A Proposal

for setting up a
Tea Manufacturing Company in
Turkey

Under the guidance of

Prof. Anirban Dutta
Finance Department

BY:

Swati Sinha
 CONTENTS

1. Overview of the Tea Industry in Turkey

2. SLEPT analysis
3. Proposal
4. Market analysis
• Market structure
• Elasticity of Demand and Supply
• Competition
• Entry and Exit barriers
5. Trade structure
• Export to Russia
• Export to UK
6. Cost structure
7. Marketing strategy
8. Conclusion
 Overview of the Tea Industry in Turkey
• Tea is the agricultural product of the leaves, leaf buds, and internodes of various cultivars and
sub-varieties of the Camellia Sinensis plant, processed and cured using various methods. After
water, tea is the most widely consumed beverage in the world.
• There are six varieties of tea: white, yellow, green, oolong, black, and post-fermented teas.
• Turkey has the highest consumption of tea with 2.1kg per person. The per capita income in
turkey is $2,397.32 per person. Turkey is the world’s fifth largest tea producer.
• From zero cultivation of tea in 1938, Turkey today is totally self-sufficient in tea production. By
1960, imports had ended, as Turkey grew enough to meet the ever-expanding demand.
• Today tea is cultivated in over 30 countries of the world. Tea cultivation was first introduced in
Batum (Republic of Georgia), neighboring Eastern Black sea region of Turkey by Russians in
the last quarter of 19thcentury after importing seedlings from China. They had successfully
established commercial tea planting here and the industry had slowly expanded with opening of
large acreage of lands for the purpose. Since Russians had successfully introduced tea in Batum,
it was felt that tea cultivation must also be introduced in Turkey.
• Soon it was discovered that the tea plants needed very specific environmental conditions to
produce an economic crop, which led to the identification that tea cultivation was not feasible in
Bursa. Broadly identifying the un-suitability of ecology of Bursa, the idea of tea cultivation in
Turkey was dropped for 26 years, until 1918; when the government secured the services of Mr.
Ali Riza Erten, (Regional Director Agriculture -Black sea region & a famous botanist from
Mardin province). He was assigned the duty to discover feasibility of some other suitable
locations with in Turkey for tea cultivation.
• Turkey's tea-growing area is located at the very mountainous eastern end of the Black Sea coast,
centered on the town of Rize - from the Giresun area East to the frontier with Georgia. Here, the
climate is totally different from that of the rest of Turkey, with 300 days a year of steady, gentle
rainfall and equable temperatures (warm and humid). The annual rainfall is between 1,000 mm
and 2,200 mm (40-88 inches), which produces a green mountain coastline of thick pine forests
• In the Rize area, tea is grown from the narrow coastal strip up to altitudes of between 700 and
1,000 meters. Tea is grown on an average of 45 [degrees] slopes. In the tea-growing region, there
are virtually no flat areas at all, except for some relatively flat areas near the coast. Relatively flat
 means only a 30 [degrees] slope. Even the steepest areas are brought into production with
terracing.
• Today, in the tea area, an estimated 90% of the population derives some part of their family
income from tea. That means 200,000 families. Tea farming creates employment for an average
of six months in every year. During the harvest season, the first picking goes from early or
middle of May to mid-June; second picking from mid-July to mid-August; the third from mid-
September until the end of October.

