Value Chain Development in Nigeria

Unlocking the potential of

Horticulture Industry
through

10
th
December 2013
Page 2

Crop Demand
Increasing per capita income will enable a growing population to purchase more
and better food, fuelling the organic growth of agri-business.

Population growth: The U.N assumes 1.1% population growth over the next 30
years (a slowdown), expecting world population to exceed 9 billion by 2050.

Calorie intake per capita: Fastest growth in calorie consumption occurs when
income is less than $5,000/ year. 83% of the worlds population currently earns
less than $5,000/ year.

Quality of diet: Exponential growth in grain production necessary to meet
increasing meat demand. Compositional change in demand as people switch from
starch-based to protein-rich diets. Demand for vegetable oils will continue to grow.

Bio fuels: Policies promoting bio fuels across the world and in particular in the US,
are adding to incremental demand.
Page 3

Crop Supply
Enhanced productivity will be the significant source of incremental crop
production.
Most recently net growth has been negligible with declines in the EU and US
roughly offsetting growth in Latin America and Asia.
Negative factors such as land degradation, industrialization, urbanization, water
restrictions, regulation and importantly climate change may be increasing.
Productivity/ yield gains have accounted for virtually all crop production growth
over the last 10 to 15 years however some data suggests that yields may be slowing
on a global basis.
Water erosion vulnerability is a significant issue and new productivity gains will
have to be achieved with less water.
Currently farmers use 70% of global water supplies but are increasingly competing
with rapid urbanization for water supplies.
China and India in particular will be forced to divert water from agricultural uses to
urban populations, meaning they will become larger importers of grain than they
might have been had water not been a constraining factor.

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Foreign Investment Development in Infrastructure Technology Development
& Supply Chain







Market Development Governmental Support & Assistance
Page 8

New Technology
Drip Irrigation
Fertigation
Use of hybrids
Canopy Management
Balance use of water
Precision Farming
Protected Cultivation

Page 9

Irrigation Technology

It is a widespread belief that most of the work done by the donor agencies and
NGOs in Africa focused on symptoms and not on the cause to remove poverty
from the continent.

In the short run, the technology should pave the way for increased consumption,
asset accumulation, and reduced persistent poverty among users.

Over the longer run, it should lead to institutional feedbacks that support
sustained economic development and nutritional improvements.

Access, distribution, and useand the ways in which the design of the technology
itself can bridge institutional gaps.

Page 10
Drip irrigation system components and pathways
of impact
Access Distribution Use
Increased
Return to
Labor
Direct Cost
Savings
Increased
Return to
Land
Increased
Investments
and Returns
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
Abandonment
Marginal Change
Substantial Impact
+ +
Initial
adoption
Realization
of
efficiencies
Re-investment
and
growth
Page 11
Factors to be considered when selecting an irrigation
technology
1) Crop
2) Field size and shape
3) Climate
4) Initial investment
5) Life expectancy of equipment
6) Yearly maintenance cost
7) Labor cost to operate
8) Flexibility of crop changes
9) Height of mature crop
10) Ease of management
11) Ability to move equipment to another field
12) Ability to remediate marginal soil conditions
13) Ability to leverage other operations such as the application of fertilizers and
chemicals
Page 12
Drip Irrigation Layout
Page 13
Irrigation Canal in Tanzania
Page 14
Irrigation Canal in Libya
Page 15

Harvesting


Summer heat contained in products

Chilling sanitizing salad vegetables in the field

Optimal but not practical in most areas

Field heat removal quickly after harvest


Page 16

Harvesting Technology

Reapers with efficient outputs

Vertical conveyor reapers

GRH-1.2 reaper operates with vertical upper delivery device

These reapers are widely adopted in south asian countries.

Page 17

Effective Sorting & Grading Technologies
Electronic Sorting Technology uses laser machines to sort based on
Colour
Structure
Size
Shape differences

FLUO Technology

Microwave Sensing grading Technology

NIR - Near Infra Red Sorting Technology

Page 18

Food Coatings


Use of Morpholine in Apple Coatings:

Morpholine is a substance which is added to some waxes used to coat apples
It is normally added to the wax as morpholine dissolves and spreads the wax
The wax is dried by a hot air treatment
Any residual morpholine evaporates
This is not practiced in India, even though the scope of apple exports, and
processing is increasing
Safety issues associated with this practice needs yet more research





Page 19

Improvement of Storage Life of Food Products


Use of titanium dioxide as Food Safety tool.
Role of Ozone in fresh food Sterilization.
Stabilization for shelf life extension.
Analysis of high pressure treatment as an alternative to pasteurization.
Calcium treatment to extend the shelf life of melons.
Control hormone levels of tomatoes to optimize their life expectancy.
Ultra-low blanching to increase the firmness; hence shelf life of canned vegetables.



Page 20

Supply Chain and Logistics Infrastructure
Pre-cooling System
Zero Energy Cool Chambers
Cold Storage
Controlled Atmosphere
Curing Chambers
Packing Centre
Distribution Centre
Cold Chain



Page 21

Cont
Africa offers great opportunity for manufacturing sector because of being
preferred source of supply, low cost of land and labor and proximity to Europe and
American markets.

