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Horticulture Opportunities in Ukraine Ukraine Horticulture Business Development Project (UHBDP)
Overview: What is UHBDP?
Market: What is the Challenge?
Services: What do we do?
Practices: How do we work?
Impact & Learning: What results?
Opportunities
Where going today…
Overview: What is UHBDP?Ukraine Horticulture Business Development Project
UHBDP Business Challenge:
Farmers and Small-Medium Enterprises (SMEs) experience market barriers that prevent them from accessing and participating in markets
UHBDP Business Objective:
• Connect small holder farmers with markets – link to opportunities
• Improve supply chain capabilities and performance
• Enable more production volume to reach end markets: Growth!
Key Activities:
• Market Development: Links to Markets
• Improvements to Production, Post-Harvest Handling and Supply Chains
• Small and Medium Enterprise growth: in the supply chain
• Alignment of University experience to Workplace / Industry
• Access to Finance and Investment
Overview: 7 Years: 2014 - 2021
$19 m DFATD + $4 m MEDA + 9 m Private
Regions:
• Kherson
• Zaporizhia
• Mykolaiv
• Odessa
Geographic Focus:
• Agriculture: Key Ukrainian industry (14% of GDP)
• Employs 20% of population
• Horticulture: Opportunity for SMF
• SMF: 60% of land under cultivation
• Grow 70% of total F&V output volume (Horticulture typically less than 3 hectares)
• Lack consistent access to markets
• SMFs isolated from markets; dependent on trader access : most F&V to local market
• Experience low crop yields and productivity; 40-60% Post Harvest Waste
• Price-centric in mindset and business approach
• Promote agri-business models: Move from price-centric mindset
• Promote access to markets: Linkages to multiple market channels : Stimulate opportunities
• Promote new post-harvest handling capacity: Cold Chain Logistics!
• Attract investments in production, supply chain and SME capacity
Market Challenges:
Hypothesis: Theory of Change
Improved production and Post-Harvest Handling practicesImproved Capabilities• Events: Practices & Techniques: Irrigation, Greenhouse, IPM, Grading, Sorting, Packaging, Chain Cold Logistics
• Incentives: Voucher / Coupons with input suppliers
Competencies college-educated entry level workforceAlign Workforce• Curriculum development: Marketing, Agronomy and Agri-business
• Provide short-term work programs/internships to promote connection to agri-businesses
Improved management practices, performance and increased cooperationLinkages to Markets• Business models and networks
• Linkages to Markets through Aggregation Hubs: (1) Informal Hubs (2) Commercial SMEs
Increased capacity amongst Ukrainian enterprises SME Capability• Matching Grants targeting “Market maker” firms
• Upgrade PHH capabilities: Traceability; Food Safety and Quality Assurance
Increased capital investmentAccess Finance• Private Investment entities & Financial Services
• “Agri-business Investment Fund”
Contracted Areas of Focus
Smart Incentives
Small-Medium Farmers; Suppliers
Access improved technologies; Induce new
Services / Products
Matching Grant Fund
Agri-Business SMEs
Spur innovative capabilities; Test new business models
and technologies; Promote SMF-led supply chains
Agri-business Investment Fund
Agri-business SMEs; Investment Firms; Commercial banks
Facilitate/Induce private capital to invest in viable
SMEs
Key Element: Innovation Fund
Key Performance Indicators
• Seeds, fertilizers and
CPP suppliers
• Service providers
• Supermarkets
• Traders
• Processors
• Aggregators
• Agrarian universities
• Higher Educational
Institutions
• Technology companies• IT-companies by activities
of planning and accounting
• Soil, Plant & Water
Analysis Laboratories
• State regional
administrations
• Ministry of Agrarian Policy
and Food of Ukraine
• Project recipients
• Partners
• Financial institutions • Banks • Investment companies
Project Implementation Partners
Market: What is the Challenge?How to promote opportunities in a transitioning market?
How to deliver services with aggressive contractual targets?
