1. MAHA 2008 Case Studies on Value added of tropical fruits in Thailand Juejan Tangtermthong, Ph.D.

2. 2 Definition of value chain Business activities –Design –Inputs –Marketing –Distribution –Finance –Human resources –After services For Regional/Global value chain… The activity and service across borders

3. 3 Adding the value BrandsResourcesTechnologies Channels and distributions ExpertiseEtc.,

4. 4 Emerging of global value chains Drivers –Multilateral and regional free trade agreements –Policy liberalization –Technological innovation –New management strategies Results –High competition –Smaller number of dominant lead firm –Inadequate facilitation in developing countries

5. 5 Challenges for SMEs in Developing countries Lack of awareness, capacity and resources (capital, networks, skilled labor, managerial expertise, infrastructure) High entry barriers (International standards, commitments) Unfavorable national business environment Lack of business development service

6. 6 Intergovernmental organization's view Agribusiness value chain is key role in poverty reduction (Food security/Job creation/Income generation)

7. 7 AFMA Agricultural and Food Marketing Association for Asia and the Pacific Established 1983 by FAO 15 institution members from 9 countries Picture disclaimer of FAO Regional Office for Asia and The Pacific

8. 8 AFMA Stimulate technical exchanges and cooperation Organizes workshop, seminar, study tour etc., Linking with governments, NGOs

9. 9 Information From study tour between 21-26 May 2007 Both cases are in Chantaburi province Cases of value added durian and mangosteen Information of each cases are from interviewing producers

10. 10 Chantaburi 245 km from Bangkok 172,000 farmer families 23.6 – 29.3°C Rain nearly 3,000 mm/year

11. 11 Chantaburi Total area3,961,250 Rai (633,800 ha) Forest1,166,662 Rai (186,665 ha) Fruit1,500,000 Rai (240,000 ha)

12. 12 Tropical fruits marketing in Thailand Jul-Oct. 2004 Fruit orchards Grower groups Local wholesale markets Distribution centre Distribution centre Wholesale market Export factory Warehouse Supermarkets Discount stores Retailers Port source: TDRI (2005)

13. 13 Traditional market Can not control the price Over supply Low price

14. 14 Value added products help Estimate the future price More markets for valued products Higher price

15. 15 Price in Apr-Jun 07 Mixed gradeQuality grade

16. 16 Two value added cases Processing durian Graded mangosteen

17. 17 Case 1:Durian processing Frozen Freeze dry disclaimers of Sunshine International Co., Ltd. www.sunshine.co.th

18. 18 Whole frozen durian Fresh durian weigh sorting cleaning freezing -45 ℃, 8 hr frozen

19. 19 Freeze dried durian Frozen durian, -25 ℃ peeling cutting freeze drying freeze dried disclaimers of Sunshine International Co., Ltd. www.sunshine.co.th

20. 20 Freeze dried durian Easier for shipment (very light) No need for cool storage Processing through out the year Durian 100 kg Freezed dried 10 kg Flesh 30 kg disclaimers of Sunshine International Co., Ltd. www.sunshine.co.th

21. 21 Buying Upto 1000 tonnes/year Buying durian from Chantaburi and South Buying from brokers disclaimers of Sunshine International Co., Ltd. www.sunshine.co.th

22. 22 Value added 1 st grade 18 Baht/kg 2 nd grade 15 Baht/kg Freeze dried 12-18 Baht/kg (Freeze dried selling at 1,500 Bt/kg) disclaimers of Sunshine International Co., Ltd. www.sunshine.co.th

23. 23 Leading time Harvest in the morning Leave to ripen 5-8 hr Chantaburi: less than 6 hr from farm to factory South: 18-24 hr from farm to factory disclaimers of Sunshine International Co., Ltd. www.sunshine.co.th

24. 24 Case 2: Certified mangosteen Mangosteen grower group (Ban Nonglaman Quality Fruit Development Group) Thamai district, Chantaburi province 4 GLOBALGAP certified orchards 20 other members

25. 25 Case 2: Certified mangosteen Gained certificate since 2006 The group was introduced by District Extension Office Started production of rambutan and Longong in 2007

26. 26 Packing house Grading and pack at one farm Facilities are shelter, walk-in refrigerator, basket

27. 27 Production collecting grading Prepackaging (8 kg white basket) storing delivered

28. 28 Mangosteen supplied In 2006: 200-300 Kg In 2007: 70 tonnes 30 to traditional market 8-12 Bt/kg 30 to traditional market 8-12 Bt/kg 30 to River Kwai Inter. (to EU) 15, 30 Bt/kg 30 to River Kwai Inter. (to EU) 15, 30 Bt/kg 5 to Sunshine International 15, 20, 27 Bt/kg 5 to Sunshine International 15, 20, 27 Bt/kg 3 to Randy (to China) 20, 25, 30 Bt/kg 3 to Randy (to China) 20, 25, 30 Bt/kg 2 to CP (to Japan, Australia) 27, 37, 47 Bt/kg 2 to CP (to Japan, Australia) 27, 37, 47 Bt/kg

29. 29 Payment Credit 15 days after harvest (CP and River Kwai) Randy pay on arrival to factory Sunshine pay next day

30. 30 Problems Price competition with nearby market Long term credit, need cash to buy from other growers No market for lower grade

31. 31 Conclusions and comments Value added chain reduces fluctuation of the price There are more markets for both top and bottom of value added tropical fruit products. It is hard for farmer to go out of the farm and seek for market and to get information of what customer need. For all these, they need only some helps to get start!!!

32. 32 Acknowledgements Chantaburi Agricultural Extension Office, Chantaburi (Mr. Piya Pokket, Chief (in 2007) and Miss Charuwan Thongbai, Extension officer) Sunshine International Co., Ltd., Chantaburi (Mr. Sonthaya Bamrungcheep, production manager) Ban Nonglaman fruit quality development group, Chantaburi (Mr. Varin Somboon, group leader)

33. 33 Thank you for attention Picture disclaimer of FAO Regional Office for Asia and The Pacific AFMA Secretariat 39 Maliwan Mansion Phra Atit Road Bangkok 10200 Thailand www.afmaasia.org info@afmaasia.org