The increasing biscuit consumption in the world makes the biscuit sector more attractive especially for export oriented investments. In 2008 world sweet biscuit market reached 35.2 billion dollars (8 million tones) and was more than the value estimated for 2011. It is estimated that this value reached 41 billion dollars in 2013. As is in the world, biscuit consumption is increasing depending on changing life-style in Turkey. Reducing of cooking time as people spare more time for working life and travelling and increasing of income level are among the most important reasons for increasing the biscuit consumption which is included in “snacked foods”. Hence production is also increasing all over the world in line with the increase in consumption. Biscuit, which was accepted as a luxury consumption material previously, became a food which can be consumed by everybody today. However, while per capita biscuit consumption is 13-15 kg in Europe, it is still around 5-6 kg in Turkey. For this reason, biscuit producers diversify their production for meeting the demands of target consumers with varieties such as diet biscuits for diabetics, formula biscuits for children, special breakfast biscuits, nutritive whole-wheat, oat or rye biscuits that are used for losing weight. Biscuit industry tending to produce healthy products in Europe and America makes efforts for producing products that are both delicious and appealing to taste of consumers and healthy. For this reason varieties with very low fat rate are introduced to the market. Particularly, studies for developing low fat using technologies are maintained in the USA. Fat-free and low in fat products constitute the part of biscuit sector which grows in the speediest way. WORLD BISCUIT PRODUCTION AND CONSUMPTION EU countries (especially England, Germany, Belgium, Italy, France, Spain and Netherland) and Canada stand out in world biscuit production and export. According to data of Association of Chocolate, Biscuit and Confectionery Industries of Europe (CAOBISCO); total biscuit production of EU, Switzerland and Japan was realized as 4 million 463 thousand tons in 2011. This amount points a decrease of 2,7% compared to the previous year and an increase of 1% in the 5-year period between 2006 and 2011. The highest production amount in 2011 among the EU countries belonged to Germany with 731 thousand tons. Italy with 655 thousand tons, England with 562 thousand tons, Spain with 447 thousand tons and France with 404 thousand tons followed Germany. In the same period; while the production of Switzerland remained at 47 thousand tons, Japan’s production increased to 242 thousand tons. World biscuit consumption increases in general due to the reasons mentioned above. However; contrary to many countries in the world biscuit consumption in EU countries decreased especially between 2009 and 2011. According to CAOBISCO data; EU biscuit consumption, which was 4 million 94 thousand tons in 2010, declined to 3 million 909 thousand tons in 2011. On the other hand; Japan’s consumption, which was 261 thousand tons in 2010, reached to 265 thousand tons by increasing approximately 4 thousand tons in 2011. The highest consumption amount belonged to Italy with 618 thousand tons and England with 611 thousand tons among the EU countries. Germany with 586 thousand tons and France with 573 thousand tons followed Italy and England. In EU, where the average per capita consumption was determined as 7,8 kg by 2011, per capita consumption decreased 4,3% between 2010 and 2011 and 2,6% in the 5-year period between 2006 and 2011. According to CAOBISCO data; Ireland with 21,76 kg, Netherland with 12,86 kg, Italy with 10,40 kg and Belgium with 10,09 kg are on top in the per capita biscuit consumption by 2011. England with 9,75 kg, Switzerland with 9,30 kg, Bulgaria, Denmark, France, Spain, Portugal and Slovakia follow those countries with the consumption amounts ranging between 8 and 9 kg. WORLD BISCUIT MARKET According to a study conducted by Datamonitor; world confectionary market had 25.5 billion dollars (7 millions tones) value in 2006 and its average annual growth is 2.9 percent on value basis and 2.1 percent on amount basis in the five years’ period between 2002 and 2006. In the said five years’ period, maximum increase rate on both amount and value bases in world confectionary market volume was recorded in 2006 and these increases are 3.3 percent in terms of value and 2.1 percent in terms of amount. In world confectionary market, EU has the biggest share with 50.5 percent. America receives 32 percent share and Asia-Pacific countries receive 17.5 percent share. These figures show that biscuit sector is in a market position which is developed, well-organized and growing. Chocolate cake, having a sale figure of 6 billion dollars and 23.5 percent share, was the sub-sector of world confectionary market with the highest profit and market share. In the said study, it is estimated that world confectionary market will reach 30.3 billion dollars (8 million tones) in 2011 by maintaining its growth at an average rate of 3.5 percent on value basis and 2.7 percent on amount basis per year during five years’ period covering 2006-2011 years. However according to another report prepared by Datamonitor in 2010, world confectionary market reached to 35.2 billion dollars (8 million stones) and that was more than the value estimated for 2011 in 2008. It is estimated that this value will reach 41 billion dollars in 2013. WORLD BISCUIT EXPORT European Union countries, which are the world’s leading biscuit producers, are the world’s leading biscuit exporters as well. The sweet biscuit export in the world decreased by 7 percent to 5.4 billion Dollars in 2009 compared to the previous year. It was realized as approximately 6.8 billion Dollars by increasing 21% in 2011 compared to the previous year. In 2010, Germany became the biggest exporter with 12.2 percent export share and an export value of 660 million Dollars. Germany was followed by Belgium with 10.1 percent share, Netherlands with 8.5 percent share, England with 6.3 percent share and France with 6 percent share. In 2011 again Germany, Netherland, Belgium, England and Canada were among the most important exporter countries of the world. 