1. UK Trade & Investment MASDAR International Consultants 17th November 2003 1 Ghana

2. UK Trade & Investment MASDAR International Consultants 17th November 2003 2 UK TRADE & INVESTMENT AGRO-PROCESSING SEMINAR Miklin Hotel, Kumasi 17 th November 2003

3. UK Trade & Investment MASDAR International Consultants 17th November 2003 3 Ghana Agro-Industry Study 2001  Phase 1  Review and diagnosis  SWOT Analysis  Identify  Investment Opportunities  Public Sector Projects  Phase 2  Investment Appraisal  Project design Nationwide study over 12 months funded by African Development Bank

4. UK Trade & Investment MASDAR International Consultants 17th November 2003 4 Seminar Programme  Agro-Processing - where is Ghana today  James Siggs Bsc. MBA  Marketing Processed Products  Matthew Kofi Ocran BSc. MPhil.  Demand for Processed Foods  Dr. Victor Nyanteng  Agro – Processing Opportunities  Mr. Colin Watson BSc. MBA

5. UK Trade & Investment MASDAR International Consultants 17th November 2003 5 Oil Palm in Ghana

6. UK Trade & Investment MASDAR International Consultants 17th November 2003 6 Ghana Agro-industries Where are we today? James Siggs

7. UK Trade & Investment MASDAR International Consultants 17th November 2003 7 (3% annual growth rate) Population Projection

8. UK Trade & Investment MASDAR International Consultants 17th November 2003 8 Agro-Industry Flow Chart BreedstocksSeedsEquipment AgrochemicalsOther Supplies Extension & Research Transport Farm Produce Transport Agro-Industry Products Transport ExportersDistributors Storage Raw Materials Finished Goods Inputs Own use Land & irrigation Finance Human Resources

9. UK Trade & Investment MASDAR International Consultants 17th November 2003 9 Main Features of Ghanaian Agriculture  Mostly rainfed  Majority of producers are smallholders  Low levels of technology utilised  Productivity is generally low and costs of production are high  Quality issues are not addressed

10. UK Trade & Investment MASDAR International Consultants 17th November 2003 10 Average Yields (mt/ha rainfed) CropActualAchievable Cassava11.828.0 Plantain7.810.0 Yam12.320.0 Cocoyam7.08.0 Maize1.55.0 Paddy rice2.03.0 Cowpeas0.82.0 Millet0.92.0 Sorghum1.12.0

11. UK Trade & Investment MASDAR International Consultants 17th November 2003 11 Agro-processing Industries? What is an Agro-processing Industry?  Integral component in the processing chain to transform or stabilise crops/products and/or to provide added value. What an Agro-processing Industry is not!  Disposal of periodic crop surpluses  Converting low quality raw material inputs into marketable finished products.

12. UK Trade & Investment MASDAR International Consultants 17th November 2003 12 Pre-requisites Market  Product  Product specifications  Demand potential  Price  Competitiveness Raw Material Supply  Quality control  Security of supply  Supply chain logistics  Price  Competitiveness

13. UK Trade & Investment MASDAR International Consultants 17th November 2003 13 Current Issues Issue  Under-utilisation of capacity  Competitiveness Factors  Raw material supply constraints  Markets and market intelligence  Access to credit  Consumer purchasing power  Competitiveness  Raw material costs  Productivity  Inappropriate technology  Under-utilisation of capacity

14. UK Trade & Investment MASDAR International Consultants 17th November 2003 14 Finance Issues  Long term nature of sector  High risks due to markets and weather  Substantial equity investment required  Availability of collateral  High transaction costs  Exchange rates/Inflation  Track record

15. UK Trade & Investment MASDAR International Consultants 17th November 2003 15 Ghana Agro-Industry SWOT Strengths  Political stability  Internal security  Land bank  Agro diversity  Low labour costs Weaknesses  Fragmentation  Not quality conscious  Lack of raw materials  Low productivity  Poor credit rating Opportunities  Import substitution  Increasing urban population  Divestment of state assets  Non traditional exports  Inflow of funds Threats  Cheap imports  Exchange rate fluctuation  Entry barriers in EU & USA  Aggressive competitors  Environmental degradation

16. UK Trade & Investment MASDAR International Consultants 17th November 2003 16 Issues & Constraints Issues  Quality  Trade policy  Land tenure  Infrastructure  Training  Information  Sustainability Constraints  Management  International treaties  Custom  Budget  Attitudes  Dissemination  Cash flow