ProductionTransport
Traders
Suppliers &
Inputs
Cold Chain Storage and Transport
Post Harvest
HandlingEnd Market
Private SHF(0.5 – 2 h)
Commercial SMF
[Lead](2 – 10+ h)
Production Inputs
readily available:
• Packaging
• Plastics
• Irrigation supply
companies
• Greenhouse
vendors &
manufacturers
Roadside
Local Village / Town
Retail MarketSmall Trader
(2-5 tons)
[Broker]
Distant City Market(e.g.: Kyiv, Odessa)
HORECA
Supermarket Chain
Export: Russia, CISLarge
Commercial
Aggregators
City Wholesale
Market
Broker /
Trader(5-10 tons)
Export: Europe (EU)
Export: Middle East
Household
ProductionTransport
Traders
Suppliers &
Inputs
Cold Chain Storage and Transport
Wholesale Final Market
Private SHF(0.5 – 2 h)
Commercial SMF
[Lead](2 – 10+ h)
Production Inputs
readily available:
• Packaging
• Plastics
• Irrigation supply
companies
• Greenhouse
vendors &
manufacturers
Issue:
• Validate false
seeds
Roadside
Local Village / Town
Retail MarketSmall Trader
(2-5 tons)
[Broker]
Distant City Market(e.g.: Kyiv, Odessa)
HORECA
Supermarket Chain
Export: Russia, CIS
Large
Commercial
Aggregators
City Wholesale
Market
Broker /
Trader(5-10 tons)
Export: Europe (EU)
Export: Middle East
Household
ProductionTransport
Traders
Suppliers &
Inputs
Cold Chain Storage and Transport
Wholesale Final Market
Private SHF(0.5 – 2 h)
Commercial SMF
[Lead](2 – 10+ h)
Production Inputs
readily available:
• Packaging
• Plastics
• Irrigation supply
companies
• Greenhouse
vendors &
manufacturers
Issue:
• Validate false
seeds
Roadside
Local Village / Town
Retail MarketSmall Trader
(2-5 tons)
[Broker]
Distant City Market(e.g.: Kyiv, Odessa)
HORECA
Supermarket Chain
Export: Russia, CIS
Large
Commercial
Aggregators
City Wholesale
Market
Broker /
Trader(5-10 tons)
Export: Europe (EU)
Export: Middle East
Household
Operational Solutions:1. Lean Startup & Design Thinking approaches
2. Data-driven: Build up data around our clients (all market actors in supply chain)
We need a “multiplier!”
Implementation Challenge:
Services: What do we do?
BUSINESS TOURS“AGRICULTURE INTERNSHIP”
PROGRAM
“AGRO INDUSTRIA” MAGAZINE
“POCHATOK” MARKET
MATCHING GRANTS
WEATHER STATIONS
BUSINESS Models &
Calculations
EVENTS: TRAINING & EXPERTISE
E-VOUCHER PROGRAM
UHBDP WEBSITE
UHBDP Services
Training Events and Consultations
Trainers are the leading Ukrainian and Israeli specialists in crop protection and fertilizer application, modern agrotechnology, mechanization,business management and business psychology
MASHAV - Israel Agency for International DevelopmentCooperation, Ministry of Foreign Affairs - promotes worldeconomic and social progress by training qualified specialistsand transferring modern technologies through advisorymissions or projects in Ukraine or Israel.
МСТС - The Golda Meir Mashav "Carmel" International
Training Center conducts trainings on organization,
management, promotion and business development.
CINADCO - The Center for International AgriculturalDevelopment Cooperation, which organizes consultingmissions on growing agricultural products, packaging,storage, irrigation, CPP and fertilizer applications.
Expertise from Israeli Government
For UHBDP clients - 25% discount for annual
subscribtion!
Specialized edition for those who grow vegetables, fruits,
berries, mushrooms and produce honey
Each issue of the magazine contains a unique
information about the latest technologies for growing
crops, including niche ones, professional advice on
agronomy, fertilizer and CPP application, effective
marketing and business promotion, success stories of
small and medium-sized farmers, production
information, crop data.
