MÜSİAD and LETVEN CAPITAL

TARS (Agriculture, Food and Technologies) Venture Capital Investment Fund

Online Press Launch Meeting / Thursday, 23 July 2020

Esteemed MÜSİAD Members and Friends,

Esteemed Representatives of the Business World, Above All of the Agriculture and Food Sector, Esteemed Members of the Press,

I say welcome to our meeting, at which we shall announce a fine cooperation to you, and I respectfully greet you all.

Esteemed participants,

Since the very first days of the pandemic process, we have all together been expressing the possibility of turning the adversities brought about by the crisis into an opportunity in the medium and long term.

Indeed, we had estimated that this process, which in the first half of the year caused not only supply and demand shocks but also a major fluctuation in the financial markets, would relatively normalize as of the second half of the year, and that the likely recovery would take place only in the last quarter of the year.

The second-quarter data, in which the negative effects of the pandemic process peaked, will follow a negative curve. However, we estimate that the supports provided to the markets will become even more evident in the coming period, with the effect of the normalization process that began on 1 June as well, and that with the third quarter, as of the last quarter of the year, the momentum in the Turkish economy will turn positive.

According to leading indicators, the fact that total exports recorded a performance with an increase of %15.8 in the month of June increases the expectation that a recovery will be observed in the current account balance data for the coming period.

In the light of all these developments, we believe that the performance we display in the current transition process will be a highly critical turning point that will determine what we can achieve in 2021 and beyond.

First of all, we believe that the pandemic process has once again shown the importance of nationalization in industry. For we see that economies based solely on the services sector have naturally suffered far heavier damage in this process, whereas our country has differentiated itself positively from other countries with its existing industrial capacity.

In this scope, we may state that, thanks to our flexible production capacity, our proximity to large markets and our renewed logistics supply Line, Türkiye is, in comparison with neighbouring countries, a candidate to become a large production base.

Esteemed Participants,

Türkiye's agriculture and food sectors hold significant potential both on the production side and in the formation of a globally competitive sector; however, this potential is not being sufficiently utilized. For our country to reach the scale of USD 150 billion in production and USD 40 billion in exports within the scope of the 2023 targets, the agriculture and food sector is of strategic importance.

Its biological diversity, its rich climatic and geographical conditions, a sufficient amount of agricultural land, its place among the top 3 in the world in 7 products and among the top 10 in the production of 55 products, its developing agriculture and food industry, its intellectual capital, its climatic diversity, the variation of regional cultivation techniques according to product, its soil culture and characteristics, and the advantages of being able to offer 7 different experiences in 7 regions, bring Türkiye to the fore in the agriculture and food sectors.

Türkiye, with its human resources specialized in agricultural entrepreneurship, its entrepreneurs who will develop the digitalization and technology that will increase added value, its business models focused on the gastro-economy and Agro-tourism, its effort to develop logistics and the value chain, and its entrepreneurs who aim to present organic, functional, endemic and geographically indicated products with added value, is eager to turn what it possesses into added value.

The Food and Agriculture sectors have an important mission for the stable and sustainable growth of the Turkish economy, for the channelling of resources into future- and technology-oriented, productive fields, and for the capital market to turn wealth into capital.

With its 2.2 million producers and more than 45 thousand small- or large-scale companies, Türkiye has for the last 20 years been a net exporter in the food and Agriculture sector and ranks among the leading countries in the world with an average annual export growth rate of %7.5.

Today, large companies with a share of %2 produce %45 of all agricultural and food products. In the İstanbul Chamber of Industry's (İSO) list of Türkiye's Top 500 Industrial Enterprises, the food sector ranks first with 100 companies, and the net sales of these companies amount to TRY 143.5 billion. The sector provides 5 million jobs, and %12 of exports are realized through agricultural products.

Migration, urbanization, small farming families, food security, climate change, the environment and natural resources, nutrition and diet will determine the change in the world's agriculture and food systems between 2030 and 2050. Technological innovations, the bio-economy and sustainable resources will determine the range of this transformation in agriculture and food as well.

Hygiene, irrigation, water technologies, soil management, waste management, organomineral fertilizer technologies, zero waste and energy production technologies, local products, functional food and medicinal aromatic products will be the indicators that prevent countries from remaining dependent on abroad. The entire world will struggle, by acting jointly in the agriculture and food sectors in order to lower costs and increase production and productivity, to form a collective wisdom in the spirit of an ecosystem.

Esteemed Participants,

Food safety is a broad field covering the processing, the preparation and the storage of foods. In the world, 2 billion people, together with those suffering from hunger, cannot reach safe food because of food safety risk. On the other hand, the economic cost of poor nutrition is of shocking dimensions.