17. UK Trade & Investment MASDAR International Consultants 17th November 2003 17 Immediate Priorities  Improved quantitative and qualitative raw material supply for existing facilities  Continued improvement in the enabling environment to augment the operational efficiency of existing facilities  Develop and introduce products with immediate potential in the domestic market  Market and quality awareness training

18. UK Trade & Investment MASDAR International Consultants 17th November 2003 18 Marketing Processed Products Matthew Kofi Ocran

19. UK Trade & Investment MASDAR International Consultants 17th November 2003 19 Order of Presentation  Performance of the NTE Sector  Market and Quality Issues  Processing, Packaging and Distribution

20. UK Trade & Investment MASDAR International Consultants 17th November 2003 20 PERFORMANCE OF NON- TRADITIONAL EXPORTS

21. UK Trade & Investment MASDAR International Consultants 17th November 2003 21 Growth in the NTE Sector  Exports of NTE brought in US$ 504 million in 2002 (Increase of 9.7% over 2001)  Number of exporters dropped from 3,117 to 2001 to 3,083 in 2002  Products number dropped from 260 in 2001 to 257 in 2002  Product number reduction occurred in semi-processed category whilst number of exporters reductions also occurred in the agricultural commodities

22. UK Trade & Investment MASDAR International Consultants 17th November 2003 22 Non-Traditional Exports

23. UK Trade & Investment MASDAR International Consultants 17th November 2003 23 Performance of the Horticulture Sub-Sector  Over the past 5 years;  Total exports of horticultural products have increased from 33,000 tones (1997) to 70,000 tones (2002)  Value of exports has also increased from US$22.9m to US$33.6m  Progress has been restricted to a few areas  Sea freighted pineapples (from 15,000t to 40,000t)  Sales to Europe of Asian vegetables (increasing unit value of air freighted exports)  Fresh produce processing (fresh-cut fruits and juicing)  Fresh produce sales in local and regional market

24. UK Trade & Investment MASDAR International Consultants 17th November 2003 24 Agricultural Non-Traditional Exports – Sub Sectors

25. UK Trade & Investment MASDAR International Consultants 17th November 2003 25 MARKET AND QUALITY AWARENESS

26. UK Trade & Investment MASDAR International Consultants 17th November 2003 26 Quality Issues  It is important that every body in the supply chain appreciates the importance of quality in the EU Market! (farmer-trucker-shipper)  Pesticide management  Pesticide Residue  Post-Harvest practices  Product norms and standards

27. UK Trade & Investment MASDAR International Consultants 17th November 2003 27 Market Opportunities  New opportunities in supermarket phenomena being brought in from South Africa; U Shoprite, Woolworth e.t.c as well as local supermarkets  Cereals, roots and tubers offer the best opportunity for processing because of their huge annual supplies that matches demand

28. UK Trade & Investment MASDAR International Consultants 17th November 2003 28 PROCESSING, PACKAGING AND DISTRIBUTION

29. UK Trade & Investment MASDAR International Consultants 17th November 2003 29 Processing and Packaging  Need for standards and measures  Processing and packaging adds value and leads to higher returns  Need for innovation eg. gari, palm oil, chicken, e.t.c  Benefits of processing  Packaging offers incentive/premium prices for high quality farm produce  Increases shelf life  Expand demand for product  Stabilises farm/agribusiness income  Reduce post-harvest losses

30. UK Trade & Investment MASDAR International Consultants 17th November 2003 30 Marketing Strategy  Reduce cost of production  Improve quality: consistency and reliability  Create local brands  Add value through processing  Introduce export quality assurance schemes  Commodity Trade Associations  Take advantage of $1/kg freight cost advantage  Diversify product portfolio by entering into high value horticultural products (MD2 variety of pineapple)  Local and regional market development

31. UK Trade & Investment MASDAR International Consultants 17th November 2003 31 Role for Public Private Partnership  Infrastructure Development  To help in infrastructure support  Eg. development cold chain infrastructure at the ports  Trade Associations to pull resources particularly in ensuring high quality standards

32. UK Trade & Investment MASDAR International Consultants 17th November 2003 32 Flowers for Export

33. UK Trade & Investment MASDAR International Consultants 17th November 2003 33 Demand for Processed Foods Dr. Victor Nyanteng

