Beginning with a humble stone mill in Samsun Bafra and now boasting a daily wheat milling capacity of 2600 tons, along with export achievements spanning over 50 countries across four continents, Pakun is ramping up its investments. As the company commemorates its golden jubilee in the sector this year, it not only shines in the flour industry but also stands out with its green energy initiatives. Moving forward, Pakun aspires to go public, aiming to join the ranks of flour companies listed on the stock exchange. 

Established in Bafra, Samsun in 1973 and now standing among Turkey’s top exporters, Pakun marks half a century on its triumphant journey. Celebrating its 50th year, which aligns with the centennial of the Republic of Turkey, the company hosted a grand ball in Samsun. At this event, graced by family members and luminaries of the flour industry, we sat down with Pakun’s Founder and Chairman, Niyazi Durgun, to discuss the company’s vision for the future and its forthcoming investment strategies.

Could you share the story of Pakun, which transformed into a global powerhouse due to the tireless endeavors and accomplishments of an Anatolian industrialist?

Our industrial voyage began 50 years ago with a humble flour mill in Bafra, Samsun. Now, we handle some of the world’s premier wheat, producing a diverse range of 25 products, including specialty wheat flour varieties. Our commercial endeavors, both domestically and internationally, have propelled us to significant heights. In 2017, we incorporated our second manufacturing facility in Çorlu, Tekirdağ. And by 2023, with our third factory investment in the same region, we continue to expand unwaveringly. Once this new plant is operational, we’ll have achieved a combined daily capacity of 2600 tons across our three facilities.

Our achievements this year were recognized with the European Quality and Taste Award. With an innovative mindset, we’ve crafted an extensive product portfolio, and our production and export endeavors are going strong. We take pride in supplying our world-standard flour to over 50 countries across four continents, flying our national flag high in global markets. Today, with half a century of expertise under our belt, we are truly influencing the direction of the flour industry.

MY WORK AND GRANDCHILDREN FUEL MY LIFE’S ENERGY

In our commercial journey that began with a stone mill in Bafra, we look forward to elevating our Pakun brand, with plans to take it public in the near future. I extend my heartfelt gratitude to each of our coworkers who have played a part in this success story, across every department and rank.

For 50 years, I’ve been actively involved in this sector. And even with the passage of time, I remain committed to my role. I dedicate at least 12 hours daily to my work. It’s my work and the legacy I see in my grandchildren that gives me my vitality and drive.

700-TON PRODUCTION FACILITY IN VENEZUELA

Could you share details about your investment in Venezuela?

Beyond the daily crushing capacity of 2600 tons across our three facilities in Turkey, our upcoming project in Venezuela will bring an additional 700 tons of production power to our portfolio. In doing so, we will further solidify our role as innovators and leaders in both the Turkish and global food industry, continuing to champion our sector to the fullest. 

What is the current status of your solar energy investments? How much energy do you aim to produce through these investments?

Guided by our commitment to environmental sensitivity and sustainability, we have initiated our renewable energy projects. The investment incentive for our solar power plant in Demirci, Manisa, with a capacity of 5 MWp, has received approval. This plant, set to be established on 53 decares of land at an approximate cost of USD 3,750,000, is projected to produce 8,500,000 kWh of electricity annually. Subsequent to our ventures in Manisa, we sought an investment incentive for another 3 MWp project located in Kalecik, Ankara. This initiative, valued at USD 2,250,000, will occupy 41 decares. Upon its completion, we anticipate our Kalecik facility will yield roughly 4,800,000 kWh of electricity each year. Once both our solar power projects are operational, we’ll be harnessing our own clean energy to power our factories in both Samsun-Bafra and Tekirdağ Çorlu. As we move towards energy self-sufficiency, we’re also advancing towards our goal of carbon neutrality. Concurrently, we have plans to sell the electricity we produce, amounting to 2,300,000 kWh. Additionally, we’re gearing up to launch our newly finalized 10MW solar power project. Moving forward, we remain confident that our innovative stance, coupled with our faith in technology and science, will sustain our leadership in the sector.

How did the first half of 2023 fare in your sector in terms of sales, production, capacity, and profit? (By what percentage did it grow compared to the first half of 2022?)

Building on our strong financial performance from 2022, as the Pakun brand, we sustained this momentum into the first six months of 2023. We saw an 85% surge in total sales during this period compared to the corresponding months of the previous year. To provide specifics, Pakun’s total sales, which stood at 918,124,180 TRY in the initial half of 2022, exceeded 1,697,470,485 TRY during the same timeframe in 2023. By the close of the first half of 2023, our period net profit reached 84,973,407 TRY, with total assets tallying up to 1,219,811,731 TRY. The company’s gross profit margin settled at 17.50%, while our EBITDA margin was pegged at 8.11%.

Delving deeper into the performance metrics for the first half of 2023, the second quarter witnessed a spike, with figures climbing to nearly 2.5 times that of the first quarter. Our cumulative sales for the initial three months of 2023 surpassed 673,671,000 TRY and scaled above 1,697,470,000 TRY by the end of June. Looking forward, we are optimistic that our performance will continue its upward trajectory in the latter half of the year. 

EXPORT REVENUE ROSE 58% IN THE FIRST HALF

How did domestic and international demand trend in your sector during the first half of 2023? What was the figure for domestic demand during this period? And the figure for international demand?

Our export revenue surged by 58% in the first half, compared to the previous year, climbing from $24,000,000 to $38,000,000 in 2023. In tonnage terms, our orders saw an uptick from 45,000 tons to 75,000 tons.

Demands from international markets have doubled since last year. At Pakun, we proudly export to over 50 countries across four continents. During this time, we expanded into new markets, namely Cuba, Cameroon, Sudan, and Sri Lanka. Currently, we’re experiencing a surge in demand, especially from African nations. 

How is the latter half of 2023 shaping up in terms of sales, production, capacity, and profit? What percentage growth do you anticipate compared to the corresponding period in 2022? How do you project the performance relative to the first half of the year?

For the second half of 2023, we project our sales to be at least double. Positive outcomes have started to emerge from the Dubai Gulfood Food Exhibition we attended in February, as well as from the F-Istanbul in July and the WorldFood Istanbul in September. Notably, at Gulfood — recognized as one of the world’s premier food exhibitions — we’re diligently and swiftly addressing the demands we’ve garnered. When juxtaposed with 2022, we foresee this year’s growth exceeding 50%. Recently, our Durgun brand flour has distinguished itself on the global stage, particularly after securing a quality and flavor award. This accolade, endorsed by the International Taste Institute, has further invigorated our demand. 

What do you anticipate in terms of domestic and foreign demand in the latter half of the year? How do you project the domestic demand figures for the next 6 months? And for foreign demand? Why?

While the sales figures from the first half of both 2022 and 2023 in the domestic market were comparable, we saw an uptick in revenues due to price hikes. In the first half of 2023, our income surged by nearly 40% compared to the previous year. For the upcoming six months, we’re optimistic about seeing an upward trajectory in both sales and tonnage, culminating in an increase surpassing 50% by year’s end.

On the export front, we’re aiming to double our success from the first half as we move into the latter part of the year. Besides our established plants in Samsun Bafra and Tekirdağ Çorlu, we have several surprise investments lined up. With the inclusion of our third facility, we’re poised to bolster our production and export capabilities by 75%. We project our export value, which was $38,000,000 in the first half of 2023, to surpass $90,000,000 in the second. Given these strides, our ambition is to round off 2023 as a brand that has expanded by at least threefold.