New ports like Lamu in Kenya are being developed and old ports like Mombasa are
being modernized.

There is a scope to integrate logistics infrastructure with SEZs, township
development and agricultural infrastructure to focus on short, medium and long
term development, thereby ensuring viability, sustainability and financial liquidity
of the project. The same project may include hospitality and healthcare tourism
within the township.

There are few large sized investible companies in this space, therefore they need
an umbrella organization to grow under, a PE Fund can assume that responsibility.

Page 22

Modern Loading Dock


Page 23

Mechanised Handeling
Page 24

Silo Technology- Shipping
Wagon Loading System Special Food grain Carrying Wagons



2 Discharges at Bottom
Top Hatch for Grain
Feeding
Page 25

Components of Cold Chain
It is basically a logistics system, which provides and maintains a series of facilities for
ensuring ideal storage conditions for perishables from point of harvest to the point
of sale.

This necessitates providing pre-cooling facilities, packaging, ripening, cold storage
facilities, reefer transportation etc. on an end-to-end basis.



Farm
(Point of
Harvest)
Pre-
cooling
Storage
(Cold
Storage/
CA)
Processing
/
Packaging
Storage/
Distributio
n Centre
Retail
(Point of
Sale)
Transportation Transportation
Inbound
Logistics
Page 26

Critical Success Factors
COLD CHAIN
Plant
Equipment &
Packaging
Different
Private
Players
Finance &
Insurance
Cold Logistics
& IT
Solutions
R&D
Institutions
Govt. Policies
& Support
Page 27

Key Challenges in Cold Storage Industry
Integration of the Cold Chain
Technology
Lack of Modernization
High Project Cost and High Working Capital Requirement
High Cost of Power


Page 28

Case Study - Cold Store Logistics Park, Hong Kong
Packing & Ripening
Centre
Fresh Produce Cold Centre
for storage
Temperature-Controlled Dock
Trading Arena
easy access & well
planned layout
Discharge &
Parking Zone
Business Complex
provide exhibitions services for
local & international clients
Page 29
A Case Study - Pan India Rail Dedicated Freight
Corridor

Connecting the modern FTWZs
Strategic Rail Terminal Network
across India


Page 30

Case Study - Wholesale Market Evolution in India
TWM
TRADITIONAL WHOLESALE MARKET
Price discovery
Aggregation
Physical exchange
Serving 1.1 bn population
MTM
MODERN TERMINAL MARKET
Hub & Spoke Model
Transparent & efficient
price discovery
Stronger farm linkages
Market information
Storage facilities
Integrated trade for fresh

MFP
MEGA FOOD PARK
Synergistic cluster based
approach
Value addition facilities
Common infrastructure
Scale of economy
Integrated trade of fresh
as well as processed
Wholesale Market Evolution in India
Enablers: Government support, modern trade, increased awareness
Page 31
Case study USA - Solar Powered Refrigerated
Warehouses
Page 32

View of a Wholesale Market on Weekend
Page 33
Mega Food Park - Concept
Cluster Based Approach



Page 34

Integrated Model for Africa

Irrigation development and enabling infrastructure for modernizing agriculture
Deployment of self sufficient renewable energy (solar and bio-gas) systems to reduce
reliance on conventional non-renewable energy sources for irrigation and other uses
Capacity building and institution building for sustainability of initiatives
Market linkages and off take of agricultural produce and creation of storage,
handling, supply chain and procurement infrastructure
Processing and value addition infrastructure
Reverse logistics and distribution of farm inputs to the project area including high
yielding tissue culture planting material
Establishment of tissue culture laboratory
Credit support, assured farming and guaranteed price discovery
Investment in research and development for commercializing technologies and their
suitability to the local conditions
Replication of the project learning, demonstrations and scaling up

Page 35
Biggest Value Opportunities
Seeds
Water
Fertilizer
Machinery
Land
Capital
F
a
r
m
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r

Feed
Dairy<
Poultry
& Fish
Farmer
Fresh
Produce
Oilseeds
Grains
Dairy
Poultry&
Fishery
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Fresh Produce, Oilseeds/ Cereals, Fishery/ Poultry : From Farm Gate to Consumer
Seeds: Control Technology and Distribution
Agrinanotechnology: Revolutionize Traditional Fertilizer
Water: Irrigation, Water Services. Infrastructure


VERTICAL DESCRIPTION:-
Page 36

Recommendations

Intensive need of farmer as well as customer education
Technology up gradation at the farm level
Capital infusion through private sector participation, FDI and FIIs
Risk management by providing services and information in time
Enabling regulations at farm level for uniformity in the produce


Page 37
Thank You
Sanjay Sethi

C.E.O. Food & Beverages

Export Trading Group

sanjay.sethi@etgworld.com

+2348080143467; +919004777119
+2348080143467
Sanjay Sethi
CEO - Food & Beverages
sanjay.sethi@etgworld.com
+2348080143467 +919004777119

Thank You