BDS and Value Chains Annual Conference

Transcription

1 BDS and Value Chains Annual Conference The Case for Lebanon Stimulating Markets and Rural Transformation Program (SMART( SMART)

2 Table of Contents 1. Overall Objective of Conference 2. Overview of the Case study Stimulating Markets and Rural Transformation (SMART) Program 3. SMART - Objective - Methodology of Program - Results & Impacts 4. Lessons Learned

3 Objective of Conference To learn about case studies from the region that are demonstrating: the ability to benefit many people living in relative poverty, through Private Sector Development (PSD)( Focus on the development of service markets and value chains has good practice in related themes, such as value chain development that reaches small producers including women entrepreneurs, or reform of the legal and regulatory environment for small businesses

4 Table of Contents 1. Overall Objective of Conference 2. Overview of the Case Study Stimulating Markets and Rural Transformation (SMART) Program 3. SMART - Objective - Methodology of Program - Results & Impacts 4. Lessons Learned

5 A Case Study from Lebanon: Stimulating Markets and Rural Transformation (SMART): The case was selected due to its Ability to benefit many people living in relative poverty, through Private Sector Development (PSD). Value chain development that reaches small producers including women entrepreneurs.

6 Case Study from Lebanon: Introduction SMART is a 3 year development program ( ) 2005) funded by the USAID and implemented by the Young Men s Christian Association (YMCA) in Lebanon. SMART was translated from another project supported by YMCA/IRDP that focused exclusively on rural development in terms of infrastructure (public roads, water reservoirs). YMCA developed SMART program to convert a local-level level cottage industry into a viable, national, regional and international sustainable economic development venture.

7 Case Study from Lebanon: Introduction The program is rural development scheme. It tapped into traditional, gender-based skills of food processing and preservation. One goal was to transform the women s s cooking and food preservation know-how into scientifically-based, standardized food processing techniques while still maintaining the traditional taste and feel of the products. An end product of the program was the establishment of the all natural, preservative and additive free products which is selling locally, regionally and globally in the UK and USA markets among others.

8 Table of Contents 1. Overall Objective of Conference 2. Overview of the Case Study Stimulating Markets and Rural Transformation (SMART) Program 3. SMART Business Development Services - Objective - Methodology of Work - Results & Impacts 4. Lessons Learned

9 BDS Facilitator BDS Provider Beneficiaries YMCA USAID Stimulating markets and rural transformation program SMART Women in rural Areas

10 SMART Objectives Provide income generation opportunities for rural women by providing them with the means for sustainable self reliance income Add value to agricultural surplus previously wasted due to inability to properly market and turn around product in a timely manner Link farmers and food processors to the market directly Increase agricultural productivity Promote natural food production

11 SMART Methodology of Work: The SMART program developers worked closely with local producers, farmers and the women who process the goods, to create links with strategic partners and to assist in the set-up, establishment and ultimate marketing and sales of their products. Logistics Marketing Inbound logistics Operation Outbound logistics Marketing Services Receiving, storing, transportation All value creating activities that transform the inputs into final products Activities required to get the finished product to the customer Activities associated with getting buyers to purchase the product Activities that maintain and enhance the product value (after sales services0 SMART Provided Logistical Support SMART Provided Marketing Support

12 Logistics Marketing Inbound logistics Operation Outbound logistics Marketing Services Receiving, storing, transportation All value creating activities that transform the inputs into final products Activities required to get the finished product to the customer Activities associated with getting buyers to purchase the product Activities that maintain and enhance the product value (after sales services0 SMART Provided Logistical Support SMART Provided Marketing Support

13 SMART Logistical Supports come in 4 consecutive steps : 1. Select a town: The selection of a town is solely based on socioeconomic criteria such as unemployment, literacy and poverty. 2. Training & Building Capacity in the filed: Building on what all women naturally know in rural Lebanon, YMCA refines this knowledge and adds to it a mixture of carefully selected topics in food safety and hygiene. 3. Rehabilitation and Initiation of Food Processing Centres.. The centres are equipped keeping in mind two key concerns: safety and employment.. It must adhere to personal safety measures and equipment should satisfy the program s aim of creating job opportunities to rural women 4. Forming Cooperatives to Sustain Activities: once the centre is equipped, a women s s cooperative is formed and given full responsibility of the centre. Trained women join the coop s s administrative cadre and assume responsibility of all decisions related to production and processing. Moreover, ownership of the equipment and center is transferred to this autonomous legal entity.

14 Logistics Marketing Inbound logistics Operation Outbound logistics Marketing Services Receiving, storing, transportation All value creating activities that transform the inputs into final products Activities required to get the finished product to the customer Activities associated with getting buyers to purchase the product Activities that maintain and enhance the product value (after sales services) SMART Provided Logistical Support SMART Provided Marketing Support

15 SMART Marketing & Services Supports: For the main purpose of promoting sales under a unified brand name and a wider national and international outreach, SMART facilitated the establishment of, a centralized cooperative, Atayeb Al Rif or Rural Delights Atayeb Al Rif -functions as the marketing, sales and packaging arm for all the other cooperatives/centres and it is the brand name of the products produced SMART created linkages with a Sales/Marketing company MAFCO,, Inc. to assist in uplifting the brand, create the Marketing strategy, and then manage distribution and sales locally, regionally and globally. Hence, all centres and farms sell their products, mainly but not exclusively, to Atayeb Al Rif, that markets and resells the produce under Atayeb s name.