In 52 of the 65 countries in which the negative effects of economic slowdown and recession on food security and nutrition have been felt most sharply in recent years, the economy rests on imports. The food sector, worth USD 7.8 trillion and generating a production value of USD 7 billion a day, provides employment to %40 of the world's population. 6 billion people are fed by conventional agriculture and 2 billion by functional agriculture.

1.3 billion tons of the food produced in the world is wasted. %14 of food loss occurs at the production – supply stage. One third of food is also wasted at the final point of sale and at the consumption stage.

When we look at Türkiye's rate of food loss, it stands between %15 and 25, together with harvesting, the transport of the product to the market and to the wholesale market, storage and the unconscious use by the consumer.

In a Türkiye that can succeed in preventing and reducing food waste, in rescuing and redistributing what is wasted, in evaluating it as animal feed before it goes to the rubbish, and in converting what does go to the rubbish into electrical energy, by giving only %5 loss in food and by preventing waste, we can become the means of feeding 900 thousand people well.

In Türkiye, 33 million tons of rubbish are collected annually, of which 14.5 million tons are food waste; as much food is wasted as our country's Food and agriculture exports, at an estimated value of the order of USD 14.5 billion. Türkiye needs to turn what it possesses into value and its wealth into capital.

The coming period requires more empathy, solidarity and teamwork; however, in order to fulfil these there is a need for focus, for setting priorities correctly and for an analytical approach.

In the field of Food, Agriculture and their technologies, it is necessary to shift from an export model based on raw materials to one based on innovative, healthy functional products and on production oriented towards sales. It is necessary to digitalize the sector by industrializing it so that it can be managed on the basis of big data analysis.

Türkiye must develop and enrich, through technology- and export-oriented business models, the value chain that will enable the agriculture and food industry to work in a coordinated and integrated manner.

Esteemed Participants,

Türkiye is positioned so as to be able to reach a food market worth USD 2 trillion and 1 billion people within a period of 4 hours. There is no obstacle before us to taking a %10 market share within 10 years.

Every year we must carry 200 SMEs in the agriculture and food industry to the status of large-scale enterprises, and 1,500 start-ups and micro-scale companies to the scale of SMEs.

Türkiye must, by supporting small farms and endemic food tourism through functional agriculture, make Anatolian cuisine a priority with its e-export-oriented enterprises that produce local flavours.

In order to export products that are sold at high prices and are in demand in the world, Türkiye must invest in portfolio management in which it can develop technology-oriented, global business models that will increase productivity in agriculture, in product innovation, in food safety, in food logistics, in the fields of packaging and packing, and in the preservation of food at points of sale.

For Türkiye to become the centre of agriculture and food investments, it needs to host at least 100 venture capital, private or corporate funds and to have 1,000 international business-developing professionals managing funds.

Here today, we shall put into practice a cooperation that we believe will be the occasion for a great leap forward in “agricultural rural development”, a subject to which we as MÜSİAD attach great importance. With the aim of supporting agricultural development and of enabling our country, which has great potential in this field, to become a leading power on a global scale in the agriculture sector, LETVEN CAPITAL has established the Food, Agriculture and Technology Venture Capital (TARS) Investment Fund.

Within the scope of the fund that has been formed, taking into account the realities of the period through which we are passing, it is aimed to form and to evaluate the business models and business partnerships needed in order to transform the agriculture and food supply chain into a sustainable, affordable and nourishing system for future generations. And we, as Türkiye's strongest and most widespread capital platform on a global scale, are entering into cooperation in this field with LETVEN CAPİTAL within the scope of the (TARS) Venture Capital Fund.

We regard this cooperation as one of the fruits yielded by the Renewal process that our MÜSİAD has put into practice. With such wide-ranging projects of ours, in which our MÜSİAD brands, the final stage of our Renewal process, will take an active part, we aim to present the national economy with work of high added value. MÜSİAD

FUTURE (the Future) — our brand as we thus define it — will make its presence felt as an active player in Türkiye's new road map in the field of agricultural and rural development, with the slogan of the business models of the future and the sectors of the future. On this occasion I should also like to give you the news that we shall present yet another project of our MÜSİAD FUTURE brand to you at a very near date.

Today we attach importance to supporting TARS, Türkiye's first venture capital investment fund investing in the field of food, agriculture and technologies, of which LETVEN CAPITAL is the founder. In order to be the lifeblood in Türkiye's raising its exports from USD 18 billion to USD 180 billion over the next 10 years and in transforming 2,000 agriculture and food companies into SMEs and large-scale companies, we, as the MÜSİAD capital platform, invite our members above all and all our stakeholders to invest in the TARS fund.

I wish that our cooperation may bring good to our country, to our members and to the food and agriculture sector, and I greet you with respect and affection.

Abdurrahman Kaan

President of MÜSİAD