SWOT analysis of the tea industry in Turkey

STRENGTHS WEAKNESS

1. With its increasing young 1. Diseconomies to scale

population beverage production and 2. Low market share
consumption is increasing in Turkey. 3. Bad communication
2. Loyal customers 4. Low R&D
3. Pricing 5. The economically volatile
4. Real estate environment affected by the global
5. Innovation economic crisis may hinder consumer
6. Cost advantage spending.
7. Exports

OPPURTUNITIES THREATS

1. Acquisitions
2. Asset leverage 1. Competition
3. Financial markets (raise money
through debt, etc) 2. Economic slowdown
4. Emerging markets and expansion
abroad 3. External changes (government,
5. Product and services expansion politics, taxes, etc)
6. Takeovers
4. Lower cost competitors Price wars

5. Product substitution
 SLEPT Analysis
SOCIAL

• Growing tea, either on smallholdings or on tea plantations or gardens, is hard work. Workers are
on their feet for hours on end, carrying heavy weights. They are exposed to pesticides and
insecticides. The living conditions of plantation workers are far from ideal. Women are widely
employed in the tea sector, but are generally underpaid. Supply chain responsibility is an
underdeveloped concept in the tea industry.
• Turkey aims to create more and better jobs through its recourse to policy and investment
financing, as well as analytic and advisory services. The Government has a new Employment
Strategy under preparation, which includes important measures to enhance labor market
flexibility and strengthen active labor market policies. Turkey also aims to generate more and
better jobs by increasing investments for export growth and attracting foreign direct investment.
• There is a declining trend in unemployment. In May-July 2010 period unemployment fell to
10.5% compared to 13% in the same period of 2009 and 11% in previous month. The youth
(ages 15-24) unemployment rate fell to 19.1% from 23.7% in this period.
• In the social sectors, the continuous implementation of the Health Transformation Program has
brought close to universal health insurance coverage (96%) and significant improvement in child
and maternal health outcomes between 2003 and 2008. The rolling of family medicine in 2010
will further ensure further gains in the access to and quality of health services. In education,
significant effort started in 2010 to increase preschool enrollment and thus improve the readiness
for school, particularly among disadvantaged children.
• Improved electricity supply security is already being achieved and will be further strengthened
through better demand management and increased generation, as well as private sector
investment in energy efficiency and renewable energy sources.
• Tangible outcomes of public administrative reform include streamlined institutional
responsibilities for disaster management, strengthened local financial management systems, and
improved government services through dissemination and effectiveness of e-government
applications.
TECHNOLOGY

• Tea plucked from the garden is sent to the factory for processing, which in most cases, is in or
near the tea garden. This processing, earlier, used to depend solely on the natural weather
conditions, but to become less dependent on the unpredictable weather conditions which affects
productivity adversely, modern technology has been introduced in the tea industry. This has
made it possible to increase the plantation area by minimizing space; also labour cost has come
down and the entire process has become much speedier.
• Tea is unique because only its vegetative parts - the two leaves and the bud - are commercially
exploited.
•
• The plucking of the two leaves and a bud involves a number of systems - Janam plucking, fish-
leaf plucking, step-up plucking etc.. Shear plucking is done when there is a scarcity of pluckers
during July to September. Pluckers' productivity is found to be maximum in unpruned teas. The
plucked leaves are processed to produce the black tea.
• Withering is a procedure which brings about physical and chemical changes in the shoots to
produce quality, apart from conditioning the flush for rolling by reducing turgor, weight and
volume. Previously the flush used to be withered under the sun. Now this process is generally
achieved either by thinly spreading the flush on mats, or in thick layers in troughs for 8-18 hours
depending on the condition of the leaves.
• The object of rolling is to macerate the leaf so that the enzymes and their substrates get
intimately mixed up. This is achieved mechanically either by the use of an orthodox roller, the
rotorvane, or by CTC (crushing,tearing and curling) machines. Rolling ruptures the cell wall
thereby enabling the production of enzymes.
• Fermentation is the process of oxidation of leaves. The mechanical aspect involves spreading out
of the leaves macerated by rolling a layer 5-8 cms thick, for 45 minutes to 3 hours, depending on
the quality of the leaves.
• Drying reduces the moisture content of rolled and fermented leaves from 45-50% level to a 3%
level in dried black tea. It also allows development of black tea aroma. Drying is physically
achieved by blowing hot air through fermented leaves as they are conveyed in chains. The drying
process lasts for about 20 minutes.
 • Sorting may be defined as a procedure in which particles of bulk tea are separated into grades of
different sizes. This sizing can be done either manually or by using different sizing equipments.
Sorting meshes of various sizes are used to grade the tea.

