“Our newly inaugurated Industry 4.0 mill has the most advanced technologies, the highest food safety environment and the opportunity to meet customer expectations with the ability of applying one percent mixture. Less than a dozen of blue-collar workers are employed in our mill where Kraft packages are done by automatized machines and robots; and delivery can be done from 6 points simultaneously. That is to say, we do not require human force in our manufacturing environment. Only white-collar colleagues take part in product development, quality check and food safety documents.”
Chairman of the board of Southeast Turkey Flour Industrialists’ Association (GUSAD)
CEO of Ozmen Un
Ozmen Un has utilized the Industry 4.0 technology within a mill for the first time in Turkey and brought one of the most modern plants of Europe to Gaziantep. Here, customized flour products are being manufactured by using the robotic technology for all phases of manufacturing. The company became highly competitive in terms of quality products thanks to this investment and it started to attract many prominent European bakers.
Erhan Ozmen, the CEO of Ozmen Un which is a family company of 40 years, is the guest of the Miller Magazine for this issue. Erhan Ozmen, who had been the chairman of Turkish Flour Industrialists’ Federation (TUSAF) for many years, has some advices to overcome wheat and flour scarcity which stems from the artificial appreciation of foreign currencies against Turkish lira. Ozmen praised Turkish flour industry for being highly specialized in production as well as exportation. He stressed that Turkish flour sector can sustain its pioneering role in exports with products of high added value and overcome the current hand-wringing period. He talked about the ways to be followed for Turkey to become a country that is a net grains exporter.
Ozmen Un CEO Erhan Ozmen is a highly active figure not only in the business world but also within non-governmental organizations. He is also the chairman of the board of Southeast Turkey Flour Industrialists’ Association (GUSAD), member of the High Advisory Board of the Young Businessmen Confederation of Turkey (TUGIK), member of the board of Gazisehir Gaziantep Football Club. He is also a columnist for daily Sabah newspaper for nearly 15 years and a volunteer for a number of NGOs. According to Ozmen, the secret of his success in both business and volunteering activities can be formulated as “Right system, efficient responsibility, qualified human resources”. He expresses that synchronized results by the help of these principles make him forget his tiredness and brings him an incredible joy, happiness and energy instead. Erhan Ozmen now enjoys the pleasure of investing in technology and R&D with his son Oguz Ozmen, the 4th generation who has started to carry their flag. Erhan Ozmen’s dream is to witness a “developed Turkish nation” soon.
Here are sincere answers of Erhan Ozmen, one of the doyens of Turkish milling industry for which he spares no efforts in order to develop further.
Mr. Ozmen, we know you well. But we want to introduce you to our readers. Would you please talk about yourself? How did you get a start in business?
I found myself in the industry as a flour manufacturer thanks to my grandfather Hursit Ozmen. He entered this sector and my father Sakir Ozmen kept the business going. The most important element that attached me to this industry was the creative and innovative potential I foresaw. My son Oguz Ozmen as the 4th generation has been carrying our flag for the last 4 years.
You took over a family-owned company that was incorporated by your grandfather and brought it to these days. Would you please tell us about challenges of a family-owned enterprise?
Unfortunately you don’t have the opportunity to bring your projects into action in short period of time when you manage an enterprise with a number of different perspectives, a small capital and marginal capacity. However, you have to come through a period of time with some challenges in order to improve and gain experience. When you overcome all these challenges, you realize that they are indeed opportunities to improve yourself.
You are the CEO of Ozmen UN, Chairman of the board of GUSAD, member of the High Advisory Board TUGIK, member of the board of Gazisehir Gaziantep Football Club. You are also a columnist and a NGO volunteer… How is an ordinary day of Erhan Özmen?
I allocate most of my time for my family and companies. If you want to lead companies and NGOs you are responsible for to success you have to make them national brands and also integrate them to the world. Becoming professional and going further in a short period of time is something hard for Turkey since we do not have many qualified professionals. Therefore you have work hard to set up a system in order to follow your projects and tasks you delegate. If you achieve to do this properly, you can make those NGOs successful organizations in fulfilling their tasks.
How can you achieve to manage this busy pace?
A sustainable working environment can be created anywhere by designing and implementing rules and systems in the right way and undertaking responsibilities in a serious way. In addition, the positive impact of qualified white and blue-collar workers will make it easy for managers to lead a company or NGO. Right system, efficient responsibility, qualified human resources and synchronized results by the help of these make them forget their tiredness and bring them an incredible joy, happiness and energy instead.
Would you please give us detailed information about the new factory of Ozmen Un which is equipped with Industry 4.0 technology?
Our newly inaugurated Industry 4.0 mill has the most advanced technologies, the highest food safety environment and the opportunity to meet customer expectations with the ability of applying one percent mixture. Less than a dozen of blue-collar workers are employed in our mill where Kraft packages are done by automatized machines and robots and delivery can be done from 6 points simultaneously. That is to say we do not require human force in our manufacturing environment. Only white-collar colleagues take part in product development, quality check and food safety documents. Ambient temperature level for the 22 thousand square meter closed area is stabilized in all seasons thanks to isolation applied to all facades of the factory. There are no windows on the facades. It is also the only mill which lighting is not utilized in Turkey. Another important feature is the water treatment unit which was installed with German technology. It turns the tap water and well water into alkaline water. As a result, pH value of the water we drink, use and wash wheat with is above 8.
You have also investments for Licensed Warehousing. Please also elaborate on Ozmen LIDAS. How popular is Licensed Warehousing in Turkey?
