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ASSESSMENT OF THE ARMENIAN DRIED FRUIT AND VEGETABLE SUPPLY CHAIN BSC Business Support Center, 1st Charents St., II floor Yerevan, 0025, RA Tel: (374 10) 574778, 571753, (374 99/77) 574778
www.bsc.am, www.trainings.am, www.business‐armenia.com
Assessment of the Armenian Dried Fruit and Vegetable Supply Chain
Table of Contents 1. Executive Summary .............................................................................................................. 3 2. Introduction ........................................................................................................................... 4 2.1
Assessment objective .................................................................................................. 4
2.2
Assessment methodology ............................................................................................ 4
2.3
Area and Site Analysis ................................................................................................ 6
2.4
Socio-Economic analysis ............................................................................................ 8
3. Overview of the Dried Food Value Chain .......................................................................... 10 4. Foreign Trade of the Dried Food of Armenia ..................................................................... 15 4.1
Imports of Dried Food to Armenia ............................................................................ 16
4.2
Exports of Dried Food from Armenia ....................................................................... 17
4.2.1 Export-Related Issues ............................................................................................. 18 5. Key Chain Players and Their Characteristics ..................................................................... 20 5.1
Fresh Fruit Producer Analysis ................................................................................... 20
5.2
Dried Food Producer Analysis .................................................................................. 27
5.3
Retailers ..................................................................................................................... 37
5.4
Confectioneries.......................................................... Error! Bookmark not defined.
5.5
Business Development and Support Analysis ........................................................... 39
5.6
Pricing of different dried products ............................................................................ 55
6. SWOT Analysis of the Dried Food Value Chain............................................................... 57 7. Conclusion and Recommendations .................................................................................... 58 8. Annexes................................................................................................................................ 61 Annex 1. Questionnaires ..................................................................................................... 62 Annex 2. List of the interviewed supply chain members .................................................... 79 Annex 3. Compliance with EU Buyer-Requirements for Dried Fruit and Vegetables ....... 82
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain
1. Executive Summary BSC Business Support Center, in cooperation with OXFAM Armenia, has implemented an assessment of the dried food supply chain. The overall findings of the carried out assessment testify that there is, although informal, but a performing dried food supply chain, though not export-oriented, that is currently operating with satisfactory efficiency. Dried food production is a centuries-old tradition on the Armenian territories, and, connected with that, there are approximately 5,500 producers of dried food all over the country. Majority are not legal entities, but households, who have inherited the tradition of drying fruits and vetetables from their ancestors. Therefore, they have more of an individual, rather than collective approach. The main hindrance to the development of export-oriented dried fruit and vegetable supply chain is the fact that whilst the foreign markets are quantity-conscious, none of the Armenian producers can continuously provide the demanded volumes, but, organized under one body, they will be able to provide the required quantities. Moreover, each player of the chain greatly welcomes any alternative intervention that will improve their position in both international and local markets and contribute towards sustainability, and is ready for any pre-requirements to that intervention. The report presents a comprehensive analysis of all the players of the supply chain, including, the producers of dried fruits and vetables, the suppliers of fresh produce as raw materials, the retail part of the chain, also, the international or local organizations providing support to the development of the chain.
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain
2. Introduction 2.1
Assessment objective
The principle objective of the assessment has been to evaluate the potential of setting up and/or enhancing a dried fruit and vetetable supply chain (including, apricots, figs, peaches, cherries, plums, tomatoes, etc.) in Armenia, to find out whether this value chain is feasible from the financial and organizational perspective. In the frameworks of the assessment BSC Business Support Center has identified key players in the chain as dried fruit and vegetable producers, producer organizations, processors, export companies and business support organizations and assessed the extent of their linkage, and the potential of linking them in a financial and institutional sustainable chain in Armenia. The assessment has also evaluated the capacity and the competence of the chain players, to see whether they are capable to generate quality dried fruits and vegetables and the required quantity for export purposes.
2.2
Assessment methodology
The methodology of the assessment included collection and analysis of primary and secondary information. The primary information was collected through face-to-face interviews with the key role players of the Armenian dried fruit supply chain that included farmers/producers of fresh fruits, producers, processors and business support & international organizations. The complete list with comprehensive contacts of the interviewed individual companies and persons is presented in Annex 2. The methodology of the assessment included specific activities, such as: -
-
-
Developing questionnaires for the interviews with key chain players (separate questionnaires for different members of the chain). Compiling and reviewing available secondary data (studies, researches, articles, etc. regarding Armenian dried fruit supply chain and reports provided by governmental institutions and international organizations). Arranging preliminary correspondence and arrangements with the organizations and companies to be interviewed via face-to-face interviews, phone calls, e-mails and Skype conversations. Conducting interviews with key chain players in Armenia: o Sun-dried fruit and vegetables Producers and producer organizations o Sun-dried fruit and vegetables Processors and/or export companies o Relevant Business Support Organizations and/or NGOs
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-
Conducting final report on the findings of the assessment of the sun-dried fruits and vegetables supply chain in Armenia
PRIMARY INFORMATION COLLECTION
SECONDARY INFORMATION COLLECTION
SOURCES:
SOURCES:
• •
• • •
• • • • • • •
Interviews with farmers/villagers Interviews with 26 processors/producers of sun‐dried food and vegetables (such as CHEER CJSC, Tsiatsan Ani, Nor Aygi, Armenian Dried Fruits, Astghounk, and other driers owners) Interviews with 4 supermarkets, grocery stores, 5 confectionaries Interviews and information from 16 other retailers, wholesalers Interviews with invited expert on the field The Association of Dried Food Producers Federation of Agricultural Associations (FAA) Agricultural Support Regional Centers (ASRC) Interviews with 10 Business Support Organizations (such as EBRD BAS, CARD, etc.)
