Opportunities for the use of WML´s facilities by the Horticultural sector in Ghana. A report about the implementation of a Cold – Chain in Ghana and the possibilities of the use of this Chain by the Ghanaian Horticultural Supply – Chain.
20/4/2013 Wegdam Meat Link , R u i s s e n b o r g h 2 , 7 8 4 1 C K , H a a k s b e r g e n , t h e N etherlands Camila Primola
Management Summary Wegdam Meat link started this research in order to find an “Effective use of the Cold – Chain in Ghana”. Wegdam Meatlink currently trades meat to the Ghanaian market, and recently the company has received a subside from the Dutch Ministry of Foreign Affairs for the implementation of a Cold – Chain in three different regions in the Ghanaian territory respectively. The chain will be primarily used for the storage/distribution of meat, A Cold – Chain is a temperature – controlled supply –chain, developed specifically for perishable products. Full loaded containers (meat) will arrive at port of Tema. The refrigerated containers will be transported by truck, and unloaded in order ( Kumasi Techiman Tamale). The cold- store will have both refrigerator and cooling functions. Although the perishable products will be stored in the same Cold- House, they will not have any contact with each other. Each Storage – House will have capacity available for a possible storage of fruits and vegetables. Productions located near those three respective places will be able to use Wegdam Meat Link’s facilities, The analysis of previous researches and local information shows that the Cold – Chain could be also used to facilitate the storage and transport in the Horticultural sector. According to our research, Ghana counts with four potential fruits , which are banana,pineapple,papaya and mangoes respectively, however pineapples ,bananas and papayas are only produced in the Volta Region ,outside the range of our cold-chain. produced along the three different locations of the Cold – Chain which are Tamale, Techiman and Kumasi respectively. Most of those Mangoes produced in Ghana are exported to the European market. Beside the export activities, Ghana has also a significant opportunities in the In – Land trade and logistics of Tomatoes produced in the Tamale and Techiman region respectively. Both Mangoes and Tomatoes production works in the out growers system, which means that smallholders gather their production and trade through representative associations.
Motivation : Ghana is one of the booming West African Markets. This country has years of experience in trading commodities (specially pineapples ) to the European Market. Besides the export activities , Ghana has a potential middle class consumer that presents continuous growth , as a consequence of the economy acceleration, however the lack of a proper infrastructure is still a significant barrier to the Ghanaian competitiveness in the Global Market. Wegdam Meat Link is one of the companies playing an important role in the Ghanaian economy .The implementation of an efficient Cold – Chain is crucial for WML in order to expand their chances in the Ghanaian territory. My research has the following central question made by WML : “ Could our Cold – Chain facilities be used by the Ghanaian fruit export ( horticultural sector) ?”
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Introduction Wegdam Meat link is a meat and chicken wholesaler based in the east of the Netherlands. One of their main markets is the west African country Ghana.The continuous emergency of a powerful Ghanaian middle class has also affected the WML products consumption positively , however the lack of proper infrastructure in the Ghanaian territory could compromise the exceptional trading/distribution performance of WML.Due to this fact, WML started planning the implementation of a Cold Chain in three different locations in Ghana.A Cold Chain is a emperature controlled supply chain consisted of one of more Cold/CoolingHouse developedmainly for the accurate storage of perishable products.This report delves into the Ghanaian horticultural supply chain emphasizing the absence of accurate acilities , researching virtually all the relevant aspects and after gathering a vast number of informations, formulating a conclusion for the possibilities of the use of WML's facilities by the Ghanaian horticultural industry.
Goal of the work: The Goal of this report is to identify the possibilities of the use of the WMLÂ´s facilities by the Ghanaian Horticultural Sector .