40% of total biscuit export on value basis in 2011 was realized by those countries. WORLD BISCUIT IMPORT The world biscuit import decreased by 9 % to about 5.4 billion Dollars in 2009 compared to the previous year. The USA, France, Germany, England and Belgium had the biggest market shares in descending order. The total import share of these 5 countries was 41 %. The USA ranks first in biscuit import with 767 million Dollars of import and 14.1 percent market share. The USA is followed by France with 9.7 percent, Germany with 6.8 percent, England with 5.8 percent and Belgium with 4.8 percent. Realized as 6.8 billion dollars in 2011 by increasing 18% compared to the previous year, the most important markets of world biscuit import were again U.S., France, Germany, England and Belgium respectively. Total share of these five countries in the world import in 2011 was 38%. BISCUIT PRODUCTION IN TURKEY When Turkey biscuit industry is examined as a chronological process, it is seen that first biscuit production on industry base started in 1924. In 1932 the number of producers in 1932 increased to 4. Production was interrupted for a while in 1941 due to the flour shortage experienced. In 1956, the production was made in small workshops with primitive methods until little automatic shapers and machines laying the biscuits on the pans. After 1960, urbanization and population growth increased the biscuit consumption significantly. In 1980s, many small facilities were established around Konya, Kayseri and Eskisehir and the country started to export. Biscuit production is carried out predominantly in the Southeastern Anatolia, Marmara and Inner Anatolia regions of Turkey. There is high correlation between this fact and the regional distribution of wheat flour facilities. According to the data obtained from the Sugar Products Industrialists Association, the biscuit production of Turkey decreased by 12,000 tons to 563,000 tons in 2010 compared to the previous year. The demand decreased by 25,000 tons to 425,000 tons in the same period. According to Turkish Statistical Institute(TurkStat) data; biscuit production of Turkey, which was 439 thousand tons in 2005, reached to 570 thousand tons in 2010 and 605 thousand tons in 2011. THE STATUS OF BISCUIT INDUSTRY IN TURKEY Biscuit producers are divided into 2 groups generally as medium-large modern enterprises and small scaled enterprises by their capacity and structures. Packaged varieties create the manufacturing weight of firms in the first group that use modern production technologies. These firms that created distribution channels in almost everywhere in our country started to be extremely effective in export, too. Small scaled enterprises where mostly bulk goods sold in boxes are produced, have low prices and low quality and technological renewal has not been realized fully in such facilities. Packaged types in the firms within this category started to gain importance in the production in especially recent years. Some of small scaled firms which employ less than 500 people are making both modernization and export efforts. Also opportunities for easiness in entrance to domestic market, investment incentives and exporting to new foreign markets caused many entrepreneurs to start operating in this sector in recent years. Today there are over 40 production facilities, majority of which have modern technology. Firm number registered in Union of Chamber and Commodity Exchanges is 266 in the sector. In biscuit sector where total capacity is 850 thousand tones, capacity using rate cannot exceed 70 percent. A significant passive capacity is available in the sector. Domestic consumption is increasing at the rate of about 10-12 percent yearly. It is estimated that total biscuit consumption is about 875-900 million dollars in our country and per capita consumption is around 5-6 kg. Nowadays biscuit plants, giving great importance to product development studies and allocating share in their budgets for this within the framework of foreign expansion, apply scientific methods, increase their varieties and modernize their technologies. Karaman Province has a special position in biscuit production in Turkey. Thanks to traditional experience of the local community in bakery products, the province where production was started on workshop base in the beginning hosts a big industry which realizes export to many countries of the world today. While there were 3-4 biscuit plants producing biscuit and wafer and having around 150-200 tones of total capacities in Karaman in the years 1989-90, plant number increased to 14 in 6-7 years’ period and each of the plants produces around 200 tons per day by itself. Biscuit export from Karaman started to increase with plants that started operating in 1994-1995. In the said period, countries established after the dissolution of The Union of Soviet Socialist Republics created an important market for biscuit. In 2005, Karaman having 1 million 100 thousands tones of annual biscuit production capacity realizes about 1/3 of biscuit production in Turkey. 