Horticulture Opportunities in Ukraine Ukraine Horticulture Business Development Project (UHBDP)

Transcription

1 Horticulture Opportunities in Ukraine Ukraine Horticulture Business Development Project (UHBDP)

2 Where going today Overview: What is UHBDP? Market: What is the Challenge? Services: What do we do? Practices: How do we work? Impact & Learning:What results? Opportunities

3 Overview: What is UHBDP? Ukraine Horticulture Business Development Project

4 Overview: 7 Years: $19 m DFATD + $4 m MEDA + 9 m Private 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

5 Geographic Focus: Regions: Kherson Zaporizhia Mykolaiv Odessa

6 Market Challenges: Agriculture: Key Ukrainian industry (14% of GDP) Employs 20% of population Horticulture: Opportunity for SMF SMF:60%oflandundercultivation Grow 70% of total F&V output volume(horticulture typically less than 3 hectares) Lack consistent access to markets SMFsisolatedfrommarkets;dependentontraderaccess:mostF&Vtolocalmarket 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

7 Hypothesis: Theory of Change

8 Contracted Areas of Focus Improved Capabilities Improved production and Post-Harvest Handling practices Events: Practices & Techniques: Irrigation, Greenhouse, IPM, Grading, Sorting, Packaging, Chain Cold Logistics Incentives: Voucher / Coupons with input suppliers Align Workforce Competencies college-educated entry level workforce Curriculum development: Marketing, Agronomy and Agri-business Provide short-term work programs/internships to promote connection to agri-businesses Linkages to Markets Improved management practices, performance and increased cooperation Business models and networks Linkages to Markets through Aggregation Hubs: (1) Informal Hubs (2) Commercial SMEs SME Capability Increased capacity amongst Ukrainian enterprises Matching Grants targeting Market maker firms Upgrade PHH capabilities: Traceability; Food Safety and Quality Assurance Access Finance Increased capital investment Private Investment entities & Financial Services Agri-business Investment Fund

9 Key Element: Innovation Fund Smart Incentives Matching Grant Fund Agri-business Investment Fund Small-MediumFarmers; Suppliers Agri-Business SMEs Agri-business SMEs; Investment Firms; Commercial banks Access improved technologies; Induce new Services / Products Spur innovativecapabilities; Test new business models and technologies; Promote SMF-led supply chains Facilitate/Induceprivate capital to invest in viable SMEs

10 Key Performance Indicators

11 Project Implementation Partners Project recipients Partners Agrarian universities Higher Educational Institutions Soil, Plant & Water Analysis Laboratories State regional administrations Ministry of Agrarian Policy and Food of Ukraine Financial institutions Banks Investment companies Seeds, fertilizers and CPP suppliers Service providers Supermarkets Traders Processors Aggregators Technology companies IT-companies by activities of planning and accounting

12 Market:What is the Challenge? How to promote opportunities in a transitioning market? How to deliver services with aggressive contractual targets?

13 Suppliers & Inputs Production Transport Traders Post Harvest Handling End Market Cold Chain Storage and Transport Production Inputs readily available: Packaging Plastics Irrigation supply companies Greenhouse vendors & manufacturers Private SHF (0.5 2 h) Commercial SMF [Lead] (2 10+ h) Small Trader (2-5 tons) [Broker] City Wholesale Market Household Roadside Local Village / Town Retail Market Distant City Market (e.g.: Kyiv, Odessa) Broker / Trader (5-10 tons) Large Commercial Aggregators Supermarket Chain HORECA Export: Russia, CIS Export: Europe (EU) Export: Middle East

14 Suppliers & Inputs Production Transport Traders Wholesale Final Market Cold Chain Storage and Transport Production Inputs readily available: Packaging Plastics Irrigation supply companies Greenhouse vendors & manufacturers Issue: Validate false seeds Private SHF (0.5 2 h) Commercial SMF [Lead] (2 10+ h) Small Trader (2-5 tons) [Broker] Broker / Trader (5-10 tons) City Wholesale Market Large Commercial Aggregators Household Roadside Local Village / Town Retail Market HORECA Supermarket Chain Distant City Market (e.g.: Kyiv, Odessa) Export: Russia, CIS Export: Europe (EU) Export: Middle East

15 Suppliers & Inputs Production Transport Traders Wholesale Final Market Cold Chain Storage and Transport Production Inputs readily available: Packaging Plastics Irrigation supply companies Greenhouse vendors & manufacturers Issue: Validate false seeds Private SHF (0.5 2 h) Commercial SMF [Lead] (2 10+ h) Small Trader (2-5 tons) [Broker] Broker / Trader (5-10 tons) City Wholesale Market Large Commercial Aggregators Household Roadside Local Village / Town Retail Market HORECA Supermarket Chain Distant City Market (e.g.: Kyiv, Odessa) Export: Russia, CIS Export: Europe (EU) Export: Middle East