• There is no single world price for tea but rather differing prices at different auctions. Between
1970 and 2002 the price trend was downward, with World Bank figures suggesting that tea
prices fell by 44% in real terms over these years. Prices have since bounced back, more than
doubling between 2002 and September 2009. They rose from 154 US cents/kg in 2003, to 238
US cents in 2008, and to 318 cents/kg in September 2009 (The FAO Tea Composite indicative
world price for black tea). The rise was due to droughts in Sri Lanka and Kenya and also to
increased demand. Prices therefore increased by more than 50% between 2007 and 2009.
• Prices reflect quality and speciality. In 2010, the return of normal weather patterns in the main
producing regions indicates increased supplies, although demand may help to maintain price
levels.

POLITICAL

• Political tensions have been rising in Turkey after a top prosecutor and a number of present and
former officers were arrested on a charge of plotting to overthrow the Turkish government. The
arrests are the outcome of ongoing investigations in the so-called ‘Sledgehammer’ and
‘Ergenekon’ cases, both involving alleged plots to overthrow the government.
• It should be noted that the earlier round of arrests in the Ergenekon case was viewed by many in
Turkey as a clean-up exercise of the Turkish armed forces while the latest arrests made were
seen as being much more controversial.
• Our overall assessment is that the situation is highly uncertain and that the conflict between the
military and the government is likely to escalate further in the coming days and weeks. However,
it should also be noted that both parties in the conflict have a relatively strong incentive to ensure
that the situation does not get totally out of control.
• That said, investors should not just assume that everything will be fine and that a calm political
situation will be restored anytime soon. The problem is that there is a near ‘structural conflict’
 between the Islamist-oriented government and the secular elite in Turkey over the role of religion
in Turkish society and this is likely to flare up again and again as it has done over the past week.
• The Turkish lira has been under some pressure over the past week and has clearly
underperformed its Emerging Markets peers.
• There is no doubt that investors are nervous about the political developments in Turkey, but
many are probably also betting that the situation will calm down soon while limiting the sell-off
in the lira.
• The developments during the political tensions in 2007 and 2008 give us reason to expect that
the impact on the Turkish financial markets of the current uncertainty will be short-lived and will
be contained. Given the increased uncertainties in the global markets, the negative political
development in Turkey is hardly helpful and we would recommend investors stay sidelined in
the Turkish markets for now. We have not changed our forecast for the Turkish lira, but might do
if the crisis escalates.

