Malawi Annual Report, April 2011 March 2012 Vito Sandifolo Country - - PowerPoint PPT Presentation

Malawi Annual Report, April 2011‐March 2012

Vito Sandifolo Country Manager Chancellor College, Zomba

Summary of Malawi strategy

• The strategy in Malawi focuses on developing

two value chains for HQCF

– Sundried value chain involving community processing groups and small entrepreneurs to supply HQCF to rural end users (primarily mandazi makers, Bakers of scones, cakes, doughnuts, buns and medium scale bakeries based district centres) – Artificial dried value chain involving commercial private sector processors to supply HQCF to paperboard companies, biscuit manufacturers and millers

Estimated demand for HQCF

Type of Market

Estimated demand for wheat (ton/yr)

Estimated demand for HQCF(ton/yr) Experiences after 2 years

• f C:AVA

Potential supply chain Millers 49,000 4,900 (10%) Untapped Flash dryer Rural retail 36,000 7,200 (20%) 18,000 (50%) Sundried Biscuit 10,000 2,500 (25%) 3000‐5000 (30‐50%) Flash dryer Paper board &

• ther

750 (maize starch) 750(100%!) Untapped Flash dryer Total 95,750 15,350 + 23,750

Revised milestones

Key milestone Target 2010‐11 Target 2011‐12 Target 2012‐13

• No. of farmers

selling to flash dryer ‐ 75 3600 farmers 203 processors Farmers benefiting ($93/yr) from sundried HQCF 78 200 400 Processors benefiting ($125/yr) from sundried HQCF 35 90 180 New flash dryer in

• peration with

C:AVA support ‐ 1 unit installed in Malawi by October 2011 1unit operating and 2 new units installed Increase in production & sales

• f HQCF

15.0 tons 112tons 74 rural 38t commercial 2,100 250t rural 1,388t commercial

Achievements against revised milestones as of March 2012

Key milestone Revised target Target achieved Remarks

• No. O f farmers

selling to flash dryer

75

Delays in installing dryer

Farmers benefiting ($) from sundried HQCF

200 978

From C:AVA and non C:AVA groups

Processors benefiting ($) from sundried HQCF

90 327

Including members of processing groups and employees

Increase in production & sales of HQCF

74 tons 123.7 tons

Processing groups utilizing any dry day for processing due to markets demand

HQCF purchased by end users

1797 total for all countries 130.3 tons 2.1 tons in stock (HQCF assoc)

Highlights of activities

Monitoring of prices for selected products

Product 1st quarter (MK/ton) 2nd Quarter (MK/ton) 3rd Quarter (MK/ton) 4th Quarter (MK/ton) Wheat flour (WS) 100,000 163,000 210,000 240,000 Wheat flour (retail) 130,000 200,000 250,000 300,000 Makaka (FG) 5,000 10,000 7,000 10,000 Makaka (MP) 15,000 15,000 10,000 15,000 Makaka (Fact G) 27,000 25,000 23,000 25,000 Makaka flour 43,000 45,000 45,000 45,000 HQCF (WS) 65,000 70,000 80,000 80,000 HQCF retail 80,000 80,000 100,000 100,000/120 Diesel (MK/litre) 260 260 360 360/600 Exchange rate (O) 152 163.4 165.4 166.7 Un official 175 200 210 270

Highlight of activities (sun‐dried value chain)

• Continued to conduct end user trials for rural bakers to

sell the remaining HQCF from 2010/11 season

• Monitored sales of HQCF at various trading centres

where first end user demonstrations were conducted ‐ at the same time measuring quality of the product – HQCF sales started going up at Nkando trading centre in Mulanje‐ Premixed flour was selling at K110/kg – Five processors opened shops for HQCF (in KK‐ had good sales after radio promotion) – Noted good HQCF sales amongst mandazi, wedding cakes and maganja makers

