00 Pakistan Horticulture Development & Export Company Ministry of Commerce, Government of Pakistan Common Facility Centres for Horticulture Products Seminar on Agriculture Monday

1 1 A. Supply Chain Management i) Facilitation & Support on international compliances for food quality & safety ii) Capacity building of stakeholders through trainings & technical assistance iii) Product Development & Certifications B. Marketing i) Market Intelligence & Information Dissemination ii) Product & Market Diversification iii) Linkages Development & Trade Delegations iv) Trade Dispute Settlement C. Business Development i) Supply Chain Infrastructure ii) Value Addition Objectives & Operational Divisions

2 Requirement of Common Facility Centres  Current Horticulture Production is (for ) 15.0 million tons. Based on domestic market rates of fruits and vegetables, its total worth is estimated at around Rs 225 billions($2.60 billion).  Among other things, one of the main constraint of horticulture sector is heavy post harvest losses estimated at % mainly attributable to poor/ less than satisfactory infrastructure for post harvest treatment of horticulture produce e.g., pack houses, cold stores & refrigerated transport.  Compliance of SPS requirements of the importing countries requires infrastructure like, hot water treatment, cold treatment, irradiation, vapour heat treatment etc. besides Global GAP, HACCP, ISO certification.  Since, the above said infrastructure is costly, establishment of common facility centres is the appropriate solution.  Collection Points being established by PHDEC is a step in this direction. Paras Foods and Apple Grading Plant at Quetta are other CFC’s under PHDEC.  PHDEC has entered into a joint venture with a private sector partner for processing of Fresh Fruits & Vegetables Processing at Karachi.  PHDEC, on directive of Taskforce on NTCIP / Ministry of Commerce, has been working on a mega project comprising common facility centres for horti products.

3 Requirement of Processing Units (000)Tones CommodityProducti on ( ) Marketable 75% of Production Export ( ) Export Potential Existing No. of Units Total Annual Existing Capacity¹ Gap V/S available capacity No. of Units Required Citrus Mango # ² Dates (fresh & dried) (6+115 )(25+125)19³10³1515 ³ Seasonal Vegetables ⁴ ¹ Based at full operation, ² Based on 5-10 tons/hr capacity, ³ For fresh Dates based on 1 ton/hr capacity, ⁴ Based on 3 ton/hr capacity # Including projects being supported by FIRMS-USAID

4 Requirement of Cold Stores (000Tons) Clusters 1 Productio n ( ) Marketabl e 80% of Productio n Storage Requireme nt ² Stores Available In Pakistan Gap/Requirements 4 Capacity ³ No. of Units1 Gap in Capacity No. of Units ⁴ Kinnow Mango Apple Other Fruits Potato Other Vegetables Total Data on commodity wise storage is not available, these are only estimates based on crop cluster of the relevant areas and judgement. ² This has been estimated on the basis of shelf/storage life of the relevant product. ³ Available storage capacity has been worked on basis of average capacity of 1,637 tons/unit. ⁴ Capacity of the required storages has been assumed at 1000 tons/unit. However, storage period has been taken on the basis of storage/shelf life of various products. ⁴ This has been estimated on the basis of shelf/storage life of the relevant product.

5 a)39 Modern pack-houses (including cold storage facilities at 31 locations) Products: Kinnow, Mango, Apple, Dates, Banana, Apricot, Peach, Plum, Grapes, Potato, Onions, Tomato and Seasonal vegetables b)23 Cold storages (CA & VS Storages at 23 locations 13-production areas, 7-airports, 3- seaports) c) 2 Reefers/container yards (with parking capacity for 200 containers & 50 CA containers each at Lahore & Karachi) d)6 Testing labs at different locations (production areas) Project Scope PHDEC, with the help of IPDF, has developed a project comprising 70 units to be established as common facility centers on the basis of Public Private Partnership. The brief detail are given here under: Cool Chain System (CCS) Project under National Trade Corridor Improvement Program