LEGAL

• Since 1984, Turkey liberalized its policy on food imports. Daily products and luxury food items,
especially from European Union countries, are available in most large cities.
• Between the 1920s and 1970, the government distributed more than three million hectares of
mostly state land to landless peasants. According to the data in a 1980 agricultural census, 78%t
of farms had fiv
• e hectares or less and together accounted for 60 percent of all farmland. 23% of farms were
between five and twenty hectares and accounted for 18 percent of all farmland. Fewer than 4
percent exceeded a hundred hectares, but they amounted to 15 percent of the farmland.
• Less than one-fifth of farmers lease or sharecrop the land they till. Sharecroppers generally
receive half the crop, with the remainder going to landlords, who supply seed and fertilizer.
• Many large farms have been converted into modern agricultural enterprises that employ
machinery, irrigation, and chemical fertilizers. Such farms concentrate on high-value fruits and
industrial crops and employ land-poor farmers. Since the 1950s, the mechanization of agriculture
has reduced the need for farm labor, causing many villagers to migrate to the cities.
ECONOMIC
•
• The economic relationships between companies in production and consuming countries are
determining the tea market. This double integration explains the considerable hold the major tea
companies have on the entire production process, from tea shrub to tea bag.
• The direct link between producers and manufacturers is most obvious in the plantation sector.
• Turkey’s economy is currently in transition from a high degree of reliance on agriculture and
heavy industry to a more diversified economy with an increasingly large and globalized services
sector.
• Turkey's economy grew an average of 6% per year from 2002 through 2007--one of the highest
sustain ed rates of growth in the world. During this period, inflation and interest rates fell
significantly, the currency stabilized, and government debt declined to more supportable levels
(39.5% of GDP in 2008). However, booming economic growth contributed to a growing current
account deficit (-5.6% of GDP or $41.6 billion in 2008). Growth fell to 1.1% in 2008, and the
economy contracted by 4.7% in 2009 due to the global economic slowdown and reduced exports.
Growth is expected to pick up to 6.8% in 2010, based on strong first and second quarter growth
rates. Continued implementation of reforms, including tight fiscal policy, and securing
independent Central Bank monetary policies is essential to sustain growth and stability.
• After years of low levels of foreign direct investment (FDI), Turkey succeeded in attracting
$18.3 billion in net FDI in 2008. Global market conditions reduced foreign capital inflows in
2009, and Turkey attracted $7.7 billion in net FDI in 2009. This amount is expected to fall to
around $5 billion in 2010. A series of large privatizations, the stability fostered by the start of
Turkey's EU accession negotiations, strong and stable growth, and structural changes in the
banking, retail, and telecommunications sectors contributed to the 2008 rise in foreign
investment. Turkey has taken steps to improve its investment climate through administrative
streamlining, an end to foreign investment screening, and strengthened intellectual property
legislation. However, a number of disputes involving foreign investors in Turkey and certain
policies, such as high taxation and continuing gaps in the intellectual property regime, inhibit
investment. Turkey has a number of bilateral investment and tax treaties, including with the
United States, which guarantee free repatriation of capital in convertible currencies and eliminate
double taxation.
 Proposal

• On conducting the SLEPT analysis of Turkey we have proposed to have a joint venture with
Sabanci Holding (Deren) in Turkey as it is economically feasible and the economy is relatively
sound and the growth is also steady.
• Also most of the tea industries are owned by the government thereby making it easier to
penetrate the market and thus become a part of the joint marketing company that was established
in 2008 with the main intention of improving the industry's reputation and productivity.
• As turkey is the only major tea producing country in the EU it has a major advantage as Europe
accounts for 65% of the total tea consumption.
• We will be producing the traditional black tea which is a Turkish delicacy.
• We have also decided to export to Russia and UK as they are among the major consumers of tea
and since they are not very far from Turkey, transportation and other expenses would be reduced.

• The world’s tea market totals an $18 billion volume. Black tea constitutes 97 percent of the
world’s total tea consumption.
• Tea is Turkey's national drink. Drinking tea is an integral part of Turkish daily life and culture,
which has helped maintain high levels of growth, even as eating and drinking habits have been
changing.
 Market Analysis
• Turkey’s economy is one of the fastest growing economies in the World. Gross domestic product
in Turkey increased an annual 11.7 %.Turkish textile, metals, home appliances, food, and
cosmetic products are trading across the global markets.
• Turkey’s government is pursuing a strategy intertwining political influence with economic might
in the developing world, particularly in Balkans, Islamic countries and the former Soviet Union
but extending in recent years across EU, Russia, India, China and Africa.
• Turkey’s GDP at present time is close to $900 billion. It remains committed to joining the EU.