Highlights cont’d

Facilitated testing of quality parameters for HQCF at CHANCO laboratory

Sample Particle size (%) Moisture content (%) Solubility (%) pH CN content (ppm) Colour Ordour MJ border wheat 91.37 weevils, 9.33 + 0.59 8.50 6.0 0‐5 Pale yellow None KK HQCF 97.7 9.58 +0.89 6.17 5.8 0‐5 White None AZAM 100 12.97 + 0.12 7.03 6.4 0‐5 cream None Old Maula HQCF 98.2 11.01 + 0.01 2.44 6.0 20‐30 White None Tiyamike HQCF 98.0 10.58 + 0.16 2.19 6.0 0‐5 White None CMRTE HQCF 96.8 9.87 + 2.81 3.69 5.8 0‐5 White None KK wheat 99.0 11.14 + 0.06 4.67 5.8 0‐5 White None

Provided capacity building activities on various topics

Type of training Participants Total Remarks Male Female Service providers Business mgt 48 32 12 92 For members

• f VPGs

Quality mgt systems 10 3 4 17 Facilitated by Louise Marketing 11 3 14 Two phased training Product development 306 448 28 782 By C:AVA and VPGs Equipment maintenance 9 3 2 14 Consultants Cassava agronomy 143 89 16 248 Small scale & commercial HQCF quality assessment 5 1 6 Lab technicians Total 532 579 62 1421

Activities undertaken by VPGs after business management and marketing trainings

• It was confirmed that there was ready market

for HQCF in rural areas from mandazi makers and scone bakers

• Most of the VPGs expanded drying areas
• Some of VPGs opened selling points for HQCF

and other ingredients for rural baking e.g. sugar, yeast, baking powder & wheat flour

– Problems of premixed flour & poor yeast

• Draft business plans were developed which

showed different break‐even prices for VPG

Estimated g/margins for village processing units

Name of group Estimated prodn S/ price

Revenue

Variable costs Margins BE/ price Tiyamike 8000 80 640000 369536 270464 46 Old Maula 10000 80 800000 514500 285500 51 CMRTE 12960 80 1036800 597500 439300 46

Mkandawire 12000

80 960000 632600 327400 53

Kasiyamaliro 16000

80 1280000 732800 547200 46 Chisi 2574 75 193050 112498 80552 44

Chikaonda 20000

80 1600000 1081300 518700 54 73534 79 49

Expansion in drying areas

Name of VPG Old drying area (square metres) New drying are (square metres) Qty of HQCF /day (tons) Remarks Tiyamike 60 120 0.24 Also moulded 40,000 bricks CMRTE 90 180 0.36 Constructed warehouse Old Maula 120 120 0.24 ‐ Chiaonda ‐ 60 0.12 Opened HQCF shop Chisi ‐ 120 0.24 Opened 2 shops Kasiyamaliro ‐ 140 0.28 Has plastic dryer Mkandawire ‐ 120 0.24 Was sick for some time NKPA 90 ‐ ‐ ‐ Press 480 480 0.96 Was disolved Total 840 1185 2.68

Highlight of activities‐sundried value chain cont’d

• Participated in national agriculture fairs and national

commission of science and technology activities‐ Advocacy for HQCF

• Conducted commercial end user trials with bread and

biscuit companies using HQCF from sundried value chain‐Universal for composite mandazi mix flour & Mothers Holding for bread and other bakery products

• Formed HQCF processors association

– Draft constitution developed with assistance from NASFAM – Discuss potential threats to HQCF industry – Plan for advocacy meetings with MoAFS

Highlights of activities cont’d

• Facilitated development and submission of proposal to U.S

Ambassador’s self help fund for construction of processing and storage shed at Tiyamike Processing group

– Member of parliament provided funds to start construction – Requested for proposal to assist in sourcing funds

• Presented key lessons and challenges several of the sundried value chain

at several fora which facilitated other projects to adopt C:AVA model

– Root and Tuber Crops Innovation Platform (RTCIP) – Trustees of Agriculture Promotion project launch (TAPP) – Wellness & Agriculture for Life Advancement (WALA) – Millennium Villages Project (MVP) – Land O Lakes (FFP)