6  Project will be implemented in two components i) Punjab & Khyber Pakhtunkhwa ii) Sindh & Balochistan  Project will be implemented under Public Private Partnership  The private sector will make the investment  Government will provide incentives  Testing labs: will be established in public sector (Rs in million) Description Punjab – NWFP Bal.– Sindh Total Total Project Cost 7,513 4,993 12,506 Project Cost Project Implementation Strategy Cool Chain System (CCS) Project under National Trade Corridor Improvement Program

7 Punjab – KPKBalochistan – Sindh FCFFFCFEFCFFFCFE NPV (Rs. in million)4,8422,9284,3852,791 IRR (%)28%38%31%44% Payback( years) DSCR (times)0.6 – – 23.4 LLCR (times) PLCR (times) Benefit to Cost Ratio Financial Indicators  Under approval process (for concessions/incentives ) after which EOI would be invited from potential investors.  PHDEC will be Coordinating/Monitory body on behalf of Govt.  IPDF is assisting in project formulation/marketing and implementation Project Status Cool Chain System (CCS) Project under National Trade Corridor Improvement Program

8 PARAS Foods This is a joint venture of PHDEC & PAEC (Pakistan Atomic Energy Commission). The main objective of the project is to act as a common facility centre for irradiation of horticulture products (fruits, vegetables, spices & herbs etc) Its major purpose is to achieve dis- infestations, extend shelf life of produce and meet quarantine (SPS) requirements of the importing countries. It is a joint venture of PHDEC and PAEC. Project Scope Project cost (approved)Rs Million. Date of Approval EDF FundsRs Million. Date of Funds Release Date of Commencement June 2006 Cost Incurred Rs Million (approx.) Cost beyond EDF funds has been financed by equity/payables to PAEC/ATCOP Project Cost Project has been in operation since June Recently, its marketing activities have been out- sourced to a private sector party to increase its capacity utilization / revenue generation. Project Status

99 PARAS Foods

10 Apple Grading Plant - Quetta  Project ScopeRenovation & Up-gradation of old apple grading plant. The project is to be run as common facility centre.  LocationAgri Research Institute, Sariab Road,Quetta.  Project Cost Rs million  Rs million – Machinery (Funded by EDF)  Rs million – Land & Building (Provided by Agriculture Dept. Balochistan)  EDF Funds Rs million  Project Status Operational since Aug 2008 while Cold store is under construction Despite efforts to motivate private sector, the project has not started commercial operation mainly due to poor law & order situation in the area and non availability of working capital. To attract private sector partners, advertisement will be placed in newspapers shortly.

11 Apple Grading Plant - Quetta Apple Grading Plant - Quetta

12 This is a joint venture between Govt. of Pakistan ((through PHDEC) and Durrani Associates. The management of the plant would be with private partner. The scope of processing activities includes sorting washing/cleaning, hot water treatment, cold treatment, grading, packing, and storage of various products, mainly for following products: Hot water treatment: Mango, Grapefruits, Capsicum,Tomato & Chilies etc. This would result in commercialization of sea shipments of mango/other at larger scale. Chilling treatment: Kinnow, cabbage, cauliflower, Capsicum, Green chilies, Cucumbers etc Project Scope Location : Gadap Road, Karachi (Sindh Plant Capacity : 15 tons/hr; 150 working days/annum Common Facility Centre for Fresh Fruits & Vegetables Processing at Karachi Project CostRs million Financing Plan Durrani AssociatesRs PHDEC (EDF) Rs IFRR :47.47% Pay Back :3.1 Years Break-even :49.32% (1st Year) Net Present Value :Rs million Financial Indicators

