1 / 13

Successful Supply Chains in Uganda

Successful Supply Chains in Uganda. Strengthening existing business linkages within the agro-business sector Kampala, March 24th 2005 ~ Preliminary findings ~. Working Definition. A supply chain is a set of sequential, inter-related value-adding activities from farm gate to plate.

jaeger
Download Presentation

Successful Supply Chains in Uganda

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Successful Supply Chainsin Uganda Strengthening existing business linkages within the agro-business sector Kampala, March 24th 2005 ~ Preliminary findings ~

  2. Working Definition • A supply chain is a set of sequential, inter-related value-adding activities from farm gate to plate. • A vertically integrated supply chain is a set of sequential, inter-related value-adding activities from farm gate to plate, which is governed (managed) by a lead firm.

  3. Selected Supply Chains • Coffee (focus on Gumutindo CCE) • Fresh Vegetables (Mairye Estates) • Dried Fruit (Fruits of the Nile)

  4. Key aspects of the 3 chains • All three operate on high value export markets • Coffee is a traditional export crop; dried fruit and fresh vegetable are new upcoming sectors • Their annual turnover is USD 300,000-600,000 • Gumutindo is owned by the primary societies, the others have close relationship with suppliers • The impact of Gumutindo in terms of outreach is much larger than the other supply chains • All of them have had external support

  5. Aspects of vertical integration • Access to market through lead firm • Quality control and traceability is the responsibility of the lead firm • Extension services to suppliers • Pre-financing of suppliers • Provision of inputs to suppliers • Integrated production planning

  6. Gumutindo Coffee Coop. Ent. • Close relationship with Primary Societies • Training, monitoring and advice on Fair Trade principles and organic farming • High degree of quality control required by the niche market they operate in (Fair Trade) • Pre-financing by buyers and others (EF) • Promotion of alternative methods of pest control and better crop maintenance • Support from TWIN and FLO-PSN

  7. Mairye Estates (Farm Fresh) • Outgrowers scheme (200 farmers) • Agricultural training, assistance to obtain certification and advice on farm management • Quality control and record-keeping of inputs • Provision of inputs (seed, etc.) on credit basis • Mairye Estates is responsible for maintaining high quality standards required by EUREP-GAP • Main buyers from UK (Tesco) and Netherlands • Support from IDEA, PSOM and CordAid

  8. Fruits of the Nile • Buy dried fruit from 110 exclusive suppliers • Provide training and advice on drying process and quality requirements • Keep close records of their product sources • Pre-finance and assist construction of dryers • Provide material for solar dryers • Historic relationship with sole buyer in the UK • Support from ACORD, AVSI, EDF and IDEA

  9. Common Success Factors • Assured access to high-value export markets • Long-term relationship with suppliers based on mutual trust and transparency • High level of quality control & traceability • Entrepreneurial attitude of lead firms • Different aspects of vertical integration (training, input provision, production planning) • Adequate support from specialized agencies • Growing commitment of all chain partners

  10. Risks and challenges • High dependency on limited number of buyers • Risks related to outsourcing (inconsistent supply, both in volume and quality) • High quality requirements in export market • Lack of entrepreneurial attitude of farmers • High costs of vertical integration, relative to the size of their business • Sometimes misguided external support • Asymmetric levels of commitment

  11. Preliminary recommendations • Look for strategic alliances with other exporters, both at home and abroad (Kenya / South Africa) • Nurture long-term relationships throughout the chain, built on mutual trust and transparency • Lead firms should invest in building up a close relationship with suppliers and vice-versa • Promotion of business attitude among farmers by training and savings mobilization • Tailor-made assistance from support agencies, addressing demands (as opposed to needs) of the private sector

  12. Feedback from Private Sector • Working with outgrowers is costly, which is not always recognized by support agencies • Intrinsic costs, such as time and money spent on proposals and reports is not covered • Donors should also be more business-like in the way they support the private sector • A code of conduct is necessary to counteract ‘poaching’ between competing companies • Low level of education of farmers is a problem, this suggests a need for vocational training to raise the status of farming as a profession

  13. The path forward • Well-structured, vertically integrated supply chains based on mutual trust, risk-sharing and equitable benefits • Strong focus on high value exports • Strategic alliances with other export companies (horizontal integration) • Demand-driven specialized support

More Related