• • • • • • • •
Acquired Info
• • • • • • • • •
Armenian Statistical Service Customs services United Nations Commodity Trade website TACIS and AET publications UNDP, ADA, DAI ASME, CARD , SHEN NGO reports Ministries of Agriculture, Trade and Industry, SME DNC BSC previous researches Periodicals, Internet, news agencies Agricultural support regional center websites, reports Fruit/vegetable processing companies Departments of agriculture and environment protection (regional administration)
Acquired Info
• • • • • •
General statistical information Export‐Import data Distributors’ general data Buyers’ general data Domestic and imported products general data Supply chain quantitative data
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Information on the availability of raw materials for the sun‐dried production, planned quantity and cost (by regions) Information on raw materials export (volumes, problems) Information on new orchards and expected harvest Information on expected organic certification Information on Market Size (variety, packaging, quality, preferences) Seasonality and state of production/drying technology Information on consumers’ segments Information on market structure Export potential
Assessment of the Armenian Dried Fruit and Vegetable Supply Chain
2.3
Area and Site Analysis
It is widely known that the fruits grown in Armenia as well as the processed produced (dried fruits, jam, compotes etc.) considerably differ in a positive side to its taste, aroma and an external commercial interface. According to scientific researches, such good characteristics of fruits are caused first of all by the geographical position of Armenia, its natural-climate conditions, abundance of sunlight, presence of qualitative fresh mountain waters and other important factors which create almost perfect conditions for cultivation of apricots, pears, peaches, apples, black and red plums, grapes and other kinds of fruits. During the Soviet era, Armenia was designated to be the fruit capital of the empire. Fruit was processed into preserves, compote, puree, and canned and jarred in massive factories. The volume of output was almost unimagineable. Today’s output is a far cry from those heady days when factories ran at full capacity, people were fully employed, and markets were guaranteed. Those who lived and worked on the collective farms and were employed in the State-owned factories strive for a return to those days. Their embracement of the free market was short-lived. Almost all of their former markets have evaporated or cannot be counted on, and trying to find new, reliable markets in Europe, the U.S. or Middle East has not been easy. Free world markets are volatile, demanding, quality conscious and, which is the most important, require huge steady volumes. Although the number of fruit trees that produced the abundance during the Soviet era still remain in the ground, their production has diminished and their quality has fallen off. For the fruit that is produced, the farmers claim that there are no markets, so why one should care for the trees and take care of the harvest. Fruit often rot on the trees or on the ground, particularly in the further regions. The question arises, then, as to how can this industry be revitalized and rehabilitated, so that it can play the major role in Armenia’s economy that it once performed. The key to solving this dilemma is to find new markets for the fruit that is currently being produced, and to place that fruit in those markets in a form that meets the tastes of the consumers. Production of fresh fruit in Armenia stretches from one end of the country to the other. In the far southern reaches of the country, on the border with Iran, one finds the concentrations of fig, persimmon, pomegranate, cherries production in the city of Meghri and its surrounding communities. The grapes, apricots, peaches, plums and pears are found throughout the Ararat
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain
Valley (Armavir, Ararat regions), and plums, pears, peaches, apples, even, figs, are also grown more to the North (such as Tavush region). Peaches are well known in the Noyemberian valley near the border with Georgia. The geographic location of dried fruit producers correlates with the location of input supply. Producers operate in locations near the input supply, or are growers of fruit and vegetables themselves (i.e. that have their own supply). This is mainly the reason why the majority of dried food producers are located in Ararat Valley – Armavir and Ararat regions. In all those regions where the cultivation of fruit and vegetable is not dominating, producers of dried fruit operate in the lowlands or pre-mountainous areas (Ashtarak region of Aragatsotn Marz, Meghri region of Syunik Marz, Ijevan and Noyemberyan regions of Tavush Marz). There are producers who operate or are accounted in Yerevan, but their production sites are located in the Marzes (Armavir, Ararat or Aragatsotn). Another important factor in determining the locations appropriate for dried food production is the number of sunny days in a geographic location. As for the volume of production by Marzes, Armavir and Ararat Marzes have bigger shares in this regard. It is estimated that 70-75% of the dried food in Armenia are produced in the Marzes of Armavir and Ararat. •
Armavir (more than 50% of the country-wide production)
•
Ararat (especially Artashat district, Yervandashat)
•
Aragatsotn (especially Ashtarak district)
•
Syunik (especially Meghri district)
•
Lori (Alaverdi district)
•
Tavush (Berd ditrict)
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Image 1. Production of Sun-dried Fruits and Vegetables in Armenia by regions
2.4
Socio-Economic analysis
The Development of drying fruit industry has significant advantages: •
Adding Value: Raw fruits often have little economic value, especially during harvest time when the prices are very low (on average, 1 kg of dried fruit can be worth 10 times more than a kg of raw fruit). By drying and processing their fruit, producers may add value to the product, allowing it to be sold at a higher price and greater profit.
•
Long Lasting: The fruit harvesting is still based on seasons. As a result during harvesting time a particular fruit floods the market, but is then often unavailable outside of season. Dried fruit can last for years if sealed and stored correctly, meaning producers can store it and sell it out of season.
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain
•
Lower weight: Comparing with their fresh counterparts, the dried fruit are 2-5 times lighter in weight and dimensions/volume.
•
Transferable and lifelong skills: Drying fruits is a cheap, simple and universal process. Involving students gives them clear identifiable skills that they can carry with them throughout life - even if the products are only used to feed the family (rather than for generating income). After all drying fruit can be used for personal consumption as well as a means of income generation through sales to both domestic and especially to export market.
There are two major market segments for dried fruits: the food processing market and the retail market. The food processing market so far is the largest segment accounting for an estimated 80% of the world’s dried fruit imports. Major consumers are the breakfast cereal (muesli) and the confectionery industries. Dried fruit products for the retail market are mainly sold as ready-to-eat snacks. The demand for high quality dried fruit continues to expand. Armenia has millennia-old tradition of making dried fruits. The written testimonials about it date back to the 5th century BC. The Greek philosopher Herodotus, when describing the social-political life of Armenia in his “The Histories”, notes that Armenian merchants used to transport dried apricot, peach, raisins, wine, and other products along the rivers of Tigris and Euphrates. Noticeable are also other testimonials, such as the one of Xeneon Athenian, who lists the food reserved by Armenian rural people for winter, including dried fruits. Also, Rollov notes that at the end of the 19th century Armenian fruits and grape were exported mainly dried. The weather-climatic conditions, as well as the availability of necessary fresh fruits, the nonavailability of cold-storage transportation means, also, the imperfection of other types of processing of fresh fruits before the 1920s have supported to the production of the dried fruits and raisins with exceptionally open-space sun-drying technology. However, starting from the 1950s, the development of preservation technologies began, in parallel to which the production of dried fruits dropped dramatically. Plus, the planning economy of the Soviet Union provided no space for Armenia in the drying of fruits. Instead, this process was planned to be implemented by the mid-Asian countries. Nevertheless, the political and economic changes that happened in Armenia (adoption of market relations, land privatization, the increase of grape-fruit-vegetable producing orchards), have created wonderful opportunities for regaining the some-time kind tradition of producing dried fruits
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain
in Armenia. The privatization also affected the processing factories, which were so powerful that they processed the main part of the fresh fruits and vegetables produced in the country. Thus, these were impossible to be exploited on private basis, and most of the fresh fruits started to be dried in “home conditions” using simplest facilities (drying right in the sun or in hand-made solar dry-houses). Also, at the beginning of the 1990s, the first sun-driers were created in Armenia (in Nor Kesaria (Armavir region), Getap (Vayots Dzor) and Berqaber (Tavush) communities. Today in 9 regions of the country more than 240 sun-driers are constructed (approximately 60% are located in Armavir and Ararat regions). The drying of fruits and vegetables is already considered to be one of the most perspective spheres of processing. However, the main part of drying is implemented with the traditional sun-drying techniques. Further, small drying productions arouse, followed by even bigger ones, and this branch of the processing of agricultural production started to develop.