16 SMART Support to Backward Linkages: Farmers Food Processing Customers SMART has a pure agricultural component tackling the initiation of high value production farms. Instead of food processing, some women will focus on producing fruits, aromatic spices, herbs and mushrooms. Meanwhile, the yield will be sold on the market or to one of the centres to be processed.

17 Results of SMART Logistical & Marketing Supports: Until recently, SMART has completed: the training of 1325 women, finished the construction and rehabilitation of 37 centers. set up four farms and began working on another one, formed 20 cooperatives and prepared for the formation of another 6. Most importantly, working women have been able to earn around 100$/ month, a decent sum to a previously unemployed rural housewife. On the other hand, Atayeb Al Rif has proved to be a success story y with sales level at around 500,000 US$ per year and exports to Saudi, Kuwait, Jordan, and potential Markets in USA, Canada, UK and the rest of the Gulf states Sustainability has been a major focus of concern to YMCA. The final year of the program, 2005, was perceived as a new phase in rural transformation; women in their centers and farms will be able to produce on their own, sell their products, secure a decent monthly income e and reinvest this money in the centers and families.

18 Results & Impacts SMART Targets 1. Set out to train 1340 women on various issues relating to the business (food safety and hygiene and micro finance issues, etc 2. Set up 5 women owned and run production farms cooperatives where various high value fruit, vegetables, spices, and herbs are cultivated (e.g. red and yellow peppers replacing the traditional green pepper) 3. Establish 37 women owned and run processing cooperatives where products are processed, packaged, labeled and sold (creating infrastructure to extend produce s shelf life e.g. surplus apples processed into apple vinegar that lasts, when properly stored for at least three years 4. Launch 1 women owned and run cooperative (Atayeb al Rif) where the their packaged goods are marketed and ultimately sold Achievements to Date 1. Trained1600 women on food processing procedures 2. Set up 5 farms; fully operational 3. Constructed and/ or rehabilitated 37 centers 4. Completed the Atayeb al Rif coop; the brand name and central marketing coop. 5. New advanced training in computer literacy, cooperative management, sales and marketing, product cost control, training the women to train 6. Two new contracts in the final phases of negotiation for distributorship of products estimated at a total value of $5.7 million over the next two years

19 Case Study, Impact : Atayeb Al Rif Marketing Branding Private labeling Fairs, exhibitions and trade shows Advertising Media Sales Products Return on Investment $897,801 and $5.7 million confirmed orders over the next two years- Local, Regional (Gulf States) and International (Europe, Canada and the USA) sales contracts 80 products, 100% natural with no preservatives or additives includes: - 15 jams and preserves - sun dried fruit and vegetable - 4 varieties of fruit compotes - 5 varieties of syrups - 12 Lebanese specialty foods To date with potential for growth- $100 per month per women

20 Sustainability of the Program Big picture Project drew upon the market driven, value chain approach that strengthen all the processes from input supply, through production, post harvest handling, processing, storage, transportation, and marketing to increase overall sales For the individual villages Since benefits of the program extend beyond the main shareholders-the women-basically, their spouses, local politicians, villages inhabitants, they all have a vested interest in maintaining and supporting the program For the women Sense of ownership

21 Exit Strategy & Sustainability Plan The exit strategy for SMART has already been put in action; A contract was signed between Atayeb Al Rif and MAFCO: Atayeb is in charge of coordination of production, quality control, coordination among the different cooperatives and is fully in charge towards its shareholders (mostly the individual cooperatives) and towards delivering to MAFCO their orders (quality and quantity) on time. MAFCO is exclusively dedicated to distributing the Atayeb Al Rif product line. Based on their market studies, MAFCO has opted to go with 37 cornerstone products first.

22 Sustainability Plan BDS Facilitator BDS Provider Beneficiaries Markets Marketing & Selling MAFCO Training, Quality Assurance, etc Atayeb Al Rif Production Centers Farms Women in rural Areas Training expenses are shared by individual cooperatives centres, Atayeb Al Rif and MAFCO

23 Looking Forward for the Program Building on the success of SMART with the funding of USAID the aim is to add new centers: New sectors will be targeted Olives extra virgin olive oil, olive pickling, and traditionally made olive oil based soap packaged with modern appeal Adding new farms For the production of new aromatic plants to be used in the soap making

24 Table of Contents 1. Overall Objective of Conference 2. Overview of the Case Study Stimulating Markets and Rural Transformation (SMART) Program 3. SMART Business Development Services - Objective - Methodology of Work - Results & Impacts 4. Lessons Learned

25 Lessons learned The following comprises the main lessons learned from the case study, basically the importance of ; Participatory Approach Non-Financial Instruments Autonomous Institutions Sustainable Institutions Involving beneficiaries to specify their exact needs and give them ownership Importance of non financial assistance to members such as training and building capacity especially in management Importance of having the BDS provider being an autonomous institutions that has good relations with BDS facilitators Importance of creating ownership & sustaining activities