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Terminology & Abbreviations AfDB African Development Bank CEPS Customs Excise and Preventive Services DAES Directorate Agricultural Extension Services DAMFA Dangme West Mango Farmers Association EMQAP Export Marketing and Quality Awareness Project EPA Environmental Protection Agency EU European Union FAGE Federation of Associations of Ghanaian Exporters (FAGE) GDP Gross Domestic Product GEPC Ghana Export Promotion Council GLOBALGAP Global Good Agricultural Practice GPHA Ghana Ports and Harbours Authority GSB Ghana Standard Board GTZ German Technical Cooperation HAG Horticultural Association of Ghana HEII Horticultural Export Industry Initiative IMO Institute for Marketecology MCA Millennium Challenge Account MOFA Ministry of Food and Agriculture MOTI Ministry of Trade and Industry NGOs Non Governmental Organisations NLC National Labour Commission PAMPEAG Papaya and Mango Producers Exporters Association Ghana SPEG Sea - Freight Pineapple Exporters of Ghana USAID United States Agency for International Development YKMFA Yilo Krobo Mango Farmers Association
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International Standard Requirements :
Ghanaian horticultural industry has developed programs to attend to the European quality and standards requirements. GlobalGAP: G.A.P. stands for Good Agricultural Practice.
Main Objective : safe, sustainable production of food, flowers and ornamentals worldwide.
• Traceability • Propagation Material • Site History and Site Management • Soil Management • Fertilizer Application • Irrigation/Fertigation • Integrated Pest Management • Plant Protection Products • Equipment • Tracebility With additional guidelines for: • Microbiological Hazards • Responsible Water Use • Integrated Pest Management • PPP use in countries that allow extrapolation • Residue Analysis • MRL Exceedance • Visual inspection and functional tests of application equipment
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Identification of Research Themes: Besides the central question “ Could WML´s Cold – Chain facilities be used by Ghanaian fruit export ( Horticultural Sector) ? “ there are some other questions which will be answered in this paper : 1 – Which fruits are interesting to the export ? 2- What are the produced volume, per variety ? 3 – What are the volumes exported? 4-Why are the quantities produced not higher? 5- Why are the quantities exported not higher? 6-Which problems are a sort of barrier towards the quality? 7 – What are the logistics problems faced by the horticultural sector? 8- How is the quality standard evaluated and controlled in Europe? 9-To which countries are the Ghanaian horticultural products exported respectively? 10- Which kind of fruits ( industry) could use WML´s facilities, including for the in-land market? 11-Are there any possibilities of the use of WML´s facilities by the Vegetable industry? 12- How does the market rolls? Who are the big actors? 13- Is it possible to approach the smallholders through associations and gather their production together? 14- What are the price levels ? 15-Is it possible to export through the ECOWAS?
The Ghanaian Horticultural Sector :Problem discription ( transport and stuff ). Graphic fresh fruit from the ghana to the netherlands
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Agricultural sector in Ghana
Ghanaian Agricultural Sector : ď‚ˇ
Agriculture is the most important economic sector in Ghana. Ghana has vast years of experience exporting horticultural products to the EU market. Opportunities in the Horticultural sector : Some of the opportunities in the Horticultural sector are : Export of fruits ( pineapple,papaya , banana and mango)
In â€“ land trade of Tomatoes ( Ghanaian tomatoes and the transport of the tomato originated from Burkina Faso).
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The Crop Portfolio : Fruits : Pineapples : Before the changing of the European preference for the “MD2” Ghana used to be one of the top exporters of the “Smooth Cayenne “sort ( P.Jaeger , 2009)
The European demand for the traditional Smooth Cayenne variety disappeared in a short time and simultaneously the requirement for EUREP GAP certification became widespread. The European market has chosen the MD2 pineapple sort , mostly produced by Costa Rica. ( P.Jaeger) Costa Rica has a large production of MD2, and is also a way more developed in terms of logistics/infra-structure production /packaging and is more market oriented than the Ghanaian producers.
Nowadays the Pineapple scenario is mostly controlled by Golden Exotics /Compagnie de Fruitiere and Blueskies. There are a lot of opportunities in the Pineapple export sector. Ghana has years of experience in exporting to the European market, and understands the market quite well ( P.Jaeger) however, most of the Ghanaian Pineapple is produced out of the WML´s Cold –Chain ´s range ( Volta Region). It might be interesting in investing on the In – Land transport / storage of the pineapple for the Ghanaian upcoming market.