3. Overview of the Dried Food Value Chain The results of the current assessment have proved that there is an acting supply chain of the dried fruit and vegetable, however, the supply chain is not formal and regulated. The players of the chain are strictly connected, nevertheless, these interconnections are neither regulated by any body, nor are they on a contractual basis. This means, that, for example, in the stage of the fresh fruit acquirement the dried fruit makers on their own initiative find the farmers/villagers, who own orchards of fruits appropriate for drying all over the fruit-growing zones of the country. Depending on the weather conditions of the year, one farmer may once have required quantities of fruits, or may not have, meaning that no contracts or obligations are arranged in advance. In the context of the current assessment the following stages of the dried food products movement have been identified: collection and transportation, wholesale procurement, general processing through drying, and retail trade and exports. Values added at each mentioned stage generate value chains that are the subject of the current assessment. Below short description of each stage is presented. In the supply chain there are also other (although, indirect) members (such as business support, subsector organizations, public institutions), which were also a part of the assessment.
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain
Image 2. Dried Food Supply Chain Map
Consumption
Consumers (in‐Armenia & exporting)
Retail
Villagers
General Processing as drying
Villagers
Collection of fruits and vegetables
Agricultural Markets & Retailers
Hotels, Restaura nts, Cafes
Processors of fresh fruit and vegetables as dried fruit
Local wholesale procurers
Wholesale Procurement
Input Suppliers
Shops, supermarkets, grocery stores
Wholesale Procurers
Villagers/Farmers
Business Support Organizations
dried fruit and vegetables
Financial Service
Certification Agencies
fresh fruit
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain
Growing of Fresh Fruits/Vegetables Growing of fresh fruits/vegetables is usually conducted by mainly the population of rural communities who have their own orchards (or they live in urban communities, but have orchards in rural communities). From the assortment of each fruit/vegetable unique types are appropriate for drying. For example, in the case of apricot, Yerevan (90%) and Sateni (5%) sorts are the most widely cultivated sorts in Armenia. Of these two types, Sateni is the one appropriate for drying. And for the later stages of the supply chain these assortments must be used. However, as it was found out during the assessment, very often the suppliers of fresh food collect and sell the wrong types of fresh fruits, thus, creating hindrances for the further drying process. That is why some wholesale procurers and processors prefer to participate in collection process with their own resources (employees, transport units, etc.). Nevertheless, as is mainly the case, the growers of fresh products usually act as collectors and provide transportation of products to facilities of processors, or wholesale procurers. Very often the growers of fresh fruits/vegetables are the later producers of dried food, who usually do not possess any driers, but they just manage it in an open air. Wholesale Procurement Two types of wholesale procurers have been identified in the dried food supply chain. The first group, later referred as Local Wholesale Procurers (LWPs), mainly operates on/next to the collection sites. These entities and individual entrepreneurs usually operate on behalf of processing enterprises and cooperate with them for quite a long time. Sometimes the role of an LWP is undertaken by active collectors, who succeed in their activity through the years and grow up. The LWPs procure fresh fruit/vegetable products from the growers and supply to processing entities. The second group, later referred as Wholesale Procurers at agricultural Markets (WPM), operates at various agricultural markets (bazaars) of the capital Yerevan and other towns. WPMs procure the products from the farmers/villagers at same conditions as their competitor LWPs do. Once being supplied, WPMs either sell their products to smaller retailers, or sell those products at markets to final consumers. WPMs have also very active roles in the later sales of the dried products. They acquire these products from their producers and get it to the final consumer. Very often at this stage the WPMs make packaging of the dried products. Also, as it turned out during the interviews with the WPMs, most of them have their own driers or, at least, implement drying without driers, on the open air.
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain
General Processing and Distribution From the point of view of the current assessment the processing of fresh fruits via drying was of interest. Different types of processors/producers of dried food were identified during the survey, depending on their production volumes, on the quantity/area of sun-driers. Processors procure their inputs (i.e. fresh fruits) both from villagers and wholesale procurers (mainly from LWPs). However, a very usual practice is the case when processors of dried fruit and vegetable have their own orchards and process the harvest of their own orchards. Procurements are organized and conducted at certain periods that are different for various products (e.g., apricot – June-July (starting from the production of Ararat valley, ending with the production of Ashtarak district of Aragatsotn region), peach – August-September, fig – September-October, etc.). Processors participate in the value chains of selected products; they usually completely transform procured inputs’ processing. Although some processors succeeded to export their products, they usually distribute their products via retail networks. For this purpose, almost all processors have developed their distribution facilities and networks. Besides, processors developed schemes of payments both with suppliers and procurers of their products. Retail Networks and Exports Retail networks are assigned to bring final products to ultimate consumers. Actually, this function is conducted by almost all participants of value chains. Some quantity of products is sold at agricultural markets directly to consumers. WPMs practice such trade, too. Processors sell their final products via firm shops, or often take the production to markets or the end user themselves, etc. Meantime, major participants of retail trade are retailers at agricultural markets, shops and supermarkets, and hotels and restaurants, or the confectionaries, which use the dried food in their production of cereals or other sweets. Shops and supermarkets usually trade with packaged products, though, as it happens very often, they perform the packaging themselves. Another important participant of the retail market is the “Duty Free” shop at the Zvartnots airport, which is tourist-oriented and sells mainly packages production. Hotels and restaurants serve/sell only processed dried food products uncovered from packaging or prepared from fresh (they mainly use these for preparation of some dishes with dried food, which are mainly traditional dishes). Some of local processors succeeded to penetrate export markets. Major foreign markets are the USA, Russia, Ukraine, some CIS countries. Actually, exports are the most desirable sales for producers, since sustainable volumes of sales are secured at hard currency. Meantime,
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain
producers have to meet many requirements and standards, such as organic, HACCP, ISO, etc. Currently, only few local companies are eligible from that point of view. Anyhow, quality and management standards are not completely new to local producers, and many of them are ready and willing to pass through certification processes.
