case studies on value added of tropical fruits in thailand
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Case Studies on Value added of tropical fruits in Thailand. Juejan Tangtermthong, Ph.D. Definition of value chain. Business activities Design Inputs Marketing Distribution Finance Human resources After services. For Regional/Global value chain… The activity and service across borders. - PowerPoint PPT PresentationTRANSCRIPT
MAHA 2008
Case Studies on Value added of Case Studies on Value added of tropical fruits in Thailandtropical fruits in Thailand
Juejan Tangtermthong, Ph.D.Juejan Tangtermthong, Ph.D.
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Definition of value chainDefinition of value chain
Business activities Business activities – DesignDesign– InputsInputs– MarketingMarketing– DistributionDistribution– FinanceFinance– Human resourcesHuman resources– After servicesAfter services
For Regional/Global value chain…
The activity and service across borders
33
Adding the valueAdding the value
BrandsBrands
ResourcesResources
TechnologiesTechnologies
Channels and distributionsChannels and distributions
ExpertiseExpertise
Etc.,Etc.,
44
Emerging of global value chainsEmerging of global value chains
DriversDrivers– Multilateral and regional free trade agreementsMultilateral and regional free trade agreements– Policy liberalizationPolicy liberalization– Technological innovationTechnological innovation– New management strategiesNew management strategies
ResultsResults– High competitionHigh competition– Smaller number of dominant lead firmSmaller number of dominant lead firm– Inadequate facilitation in developing countriesInadequate facilitation in developing countries
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Challenges for SMEs in Developing Challenges for SMEs in Developing countriescountries
Lack of awareness, capacity and Lack of awareness, capacity and resources (capital, networks, skilled labor, resources (capital, networks, skilled labor, managerial expertise, infrastructure)managerial expertise, infrastructure)
High entry barriers (International High entry barriers (International standards, commitments)standards, commitments)
Unfavorable national business Unfavorable national business environmentenvironment
Lack of business development serviceLack of business development service
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Intergovernmental organization's viewIntergovernmental organization's view
Agribusiness value chain is key role in poverty Agribusiness value chain is key role in poverty reductionreduction
(Food security/Job creation/Income (Food security/Job creation/Income generation)generation)
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AFMAAFMA
Agricultural and Food Marketing Agricultural and Food Marketing Association for Asia and the PacificAssociation for Asia and the Pacific
Established 1983 by FAOEstablished 1983 by FAO
15 institution members from 9 countries15 institution members from 9 countriesPicture disclaimer of FAO Regional Office for Asia and The PacificPicture disclaimer of FAO Regional Office for Asia and The Pacific
88
AFMAAFMA
Stimulate technical exchanges and Stimulate technical exchanges and cooperation cooperation
Organizes workshop, seminar, Organizes workshop, seminar, study tour etc., study tour etc.,
Linking with governments, NGOsLinking with governments, NGOs
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InformationInformation
From study tour between 21-26 May 2007From study tour between 21-26 May 2007
Both cases are in Chantaburi provinceBoth cases are in Chantaburi province
Cases of value added durian and Cases of value added durian and mangosteenmangosteen
Information of each cases are from Information of each cases are from interviewing producersinterviewing producers
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ChantaburiChantaburi
245 km from Bangkok245 km from Bangkok
172,000 farmer families172,000 farmer families
23.6 – 29.323.6 – 29.3°C°C
Rain nearly 3,000 mm/yearRain nearly 3,000 mm/year
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ChantaburiChantaburi
Total areaTotal area3,961,250 Rai 3,961,250 Rai (633,800 ha)(633,800 ha)
ForestForest 1,166,662 1,166,662 Rai (186,665 ha)Rai (186,665 ha)
FruitFruit 1,500,000 Rai 1,500,000 Rai (240,000 ha)(240,000 ha)
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Tropical fruits marketing in ThailandTropical fruits marketing in Thailand
Jul-Oct. 2004Jul-Oct. 2004
Fruit orchards
Grower groups
Local wholesale markets
Distributioncentre
Distributioncentre
Wholesalemarket
Exportfactory
Warehouse
Supermarkets
Discount stores
Retailers
Port
source: TDRI (2005)
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Traditional marketTraditional market
Can not control Can not control the pricethe price
Over supplyOver supply
Low priceLow price
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Value added products helpValue added products help
Estimate the future priceEstimate the future price
More markets for valued productsMore markets for valued products
Higher priceHigher price
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Price in Apr-Jun 07Price in Apr-Jun 07
Apr
May
Jun
AprMay
Jun
0
5
10
15
20
25
Price (Thai Baht)
Durian Mangosteen
Apr
May
Jun
Mixed grade Quality grade
Apr May
Apr
May
051015202530354045
Price (Thai Baht)
Durian Mangosteen
Apr
May
Jun
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Two value added casesTwo value added cases
Processing durianProcessing durian
Graded mangosteenGraded mangosteen
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Case 1:Durian processingCase 1:Durian processing
Frozen Frozen
Freeze dryFreeze dry
disclaimers of Sunshine International Co., Ltd. www.sunshine.co.th
