Hazelnut Presentation January 2013 Presented by Ufuk Özongun Olam International Limited

World hazelnut farming areas

Hazelnut farming areas/ha by countries

World hazelnut supply in shell 2000–2012

World hazelnut kernel consumption 2000-2012

Global supply Turkey remains the major source of hazelnuts Improvement on the production side Stable quantities in Italy and Spain, USA Weather and seasonal differences affect the crop Emerging countries like Georgia,Azarbaijan and Chile New acreages in southern hemisphere countries 2 crops in one year

Hazelnut growing areas at Turkey Western Black Sea Eastern Black Sea New Developing Region Traditional producing Region Duzce 15.1% Samsun 14.3% Sakarya 16.8% Ordu 18.4% Trabzon 7.9% Giresun 15.3%

Hazelnut farming areas/Ha Turkey 2000-2012

Turkish hazelnut crop 2000-2012 mt

Turkish Hazelnut Industry Traditional system governmental intervention FKB/TMO replaced with a new system free trade without FKB/TMO Mechanisation problems. Small farms (350.000) increasing farming costs Low average harvest per producer (68% below 2Mt) Increasing hazelnut demand,volatile crops and price level EU countries remains the main destination. Confectionary usage is high -more than 80% Factories in Turkey produce using the latest technology and with a high level of food safety Emerging export markets like China,Russia,Middle East and South America.

Global Supply 2012

Turkish hazelnut kernel price FOB USD / KG

Prices of Turkish Hazelnut kernels 1950 to 2012 US$ per 100 kg CPT EU

Chile Hazelnut farming started with lead of Ferrero Oregon/USA Chile Expected crop is 36- 38.000 stons Blank nuts during harvest Very good quality, no mould and decay Most products are sold or commited Expect little carry over end of season Hazelnut farming started with lead of Ferrero Reached 13.000 ha, expected 25.000 ha in 2019/20 Suitable land for mechanisation Low farming cost

Georgia Azarbaijan Around 20.000 ha and 35.000 mt crop Big product size, but low yield 38-40% Low labor costs, unefficient technologies Exports kernels to neighbouring countries and in shell to Far East 25.000 ha area and 40.000 mt crop Average yield 35-38% Low mechanisation o farming side Factories for cracking and selecting Exports mainly to Russia and EU

Market trends Development of new products with hazelnut kernels as an ingredient European Market is stagnant, but still on high level Hard Discount retail chains are expanding Demand increasing across all markets East European Markets increasing due to growth in the confectionary industry in the American Market through imports of branded products New markets in Asia and Far East

Looking into the Future Crops likely to be stable , unlikely to increase in Turkey, Italy, Spain and Oregon but growing in Georgia, Azarbaijan and Chile Sustainibility and Tracebility likely to be buzzwords in the coming future Increasing ‘Farm to the fork’ focus Increasing price levels Major buyer’s developing farming projects Global player’s entrance to the hazelnut market Promotion activities

THANK YOU

Questions?