A privileged subscription for the specialized “Agro
Industria” magazine is still under way!
“Agro Industriia” Magazine
Applicable scope: farms, family budget
Accounting for fixed and variable costs, depreciation, cash flow
Income accounting, crop reports
Graphs, diagrams
Analysis
Business Modeling and Calculation
INTERNATIONAL APICULTURAL
CONGRESS
Istanbul,
September 29 - October 04, 2017
INTERNATIONAL TRADE EXHIBITION
FOR FRESH FRUIT AND VEGETABLES
Berlin,
February 06-09, 2018
INTERNATIONAL TRADE FAIR FOR
ORGANIC PRODUCTS
Nuremberg,
February 13-16, 2018
https://uhbdp.org/ua/our-services/business-trip
Business Market Tours
https://pochatok.od.ua/
UHBDP clients can sell their produce on
“Pochatok” market during weekends FOR FREE
Comfortable and safe conditions for trade,
free, convenient parking for customers’
transport
Trading space can be given to a farmer for 1 or
2 days
Working hours : 24 / 7
Preliminary registration by phone:
097-073-5-777
“POCHATOK” Market test
19 weeks
= 5 months
59821 KG
of fruits
and veg
32 SMF
Participants
340 L of
Honey
2250 PCS
of sweet
corn
TOTAL SMF
REVENUES
668 535 UAH
30 SMF participants
Key Test Results
"... I can take any quantity of
goods. If I do not manage to
sell at retail, I can sell the rest
in bulk ..."
Feedback from UHBDP participants regarding trading on Pochatok market
".... It is really hard to find a place
on the market, you know. Everything
is reserved, but here I was offered a
trading spot... I have the right to go, I
will not look for a trade point as I
come to the market purposefully ..."
"... Earlier we stood on hills, along the
roads and it was bad ... there were
racketeers, but now everything is fine
and free. We are protected and that’s
also great... "
Linking actors in Market Channels
EFFICIENCY
REPORTING AND MONITORING
OF THE PROJECT
• Quarterly monitoring and data
collection
• Evaluation of investment efficiency
• Information about company’s activity
• Performance analysis of working
with small and medium-sized farmers
CONTRACT
CONCEPT, FINANCIAL MODEL AND BUSINESS PLAN DEVELOPMENT
• Consultative planning with applicants
• Selection of potential candidates (SMEs)
• Projects:
- storage
- cooling
- processing
- sorting
- packaging
- other
CONCEPT
SEARCH AND SELECTION
OF THE APPLICANTS
• Obtaining company’s data:
- Shareholders / Management
- Financial indicators
- Sales markets/Competitors
• Business development prognosis:
- Crops
- Area/Yield
- Price forecast/Sales markets
- Evaluation of financial indicators
Matching Grants
Matching Grant: Andrii ChornyiCompany Andrii Chornyi
Problem • Region is in high demand for tomatoes
• Local trading center: asphalt, day traders
• SME: Vision for regional logistics
o Expertise; Connections to export market
Solution • Create a packing house
o Renovate old transport facility
o Temporary cold storage
o Clean environment
• Grading and Sorting
• Packaging and transport logistics
• Opened September, 2017
• Opportunity to aggregate 30+ farmers
Amount Total business plan: US$198,940
MEDA match: US$ 74,400
Matching Grant: Tempori ParseCompany Tempori Parse
Problem • Grow garlic; Connections to export
• Could sell more, but need supply
• How to source garlic from small famers
Solution • Production:
o Support in preparing and growing
o Make inputs and equipment available
• Construct cold storage
o Temporary cold storage supply
o Grading and Sorting
o Packaging and transport logistics
• Multiple stages of implementation
• Opportunity to aggregate 20+ farmers
Amount Total business plan: US$ 347,700
MEDA match: US$ 138,500
Practices: How do we work?Applying Business marketing techniques in the development industry:
• Lean Startup : Design Thinking : Hypothesis Testing
• Client Centricity and Client Experience (UX)
• Data Driven Tools and Management
Leverage our Test Hypothesis strategy to Learn about clients!