16 Implementation Challenge: We need a multiplier! Operational Solutions: 1. Lean Startup & Design Thinking approaches 2. Data-driven: Build up data around our clients (all market actors in supply chain)

17 Services:What do we do?

18 UHBDP Services EVENTS: TRAINING & EXPERTISE WEATHER STATIONS AGRICULTURE INTERNSHIP PROGRAM AGRO INDUSTRIA MAGAZINE BUSINESS TOURS E-VOUCHER PROGRAM UHBDP WEBSITE POCHATOK MARKET BUSINESS Models & Calculations MATCHING GRANTS

19 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

20 Expertise from Israeli Government MASHAV - Israel Agency for International Development Cooperation, Ministry of Foreign Affairs - promotes world economic and social progress by training qualified specialists and transferring modern technologies through advisory missions or projects in Ukraine or Israel. CINADCO - The Center for International Agricultural Development Cooperation, which organizes consulting missions on growing agricultural products, packaging, storage, irrigation, CPP and fertilizer applications. МСТС - The Golda Meir Mashav "Carmel" International Training Center conducts trainings on organization, management, promotion and business development.

21 Agro Industriia Magazine 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! For UHBDP clients - 25% discount for annual subscribtion!

22 Business Modeling and Calculation Applicable scope: farms, family budget Income accounting, crop reports Accounting for fixed and variable costs, depreciation, cash flow Analysis Graphs, diagrams

23 Business Market Tours 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,

24 POCHATOK Market test 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 Tradingspacecanbegiventoafarmerfor1or 2days Preliminary registration by phone: Workinghours:24 / 7

25 Key Test Results 30 SMF participants 340 L of Honey 32 SMF Participants 19 weeks = 5 months KG of fruits and veg TOTAL SMF REVENUES UAH 2250 PCS of sweet corn

26 Feedback from UHBDP participants regarding trading on Pochatok market "... 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... " "... I can take any quantity of goods. If I do not manage to sell at retail, I can sell the rest in bulk..." "... 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..."

27 Linking actors in Market Channels

28 Matching Grants 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 CONCEPT CONCEPT, FINANCIAL MODEL AND BUSINESS PLAN DEVELOPMENT Consultative planning with applicants Selection of potential candidates (SMEs) Projects: - storage - cooling - processing - sorting - packaging - other CONTRACT REPORTING AND MONITORING OF THE PROJECT Quarterly monitoring and data collection Evaluation of investment efficiency Information about company s activity Performance analysis ofworking with small and medium-sized farmers EFFICIENCY

29 Matching Grant: AndriiChornyi Company Problem Solution Andrii Chornyi Region is in high demand for tomatoes Local trading center: asphalt, day traders SME: Vision for regional logistics o Expertise; Connections to export market 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

30 Matching Grant: TemporiParse Company Problem Tempori Parse 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

31 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

32 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

33 UX : Small Farmer Open Market

34 UX : SME Niche Market

35 Leveraging a data-driven strategy to enable: Contract Reporting Track performance indicators Fulfill contractual obligation reporting requirements to demonstrate project success Reduce time to know whether on target Manage Operations Track Operational Performance Manage key partners targets, activities and performance with operational data Enable key partners to leverage their own data to manage performance => Capacity Building Understand Clients Profiles, Client Segmentation and Opportunities Gain insight into client experience (UX) and perception Understand adoption models: Why change what currently doing? Share Data Induce potential market actors to act in the market

36 Impact & Learning:What results?

37 Locus of Control Statement: I have access to training and information on how to sell 2017 Baseline

38 Locus of Control Statement: I feel confident about opportunities to sell my produce 2017 Baseline

39 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 I feel confident about opportunities to sell my produce I have access to training and information on how to grow I have access to training and information on how to sell 19% 39% % 41% % 58% % 39% +26

40 Client Reach: 28,000 of 44,000 clients (achieved 63% of Target by Year 3)

41 Sales Volume: Top Ten Aggregation Hubs 22,000 of 50,000 MTs [conservative] Achieved 44% of Target in Year 3

42 Opportunities Import Fruits & Vegetables?! Expertise with Cold Chain Logistics? Prayer: Staff, Clients and Markets

43 Questions

44 Thank You Creating business solutions to poverty meda.org

45 Resource slides Not used in the presentation

46 Contract Reporting Purpose: Capture data to track and report progress on achieving contractrelated 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

47 Manage Operations Purpose: 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?

48 Understand clients Purpose: Capture data to enable segmentation, profiling and better understanding of how UHBDP provides value Clients: Market actors in supply chain Input Distributors and retailers Small and Medium Farmer Traders & W/H SME: niche sellers 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 Call Center

49 Share Data Purpose: 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