• Facilitated planting of demonstration plots with improved cassava

varieties and promising clones for HQCF at CMRTE

• Ordered commercial presses for NKKP processors

Highlights of activities with artificial dried value chain

• Provided support towards investment in flash dryer by

Universal industries by: a) Providing cassava seed to 7 commercial growers and providing agronomy support b) 5500 bundles of cassava seed given to 7 commercial growers who planted more than 42ha‐ also to act as seed multipliers for surrounding smallholder farmers‐ estimated to supply seed for 400 ha to be planted by over 1000 farmers c) Facilitated updating of business plan for loan application from the project for procurement of flash dryer‐ due to forex problems

Support to Universal continued

d) Facilitated cassava seed distribution and price negotiations between UI and Millennium Villages project

i. 1880 bundles of cassava seed distributed to MVP farmers ii. Provided agronomy support to farmers in MVP iii. Maintained 2 ha of cassava nursery under DARS iv. Prices of K9000‐10000/ton agreed between farmers and Universal Industries

e) Facilitated follow up meetings with potential buyers

• f HQCF e.g. PIM to ensure continued interest in

buying HQCF. The company has invested in installing cooling systems to be able to use HQCF following recommendations from C:AVA

Progress made towards investment in flash dryer by Universal Industries

• Flash dryer has been ordered

and under construction

• Flash dryer to be shipped from

Nigeria by 19th of March

• Drawings of processing

structure agreed by board at Njuli (Over K20 Million worth

• f investment)
• Logo for HQCF by Universal

Industries agreed

• Currently in the process of

estimating yield from various production areas and developing schedule for supply

Highlights of activities artificial dried value chain cont’d

• Facilitated development of business plan for

Rab Processors

– Draft business plan available – Will wait to study operations of first flash dryer by Universal Industries Another private investor (Former Chief Executive of Press Agriculture )has shown interest to establish flash dryer in Lilongwe

Challenges for sun dried value chain

• Inappropriate (capacity, quality) processing

equipment such as presses for some of the pilot processing entrepreneurs especially in Nkhotakota

– Lack of appropriate milling screens affecting particle size of HQCF for all groups‐ correct screen for <250m‐ New sieve now identified from Tanzania‐ Size 7 – Lack of hammer mills for Old Maula and Tiyamike Green Belt (mill 3Km away)

• Bad quality wheat flour supplied by unscrupulous

vendours especially in Mulanje

• Variability in fresh roots : HQCF across the season

Challenges cont’d

• Limitations is processing capacity to supply HQCF

during the wet season

• Quality management by some processing groups ‐

Some groups making short cuts to supply available markets

• Continued increase in wheat flour prices
• Scarcity of fuel for activity implementation
• Inability of service providers to provide services as

agreed in contract document

• Availability of low quality wheat flour in trading

centres along the borders with Mozambique‐ which do not produce good results when mixed with HQCF

Challenges for artificial dried value chain

• Economic hardships faced by the country‐ lack
• f forex, fuel
• Delays due to bureaucratic procedures by

investors

• Cassava diseases especially Cassava mosaic

disease

Key lessons

• Big limitations in sun dried value chain. It is difficult

to process big volumes due to problems of drying – Hence problems of targeting big markets

• Quality of product (moisture content, particle size,

pH, fibre content, colour) fluctuations between various processing groups‐hence requiring constant supervision from project staff despite various capacity building activities‐ need to focus on quality monitoring

• Dispelling the notion that Big is better and

embracing the principle that small is beautiful‐ Bigger markets may not be the best always

Key Lessons

• Both small scale and commercial processors have room to

play to be able to establish a vibrant and sustainable HQCF value chain. Each one of them has a niche market to target

• The need to identify and involve drivers/innovators in

establishing a new value chain. While most projects focus

• n resource poor smallholder farmers, it is difficult to

depend on them to develop a viable value chain. No serious investor will make decision based on such conditions

• Importance of practical, result‐oriented training to achieve

desired results

• Moving beyond the VPU and venturing into the market. ‐

Importance of Building capacity for ownership of the process

• It’s all about money (and quality) !!!!!