• Purpose: Why we use Hypothesis testing
• Understand clients perspectives and responses to our ideas
• Test Assumptions: Prototype!
• Purpose: Learn Quickly!!
• Based on Lean Strategy and Agile
• Fail Quickly; Fail Small Learn
• Based on Hypothesis Testing
• Test scenario
• Result Learning
• We have a series of ICT tools to help us
UX : Small Farmer – Open Market
UX : SME – Niche Market
Track performance indicatorsContract Reporting
• Fulfill contractual obligation reporting requirements to demonstrate project success
• Reduce time to know whether on target
Track Operational PerformanceManage Operations
• Manage key partners targets, activities and performance with operational data
• Enable key partners to leverage their own data to manage performance => Capacity Building
Profiles, Client Segmentation and OpportunitiesUnderstand Clients
• Gain insight into client experience (UX) and perception
• Understand adoption models: Why change what currently doing?
Induce potential market actors to act in the marketShare Data
Leveraging a data-driven strategy to enable:
Impact & Learning: What results?
Locus of Control
Statement:
“I have access to training and information on how to sell”
Ba
selin
e2
01
7
Locus of Control
Statement:
“I feel confident about
opportunities to sell
my produce”
Ba
selin
e2
01
7
Locus of Control:Women’s Perspective
Comparison of Baseline and 2017 responses: Percentage responding to “AGREE”
Observations:
• Large increase from Baseline to AS2017
• Women feel more confident about opportunities to sell produce
• They believe they have more access to information:
• How to grow
• How to sell
• They have a better understanding of which markets they sell to
Question Baseline AS2017 Change
“I know exactly which
markets my produce
goes”
19% 39% +20
“I feel confident about
opportunities to sell my
produce”
10% 41% +31
“I have access to training
and information on how
to grow”
14% 58% +44
“I have access to training
and information on how
to sell”
13% 39% +26
Client Reach:
28,000 of 44,000 clients
(achieved 63% of Target by Year 3)
Sales Volume: “Top Ten” Aggregation Hubs
22,000 of
50,000 MTs
[conservative]
Achieved 44%
of Target in
Year 3
OpportunitiesImport Fruits & Vegetables?!
Expertise with Cold Chain Logistics?
Prayer: Staff, Clients and Markets
Questions
Thank YouCreating business solutions to poverty
meda.org
Resource slidesNot used in the presentation
Contract ReportingPurpose: Capture data to track and report progress on achieving contract-related performance indicators – usually expressed in our Performance Management Framework indicators (GAC)
We capture data from a variety of sources to report on KFPs / PMF indicators: periodic targets and actual results
Examples:
• # Clients
• # Events
• Sales volume and Sales Value
Manage OperationsPurpose: Capture data to (1) tracking of performance with more frequency, enabling pivots and changes in programming (2) make management decisions
We capture data from a variety of sources and use it to actively manage project activities and operations
1. Key Facilitating Partners
• Performance of Actual against Targets
• Delivering as contracted and agreed?
2. Service offerings
• What seems to be successful?
• What should we stop doing?
• Where do we need to pivot?
3. Clients and Client segments
• Are we targeting the right market segment?
• Are they adopting our “services” and services of partner firms? Why / Why not?
• Are we delivering the right services?
Understand clients
Purpose: Capture data to enable segmentation, profiling and better understanding of how UHBDP provides value
We capture data from a variety of sources and desire to associate them to the client (Dynamics Contac)
1. Surveys• Annual surveys• Matching Grant surveys• Market and business model surveys
2. Events• Participation at Events• Feedback from Events
3. Web site• What did they find useful/valuable?• How are they responding to communication?
4. Communication
• SMS• Email• Call Center
Clients: Market actors in supply chain
• Input Distributors and retailers
• Small and Medium Farmer
• Traders & W/H
• SME: niche ‘sellers’
Share DataPurpose: Demonstrate market opportunities to other market actors who are not actively considering horticulture a viable market
We have connections with over 25,000 market actors
Area under production Sales Volume