34. UK Trade & Investment MASDAR International Consultants 17th November 2003 34 Content  Role of Food Processing  Processed Food Commodities for the Domestic Market  Use of Processed Food Commodities in the Preparation of Household Meals Demand for Processed Food Commodities  Prospects for Increased Demand

35. UK Trade & Investment MASDAR International Consultants 17th November 2003 35 Role of Food Processing  Adds value to low value fresh commodities  Increases shelf life of the perishable fresh commodities  Improves intra-year availability of seasonal food crops production  Reduces wide fluctuations in intra year food prices  Enhances producer prices and incentives for increased production

36. UK Trade & Investment MASDAR International Consultants 17th November 2003 36 Role of Food Processing  Substitutes for imported processed food commodities  Opens avenues in export markets  Enhances food security  Improves nutritional quality of fresh food commodities  Adds unique taste to meals

37. UK Trade & Investment MASDAR International Consultants 17th November 2003 37 Processed Food Commodities on the Domestic Market  Some food commodities enter marketing channels and remain fresh throughout.  Others are transformed prior to entering or while in the marketing channels.  Many imported and locally processed food commodities on domestic markets including:  Frozen Meats, Poultry & Fish  Canned Meats Vegetables And Fish,  Edible Oils

38. UK Trade & Investment MASDAR International Consultants 17th November 2003 38 Levels of Food Processing  Food processed for use in household preparation of meals is at 3 levels:-  Primary Processing  Secondary Processing  Household Processing

39. UK Trade & Investment MASDAR International Consultants 17th November 2003 39 Primary Food Processing  Minimum transformation required in marketing channels  Carried out by initial producer (farmer), using poor technology

40. UK Trade & Investment MASDAR International Consultants 17th November 2003 40 Secondary Food Processing  Further transformation of output of primary processing or from raw food commodity where primary processing not required in marketing channels  Carried out by entrepreneurs in marketing systems  Some involve combining two different food commodities (eg dawadawa seed and groundnut).

41. UK Trade & Investment MASDAR International Consultants 17th November 2003 41 Household Processing  Transformation of raw food commodity in household before preparation of meals e.g.  Palm fruits to puree  Groundnuts to paste

42. UK Trade & Investment MASDAR International Consultants 17th November 2003 42 Processing of Cereals CommodityPrimarySecondaryHousehold MaizeShellDough/Grits/ Flour Nil RiceThresh/MillGrits/FlourNil Millet ShellNilFlour SorghumShellNilFlour

43. UK Trade & Investment MASDAR International Consultants 17th November 2003 43 Processing of Roots/ Tuber / Plantain CommodityPrimarySecondaryHousehold Cassava Nil / Chips Dough/Gari/ Flour/Starch Nil YamNil Cocoyam Nil FlourNil PlantainNilFlour / Fried Chips Nil

44. UK Trade & Investment MASDAR International Consultants 17th November 2003 44 Processing of Vegetables CommodityPrimarySecondaryHousehold TomatoesNilDry Slices/PowderPuree PepperNil / DryPuree / PowderPuree Garden Eggs Nil Puree OkroNil /DryPowderGrated OnionNilDry/FlakeNil

45. UK Trade & Investment MASDAR International Consultants 17th November 2003 45 Processing of Beans/Nuts CommodityPrimarySecondaryHousehold GroundnutShellPaste/OilPaste SoybeanShellPasteNil DawadawaNilPaste + Groundnut Paste + Soybean Nil CoconutCopraEdible oilNil

46. UK Trade & Investment MASDAR International Consultants 17th November 2003 46 Processing of Fruits and Other Tree Crops CommodityPrimarySecondaryHousehold OrangesNilJuiceNil PineappleNilJuice / Canning / Fresh Chunks Nil PawpawNilNil / DryingNil Palm FruitsNilPalm Oil/ Kernels /Kernel Oil Puree

47. UK Trade & Investment MASDAR International Consultants 17th November 2003 47 Processing of Livestock and Fish CommodityPrimarySecondaryHousehold LivestockNilSlaughter/ Feed Production/ Butcher/ Minced/ Sausage Nil FishNilSun Dry/ Salted/ Smoked/ Frozen/ Can Nil SnailNil/ Smoked / Dry Nil

48. UK Trade & Investment MASDAR International Consultants 17th November 2003 48 Processed Food Commodities Not On Domestic Market  Canned Fresh Snail  Canned Palm Fruit Puree  Canned Sliced Pineapple  Frozen Cocoyam Leaves

