Turkey’s largest B2B flour miller lands $25m facility to transition into retail sector

By Gill Hyslop

- Last updated on GMT

Ulusoy sees 2022 as a year of new opportunities.
Ulusoy sees 2022 as a year of new opportunities.

Related tags Turkey Ulusoy Un FMO acquisition flour miller B2B B2C

Ulusoy has secured a 6-year, US$25m senior debt facility from Dutch entrepreneurial development bank FMO to fund the acquisition of a prominent consumer brand, which will enable it to move from an exclusive B2B business into B2C channels.

Ulusoy Un Sanayi ve Ticaret A.Ş was founded in 1969 and today is the largest wheat milling company in a country that is the world’s leading flour exporter.

The Samsun-headquartered company operates three facilities with a daily wheat flour processing capacity of 2,100 tons and warehouses with a grain storage capacity of 360 thousand tons. Its goal is to become Turkey's largest agro-industrial company by 2029, and among the world’s top 10 agro-industrial companies by its centennial.

The FMO facility will be used by Ulusoy to acquire Söke Degirmencilik Sanayi ve Ticaret A.Ş, a popular flour brand in Turkey. The bolt-on will enable Ulusoy to capitalise on Söke’s strong brand recognition and market expertise in the retail sector.

The bank loan will also be used to improve Ulusoy’s milling capacity and distribution network.

Ulusoy purchases its wheat from across Turkey as well as in the Black Sea region, which it processes into flour at its facilities in the cities of Samsun and Çorlu. Currently, half its sales (TRY 4.3bn – US$317m – in 2020) come from B2B Turkish customers, with the other half made up from exports to countries across the Middle East and Sub-Saharan Africa. Its customer base includes food processors, bakeries and organisations like the World Food Programme.

Business confidence

The current economic climate in Turkey has curbed credit appetite from local banks and finance institutions. However, despite the downturns in the national economy and the COVID-19 pandemic, Ulusoy’s financial performance has remained steady.

“With support of FMO, Ulusoy has now become the biggest flour producer in the country, as well as the owner of a well-known consumer brand Söke,”​ said Gunhan Ulusoy, chairman of the Board.

We believe that this is just the beginning of the way for us in B2C world. While we will keep our commitment to produce safe and healthy food products, more dreams will come true with the support of our stakeholders like FMO, which will stimulate our further growth.”

This is not the first time FMO has partnered with Ulusoy. In 2018, the bank provided a long-term US$18m facility to finance the construction of a state-of-the-art flour mill in Samsun.

“We are pleased to further strengthen our relationship with Ulusoy, an important staple food producer, contributing to the food security in the region,”​ said Bram Reijnen, manager, Agribusiness, Food, Water at FMO.

“By signing this facility, FMO confirmed its support for strong private companies in the food sector in the times of a more difficult economic climate of Turkey.”

Ethically focused

Ulusoy contributes to no less than two of the UN Sustainable Development Goals (SDGs).

In providing a staple food across the MENA, it contributes to SDG 2 of zero hunger. Additionally, the FMO bolster will enable Ulusoy to contribute toward SDG 8 by providing employment across the more rural provinces of Turkey and boosting economic growth.

FMO supports sustainable private sector growth in developing countries and emerging markets to empower people and improve their quality of life. The bank focuses on three sectors that have high impact: agribusiness, food & water; financial and energy. With a committed portfolio of €9.3bn spanning 85 countries, FMO is one of the larger bilateral private sector developments banks globally.

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