Success stories

• 1. Tiyamike processing group wins Presidential award as best

farmer organization at National Agriculture Fair (2011)

Success stories

• 2. Mr Chisi one of the processing entrepreneurs increases HQCF sales

by sponsoring radio promotion, opens new HQCF shop and sells composite mandazi to secondary school

Success story

• 3. Marketing training for sun dried groups opens up new market
• pportunities for HQCF in Malawi by October 2011

0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0

Sales volume (t)

Sales volume (t) Aug 10 Mar 11 Aug 11 Oct 11 Nov 11

Success stories cont’d

• 4. HQCF saves rural mandazi makers and bakers

from bankruptcy

• 5. Lessons from C:AVA provide model for other

projects to follow in commercializing cassava

• TAPP
• WALA
• Land O Lakes (Food For Progress Project)
• MVP
• Mulanje DADO starting new group in Milonde EPA

Direction of C:AVA in MW if no further funding is available

• The HQCF value chain will continue as it has been proven

that it is viable but in limited areas

• Quality of HQCF may become an issue as most processing

groups still need to take quality issues seriously

• Scaling up and out the sun‐dried value chain will continue

by other partners but may have problems as they will need to have source of information for consultations as the value chain is still in its infancy

• The HQCF association will play key roles of advocacy and
• ther roles but still needs mentoring
• Private sector investment may slow down as they still

need a lot of information on the artificial value chain

If funding is available

• Scaling out of the value chain will be faster to new areas

and districts‐ thereby increasing the contribution of HQCF

• It will be easier to get new investors to establish artificial

dryers and thereby increasing number of beneficiaries

• Quality management by sun dried groups will be

consolidated

• The HQCF processing association will be properly

mentored to undertake issues on HQCF thereby making it more sustainable

• It will be easy to identify new market opportunities for

HQCF within the country and region

• Group cohesion and business management skills will be

consolidated

Thank you

Workplan for rural value chain

Activity By who A M J J A S O N D J F M TOT‐Service Providers on QMS LA x TOT of business management for VPG managers BDA x Conduct targeted Market campaign/promotion BDA x x x x x x Conduct training on equipment maintenance Consultant x Provide agronomy support to rural growers CM x x x x x x Provide support towards equipment (sieves, presses graters) CM x x x x Support towards Chanco lab for quality control AB/LA x Training of HQCF processing for new groups CM x x x

Workplan (2011/12) for artificial dried value chain

Activity By who A M J J A S O N D J F M Installation of flash dryer UFML x Finish construction of factory infrastructure UFML x x Testing and commissioning of flash dryer UFML x Training and tech support UFML x x x Start processing HQCF UFML x Establish agreements for FCR supply UFML x Supply HQCF to markets UFML x x x x x x x x x x Form cassava agronomy group VS x x x Establish trials programme VS/DARS x x x x x x x Provide technical support to commercial growers VS x x x x x x x x x x x x Loan repayment UFML x x x x

Workplan for artificial dried value chain

Activity By who A M J J A S O N D J F M Develop theoretical planting programs ‐ Planting VS x x x Harvesting UFML x x x x x x x x x x x Identify small‐farmer groups near factories VS/com growers x x x Provide training to farmer groups VS x Update PIM trails AG/LA x x Conduct regional market studies VS/MS x x Evaluate Flexible Packaging AG/LA x Undertake DW trials AG/LA x Undertake trials at Flexible Packaging AG/LA x Finalize business plan for Rab HL x x Meet other donors VS/MS x x x x x x

Workplan for sundried value chain

Activity By who A M J J A S O N D J F M Monitor market linkages and HQCF quality VS x x x x x x x x x x x x Provide training to new groups with partners VS/VK x x x Provide equipment to new groups VS x Provide training to members

• f HQCF association

VS x x Assess market linkages for new groups VS/VK x x x x x x Provide business mgt training to new groups VS/VK x Provide QMS training to new groups VS/LA x x Media campaign VS x x x x x x x x Participate in meetings VS/VK x x x x x x x x x x x x