MARKET STRUCTURE
• The tea industry in turkey is imperfectly competitive as it is between a monopolistic and
oligopolistic market structure.
• There are large numbers of tea producers. The number of major players is 32. The major player
in the tea industry is Çaykur with 60% of the output.
• The sellers behave strategically ie they have to analyze the reaction of their competitors before
raising the prices of their products which is tea.
• The Turks evolved their own way of making and drinking the black tea (Çay in Turkish or
Camellia Sinensis in Latin), which became a way of life for their culture. Tea is thus said to be a
necessity and turkey and the demand for it is slightly inelastic.
• The products sold are either homogenous or differentiated
• Product differentiation: The differentiation practiced by the players is the kind of tea they
produce which are Ooh la la Ihlamur Tea, black tea which a Turkish delicacy, herbal tea and
green tea which are gaining popularity among the youngsters and women because of the rising
health consciousness among people.
• Turkey ranks as the 65th easiest nation to do business in. thus it can be concluded that Turkey lies
in the better half of the spectrum.
• The entry barriers in this industry are the high degree of competition. Thus unless a player is
already well established it will be difficult to compete against the already existing giants mainly
due to the large amount of capital that will be required just to sustain in the industry.
The major practices that make doing business in Turkey harder are:
1) Dealing with construction permits: There are 25 procedures in getting a construction permit in
Turkey which takes around 188 days this makes it a very lengthy, tiresome and laborious
practice. The cost of obtaining these permits is also high at 231.4 percentage of income per
capita. Due to these factors Turkey is ranked 137th among 183 nations in this respect.
2) Closing a business: It is very expensive in turkey to wrap up a business as the cost of wrapping
up is 15 percent of the company’s total asset. It is also a very lengthy procedure as it takes on an
average 3.3 years to wrap up a business here. One of the major drawbacks is that the recovery
rate (cents on dollars) is low only 21.1, which means for every dollar invested you will only get
back 21.1 cents. Due to these factors Turkey is ranked 115th among 183 nations in this respect.

The practices that make doing business in Turkey much easier are:
1) Registering property: Registering a property in Turkey is easy as it takes only 6 permits
obtaining which on an average takes 6 days. The cost of the process is also fairly low as it is only
3 percent of the property value. These practices take it to the 38th rank in this category.
2) Enforcing contracts: The major benefit of doing business in turkey is that enforcing contracts is
comparatively easier. It takes 35 procedures spread over 420 days and costs about 18.8 percent
of the total claim. These practices take it to the 26th rank in this category.
As can be seen and inferred from this data it is easier to do a business in Turkey when a factory system
is already in place and as it is comparatively easier to enforce a contract here it makes sound business
sense to go for a Joint Venture here in partnership with a domestic company which already has a proper
infrastructure in place.

COMPETITION

• Although the Turkish tea market is enjoying healthy growth in sales, the tea industry realizes that
it is faced with competition from other beverages, typically instant coffee.
• On top of this the increased amount of illegal imports has posted a threat to local tea players.
Industry sources believe that this is also a factor for the slowed growth of loose black standard
tea in recent years.
• Currently, there is no official data regarding how much of this illegal tea is actually imported and
sold locally. However, Euromonitor International field researchers have observed that a large
amount of illegal tea is consumed in the East and South East part of Turkey.
• Illegal teas are cheap; however, their quality is normally substandard
• Some of the major tea producing countries of the world are:
 Trading Practices
EXPORT
The major export destinations for the company would be Russia and UK as there is already a culture of
drinking tea in these countries and they are major importers of tea. The double taxation agreement is
signed with these 2 countries which makes the situation more favorable.

1. Russia:
• Russia has a long history of tea drinking because of its proximity to China and Central Asia.
• Russia is the largest market for tea in the world, both in terms of all tea varieties, as well as for
just black tea. In 2007 in terms of retail value the Russian market was worth $3,266 million and
in terms of retail volume it was 161.44 million kg.
• The year-on-year growth rate of the Russian tea market, for the period 2006-07 in terms of retail
value was 12% and in terms of retail volume was 2.3%.
• The Russian market also has one of the highest per capita consumption rates for tea. In 2007, per
capita consumption of tea in Russia was 1.3 kg compared to the average global per capita
consumption of tea, which was 0.3 kg in the same year.
• Retail prices for tea in Russia are relatively high and growing. In 2007, the average retail price
for tea in Russia was $20.2 per kg, compared to the average global retail price of $13.2 per kg in
the same year.