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain
4. Foreign Trade of the Dried Food of Armenia The official statistics prove that from the point of view of the foreign trade of dried food, Armenia is a country with negative balance, meaning that it imports more dried food than it exports. Graph 1 shows the data of exports-imports of dried food for Armenia for the recent 10 years (2002-2012). It can be clearly seen that exports are just a little part of the total foreign trade, with the major share given to the imports. The foreign trade of dried food has no clear trend, it is very volatile, growing one year, and decreasing in the next one. However, one thing that can be stated is that most often the imports are approximately 1,000 tones, and the exports are very different numbers, but always lower than 100 tones. Graph 1. Foreign Trade of Dried Food of Armenia
Foreign Trade of Dried Food for Armenia 1400 1226.5
1203.8
1200
1100.8
1044.9 1000 800
1078 954.6
919.5 691.9 585.1
600
Exports
601.6
Imports
400 200 43 27.2
71.9
80.7
21.6
16
23.8
41
90
42
0 2002 2003 2004 2005 2006 2007
2008
2009
2010
2011
Source: State Customs Committee of RA and United States Commodity Trade Statistics Database
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain
4.1 Imports of Dried Food to Armenia As stated above, the foreign trade (but, mainly, the imports) has a big share in the Armenian dried food sector. The imported dried food is dominating in the Armenian market. The volume of raisins is the largest in the total volume of imported dried food (73.6%), followed by dried fruits (16.8%) and vegetables (9.6%). Raisins have the major share among the imported dried food products. Raisins are primarily imported from Iran. This country accounts for 67.6% of the imported dried food. As a matter of fact, the shares of imported dried food from Iran are stable, since every year 650-700 tons of raisins are imported from Iran to Armenia. The distribution of this and other dried products by countries of import is presented below: Table 1 – Imports of dried fruit into Armenia, by different countries, in kg, 2011 Apples Argentina Chile China Georgia Greece India Iran Italy Russia Syria UAE Ukraine USA Uzbekistan Vietnam
Apricots
Figs
200
Prunes 56,200 38,400
1,000
Raisins 94,330 3,045
400 44,765 74,095
1,000 691,272 153 171 45
510 300
Other1
1,425 3,708
1,435 160
200 414 40,012
3,001
Total
48 9,004
231 12,003
Total 56,400 132,730 5,470 4,108 44,765 1,000 766,802 484 45 510 500 414 40,291 12,005 12,003 1,077,527
Source: State Customs Committee of RA, United Nations Commodity Trade Statistics Database
As it can be seen from the table, approximately 1,078 tones of dried food was imported to Armenia from different countries. This is huge quantity, taking into consideration that this quantity could be potentially produced by Armenian entities, since most of them produce with not their full capacity.
1
mainly mixture of dried fruit
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain
The dried food is imported to the country by entities of Armenian origin. The major part of imported dried food is intended for the retail market (public consumption). As a matter of fact, the majority of importers are entities engaged in wholesale and retail trade. Some importers cooperate with Armenian confectioneries supplying them with raisins and various types of dried fruits (usually, for the production of dried fruit with any type of nut, covered with chocolate). Several confectioneries (such as “Grand Candy” LTD) import dried food themselves, almost entirely for their own industrial consumption. Some part of the dried food is imported by such entities, which cannot be considered importers. These are drivers (mainly working on Armenia-Iran cargo transportation), who among other goods, transport a certain quantity of dried food (primarily raisins). It is generally difficult to identify them or their Armenian partners (who are likely to be the real importers) and give their exact number. The Armenian partners carry out the sales of these products.
4.2 Exports of Dried Food from Armenia As for the exports of the dried products, there are only several companies (4-5 producers) which have organized exports of the dried food. Among them are, firstly, “Cheer” CJSC (mainly to EU countries), S/E Armen Manukyan, “Levon” LLC (mainly to Russia). “Cheer” CJSC exports not only its own products, but also the products of several other producers. In this regard, “Cheer” has become a wholesale buyer in the market. The company exports mainly dried tomatoes, dried apricots, dried prunes, dried herbs. The main business of “Levon” LLC is preserving of fruits/vegetables, and it is mainly exportoriented to Russian market. In parallel with the exports of its main production, the company also exports dried fruit it produces if the year is appropriate for drying of food. Most of the interviewed producers said to have tried to make exports, however, the main thing with the dissuccess of this endeavor is that the foreign markets require continuous supply of big quantities, which no sole producer can provide on his own. Another important factor with the exports of dried food is that a lot of Armenians, visiting their relatives abroad, together with other Armenian production such as cognac, take the dried food for them, and this, though not presenting significant quantities for one case, in total, makes a rather big part of the exports. As opposed to the imports of dried food, the volume and assortment of the exports of dried food is significantly smaller. Only dried tomatoes,
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain
spices, dried apricots and prunes, as well as some quantity of dried fruit mixtures are usually exported. The main export destinations of Armenian dried food are the Russian Federation, USA, France and Switzerland. Very often businessmen of Armenian origin living in the diaspora try to play a big role in the export of the dried fruit, however, seeing that the necessary quantities can not be supplied by the Armenian market, they find other partners. Table 2 - Export destinations of dried food, in kg 2011
Apricots
Prunes
Mixture of dried fruits
Tomatoes
Dried spices
5
5
Lebanon Switzerland
100
50
89
Russia
136
68
15,876 13,486
Ukraine France
20
5
1,030
Total 10 1,269 16,080
604
10
14,090 35
Iran
10,000
Iraq
13
13
38
64
Georgia
12
12
36
60
10,000
Total
41,608
Source: State Customs Committee of RA and United States Commodity Trade Statistics Database