13 Dates Processing Plant at Khairpur Fresh dates processing facility comprising of Storage, Fumigation, Cleaning & Washing, Drying, and Sorting & Grading & Packing. The project will be implemented under PPP mode. In this connection, an MOU signed with Sindh Board of Investment & Agriculture Department, Sindh. Project Scope The plant will have a processing capacity of 1.5 tons per hour or 3,375 tons per year (based on two shifts and 5 months operation) at 100% capacity level. Processing Capacity Revised Total Project Cost = Rs million Revised Project Cost Excl Land =Rs million Funds Available =Rs million Shortfall/Funds Requirements =Rs million Project Cost Financial Indicators IFRR33.7 % NPV (at 15 %) Average rate of return27.99 Pay back period 2.87 years Breakeven capacity 28% Project Status PHDEC & SBI jointly are working on this project

14 Support / Suggestions for Hoticulture  Support for Common Facility Centers for processing of fresh fruits & vegetables  Approval of Cool Chain System Project by CDWP/ECNEC on fast track basis.  Extension of mark-up support facility (through Export Development Fund) to Pack Houses & Value Addition units.  Resolution for shortage of Controlled Atmosphere (CA) and Reefer containers for sea shipments.  Resolution for inadequate air cargo space.  Special air freight rates for export of mangoes.  Financial support to farmers/exporters Loan Guarantees Revolving credit (seasonal)

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16 PROPOSED SITES FOR PACK HOUSES WITH COLD STORAGE FACILITIES Commodity* Pack House /Cold Store Processing Capacity (MT Cold Storage Capacity (MT) City/AreaProvince Kinnow1 PH & 1 CS (20 t / h) 5000 (10 X 500)Bhalwal Punjab Kinnow1 PH & 1 CS (5 t/h) 3000 (6 X 500)T.T. Singh** Punjab Kinnow1 PH & 1 CS (5 t/h) 3000 (6 X 500)Mandi Bhaudin** Punjab Mango3 PH & 3 CS (8-10 t/h) 1000 (4X250)Multan Punjab Mango2 PH & 2 CS (8-10 t/h) 1000 (4X250)R.Y.Khan Punjab Mango2 PH & 2 CS (8-10 t/h) 1000 (4X250)Muzafar Garh Punjab Mango1 PH & 1 CS (8-10 t/h) 1000 (4 X 250)MirpurKhas Sind Mango, Citrus & Vegetable1 PH & 1 CS (5 t/h) 2000 (4 X 500)Khanewal Punjab Mango + Banana Ripening Facility 1 PH & 1 CS (8-10 t/h) 1500 (3 X 500)Hyderabad Sind Apple1 PH & 1 CAS (5 t/h) 3000 (6 X 500)Peshawar NWFP Apple & Grapes1 PH & 1 CAS (5 t/h) 2000 (4 X 500)Quetta Balochistan Peach, Apple1 PH & 1 CAS (10-12 t/h) 4000 (8 X 500)Swat NWFP Apple, Apricot1 PH & 1 CAS (10-12 t/h) 1500 (3 X 500)Kalat Balochistan Apple, Apricot1 PH & 1 CAS (10-12 t/h) 2000 (4 X 500)Kila Saifullah Balochistan

17 PROPOSED SITES FOR PACK HOUSES WITH COLD STORE FACILITIES Commodity* Pack House /Cold Store Processing Capacity (MT Cold Storage Capacity (MT) City/AreaProvince Apple, Apricot, Peach & Grapes 2 PH & 2 CAS (10-12 t/h) 2000 (4 X 500)Pishin Balochistan Apple & Grapes1 PH & 1 CAS (5 t/h) 2000 (4 X 500)Mastung Balochistan Apple, Apricot1 PH & 1 CAS (5 t/h) 1000 (4 X 250)Loralai Balochistan Apple, Apricot1 PH & 1 CAS (10-12 t/h) 2000 (4 X 500)Zhob Balochistan Dates1 PH & 1 CS (4 t/h) 5000 (10X500)Panjgur Balochistan Potato 2 PH & 2 CS (10 t/h) 2000 (4 X 500)Okara Punjab Potato2 PH & 2 CS (10 t/h) 2000 (4 X 500)Sahiwal Punjab Potato1 PH & 1 CS (10 t/h) 2000 (4 X 500)Pak Pattan Punjab Potato1 PH & 1 CS (10 t/h) 1000 (4 X 250)Sialkot Punjab Potato1 PH & 1 CS (10 t/h) 1000 (4 X 250)Kasur Punjab OnionI PH & 1 VS (10 t/h) 1000Hyderabad Sind Onion1 PH & 1 VS (10 t/h) 1000Sanghar Sind OnionI PH & 1 VS (10 t/h) 1000Chaghi Balochistan Onion1 PH & 1 VS (10 t/h) 1000Kharan Balochistan Vegetable1 PH & 1 CS (5 t/h) 2000 (4 X 500)Sheikhupura** Punjab Vegetable1 PH & 1 CS (5 t/h) 2000 (4 X 500)Gujranwala** Punjab Vegetable1 PH & 1 CS (5 t/h) 2000 (4 X 500)Faislabad** Punjab Vegetable1 PH & 1 CS (5 t/h) 2000 (4 X 500)D.I. Khan** NWFP Total39 69, Back

