No one can deny the fact that technology makes our life easier and improves our quality of life. With this perspective, we can make our customers' lives easier by using technology in our machinery and equipment. The Industry 4.0 revolution is a technology that has been in use in our industry for years. We run our processes with hardly any human intervention in a completely digital environment free from human errors. This has been so for a long time. But I think there are still things we are missing. In support of the technology we use in our processes, we need to add our own technologies to our machines. We need to provide new facilities to our customers in some production phases, and to contribute to the quality of the products they produce by offering new scenarios other than the process scenarios our customers implement. The most effective and affordable methods of animal feeding are being researched in the feed industry. As machine manufacturers, we have to respond to this research with new machines benefitting from their imaginations, too. Undoubtedly, this is how we will get rid of the stereotype claiming that we are behind European countries in machinery, which has been the prevailing narrative for long years. This seems possible with hard work. The Sakıp Sabancı came out of me here: work work work…

CULTURED MEAT AGENDA IS A DISASTER

Consumers felt the impact of the pandemic primarily on food. However, the supply chain, which was also disrupted in terms of feed ingredients and raw materials required for machine production, also affected the industry at firsthand. How did the process turn out in the last instance? Can I get your market analysis regarding raw material prices and availability?

The pandemic has affected our country in many areas, as it has all over the world. We live in a world dominated by China in terms of food and raw materials. They are very influential all over the world, especially in ore and raw materials. Due to the full lockdowns and long-lasting quarantines they experienced in this process, they could not make production for months. As a result, we saw a raw material crisis all over the world. And its effects still continue. This process will take years, I guess. At the beginning of the main reasons for this, there is a situation that already existed before the pandemic: our depleting resources. I think the crisis in agriculture and foodstuffs existed before the pandemic. Our dependence on foreign agriculture is increasing day by day. We are not a self-sufficient country. There are many reasons for this, but instead of diving into political issues, we have to focus on what we can do. I mentioned this in the answer to your previous question. The world is in search of novelties. Everything from the food animals eat to the breath they take has become questionable. Some ask what's the need for all these animals while some others defend cultured meat. Of course, there are some who are against everything that will disrupt natural life, including me. Although animal feeds are not natural enough, believe me, the thought of these foods becoming completely chemical is a complete disaster. In this regard, we need to find more effective methods of feeding animals. How to get more yield with less feed. Or how to use our land in the most efficient way. We must address these questions. This issue is crucial for our future. Using arable land in the most efficient way, enabling recycling, and minimizing our raw material needs can be small but effective solutions. In both cases, I think the main task falls upon us. Hammadde konusunda işin bir de maliyet kısmı var, azalan kaynaklar, stokları eriyen cevherler vs. şu an işi içinden çıkılmaz bir hale getirdi. Demir ve çelik fiyatları hiç olmadığı kadar yüksek. Ve sanayinin en öneli hammaddeleri bunlar. Değişken döviz kurları da imalatçıların belini büken başka bir durum. Umarım en kısa zamanda doğal sürece yakın bir süreç yaşamaya başlarız. Uzun vadede imalatçıları kötü günlerin beklemesini istemiyorsak, en kısa zamanda bu krize bir çözüm bulmalıyız.

WE MUST COMPETE ON QUALITY, NOT PRICE

What would you like to say about the incentives for the use of domestic machinery? Do you have any suggestions on the subject?

We are happy with the conveniences provided by the government in the use of domestic machinery. Although late, this is a promising practice for industrial businesses. The whole world has been struggling with the economic crisis for a long time. We see that many countries have made enormous strides in domestic production and domestic raw materials. Our state institutions are also trying to help us in this regard. But here I find it useful to ask ourselves the following question. Why would domestic machines be preferred only after an incentive? Why are investors interested in foreign-origin products? I think machine manufacturers need to figure out which requests they cannot respond to. First of all, we have to give some thought to this and make self-criticism. Turkish industrialists know very well that some foreign-origin machines manufactured years ago still serve many companies. If we look from the perspective of all sectors, this is the problem of every manufacturer. Why are our machines not preferred primarily? Is it because of prejudices about us, or is it because our machines really can't meet the demands? Whenever we compete on quality rather than price, make the highest quality products, only then can we eliminate the reasons investors do not prefer domestic machinery. Such incentives are usually made to financially relieve the investor, not the domestic manufacturer. Every step to be taken in this regard is very important. All machine manufacturers need to consider this issue from this aspect. I'm sure we can produce machines of very high standards if we want to.