4.2.1 Export-Related Issues Connected with the fact that countries of the European Union are the future target export destinations for the Armenian dried food, a series of requirements (both legal and non-legal) for exporting dried fruits and vegetables to EU has been identified. One such document, presenting the requirements has been developed by the Center for Promotion of Exports from Developing Countries (CBI)2 of the Ministry of the Foreign Affairs of the Netherlands. The document is presented in more detail in Annex 33. The main legal requirements include the food safety, maximum residue levels of pesticides and additives. Maximum Residue Level of Additives The dried food products exported to the EU and should meet all legislative requirements set for additives, enzymes and flavourings in food. EU consumers are very conscious about the 2 3
http://www.cbi.eu/5/about_cbi http://www.icci.com.pk/data/downloads/1/131919889_1.pdf
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ingredients of the food they buy, and so are EU food safety authorities. Food containing substances that are not explicitly approved by the EU or inadequately labelled is prohibited and will be taken from the market. Regulation (EC) 1333/2008 lays down the additives that are allowed to be used in food sold on the EU market. The additives should be mentioned in the list of ingredients on the label of the dried fruits in the consumer packs. Also, it is important to notice that the legislation concerning food is continuously changing and it is therefore strongly advised to check with the Food Administration bodies before any import process is commenced. Hygiene of Foodstuffs (HACCP) The Hazard Analysis and the Critical Control Point (HACCP) deals with the handling and treatment of foodstuff in order to ensure that foodstuff do not pose a risk to human health under normal use. In addition, the HACCP certification is also important outside EU, indicating that the responsibility of the production has passed all the way throughout the supply chain. Maximum residue levels (MRLs) / pesticides Import of dried fruits to EU countries must comply with the regulations for maximum permissible levels for the content of residuals of a large number of pesticides. Regulation (EC) 396/2005 establishes the MRLs of pesticides permitted in products of animal and plant origin that are intended for human or animal consumption. The Regulation is fully harmonised which means that the MRL requirements are the same in all EU Member States. Moreover, different countries have additional regulations for a number of pesticides, which need to be taken into account in case of export intentions to those countries.
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain
5. Key Chain Players and Their Characteristics 5.1 Fresh Fruit Producer Analysis A notable fact connected with the Armenian dried food production is that it is entirely based on the local input supply. In other words, no dried food is produced from imported inputs, i.e., what is imported, is ready-made dried food. As a result of this, if a year is productive for the fruit harvest (as in the case of 2012), the production of dried food also grows respectively, and vice versa, the frosts or hails bring to the lack of fresh fruit and, followingly, little volumes of dried food production Today fruit and vegetable-growing is wide-spread all over the country, in more than 482 communities of all the regions of Armenia. The types of fruits that are appropriate for drying are cultivated in those communities, such as apricot, peach, prune, fig, persimmon, apple, pear, cherry, grape, etc. The supply of fresh fruits as inputs directly depends on Armenia’s climatic conditions. During unfavorable years, up to 90% of the yield can be lost due to early spring frosts or heavy late spring hails. Climatic fluctuations first of all reflect on the prices of inputs, thus making the final products less cost-attractive and competitive against the production of competitors. The situation is better in the case of vegetables, and sufficient quantity of inputs is available almost each year. According to the information provided by the Armenian Statistical Service and the Armenian Ministery of Agriculture, as of January, 2012 the total area cultivated under different types of fruit orchards throughout Armenia was 37,149 ha (of which, 32,421 ha was prolific) and the area under grape was 16,288 (of which, 14,478 is of prolific state). Thus, the total areas of orchards and vineyards sum up to 53,437 ha (70% are orchards, 30% are vineyards). Anyway, there is a tendency of founding more and more new orchards, in which the types of fruits appropriate for drying are also included. The following graph illustrates the distribution of the total orchards by different types of trees (i.e., stone, seminal, subtrocial, grape, nuts, berries). According to it, the stone fruits (including, apricot, peach, cherry (sour and sweet)) are the most-widely cultivated (36%), followed by grape (31%), and seminal fruits (including, apple, pear, quince).
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Assessm ment of the A Armenian Drried Fruit and d Vegetable Supply Chain n
Graph 2. 2 Distributtion of Orch hards and V Vineyards by b Types
Distribution n of orch hards and vineyards by types 3 3%
1% 5%
31% Grape Seminal Stone 36%
Nuts Subtropical Berries 24% %
Source:: Ministry of Agriculturre of Armennia Graph 3 illustratess the distribbution of thhe total orcchards by different d typpes of ston ne fruits. According to it, appricot is thee most wideely cultivateed stone fruuit over the country (9,4 430 ha), ( ha). followeed by peach (4,870 ha),, and plum (2,160
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Assessm ment of the A Armenian Drried Fruit and d Vegetable Supply Chain n
Graph 3. 3 Distributiion of Orch hards by Typpes of Stone Fruits
Disttributio on of sto one fruits (ha) 10000
6 9429.16
9000 8000
7539.5 7
7000 6000
4872.87
5000
41 110.25
Total are ea Prolific (o of the total)
4000 3000
162.24 21 1271.22 1065.59
2000
1745.3 32
1000
78 87.67
3 743.63 24 41.85 233.1
0 Apricot
Peach
Sweet Cherry
Plum
Sour Cherry
C Cornel
Source:: Ministry of Agriculturre of Armennia Graph 4 illustratess the distribbution of the total orch hards by diffferent typees of seminaal fruits. According to it, appple is the most widelly cultivateed seminal (10,308 ( ha)), followed by pear (2,658 ha), h and quiince (262 haa).
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Assessm ment of the A Armenian Drried Fruit and d Vegetable Supply Chain n
Graph 4. Distribution D n of Orcharrds by Typess of Semina al Fruits
Distribution of sseminalss (ha) 1200 00 10308.766 9548.946
1000 00 800 00
Totaal area
600 00
Prollific (of total) 400 00
2 2658.63 2482 2.48
200 00 268.28 231.74
27 7.21 24.41
0 App ple
Pear
Quincee
O Other
Source:: Ministry of Agriculturre of Armennia Graph 5 illustrates the distriibution of the t total orrchards by different tyypes of sub btropical fruits. According A to it, perssimmon is the most widely culltivated subbtropical (2 245 ha), followeed by fig (2336 ha) and pomegranat p te (which, however, h is not n a fruit uused for drying).
