Trade Corridor – Government to Government

Professor Mike Dillon

Acknowledge: John Ogier, States of Guernsey. John Ryder, Eastfish (UN/FAO)

Overview of Trade Corridor vision

• Background & Traceability Project history

• Indonesian issues- new project under discussion

• Example business impact – Guernsey fresh produce

• Next steps for Trade corridor - Indonesia (Pakistan, Egypt, Ghana?)

Background – Fresh produce.

• Fruit and Veg research – 84-03

• Numerous consultancy and student projects

• Understanding - post harvest technology, plant systems, and cold chains.

• Research- time, temperature and specific gases on plant physiology and biochemistry.

• Knowledge is power= added value

Trade related technical assistance

Manufacturing Improvement International Ltd ©2004

• 88-03G to B - Guernsey- CORRIDOR

RESEARCH

• 93- 07 G to G African Exports

• 95 – 01 G to G- Canadian Exports

• 04- 07 G to G - Egypt & Pakistan

• 06- 07 G to G Indonesia

= TRADE CORRIDOR VISION

Microbial

Histamine

Other Causes

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Microbial

Chemical

Histamine

Parasites

Other Causes

1999 2000

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2003

G to G Issues !!!! – Reduces brand value !!!

Trade Corridor – Project Discussions

• Build on NELC /Business Infrastructure:-– Port– Logistics - Quayside, Samskip etc– Cold Chain- local industry- Four Seas– New Technology- Cool Blue – Purchasers/ processors– Institute

• Indonesia – Example project:-– G to G – Policy -Strategic planning- NELC– B to B - NPD- Logistics. – G to B- Branding- M.Sc. ISO 22000– B to B - Green logistics (Cool-Blue)– Project support- Institute

Jakarta

Bitung

Indonesia

$1.6 Billion export seafood.

18,108 islands, 3,000,000 km2 sea

Guernsey – Examine model chain

PRICE

High Medium Low

Excellent 1. Premium 2. Penetration 3. Super-bargain Strategy Strategy Strategy

PRODUCT Good 1. Overpricing 2. Average 3. Bargain QUALITY Strategy Quality Strategy Strategy

Poor 1. Hit & Run 2. Shoddy 3. Cheap Goods Strategy Goods Strategy Strategy

Added Value Vision– Choose your weapons!

• Guernsey cannot be the cheapest • Guernsey cannot be the largest volume supplier• Guernsey can be the highest quality

Value Stream analysis

Flowers on the Island

Growers storage

Flowers transported to UK depot

Flowers are transported to market

Flowers are sorted against invoice (and conveyed to Wholesaler)

Collate Orders

Product Displayed

Stock take of Product

Additional Product Storage

Retailer / Customer

20 Days Shelf Life

17 Days Shelf Life

15 Days Shelf Life

13 Days Shelf Life

FactorsTime

TemperatureHandling

Pest & DiseaseWater QualityStem Quality

ScoreModellingATP Work

Improve Logistics?

Create Brand Value

BRC, MSC, etc

Cold Chain- Set Standard

Cold chain- improve standard

Can we increase Value - 20% ?

Product type Value

Cut flowers £9.92m

Postal flowers £6.60m

Plant and seed exports £24.69m

Edibles £4.32m

Total value £45.53

Business Impact

Example of Supply and Demand Information

Normal 20% increase or faster/only sale on slow market

QA Product Non QA Product

Product Price Range (£)

Assumed Avg. Price

Price Range (£)

Assumed

Avg. Price

Increase for QA

Price Benefit Opportunity

Lo Hi (£) Lo Hi (£) % (£)

50 - 60 cm Roses 1.25 1.75 1.50 0.80 1.25 1.025 46.3 0.475

Freesia 1.75 2.50 2.125 0.75 1.50 1.125 88.9 1.00

40 cm + Freesia 0.35 0.40 0.375 0.25 0.30 0.275 36.4 0.10

Spray Carnations 0.75 0.75 0.75 0.50 0.75 0.625 20.0 0.125

Island example =

• Policy led programme -combined government, industry, solution providers and market.

• Better logistics meant improved market share

• QA systems – resulted in brand loyalty- forward sales, faster sales,

• Chill chain verification was essential

• New technology – (bucket) - research essential

• Price increases of 10% - 50% where achieved

Conclusions

• NELC-/ partners - opportunity to develop “Trade Corridor strategy”

• Industry can capitalise on opportunity in these supply chains

• Logistics, cold chain, new technology = added value

• Institute can assist as required e.g links with UN, EU, W.Bank, or individual Governments.

– All can be used to drive local economic growth

Next Steps – Indonesian proposal

• NELC/ambassadorial meeting January• Ministerial meetings on trade January• NELC discussions Feb/March• Visit to Minister Trade March• Policy discussions London April• Delegation to Brussels April• Ambassadorial visit to Grimsby May/June• Indonesia – Trade Delegation July

• Output – Trade Corridor proposal scoped.

Next stepsTrade Corridor working group

• Establish a serious of trade corridors.

• Use the Indonesia Trade Corridor as a pilot.

• Work with Key Government Partners - policy links.

• Agree programme placing NELC in Lead position.

• Establish working group to develop programme.