Bananas : Banana production is virtually all controlled by the Golden Exotics . The output from the last five years is around 35,000 – 40,000 tonnes. Production Area : Bananas are virtually all produced in the Volta Region Quantity produced : Around 35,000 – 40,000 tonnes per year.
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The Mango Industry :
Mangoes have become one of the top export horticultural products from Ghana.Mango has become a major potential export product , receiving incentives from the Ghanaian government and foreign private investment in order to boost the production and competitiveness in the following 5 10 years. Major Importers : The EU Market are the major importers. The UK,Germany, Switzerland,France,Italy and the Netherlands are the main export destinations. The Big Players : Wienco . ( Tamale region). Bomarts ( small quantities). Smallgrowers working in the Outgrower System.
The Mango industry and its three levels of production: -
Ownership of companies in the industry ( locally owned firms) 51% Joint Venture 21% Completely foreign owned 28%
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Tomatoes : Tomato Industry : Ghana has a potential tomato consumer market, once tomato is an important product to the Ghanaian diet. Ghana is considered less favorable for the tomato production comparing to Burkina Faso. It seems the soil conditions presented in Ghana ( high humidity for example) are prejudicial factors to a tasty and firm tomato produce.
The Tomato Chain : The Ghanaian tomato trade has three important involved parts : SMALLHOLDERS WHICH ARE DIRECTELY LINKED TO TRADERS ( MARKET QUEENS) > LEAD – BOYS. Lead – Boys determine who the Market Queens should buy the crops from. Those Lead – Boys have a key role in price negotiation and the transportation of the tomatoes. Generally the Lead – Boys find the production locations, volume produced and quality of the tomatoes. They normally translates and facilitates the border – crossing between the Upper Region and Burkina Faso, although they’re also present in the Brong Ahafo region. In the Brong Ahafo region they’re mainly involved in loading trucks. Large – scale farmers normally negotiates directly with the trader , therefore not involving lead- boys in their negotiations.
Market Queens ( traders ) : Market Queens sell their products in the retailing markets of Kumasi and Accra. They travel overall in order to purchase tomatoes from direct producers and communities. They have their own trucks, and they transport the tomatoes to the markets and sell it to retailers. Those Market Queens have established a long – term relationship with the farmers, in this case there are no need of involving the Lead – Boys in their negotiation. ( Lead – Boys are only involved when there is no long – term relationship between farmers and traders), although farmers have no exclusivity contract with the traders ( only 30% of the farmers sell to a particular trader). Those Market Queens ( Traders ) have the absolute control of the Tomato Trade.They might restrict access to the markets.
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Retailers : Retailers trade directly with the Market Queens ( Traders). Retailers must buy a crate of tomato ( the traders just sell the tomatoes in a full crate).
3- Currently Situation of the Tomato Trade in Ghana : Factories are running out of Capacity. Imports of Tomato from Burkina Faso and China are increasing dramatically. Some of the issues faced by the Government: The Ghanaian public sector has been much more interested in focusing on Large â€“ Scale production, not investing on the improvement of the conditions for the smallholders. The current situation in the Ghanaian tomato trade : Factories running out of capacity.
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Imports of Tomato produces from Burkina Faso and China increased dramatically . Some governmental barriers: - Investing in rural infra –structure
- Technical and development support Investments in irrigation in the Northern region. It is necessary to ensure viable and competitive tomato production to provide the input required at a competitive price by tomato processors. Problems faced by the tomato farmers : Ghana’s farmers have not been able to produce tomato at sufficiently high levels of output, at sufficiently low cost , and at sufficiently high quality , to enable domestic processing to be competitive with imported tomato paste., besides , they’re constantly facing problems due to the trade domination by the market queens.