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Assessm ment of the A Armenian Drried Fruit and d Vegetable Supply Chain n
Graaph 5. Distrribution off Orchards by b Types off Subtropica al Fruits
Distrib bution o of subtro opical fruits (haa) 250.0 0
236 6.3
245.7 220.4 202.8 8 194.1
182.1
200.0 0
150.0 0 Totall Area Proliffic (of total) 100.0 0
50.0 0
0.0 0 Fig
Pomegrranate
Persimmon
Source:: Ministry of Agriculturre of Armennia As it caan be seen from f Table 3, Ararat valley is the fruit centree of Armeniia for most types of the fruiits. 69.3% of o all apricoots, 72.6% of all peach hes, 49.3% of all plum ms, 48.4% of o sweet cherriess orchards and a
72% of vineyardds are locatted in the regions of A Armavir and d Ararat
(see Tabble 3). Thiss is one of thhe determinnants for thee Ararat vallley to be thhe provider of more than 700% of all dried d food over the country. c Whereas, W Tavvush and S Syunik regiions are “specialized” in thhe productioon of subtroopical fruits – i.e., 71.44% of all figgs and 97.5% of all mons orcharrds are locaated in thesee regions. persimm
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain
Syunik
Vayots Dzor
Tavush
Total
993
863
814
975
2078
248
979
640
513
10816
%
1.5
23.6
9.2
8.0
7.5
9.0
19.2
2.3
9.1
5.9
4.7
100.0%
ha
121
92
309
178
431
338
585
90
258
175
201
2778
%
4.4
3.3
11.1
6.4
15.5
12.2
21.1
3.2
9.3
6.3
7.2
100.0%
ha
469
1061
3092
3764
18
51
841
2
62
520
15
9895
%
4.7
10.7
31.2
38.0
0.2
0.5
8.5
-
0.6
5.3
0.2
100.0%
ha
201
220
2176
1507
-
148
98
-
78
215
429
5072
%
4.0
4.3
42.9
29.7
-
2.9
1.9
0.0%
1.5
4.2
8.5
100.0%
ha
53
81
191
897
44
298
143
33
77
45
345
2207
%
2.4
3.7
8.7
40.6
2.0
13.5
6.5
1.5
3.5
2.0
15.6
100.0%
ha
60
53
100
149
56
101
122
44
85
34
44
848
%
7.1
6.3
11.8
17.6
6.6
11.9
14.4
5.2
10.0
4.0
5.2
100.0%
Sweet cherry
ha
61
196
104
541
14
54
213
3
74
30
43
1333
%
4.6
14.7
7.8
40.6
1.1
4.1
16.0
0.2
5.6
2.3
3.2
100.0%
Persimmon
ha
-
-
-
-
-
6
-
-
100
-
138
244
%
-
-
-
-
-
2.5
-
-
41.0
-
56.6
100.0%
Fig
ha
3
3
5
15
-
42
-
-
96
-
74
238
%
1.3
1.3
2.1
6.3
-
17.6
-
-
40.3
-
31
100.0%
ha
637
1148
4881
6863
-
64
290
-
185
889
1356
16313
%
3.9
7.0
29.9
42.1
-
0.4
1.8
-
1.1
5.4
8.3
100.0%
Apricot
Peach
Plum
Cherry
Grape
Ararat
Yerevan
Pear
Kotayk
2556
Lori
157
Apple
Armavir
ha
Aragatsotn
Shirak
Gegharkunik
Table 3. Distribution of Orchards and Vineyards by Regions
Source: Ministry of Agriculture of Armenia
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain
Table 4. Pricing of the Fresh Input
Fresh Fruit Pricing Apricot 2011
200-250
2012
100-150 250-300
Prune
Peach
250
200-250
Pear
Apple
Fig
Grape
Tomato
200 150-600
160 120-170
200
200
250
120 2011
300
2012
250-200
250
120-200
150
150
250
2011
300
2012
100-200 300
2011
300
2012
150
200-300
100-150
250-300
50-70
250
300
400
250 200-250
180 200-250
250-300
200-250 100
200-250
200-250
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain
5.2 Dried Food Producer Analysis Dried food production may be considered as one of the perspective industries of the Armenian agriculture: it has the characteristics of tradition and is implemented in almost all regions of Armenia. Homemade dried food production is very common in many Armenian families, and the homemade product is often sold along with dried food produced in plants. The producers of the dried food supply chain are individual farmers, cooperatives/farmer groups, as well as legal entities. Depending on the volumes of their annual production, the producers are classified as small, medium-sized, and large.
Small (5 tones annually)
According to the information of the Association of Dried Food Producers of Armenia, small producers are approximately 5400. There are 100 medium-sized producers with annual production volumes of 1 – 5 tones, and 21 large producers with annual production of above 5 tones. 80% of the production capacities are located in rural communities. Most of the producers are located in Armavir and Ararat regions of the Republic of Armenia, together contributing to 65% of the total countrywide production of the dried fruits. This is connected with the fact
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain
that the supply of some fruits and vegetables is highly concentrated in four main centers of growing: • Lowlands (Ararat Valley, including Armavir and Ararat regions) where around 66% (6,400 ha) of apricots, 73% (3,423 ha) of peaches, 40% (423 ha) of sweet cherries, more than 90% (1,600 ha) of the table grapes (which are appropriate for drying) are grown, • Lowlands (Meghri region of Syunik Marz) where 70% (98 ha) of persimmons and 55% (95 ha) of figs are grown, • Pre-mountainous zone (lowlands of Aragatsotn and Kotayk Marzes) where 45% (4,282) of apples and apricots are grown, • Pre-mountainous zone (Tavush Marz) where 30% (45 ha) of persimmons, figs, peaches are grown. Graph 6 shows the distribution of the food driers, which can be both technical (electricityoperated, gas-operated, and mechanical (sun driers the main principle of which is the greenhouse effect) by regions of Armenia. It can be seen that nearly 50% of all the driers are located in Armavir region (130 driers), followed by Ararat region (36 driers), and Aragatsotn region (30 driers). There are different providers of driers among business support and development organizations, such as UMCOR, CARD, UNDP, SME DNC.
