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Enhancing Competitiveness through Higher Productivity. Fruit & Vegetable Sector in Sri Lanka : THE HAYLEYS AGRICULTURE EXPERIENCE. KEY FACTS. Bio-diversity of Sri Lanka offers tremendous opportunities for producing a range of fruits & vegetables
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Enhancing Competitiveness through Higher Productivity Fruit & Vegetable Sector in Sri Lanka: THE HAYLEYS AGRICULTURE EXPERIENCE
KEY FACTS • Bio-diversity of Sri Lanka offers tremendous opportunities for producing a range of fruits & vegetables • Regional markets have grown over the past decade (Maldives, the Middle East) • Enormous opportunities for processed fruits & vegetables in Europe & Asia • Globalization – Year round supply of fresh & processed agri products – sustained demand • Establishment of globally-linked supply chains • Quality and Innovation gaining ground • Steady growth in exports from US 36 mn in 2011 to US 45 mn in 2012
PRODUCTIVITY ENHANCEMENT Access to and application of latest growing and processing technologies Co-ordinated supply chains result in high value-added products Focussed R&D to drive innovation and product development Strengthening partnerships along the supply chain Agricultural extension services Cost management& improved margins
The Opportunities Demand for organic, exotic, fair-trade & ready-to-eat products Value added processed fruit and vegetable products Access to insights into changing consumer demands Standardization & accreditations Global forums and trade fairs
HAYLEYS AGRICULTURE • Account for 43% of Sri Lanka’s total fruit and vegetable exports and suppliers to McDonalds, Burger King, Hungry Jack’s, Subway, 7-Eleven , Heinz , Unilever and Nestle. • Involved in large scale cultivation via outgrowers of gherkins and other fruits & vegetables such aschillies, bell peppers, jalapeno peppers, Spanish peppers, pineapple etcfor the export market • Second largest gherkin exporter in Asia, processing 12,000 MT per annum and holds 62% share of the Japanese market for bottled pickles • Supplier of exotic processed fruits & vegetable to global private labels
The Sri Lanka Experience Processed fruit & vegetable supply chain Gherkins in brine in bulk Value-added pickles in retail forms
SUNFROST LIMITED Nucleus Farm Improving Quality of Farm Produce & Processing Techniques Out-grower System 1980’s – Pickled Gherkins in bulk Maximizing Profit + Helping Farming Community The Supply Chain • Identified suitable seed varieties • Developed other growing techniques • Training of extension and processing staff
How the Linkage wasprovided …. Buyback & Price guaranteed Capacity building at FARMER LEVEL Market, Product & Process Information Farmer Inputs on Credit The Supply Chain Technology Transfer Presence in Remote Villages R&D in Farming & Processing New Product Development
Buyback & Price guaranteed • A Supply Chain pulled by Buyer • Planting program to meet market/customer needs • Weekly payments through Farmer Bank Accounts Market Information –Increased flexibility • Farmer awareness of their position in the supply chain • Discuss market trends at Farmer Training Classes
Technology Transfer • Field Extension staff - Agric. Graduates & Diploma Holders • Extension staff trained by Experts from Dept. of Agric., Universities, Factory staff • Farmer Training • Training Classes • On farm training during regular farm visits Farmer Inputs on Credit • Seeds, Fertilizers on Credit • Quality and correct dosage of Inputs • Traceability & Timely use • Easy & reliable source of Credit to Farmers • No security on Credit, Settlement once harvest is delivered
New Product Development • New products to add value to local Fruits & Vegetables • Products that are popular in the market, new to local growers R&D in Farming & Food Processing • On farm Productivity & Quality improvements • Effectiveness and efficiency of Inputs use (Seeds, Fertilizer, Pesticides) • Labor efficiency • Post harvest handling • Improving Quality of Farmer Produce • Upgrading Manufacturing Process • Best Management Practices: 5S, QCC, Kaizen, Lean Manufacturing • Cost Effectiveness • Quality of Finished Product
Mid-1990s - Value-added pickles in retail form HJS CONDIMENTS LIMITED Focus on Finished Product Accreditations: HACCP / ISO 22000 ISO 9001 - 2000 ISO 14000 OHSAS, BRC The Supply Chain Diversification – adding value to wide range of fruits & vegetables New Product Development Market Links with Distributors, Food Wholesalers, Food Retailers, Food Manufacturers Improved Product Quality
LINKAGES Inputs Grower/ Supplier Transformation Manufacturer / Processor Distribution Distributor Output Customers The Linkage Sunfrost HJS Global Market Local Farmers How the supply chain activities are linked (Growers, suppliers, manufacturers, distributors, and customers)
CONSTANT MARKET FOCUS • VALUE ADDITION & PRODUCT DEVELOPMENT • INNOVATION • EMPHASIS ON TOTAL QUALITY • SUSTAINABLE SUPPLY CHAIN KEY LEARNINGS