THERE IS A BOTTLENECK IN EXPORT MARKETS

Turkish machinery manufacturers have been increasing their exports exponentially in recent years. According to the data of the Machinery Exporters' Association (MAİB), a total of 23 billion dollars of machinery was exported in 2021. What would you like to say about the present and future of the sector in particular for feed machinery?

In this regard, I always prefer to look at the market share rather than the figures. Export is a very important issue for our country. Especially in recent years, the economic bottlenecks that have been seen frequently in our country bring this issue to a much more important point. We have a considerable export in the world. But we are still far behind where we should be. We are having difficulties in searching for new markets. Now some companies may have to produce country-specific machines. Price competition is pushing machine manufacturers incredibly hard. One of the main reasons for this is the constraint of our export points. We always operate in the same countries. I am sure that we can sell our machines to all over the world with professional work. I don't know why, but our companies are roaming around constantly at the point of saturation. If we look at the feed industry from a bird's eye view, European companies in this industry are fighting to export to every region of the world. They develop their machinery and constantly expand their sales network. They make almost all spare parts of their machines in-house and make their investments in order to continuously improve their business. We need to act quickly in this regard. Then our export figures will reach incredible levels.

WE EXPORT 80% OF PRODUCTION

As Atlas Yem Makinaları, what are your position and targets in export?

Atlas Yem Makinaları has reached a point that cannot be underestimated in exports. Let's not talk figures here but if we look at our sales as a percentage, about 80% of them are exports. All the efforts of our representatives and sales team located in many countries are to provide customers with the highest quality product at the best prices. And since we are constantly in search of new export points, our export network is increasing every year. We're not trying to slice the existing pie but trying to find new pies. The place where we want to come after years in the sector -I will not be modest here- is the top. We know that there is a long way to go and that our job is difficult, but this is how our effort will be. We are striving to be the company that leads the sector, not one that has a place in the sector.

ALTHOUGH THE EXCHANGE RATE STABILIZED, RAW MATERIAL PRICES STILL INCREASE

Can you talk about the impacts of sudden fluctuations in exchange rates on your company and the sector? Although it is difficult to talk long-term on this issue, the dollar rate seems to be anchored between 13-14 TL for now. What have you experienced recently in connection with the exchange rate? What are your expectations and foresight for the near future?

The fragile economy of Turkey, unfortunately, makes itself evident very much in exchange rates. In this context, we are having a lot of difficulties due to the increase in costs both at home and in the export market. On top of the constantly increasing raw material prices, the sudden increase in the exchange rate can, unfortunately, render us helpless at many points. In the last few years, the increase in costs has been reflected in the sales prices by 20-25%. We are already in a competitive industry. Price increases push the competition to a much more challenging point. However, there is nothing we can do right now. As you said, exchange rates stopped within a certain level, but the increase in raw material prices still continues. Let's hope it won't go on like this. However, if it does, it is certain that this will leave our companies in a very difficult situation in terms of exports.

WE CREATE NON-STANDARD ORIGINAL DESIGNS

Can you tell us about your investment plans for the upcoming period?

I think we've covered a significant distance in the past few years. We are adding new machines to our portfolio every passing day. We pay attention to manufacturing our machines with original and non-standard designs. We are improving ourselves to make new generation machines by designing upgradeable products. While our R&D studies continue within this scope, our efforts to establish new sales networks never stop. In other words, each department strives to duly perform its duties. We also continue to work to develop feed and flake facilities. We take care to do the best by drawing our strength from the imagination of our customers. While doing all these, we will continue to increase our production range within our company. In the near future, we plan to improve our manufacturing area and offer more comprehensive services.

Is there anything you want to add?

First of all, I would like to thank you for this heart-to-heart talk. I hope I didn't bore your readers. Your contributions to the development of our feed industry continue to increase the respect I have for you. I hope that thanks to your efforts, all companies in our sector will take their rightful place as soon as possible. I look forward to seeing everyone at our booth at IDMA-VICTAM 2022.