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain
Graph 6. Food Driers’ Distribution in the Regions
Distribution of Food Driers by Regions
Aragatsotn 20
7
Ararat
30
Armavir
12 12
36
7 6
Lori Kotayk Syunik Vayots Dzor Tavush Yerevan
130
Most of the small producers are farmers, which are not registered as legal entities and operate as usual physical entities, i.e., they are individuals. The reason for this is the fact that dried food production as business activity is subject to taxing, and the producers avoid taxing which would increase the cost of dried food. Besides, it should be noted that the number of small and medium-sized producers may change year-by-year based on the yield and other factors of the given year, since for them the production of dried foods is not a primary business. This means that if a year is harvestful and favourable for the crop yield, and the raw materials are of high supply, as it is in the year 2012, more small (i.e., homemade) producers become engaged in simple sun-drying of fruits, without any additional technical facilities. For example, on Nalbandyan street of the Armavir city of Armavir region nearly all the households make drying of fruits, and that is why this street is sometimes called the street of “Sun-driers”. The number of the so-called “regular” producers is estimated to be around 1000 entities. As for the large producers, there are both legal and physical entities among them, who make only the 0.37 % of the total number of producers, but produce 31 – 37 % of the overall dried © BSC Business Support Center LLC, 2012
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain
food produced in Armenia. These companies, along with purchasing their raw materials from individual farmers/producers of fresh fruits, have their own orchards of different types of fruits (such as the “Cheer” CJSC, which has 45 ha of orchards together with Shen NGO, “Armen Manukyan” S/E, who has a recently founded orchard, or the “Nor Aygi” LLC, which has more than 6 ha of own orchards of apricot, peach, prune, or the “Astghounk” LLC, which has 5 ha of orchards under apricot, prune, peach, pear, apple, grape). This helps these companies to leverage the risks related to the price, quality, timing issues created by the individual farmers/suppliers of fresh fruits. Also, these firms employ local farmers on contractual basis to work in their own plantations on seasonal basis. Most of the producers we have met in the scope of the project have their own cold storages/refrigerators, where they keep their production of dried fruits. In the framework of the current assessment, face-to-face interviews with 26 producers were conducted from different regions of the country, of which 6 were small producers, 11 were middle producers, 9 – large. The total dried production of the 26 interviewed producers for the year 2011 was 166 tones, the distribution by different types of fruit-vegetable is presented in Graph 6. It can be seen that dried apricot had the major part in the total production (69.9 tones), followed by dried tomato (33 tones) and prune (28.76 tones).
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain
Graph 7. Distribution of Different types of dried fruit-vegetable production for the surveyed producers
Production of Dried Food of Inerviewees in 2011 (tones) 80
69.6
70 60 50 40
33
28.76
30 20
13.6
10
5.6
7.6
3.3
1.95
Fig
Grape
2.95
0 Apricot
Prunes
Peach
Pear
Apple
Tomato
Other
Source: Dried Food Supply Chain Assessment, BSC, Yerevan, 2012 The total dried food production for all the above-mentioned 5,500 entities is approximated to be 1,000 tones annually. This number may differ, depending on the concrete year, on the availability of fresh fruit harvest. Adding up these 1,000 tones to the 1,078 tones of import of dried food, and subtracting from the total number the 42 tones of export, we get that 2,036 tones of dried food were consumed in Armenia in 2011.
1,000
1,078
42
2,036
Taking into account that officially 2,500,000 people live in Armenia, it can be calculated that the per-capita consumption of dried food is 0.8 kg annually. The same indicator for different world countries are Italy – 25 kg, Czech Republic – 16 kg, Sweden – 12 kg, USA – 1.26 kg. The detailed information on the biggest producers of the dried food is provided below.
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain S/E “Armen Manukyan”, “Armenian Dried Fruits”, Surenavan, Ararat
There are 35-40 dried-fruit makers at the busy-season in summer, also plus 10 packaging workers. The company has sun (400 sq.m.) and electrical driers (3.5 tones of production). In one day up to 600 kg of fruits can be dried with the sun-driers. The total area of the company (including, driers, equipment) is 2400 sq.m. The company has also refrigerators for keeping the dried fruits. The volume is 1000 m3, in which 300-350 tones of harvest can be placed. The company produces dried apricot (100 tones of apricot was purchased in 2012 starting from Baghramyan community of Armavir to Gndevaz community of Vayots Dzor), plum, peach (purchased from even Noyemberyan, of which approximately 20 tones of dried apricot was produced), pear, apple, fig, grapes, melon, also, fruit sticks. One of the main lines of the company is the chocolate with dried fruits. The production is sold mainly in SAS, Yerevan City, Star supermarkets, with the highest share given to Yerevan City. The quality of fruits convenient for drying is middle (neither the highest quality appropriate for sale, nor the worst quality appropriate for preservation). The producers of fruits/farmers sell their fruits, however, it turns out that the quality of the fruits is not totally the same, and there are also the worst quality fruits among them, which are used to produce fruit sticks. The “Armenian Dried Fruits” company, for example, has founded its own orchards of peach (300 trees), apricot (250 trees), plum (3000 trees of red and white sorts). This supposes that in 2-3 years’ time the company will be able to produce around 300 tones of dried fruits and will be independent of sellers of fresh fruits/farmers and the prices they offer to the company. But currently the 100 % of the inventory fresh fruits are purchased from farmers of different regions. The company has packaging machinery and the production is sold packaged. The plastic packaging is purchased from Iran. In Armenia there is the “Ovalplast” company, the production of which is not that good. The company has exported its production to USA (Chicago, but it was cancelled since the required quantity was not supplied), to Australia (with company Noyan), to Switzerland. According to Mr. Manukyan, there are several weak points with the Armenian dried food sector, which are as follows:
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain
1. The bad thing about the dried fruit production in Armenia is that the producers of dried fruits need to buy their inventory, i.e., they do not use their own production of fresh fruits, whereas in, for example, Turkey, the owner of fresh fruit orchards produces also dried fruits. They have 8 types of dried fruits, and the processors of dried fruits, who purchase from the producers, can easily sort the production. In Armenia, the thing that can be done, is to make the stages of production of dried fruits sorted – i.e., the owner of orchards should produce also dried fruits. 2. Also, another weakness is that the image of Armenian agriculture is rather negative abroad in foreign markets, thus, it is very difficult to find a customer. 3. The contribution of the country or a for-profit company must be very big in support to the sector. Foreign customers want large quantities, which can be produced in practice. However, currently there is no such coordinated supply, but the whole supply offered by different producers can reach to the demanded quantities. And this coordination had better be implemented by a for-profit company. 4. Also, Armenia offers not a large variety of dried fruits. S/E Vladimir Khachikyan, “Sateni” brand, Yervandashat, Armavir
