(alirizasakli@yahoo.com; http://www.sakli.info)

Adviser: Dr. Seriye SEZEN

            Turkish tea industry as a whole with its peculiar structure of market sharing by State enterprise Çaykur[1] with its 66 pct (based on quantity) and hundreds of private enterprise companies holding the rest appears not to have been successful against standard criteria of efficiency and quality orientation in comparison with those of averages for similar industries in Turkish and other international economies. The major problems that surface the poor performance are continuous operational losses resulting in subsidies provided by the government in case of Çaykur, lack of capability to increase their market share in case of the private owners and the low pricing of harvested tea resulting in poor income generation in case of the growers.

            The objective of this study is to investigate whether a new model may be constructed to satisfy the requirements of product quality and efficiency in an environment of liberal economy and to provide solutions to problems of parties involved in tea industry.

            The study has been extended along the historical traceback of Turkish tea industry while in particular current circumstances have been delineated with particular emphasis on problems for each party involved. Doing so helps in building a log of problematic issues which then shall be put at test with the model to verify its capabilities for resolving the conflicts and satisfying the requirements.

            Various aspects of the Industry have been analyzed in search of developing a new model. To this end, rehabilitating the Industry while keeping the current structuring and roles of the parties intact, disintegrating Caykur by privatizing the tea processing facilities, or transferring Caykur, maintained as a whole, to growers, have been examined while investigating similar models of Pankobirlik factories that are owned by unions, Karabük Iron Works owned by own workers, and Tigem that has a long term leasing contract.

            Tea industries of the leading producing countriesof India, Sri Lanka and Kenya have been examined. Kenyan Tea Development Authority as a union of growers has been of particular interest for the new model in this work.

            The model that has been constructed in this study is expected to achieve a new structuring of the Tea Industry, Tea Board and Tea Auction with a mission of high efficiency in the industry and good quality for consumer through providing solutions to industry problems.

            The radical approach of this model has been on Government policies on pricing of growers’ tea. The payment installments are rearranged as two, with one during the season and the other at the end of the year while prices themselves are based on references of tea prices of processed (dry) tea at the Board’s auctions.

            The model that has been developed comprises of turning each processing factory into a separate corporation and transferring the shares to the local growers in the factory hinterland while maintaining Caykur as a packing and marketing enterprise for the products of newly established factory-corporations with a market share of 95 to 110 thousand tons per annum. The restructuring of the Caykur operations is expected to be completed at the end of the eight year when the ownership of Caykur Corporation so developed will also be transferred to the processing factory corporations.

            Keywords: Turkish tea industry, disintegrating Caykur, reconstructing the tea sector, Tea Board and Tea Auction.