Development and scale-up of the oil market supply chain

The case of Allanblackia oil in Tanzania and Ghana

Fidelis Rutatina and Cyril Kattah

PRESENTATION

• Structure and Key features of the Allanblackia Supply Chain

• Chains and Benefits to the Farmer• Supply Chain Similarities and Differences across

Countries• Impact of the Supply Chain• Scaling up of the Supply Chain• Wild Harvesting, Domestication and a Balanced

Supply Chain• Key Issues and Gaps

Structure of AB supply chain

• Farmers/Collectors

• Collection centres/focal person

• Buyers/transporters

• Oil processors

• Export

• Oil refinery

• Buyer of oil

Sample

ShellManhole

Agitator controlled by Timer

Vent

Dip PointOil Inlet

Coil Inlet/Outlet

Inspection

Oil Outlet

Sample

ShellManhole

Vent

Dip PointOil Inlet

Coil Inlet/Outlet

Inspection

Oil Outlet

Collectors/farmers Transporters/buyers

Oil milling

Transport to port

Crude oil storage Oil refining/Buyer of oil

Transport

FROF storageand blending

AB SUPPLY CHAIN

Collection centre/focal person

Shipping

Key features of AB supply chain

• Buyer as Key driver of initial SC Development• Large scale targeted Investment in SC Devt and

Components• Cost build up monitored and adjusted to ensure

equity and Fairness to Stakeholders• SC designed to Promote Sustainability and be

Socially Responsible• Partners contributing significantly to

Development of Business at Various Levels

Chains and the Farmer (Benefits)

• Potential of contributing to wealth creation Looking for more than 10 times current figures by 2015.

• Farmers organised for tapping business opportunity

• Education given on entrepreneurship and business development

• Conserved indigenous trees (AB)

Key Components and Functions in Various CountriesGhana Tanzania

Village level operations

Collection, storage/ Buying

200 communities of 1 Focal Person (FP) and 10 – 15 collectors each. (2500 collectors)

FP equipped with Cash, Weighing Scale, sacks, Signboard, own storage space

54 collection centres with farmers appointed& project trained clerk, 6000 farmers, all centres equipped with sign boards, scales, sack, hired stores

Buying and Transport Buying by Project Team from FP

Dedicated and 3rd Party Transport

Buying through trained clerks and transport by third party

AB seed crushing Third Party facility located close to Unilever site. Technical and capacity competence

Done by third party. Building capacity to meet standards.

Community Mobilisation

Support of Partner NGO’s

Dedicated Project Team

Traditional Authorities – Village Chief

Support of partner NGO`s

Dedicated project team. Involved local government structure

Public Education Fliers, Posters, Community Film shows, Village meetings and Training

Village Campaigns by NGO’s

Fliers, Posters, Village meeting and training, Village campaigns by NGO, Annual participatory evaluation

Coordination of SC Operations

Dedicated Unilever Project Team

Training with Technoserve (NGO)

Dedicated Unilever team. Partners filling gaps

Integration in Domestication/Other efforts

FORIG/ICRAF leading research

ITSC supporting efforts

Village nurseries

ANR/TFCG/ICRAF and Farmers playing key role. TAFORI managing challenges

Impact of Supply Chains – What we want to achieve

• Safety, Health and Quality

• Improved Supply of AB Volumes

• Non-degradation of Environment

• Improved incomes of Stakeholders

• Development of Local Business and Self-Sustaining Supply Chain– Income to the Rural Farmer

• Cost-effective Business proposition

Scaling up the AB Market Chain

(Best) Estimates - Allanblackia Oil Production

0

200

400

600

800

Years

AB

Oil

Vo

lum

es

Tanzania Ghana Nigeria

Nigeria 50 150 250 350

Ghana 50 65 90 125

Tanzania 140 150 175 200

2006 2007 2008 2009

Wild Harvesting, Domestication and a Balanced Supply

• For Tanzania, AB seeds volume supply far below the current demand of 6000 tones of seeds per year.– AB cultivation/domestication

strategy to address this gap.

– To get 6000tones in 2015,must plant 100,000 female trees in `07&08 by serious 4000 farmers given 6years fruiting age.

AB production in Tanzania, conseravtive Plan Vs Actual

0

200

400

600

800

1000

1200

Years

To

ne

s o

f A

B s

ee

ds

estmate Actual

Wild Harvesting, Domestication and a Balanced Supply

Community and Volume Analysis

0

200

400

600

800

2003 2004 2005 2006

Period

Com

mun

ities

/Vol

um

e (t

ons)

Communities Visited Communities Bought From

Total Tonnage

 Communities Visited

Communities Bought From

Total Tonnage

2003    

2004 600 80 9

2005 600 350 42

2006 250 200 110

Ghana Planned vrs Actual Seed Volumes

0

100200

300

400

2004 2005 2006 2007 2008 2009

Years

Prod

uctio

n Vo

lumes

Planned Actual

The need for Domestication

• Rapid multiplication of supply source (trees)• Better control of and access to resources

(seeds)• Monitoring of harvest and implementing best

practice• More accurate projections of potential harvests –

Business Development• Increased and focused farmer activity in Supply

Chain

Strategies and Best Practice in Up-scaling

• Expansion and equipping of current Supply Chain Operation. – Wild Harvesting to Planting

• Maintain Interest of Current stakeholders• Development of AB cultivation strategy• Research on Vegetative propagation• Field extension work with Farmer groups• Farmer-owned plots and integrated agro-forestry• Monitoring and evaluation• Funding and resource mobilisation

Key Issues and Gaps - Ghana

• Market chain vis a vis research chain• Research Coordination – UNI, FORIG/ICRAF,

FORIG/IUCN, ITSC– Knowledge Sharing– Resource Pooling

• Integrated approach with all stakeholders– Time-Based Action Plan

• Stakeholder resources and funding• Difficult terrain and expansive area for wild harvesting• Accessibility to dedicated land resource for Planting• Scale-up Roll-out and time factor – Farmer Interest• Scale of Operation- short to medium term

Key issues for Tanzania• Busy stakeholders• Stakeholder resources and funding• Accessibility to reserved land• Volume development/Domestication

– How may trees will be planted each year up to 2015– Duration to harvest realization

• Payment system• Bring former AB areas back in to production• Crushing capability• Transport- Infrastructure/weather• Undiscovered AB potential areas.