Sales of Tea by Sub-Sector in Russia: In traditional tea markets like Russia, there is a growing demand
for premium specialty and healthy tea varieties as can be seen:
Russia's customs service does not differ much from other nations'. The primary reasoning behind this
screening process is to prevent illegal goods from entering the country and to regulate the commercial
sale of foreign goods. The general guidelines for goods differ among those for personal use versus those
intended for commercial or professional use.

CUSTOM AND EXCISE:

• The Russian Customs and Border Control is particularly focused on commercial goods entering
their nation. All goods for this purpose must be declared and a duty will be imposed if their value
exceeds $2300 USD or if the weight is over 110.2 pounds (50 kilograms). The import duty for
these items is determined at 30% of the value of the items.
• Imported coffee and tea can attract customs duty, depending on the type of tea or coffee being
considered. In the case of tea, the duty depends on whether the commodity is fermented.
• Unfermented green and black teas do not attract customs duty, but flavored green teas are subject
to a General customs charge of 6.4 percent of value, but a duty of 20 percent of value is levied if
the products are imported from countries that do not have normal trade relations with the U.S.,
such as North Korea and Cuba.

2. UK:
Tea is an overriding food ingredient in the UK, as exemplified by the Snapple Beverage Corp decision
(VATD Decision 13690). Tea, as a beverage, is enjoyed by more than half of the world's population.
Historically, tea consumption has been very high in the U.K and Ireland. However, the consumption is
declining there. U.K. and Ireland accounted for one- third of the world's tea consumption in 1955. Their
share in tea consumption currently is around 5%.

CUSTOM AND EXCISE:

• The UK Trade Tariff helps you find commodity codes to classify goods for export and import.
Commodity codes are used to find import duties, taxes, tax rebates, reliefs, licenses and special
conditions such as prohibitions that may apply to particular goods.
• U.K. customs duty is a special tax charged on imports of goods produced outside the European
Union (E.U.). If you’re travelling from the E.U., you do not have to pay customs duty. You also
 do not pay the custom duty when you are buying or sending goods to the U.K. from the E.U. for
your personal use. Customs duties are only payable on goods from outside the EU that exceed a
certain value.
• Although the Value-Added Tax (VAT) is not technically a customs duty, it is levied on the
supply of all goods that are brought in or sent to the U.K. above a given duty-free allowance (the
allowance depends on the type of goods). The percentage levied is the same VAT rate that
applies to the same or similar goods that are sold in the U.K. The standard rate as of 2010 is 17.5
percent, with some exemptions and exclusions.
• Imported tea can attract customs duty, depending on the type of tea being considered. The duty
depends on whether the commodity is fermented. Unfermented green and black teas do not
attract customs duty, but flavored green teas are subject to a General customs charge of 6.4
percent of value, but a duty of 20 percent of value is levied if the products are imported from
countries that do not have normal trade relations with the U.K., such as North Korea and Cuba.
 Cost Structure
• Aside from its ability to maintain a stable intra/extra-economic market, Turkey is the 13th most
attractive country for foreign direct investors
• Another influential reason for the attraction of foreign investors into Turkey is its strategic
position. Turkey lies on the borders between Europe and Asia and is used as a gateway to
achieve strategic goals to enter into the Asian or European market.
• Turkey signed the European Customs Union (ECU), which has been effective since
31st December 1995. The ECU involves preferential trading agreements between EU member
countries where goods and services imported are exempt from any duties, and a common export
tariff. This has had an incremental impact on the overall trade environment and the international
standard a foreign investor would expect to operate in.
• A joint venture or a consortium may be set up for international contracts to be carried out in
Turkey. It can be freely established based only on the international contract signed. Without any
obligation to establish a company, the joint venture or the consortium can carry out the business
activities. The only requirement would be registration with the tax office and the Social Security
Institution. When the contract is completed, the Turkish joint venture dissolves
• Joint ventures are relatively easy to establish in Turkey thanks to the introduction of the new FDI
Law in 2003. Once all the requisite documentations have been prepared and furnished to the
relevant authorities, official establishment of the joint venture takes approximately 1-3 days.