18 PROPOSED SITES FOR COLD STORAGES Commodity Requirement (Number) Capacity (Tonnes)LocationProvince Kinnow1 CS3000 (6 X 500) Sargodha (Production Area) Punjab Kinnow1 CS5000 (10 X 500)Kot MominPunjab Kinnow, Apple Potato 1 CS5000 (10 X 500) Islamabad (Sector I-9) Punjab Fruits and vegetables1 CS1500 (3 X 500) Sargodha (F & V Market) Punjab Apple1 CS2000 (4 X 500)WaziristanNWFP Apple and other fruits and vegetables 1 CAS5000 (10 X 500)QuettaBalochistan Peach, Apple Potato1 CS5000 (10 X 500)PeshawarNWFP Peach & Apple1 CS2000 (4 X 500)MardanNWFP Dates & other Fruits1 CS5000 (10 X 500)TurbatBalochistan Dates1 CS5000 (10 X 500)KhairpurSindh Dates & other Fruits1 CS3000 (6 X 500)SukkurSindh Fruits and vegetables1 CS1000 (4 x 250)ChitralNWFP Fruits and vegetables1 CS1000 (4 X 250)ChamanBalochistan Total1343,500 Back

19 PROPOSED COLD STORAGES AT AIRPORTS & SEAPORTS Air PortsCapacity Cold Store + Freezer Unit (Tons) ProductsRemarks Karachi500 (5 x 100) ---- Lahore300 (3 x 100)Extendable to 500 tons Faisalabad200 (2 x 100)Extendable to 300 tons Multan200 (2 x 100)Extendable to 300 tons Quetta200 (2 x 100)Extendable to 300 tons Peshawar200 (2 x 100)Extendable to 300 tons Islamabad200 (2 x 100)Extendable to 300 tons Total = 7 1,800 Sea Ports Fruits and vegetables, Meat, frozen food and pharma products Bin Qasim Karachi Port 5000 (10 x 500) ---- KPT Karachi Port5000 (10 x 500) ---- Gawadar Port*5000 (10 x 500) Total = 315,

20 Postharvest Losses in Apples ( Swat)

21 Postharvest Losses in Peaches ( Swat)

22 Post Harvest Losses CropsPost Harvest Losses (%) Fruits Citrus15 Mango25 Dates35 Apple14 Pear15 Peach15 Plum25 Apricot25 Other fruits24.4 Vegetables Potato15.2 Onion20 Tomato40 Other vegetables30.5 Ibrahim & Anwar, 2004, Horticulture Education, Extension & Training System in Pakistan

23 A. Supply Chain Management i) Facilitation & Support on international compliances for food quality & safety ii) Capacity building of stakeholders through trainings & technical assistance iii) Product Development & Certifications B. Marketing i) Market Intelligence & Information Dissemination ii) Product & Market Diversification iii) Linkages Development & Trade Delegations iv) Trade Dispute Settlement C. Business Development i) Supply Chain Infrastructure ii) Value Addition Operational Divisions