2005 estimated production figure of the province doing export to 80 countries is 300 million dollars. As a result of careful studies for high quality supply, many production facilities in the province achieved the international quality standards and registered the quality of its products obtaining ISO 9001 quality certificate. BISCUIT FOREIGN TRADE OF TURKEY When the very symbolic level export done to Cyprus in 1974 was not taken into consideration, it is found that the first important biscuit export of Turkey was made in 1980, however, the amount was only 2 thousand 700 tons and 3.756 thousand dollars on value basis. Increasing gradually in the following years, Turkish biscuit export reached to 11.630 tons and 12.644 thousand dollars in 1985 and 16.709 thousand tons and 20.748 thousand dollars in 1990. In 1997, when especially Russia and Central Asia Republics were selected as the target markets, export reached 182 thousand tones. Global economic crisis experienced in 1998 reduced the foreign demand to biscuit produced in Turkey. Consequently, domestic production and export regressed. Since Turkish Grain Board determined a price in wheat which is the most important raw material of the sector above world prices, thus increasing the costs, decreases occurred in the production. Biscuit exporters, in search of new markets in this crisis period, turned towards Africa countries. Bulgaria and other Balkan countries stand out as new markets for overcoming the crisis in the biscuit sector. Especially Bulgaria became the distribution channel of the region in Turkey’s biscuit export. Charming price, quality product and stable marketing strategy applied by Turkish biscuit sector in this market were effective for achieving this result. Sector increased its export to Senegal where it started export with low profit margins for overcoming the problem. Export done to Germany where Turkish people live intensively and which is the traditional market of Turkey tripled between the years of 1998-2002. With new markets biscuit export started to increase as of 2002 and according to data of Turkish Statistical Institute, it reached 144 thousand tones on amount basis in 2007. However with the effect of global crisis biscuit export which regressed in 4 percent in 2008 and around 7 percent on value basis in 2009 was realized in the level of 131 thousand tones in 2009. In 2010, biscuit export increased 13% on value basis and 15% on amount basis and Turkey realized 151 thousand tons of biscuit export with a value of 270 million Dollars. In 2012, biscuit became the mostly exported product after wheat flour among the flour and bakery products industry and biscuit export increased 4% on value basis and 1% on amount basis compared to the previous year. Just like in other years, the most important product group in the biscuit export of Turkey in 2012 was sweet biscuits examined under 1905.31 GTIP code with a share of 81%. The most important markets in biscuit exportation of Turkey are Iraq, Yemen, Germany, Saudi Arabia, Palestine, Albania, Azerbaijan, Bulgaria, Lebanon, Senegal, Turkish Republic of Northern Cyprus, Macedonia, the United Arab Emirate and the USA as of 2010. There was not much change in the export markets of Turkey in 2012. Iraq is the most important market in Turkey’s sweet biscuits export with a share of 25% by 2012. Following this country respectively; Yemen, Saudi Arabia, Libya and Algeria are other important markets in the sweet biscuits group. In the export of other biscuit varieties, again Iraq is the most important market with a share of approximately 21% by 2012. Azerbaijan, Palestine, Germany and Albania follow this country respectively. Great part of Turkey’s export is directed to Middle East, The Balkans and European markets. The trade made to western countries that are the essential great consumers of biscuit is still not in dimension to be considered important. Export to western markets is limited with ethnical markets in those countries. The primary reason for this is the different palate in western countries. Production for the West requires special effort and know-how. Biscuit producers started to have serious researches investigating western markets, nutrition habits and consumer demands done. The most important evidence of appropriate situation of production technologies for competing is shown as the fact that some biscuit producers of the West conduct contract production in Turkey. Biscuit producers can produce “difficult” products now. For example, products similar to the ones produced by the firms that are market leaders in the world are produced in Turkey as well. Hence Europe stands out as new target market in next period. BISCUIT IMPORT OF TURKEY In biscuit foreign trade of Turkey, place of import is in very low level compared to export and some foreign brand products are imported in terms of only variety. In 2009, import value of biscuit, cake, etc. realized was 39 million of dollars increasing 7.1 percent compared to the previous year. A great part of import was made from Poland, Germany, Belgium, Italy, Bulgaria, Netherland, Slovakia Republic and England in 2009.