4- The Players in the Ghanaian tomato processing sector : Trusty Foods Company Limited . Kwame Nkrumah University of Science & Technology, Kumasi Derma Vegetable Growers Association Limited ( Brong Ahafo). .The factories are Northern star Tomato Factory ( Pwalugu Tomato , processing 500 tones per day ) , Afrique Link ( Wenchi Tomato , processing 200 tones per day and Olam ( formerly Expoma Ghana Limited at Tema, processing 500 tones per day). Unilever pushed the production of Tomato by the farmers located in the Tono – Vea ( Northern region ) and subsequently sending their production to the processing plant in Tema ( Tomaroma – Unilever processed tomato brand for the Ghanaian market) .
5- The tomato transport : A five day trip to Burkina Faso ( takes 2 days to Reach Burkina , 1 day to load the trucks , 2 days to go back to Accra/Tema region ). Transporters are a Key Play in the tomato trade. Problems faced during the transport of tomatoes : Bad packing conditions might result in potential losses of the tomato crops ( V.Venus 2013) . In West Africa, tomatoes account for around 60 millon USD ( around 46.152 EUR). Ghana is the most important destination of the Burkinabe tomato. The relative high humidity and rainfall encourages pest and diseases , causing losses up to 30 -40% of the Ghanaian tomato production . ( Ouedraogo et. Al .2008). Burkina Faso present ideal conditions to the tomato crops, resulting in a better taste and appeal.
6- Profits of the Tomato Transport : 5 day trip . Revenues : US$ 690 per trip ( exclusive the truck depreciation).
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Transporters are a Key Play in the tomato trade. Problems faced during the transport of tomatoes : Bad packing conditions might result in potential losses of the tomato crops ( V.Venus 2013) . In West Africa , tomatoes account for around 60 millon USD ( around 46.152 EUR). Ghana is the most important destination of the Burkinabe tomato. The relative high humidity and rainfall encourages pest and diseases , causing losses up to 30 -40% of the Ghanaian tomato production . ( Ouedraogo et. Al .2008). Burkina Faso present ideal conditions to the tomato crops, resulting in a better taste and appeal. Bad conditions of the roads, poor infra – structure and a lack of a proper Cold – Chain results in a 20% up to 100% losses of the tomato production in West – Africa. In the figure 4 is possible to see the Tomato routes in West – Africa, and the stopping points, where mig ht also result in bribery ( giving money or gift giving that alters the behavior of the recipient, illegal practice) sometimes.
Transport Problems : Another problems faced during the tomato transport are : Delay at border crossing ( illegal ) Toll stops Police control Poor trucks and roads conditions Tomato good conditions : Tomatoes are highly sensitive to external environment conditions, for instance temperature. Transporters play an important role in the Tomato Trade in West – Africa. Lead – Boys play a key – role in the transport ( cross- boarder trade), specially when it comes to diverting trading in Burkina Faso. Lead – Boys profit : CFA 1.000 ( US$ 2 ) per crate for cross border trade. A typical truck transports around 100 crates, resulting in a profit of US$ 200 to the Lead – Boys. Infra – Structure problems : Poor Trucks and Road conditions.
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Lack of proper storage and of a Cold â€“ Chain. All those problems lead to losses in the tomato trade.
Figura 1: Tomato Transport between Burkina Faso and Ghana - V.Venus 2012
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1- Tomato Production: Its not achieving its optimal production potential, which is happening due to the fact the Ghanaian tomato industry faces some problems. - Harvesting and Postharvesting problems. - Lack of proper irrigation - Bad conditions of packing ( crates are not designed to endure the truck shaking, resulting in the compromise of the tomato’s firmness and resulting into losses) - Lack of a Cold – Chain - Poor conditions of roads and trucks - No of insignificant support to medium and small- holders. • Ghanaian Tomato Conditions: Tomato is an extreme seasonal product, predominant rainfed production (rainfed farming practices that rely on rainfall for water. It provides much of the food consumed by poor communities in developing countries using small scale irrigation. Ghana is considered less favorable for the tomato production comparing to Burkina Faso. It seems the soil conditions presented in Ghana ( high humidity for example) are prejudicial factors to a tasty and firm tomato produce. • The preference to the Burkina Faso Tomato : Burkina has favorable conditions for a tasty/better quality tomato .