There are several ways in which joint ventures can be formed in Turkey under the Turkish Law:

1. Commercial Company governed by the Turkish Commercial Code

2. Ordinary Company governed by the Turkish Code of Obligations.
• Our company is well established in India and is earning profits year on year. Thus we
have decided to enter the international market by establishing a join venture in turkey in
the form of a commercial company as we are in for the long haul and not to just achieve
short term profits.
• This is to be done with Gidasa which was established by Sabanci Holdings which is one
of the biggest industrial and financial conglomerates in Turkey, owns 66 companies
 operating in various business areas such as financial services including banking and
insurance, food and retailing, information and telecommunications, automotive
distribution plus the production of polyester, cement, textiles, tires and nylon.
• Gidasa entered the tea market with Deren brand in early 2005. Under Deren
brand, Gidasa offers products in teabag, potbag, loose, herbal & fruit tea categories. Saka
branded natural spring water and Deren branded tea production take place in Gidasa's
'food base' in Sakarya.
• In Gidasa facilities, the production is done with machines, implementing world standards
of hygiene. USA, EU and the African countries are among the strongest export markets
of Gidasa. Currently it employs more than a 1000 workers, the facility is built in a 26,000
m sq. closed field and 18. 000 m. sq. closed area. Gidasa has a 5420 tonne tea production
capacity. It’s turnover this year was 20,000,000$ and has a long and fruitful exporting
experience.
• We will buy 40% shares in Sabanci Holding to establish the joint venture. The shares of
Sabanci are currently trading at 6.90 Turkish Lira which be purchased at a discounted
rate by raising capital from the profits generated by our Indian parent company and the
SBI.
• We will raise also this money through FCCB’s which will be more beneficial to us
because the equity side of the bond, which adds value, the coupon payments on the bond
are lower for the company, thereby reducing its debt-financing costs. The FCCB’s will be
floated in the European market.

MARKETING STRATEGY
• Gidasa has its own network of suppliers and distributors in place and that is one major
advantage for us as we will be entering a completely new market. We will change the
packaging strategy of the product to make it more in touch with the changing customers.
• As they already have international distributors in place we will not have to worry about it and
we will also open up the Russian market which has a huge potential for us.
• The tea which we are going to export to UK and Russia is estimated at 9 USD as tea prices
are at hike. Tea prices have been raised by 30% in UK due to inflation.
• We will also come up with organic tea as it is fast becoming a major niche market sector with
green tea.
• We will also launch a new brand of bottled iced tea with a major football star from turkey as
its brand ambassador.

CONCLUSION
• Driven by health, quality and 'premiumisation', the global hot beverages (coffee and tea) market
is estimated to reach USD 69.77 billion by 2015. This was revealed by a recent report, titled
“Hot Beverages (Coffee and Tea): A Global Strategic Business Report”, by Global Industry
Analysts Inc.
• As the health benefits of tea are coming to be known the global consumption of tea is increasing
day by day as is its production. This is the best time to expand our production facilities.
• Turkey is the best place to start our expansion as the market is not inundated with tea companies.
It is also the fifth largest producer of tea and the second largest consumer. So not only would we
have a steady supply of raw material, we would also have a large domestic market.
• To make matters better Turkey is situated right beside Russia and England the two largest
importers of tea. So we would have a large and lucrative export market right at our doorsteps.
• Initial discussions have already been carried out with Sancai Holdings a large conglomerate of
companies raked 610th in the world. With our business expertise in terms of the tea industry and
their infrastructure we would make a formidable force in the Turkey tea maket.