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Whole frozen durianWhole frozen durian
Fresh durian
weigh
sorting
cleaning
freezing
-45℃, 8 hr
frozen
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Freeze dried durianFreeze dried durian
Frozen durian, -25℃
peeling
cutting
freeze drying
freeze dried
disclaimers of Sunshine International Co., Ltd. www.sunshine.co.th
2020
Freeze dried durianFreeze dried durian
Easier for shipment (very light)Easier for shipment (very light)
No need for cool storageNo need for cool storage
Processing through out the yearProcessing through out the year
Durian 100 kg
Freezed dried 10 kg
Flesh 30 kg
disclaimers of Sunshine International Co., Ltd. www.sunshine.co.th
2121
BuyingBuying
Upto 1000 tonnes/yearUpto 1000 tonnes/year
Buying durian from Chantaburi and SouthBuying durian from Chantaburi and South
Buying from brokersBuying from brokers
disclaimers of Sunshine International Co., Ltd. www.sunshine.co.th
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Value addedValue added
11stst grade 18 Baht/kg grade 18 Baht/kg
22ndnd grade 15 Baht/kg grade 15 Baht/kg
Freeze dried 12-18 Freeze dried 12-18 Baht/kgBaht/kg
(Freeze dried selling at (Freeze dried selling at 1,500 Bt/kg)1,500 Bt/kg)
disclaimers of Sunshine International Co., Ltd. www.sunshine.co.th
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Leading timeLeading time
Harvest in the morningHarvest in the morning
Leave to ripen 5-8 hrLeave to ripen 5-8 hr
Chantaburi: less than 6 hr Chantaburi: less than 6 hr
from farm to factoryfrom farm to factory
South: 18-24 hr South: 18-24 hr
from farm to factoryfrom farm to factory
disclaimers of Sunshine International Co., Ltd. www.sunshine.co.th
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Case 2: Certified mangosteenCase 2: Certified mangosteen
Mangosteen grower group Mangosteen grower group (Ban Nonglaman Quality (Ban Nonglaman Quality Fruit Development Group)Fruit Development Group)
Thamai district, Thamai district, Chantaburi provinceChantaburi province
4 GLOBALGAP certified 4 GLOBALGAP certified orchardsorchards
20 other members20 other members
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Case 2: Certified mangosteenCase 2: Certified mangosteen
Gained certificate since Gained certificate since 20062006
The group was The group was introduced by District introduced by District Extension OfficeExtension Office
Started production of Started production of rambutan and Longong rambutan and Longong in 2007in 2007
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Packing housePacking house
Grading and pack at one farmGrading and pack at one farm
Facilities are shelter, walk-in refrigerator, Facilities are shelter, walk-in refrigerator, basketbasket
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ProductionProduction
collecting
grading
Prepackaging
(8 kg white basket)
storing
delivered
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Mangosteen suppliedMangosteen supplied
In 2006: 200-300 KgIn 2006: 200-300 KgIn 2007: 70 tonnesIn 2007: 70 tonnes
30 to traditional market30 to traditional market 8-12 Bt/kg8-12 Bt/kg
30 to River Kwai Inter. (to EU)30 to River Kwai Inter. (to EU) 15, 30 Bt/kg15, 30 Bt/kg
5 to Sunshine International5 to Sunshine International 15, 20, 27 Bt/kg15, 20, 27 Bt/kg 3 to Randy (to China)3 to Randy (to China) 20, 25, 30 Bt/kg20, 25, 30 Bt/kg
2 to CP (to Japan, Australia)2 to CP (to Japan, Australia) 27, 37, 47 Bt/kg27, 37, 47 Bt/kg
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PaymentPayment
Credit 15 days after harvest Credit 15 days after harvest (CP and River Kwai)(CP and River Kwai)
Randy pay on arrival to Randy pay on arrival to factoryfactory
Sunshine pay next daySunshine pay next day
3030
ProblemsProblems
Price competition with Price competition with nearby marketnearby market
Long term credit, need Long term credit, need cash to buy from other cash to buy from other growersgrowers
No market for lower gradeNo market for lower grade
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Conclusions and commentsConclusions and comments
Value added chain reduces fluctuation of the Value added chain reduces fluctuation of the pricepriceThere are more markets for both top and bottom There are more markets for both top and bottom of value added tropical fruit products.of value added tropical fruit products.It is hard for farmer to go out of the farm and It is hard for farmer to go out of the farm and seek for market and to get information of what seek for market and to get information of what customer need. customer need.
For all these, they need only some helps to get For all these, they need only some helps to get start!!!start!!!
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AcknowledgementsAcknowledgements
Chantaburi Agricultural Extension Office, ChantaburiChantaburi Agricultural Extension Office, Chantaburi
(Mr. Piya Pokket, Chief (in 2007) and Miss Charuwan (Mr. Piya Pokket, Chief (in 2007) and Miss Charuwan Thongbai, Extension officer)Thongbai, Extension officer)
Sunshine International Co., Ltd., ChantaburiSunshine International Co., Ltd., Chantaburi
(Mr. Sonthaya Bamrungcheep, production manager)(Mr. Sonthaya Bamrungcheep, production manager)
Ban Nonglaman fruit quality development group, Ban Nonglaman fruit quality development group, ChantaburiChantaburi
(Mr. Varin Somboon, group leader)(Mr. Varin Somboon, group leader)
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Thank youThank youfor attentionfor attention
Picture disclaimer of FAO Regional Office for Asia and The PacificPicture disclaimer of FAO Regional Office for Asia and The Pacific
AFMA SecretariatAFMA Secretariat
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