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Conclusion: The object of this report was analyzing the Horticultural sector in Ghana , and subsequently pointing out the possibilities of the use of WML´s facilities by different parts in the Ghanaian horticultural sector. After these months of research, we eventually concluded that there are a vast number of opportunities in Horticultural sector, however a two level analysis has to be considered. The first is that most of the fruits produced and exported to the European market are out of the WML´s facilities´range ( Kumasi,Techiman and Temale) . They count with their own Cold – Chain facilities and besides, they´re located quite close to the Port of Tema and Accra International Airport. The second consideration is that there is a booming marketing in Ghana, and export is no longer the main activity performed by the Ghanaian horticultural sector. The in-land trade is becoming more and more interesting over the years and the necessity of the implementation of facilities in remote areas are also proportionally increasing, therefore there are definitely opportunities regarding the improvement of the infrastructure for the horticultural sector. We´ve also concluded that the in-land trade of tomatoes is very interesting, however due to the lack of a Cold – Chain and proper transportation conditions, Ghana is forced to supply it´s demand by purchasing tons of tomatoes originated from Burkina Faso. Tomato is one of the major ingredients of the Ghanaian food, and establishing a Cold – Chain in those remote areas where the tomatoes are produced ( Tamale,Kumasi and Techiman) would positively change the Ghanaian tomato competitiveness.
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Literature References: publications and papers Trienekens, J.H., et al. (2003). Innovation Through (International) Food Supply Chain Development: A Research Agenda, in: International Food and Agribusiness Management Review, Vol. 6 Trienekens J.H. & S.Willems (2002). Cross-border Agri Supply Chains, in: The challenge of global chains; integrating developing countries into international chains, a potential risk or an opportunity? Wageningen Academic Publishers, 63-68 Pedersen, P.O. (2001). The Freight Transport and Logistical System of Ghana, Centre for Development Research, Copenhagen Kramer, K.J. (2000). Food Matters. Groningen, University of Groningen Remmers, J. (2004). People Planet Profit in de Supermarkt. Utrecht, Stichting Natuur en Milieu (Netherlands Society for Nature and Environment) Poelman, A.A.M. & J. Mojet (2004). Preferences of fresh pineapple by European consumers. Wageningen, ATO Trace, K. (2002) Globalisation of Container Shipping: Implications for the North-South Liner Shipping Trades. Paper presented during the XIII World Congress of Economic History, Buenos Aires, July 2002 Previous results of this project Peter Achuonjei et al. (2003). Analysis of the Ghanaian Fresh Fruits and Vegetables Industry. MSU, Michigan Tromp S.O. (2004). Ananas snijden: hier of daar? Een aladin-analyse. Wageningen, A&F A selection of websites consulted www.faostat.com www.geographic.org www.africaonline.com/site/gh/ www.ghana-exporter.org www.ghanaweb.com www.freshinfo.com www.mckinseyquarterly.com
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Appendix : Developed Model The model used in this research was the Benchmark model , and we took the Motorola Five –step Benchmark principle as our basis. This model is used to select the actors ( farmers, institutions, companies ) involved in the Ghanaian horticultural sector. A selection of those actors can be done in a short space of time ( using local information/people). The Motorola Five – step Benchmark Model:
Determine what you want to benchmark Determine the companies you are going to benchmark Collect the data Analyse the data and use the results to put together an action plan Repeat the process. Determine what you want to benchmark.
We have used three different criterias in order to approach those parts involved in the horticultural sector in Ghana: 1.
Information on the post harvest methods : Refrigeration method Packaging method Logistics method
Information on the infrastructure: Roads Facilities and services at the airport of Accra Facilities and services at the port of Tema
Information about the organizations : Banks and institutions involved Export associations Import associations Producers associations
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