49. UK Trade & Investment MASDAR International Consultants 17th November 2003 49 Processed Food Commodities in Household Meals Preparation (1) Processed Form Use in Meal Preparation Maize Dough Porridge/Kenkey/Banku (+ cassava dough) GritsPorridge FlourAkple (+ cassava flour)/Tuo Zafi Roasted Maize FlourPorridge/aprapransa Rice GritsPorridge Flour Porridge

50. UK Trade & Investment MASDAR International Consultants 17th November 2003 50 Processed Food Commodities in Household Meals Preparation (2) Processed Form Use in Meal Preparation Cassava DoughBanku (+Maize dough) FlourAkple (+Maize Flour)/Kokonte/Pastries Cocoyam Flour Fufu Plantain FlourFufu Tomatoes Paste/Puree Soup/Stew Dry Slice Soup/Stew Pepper Paste/Puree Soup/Stew PowderSoup/Stew

51. UK Trade & Investment MASDAR International Consultants 17th November 2003 51 Processed Food Commodities in Household Meals Preparation (3) Processed Form Use in Meal Preparation Okro Powder Stew Palm Fruit Palm Oil Stew Fish Sun Dried Soup Salted Stew Smoked Soup/Stew Powder Soup/Stew Shrimps Smoked Dry Soup Powder Soup Cube Soup/Stew

52. UK Trade & Investment MASDAR International Consultants 17th November 2003 52 Demand for Processed Food Commodities  Two sources i). Household and ii). Export

53. UK Trade & Investment MASDAR International Consultants 17th November 2003 53 Household Demand  Two sets of factors i). Positive (promoting) factors and ii). Negative (discouraging) factors

54. UK Trade & Investment MASDAR International Consultants 17th November 2003 54 Positive Factors  Some processes not easy at home (cassava dough, gari, edible oils  Reduction in cooking time  Convenient and easy in cooking  Convenient for spouses working out of home and cooking evening meals  Convenient and easy to store at home  Providing colour to meals (tomato puree)  Unique taste (processed fish / shrimps)

55. UK Trade & Investment MASDAR International Consultants 17th November 2003 55 Negative Factors  Availability of fresh forms  High prices compared to fresh forms  Traditionalism in household meals preparation eg, fufu  Adulteration of processed food commodities (groundnut paste/ pepper puree, roasted maize flour, etc)  Unsanitary processing environment (fish processing, drying pepper, cassava chips, etc.)

56. UK Trade & Investment MASDAR International Consultants 17th November 2003 56 Negative Factors Contd.  Inappropriate and unhygienic packaging  Suspicion of mixing poor quality/rotten raw material in the process (pepper, tomatoes, maize, etc)  Poor packaging that make it difficult to sell in supermarkets, corner shops, etc.  Poor quality meals (fufu, discoloured cassava meal {kokonte})

57. UK Trade & Investment MASDAR International Consultants 17th November 2003 57 Export Demand  Positive Factors  Large cross-border market (cassava dough /maize dough in Togo, Smoked fish in Togo / Benin  Large population of West Africans in Europe and America  Negative Factors  Phyto sanitary restrictions  Poor / unattractive packaging  Poor result of prepared meals  Intense competition from established suppliers  Limiting infrastructure

58. UK Trade & Investment MASDAR International Consultants 17th November 2003 58 Domestic Demand Prospects  Strengthening positive factors and  Effective removal of negative factors  Positively correlated with rate of spouses working out of home, and high socio- economic costs of maids  Poverty reduction strategy raising incomes and therefore affordability

59. UK Trade & Investment MASDAR International Consultants 17th November 2003 59 Domestic Demand Prospects (Contd.)  Effective monitoring of quality to remove suspicion of adulteration and inconsistent quality (Food and Drugs Board / Ghana Standards Board)  Education to improve unhygienic processing environment  Improvement in packaging to enhance distribution outlets and acceptability  Research to improve quality of prepared meals from processed food commodities (Food Research Institute of CSIR)

60. UK Trade & Investment MASDAR International Consultants 17th November 2003 60 Export Demand Prospects  Substantial overseas niche markets for West African specialities  Developing regional markets

61. UK Trade & Investment MASDAR International Consultants 17th November 2003 61 Summary  Increasing demand for processed foods in Ghana  Increasing demand for West African specialities in US and EU  Today much processed foods do not mach the standards required by domestic and export markets  The prospects for high quality processors using modern methods are enormous

62. UK Trade & Investment MASDAR International Consultants 17th November 2003 62 Cotton Bales