Licensed Warehousing is an advanced system that protects grains in a healthy way and enables trade and financing by Electronic Warehouse Receipts. The system for grains from field to fork based on manpower is replaced by most advanced techniques, automation systems and sensors thanks to Licensed Warehouses and has become ready for global competition. Product inventory, one of the biggest problems in our country, will easily be foreseen thanks to Licensed Warehouse. Ozmen Licensed Warehouse (LIDAS), which was put into operation 3 years ago, is a modern plant with 55 thousand tons capacity and 7 personnel are employed in this plant.
CAPACITY UTILIZATION RATE
WILL INCREASE IN A YEAR
According to Turkish Grain Board, there are 640 mills in Turkey. But capacity utilization rates are at around 51 percent on average. What is the production capacity and utilization rate of Ozmen Un?
Ozmen Un formerly had a capacity of 350 tons and it was highly dependent on manpower. We closed down the two plants which were in urban areas in order to use their land more efficiently. Our current mill has a daily capacity of 500 tons/day. Our capacity utilization rate is so satisfactory. God willing, we will have pleasant figures at the end of the year.
What can be done to utilize idle capacity in Turkey?
We are not only the leading country in flour exports; but also in flour consumption. Consumption of bakery products in Turkey equals to 150 kgs wheat consumption per capita in a year. Including Syrian guests, wheat consumption in Turkey is 13 million tons/year in total.
Turkey has a share of 30 % of global flour trade, which is around 12 million tons. This figure corresponds to 5 million tons/year of wheat. Domestic consumption and exports together correspond to 18 million tons/year. So why have we created a capacity for wheat processing 40 million tons as there is no more potential of consumption and exports? Unfortunately, now we are downgrading, and we came from 40 million tons and 712 mills to the level of 32 million tons with 485 mills. Current difficult economic conditions will speed up this retreat and flour industrialists will experience this consolidation with national economy. We would wish that this process could be managed in a well-planned way. But in one year Turkish economy and millers will enjoy higher capacity utilization rates and gain reestablishment again.
What are domestic market share and export share of your company?
Our target was fifty fifty for domestic market and exports. But domestic market has been shrunk so we increased the share of exports for a while.
Bread and flour prices have been at the top of agenda recently. This sector was accused with profiteering and stockpiling? What happened in the background?
Since the very beginning of this year, domestically produced and exported wheat prices have been significantly increased as well as other inputs such as financing and energy costs. Therefore, it was natural to see their impact on prices. I have just answered this question in part indeed. Can you talk about profiteering or stockpiling in an industry when the capacity doubled exports and domestic consumption together?
Following controversy, export of flour produced from domestic wheat was restricted. As a professional who led TUSAD for 10 years and as chairman of the board of GUSAD, you are one of the most important actors of the sector. How do you evaluate export limits for flour industry?
With the decision about wheat imports first and then the one about flour exports, actually, inward processing regime was re-implemented. If this measure was not taken by the ministry at that time, everyone could have been affected much more negatively. But flour industry was blindsided because the move was so sudden.
Turkey is the biggest flour exporter for the last
6 years. Do you think that economic difficulties stemming from Turkey’s domestic market will have negative effect for exports?
I think we will experience these effects but difficulties will not deepen. Flour industrialists have been specialized significantly in production and exports. Relevant ministries and finance sector are well aware of developments. Export figures may be floating for a certain period but I think our exporters will improve its record with higher value added products.
What measures can Turkey take in order to prevent scarcity for wheat and flour?
There are two critical aspects for this issue:
1-Size of agricultural lands are at an average level of 59 acres and it is not efficient to do agriculture in small farm lands,
2-The issue of “how to train our people living in villages to become professional farmers”.
When we achieve to unite agricultural lands and engage our farmers in this sector, we will have no problem about wheat production in terms of volume and quality. Problems about amount of grains or fluctuations in market will also be resolved. We will become a country that is net grains exporter. Moreover, Turkey should base its growth and development projections on agriculture first, not technology. Because there is a long way to go in the area of technology but we have immediate opportunities to seize in order to realize a great potential in the field of agriculture.
At the end of September, you held the Forum of Grain Processors in Odessa, a significant event for the industry. You talked about the future of grains and flour markets and possible partnerships. How can Turkish industrialists take advantage of the Ukrainian market?
This international forum gave us the opportunity to evaluate a number of global developments with shareholders from Black Sea countries. Particularly, innovative developments and markets about flour industry drew our attention. Also, agricultural lands of 1100 acres of Ukraine were sparkling. We are convinced that they are specialized in agriculture as we are in flour manufacturing and trading. We agreed with especially Ukrainian and Kazakh shareholders to further negotiate on developing partnerships.
I am also curious about your aspiration for football. You are a board member of Gazisehir Gaziantep football Club. You are watching matches with a great enthusiasm. You look like a die-hard fan? Do you regularly exercise?
Gaziantep is a significant and creative Turkish city. It is the 8th oldest city of the world. Our city has enormous potentials in industry, exports, tourism and gastronomy but the public opinion is that it should also be supported with cultural, musical and sportive activities. Therefore, like many other metropolitan cities, Gaziantep should also have a football club to compete in top-flight Turkish Super League. This team would give the city a different atmosphere and enthusiasm. It would boost its spirits. Gazisehir football club lost at the final match last year but I hope we will achieve our goal to be among Super League clubs next year thanks to efforts of our chairman Adil Konukoglu, board members, the coach and his team.
Of course, I exercise regularly. Because sport is a philosophy of life, source of energy, method of spiritual comfort for me. I think there should be no excuses for not doing exercises. I exercise 1,5 -2 hours every evening before dinner. It enables me to have a better meal and sleep.
Anything you want to add?
Turkey is a big country with its population and land. It is among the 20 biggest economies and has a strategic importance. I hope that our country will be more developed and powerful in all areas with the right steps. My dream is to witness a “developed Turkish nation” among 36 developed nations.
Sincere regards for all readers of the Miller Magazine.