The company has 2 admin workers, 6-8 permanent, 12-15 seasonal workers. If weather condition is favorable, the production can be up to 15 tones out of its driers. It has 3 sun-driers, 1 – electrical drier (with production of up to 1.5 tones). It has 2 driers of 75 sq.m. and 1 sun-drier of 100 sq.m. The cooperative produces organic dried apricot (1.5 tones), plum (1.5 tones), peach (500-700 kg), apple (200 kg), sour-cherry (200 kg), melon (200 kg), tomato (50 kg). The company has also gift-collections which are a collection of different types of dried fruits and are very well consumed. The production of the company is massively consumed in the Zvartnots airport duty-free shop (50%), (up to 8-10 milion AMD), in the “Star” and “SAS” supermarkets’ chain, in markets of Gum, Petak (10%), by wholesalers from Sevan, Vanadzor, and other regions (1520%). The wholesalers purchase the most low-quality production without packaging, but there is also packaged production. The production is packaged in Doy-packs (a sealed plastic bag that is designed to stand upright). This packaging is provided by “Card Agro-
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain
Service” (it has so far provided 1.500 packages). Also, the company “Arcolad” purchases the production of the company. The cooperative had a contract with Grand Candy for 2 years to consume 1 tone of dried fruit monthly, however, since 1998, the company is switched to using the dried fruits of Turkey or France, since they are cheaper. The Armenian dried fruits are not competitive in either the international or the local market in only pricing, since the quality and taste of Armenian dried fruits (this reasoned by the natural tastiness of Armenian fresh fruits) are even higher than those of the competing. In Yervandashat around 80% of the population goes in for making of dried fruits, and ecological dried fruits are produced in the community. In Yervandashat village this year 60 tones of dried fruits have been produced by the members of the cooperative, of which 15% is high-quality. Quality dried fruits are produced in sun-driers. The season of drying is short, and if there are more driers, much more quality dried fruits can be produced.
The 2
neighboring communities have produced 80 tones of dried fruits this year, but most of it is not the highest quality, since there are not many driers. This production is mostly purchased by the colonies of Sevan, Hrazdan, by the national armies of the Republic of Armenia, Russian Federation which is mostly used to make compotes. There is no warehouse place in the district, which is necessary for both having a reserve of dried fruits for the coming years, since there might be force major situations (such as frostbite, hail, drought), which can bring to lack of production, and the warehouse can insure some quantity of supply. There is also a problem of refrigerators; a lot of non-finished goods are spoiled because of absence of a cold-storage. If these two obstacles are to be overocome (warehouse and refrigerating facilities), the quality and quantity of the production can be increased by 40-50%. The members of the cooperative have their own orchards, and the problem with fresh fruits as a resource is solved. This year, for example, there were 80 tones of fresh apricot produced, of which 20% is exported and 80% is used for dried-apricot. However, from other regions of Armenia, such as Surenavan, Arteni, Aragats, also, from organic gardens of Shen (in 2012, 12 tones of fresh apricot was obtained) fresh fruits are purchased.
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Assessm ment of the A Armenian Drried Fruit and d Vegetable Supply Chain n
“Vayk Group” G Ltd, Ashot Zaka aryan, Vayk k, Vayots Dzor
mpany has 27 perman nent employyees, but thhe total num mber of The com employeees in busy-summer seaasons can reeach up to 880. The com mpany has drying d area with w the lenngth of 24 m meters, wheere it can producee up to 5-66 tones of dried d fruits in 4-5 day ys. Also, thee company has a natu ural gazoperated drier, whhich can produce p up to 5 toness of dried fruits in oone day. The T total c be up too 100 tones in i the seasoon. producttivity of the company can The com mpany prodduces driedd apricot (13 tones in 2012), plum m (2 tones in 2012), peach p (3 tones inn 2011), appple (3 tones in 2011). The com mpany has 45 ha of appricot orcharrds (approx ximately, 122000-130000 trees), from m which in 20122, 200-220 tones t of fressh apricots were receiv ved. The maain productiion is exporrted (has sold to “Spayka” LLC). L The 10-15% 1 of the t harvest is used for making driied fruits. The T bestquality production is exportedd, the averaage-quality are a used forr drying, annd the worstt-quality fruits arre used for making m voddka. The prooduction off the compaany is sold mainly to wholesalers w s in marketss, and in 20 012 it is also going to workk with supeermarkets diirectly. Also o, companyy “Arcolad”” has purchased the producttion of the company c (500 kg of driied black pllum). Also, thhe companyy has 2-3 haa of plum orchards o (ap pproximatelly, 800 trees), which gives g 1520 tonees of plum harvest. h Thee 75% of thhese fresh frruits are useed for makiing dried pllum, and the 25% % are exportted to Georggia (4-5 tonnes). The com mpany has 4-5 ha of apple a orcharrds, the 10--20% of thee harvest off which (maainly the small onnes) is usedd for drying and then seelling in thee local markket. The harrvest of the 1 ha of peach orchard is totally ussed for dryinng. The company alsoo has 27 ha of grape orchards, the harvestt of which is totally used u for makingg wine. The dried fruit production is sold s in polyeethylene paacks. The 90% % of the drried-fruit prroduction iss made with h the harveest of the coompany’s orchards, o whereass, 10% is made m from purchased p fr fruits. In 2012, 3 tones of dried-appricot was prepared p (from thhe “Sateni” sort of apriicots). For dryying the fruitts the follow wing criteriaa are mentio oned for theem: •
sweetness
•
solidity
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain
•
healthiness
The company has a refrigerator with capacity of 60 tones. The company has sent the samples of its production to Netherlands and several other countries; however, in the future it plans to export to the Russian Federation. According to Mr. Zaqaryan, the main problems connected with the Armenian dried food sector are: 1. The problem connected with the Armenian dried fruits is the foreign markets as national level support is required for this sub-sector development. For example, in Turkey, the government has subsidies for the fruit-drying sector, the production is exported at its Cost of Goods Sold. 2. A specialized exporting body needs to be created, to facilitate exporting. “Cheer” CJSC, Tigran Tsaturyan, Sardarapat, Armavir The permanent workers of “Cheer” CJSC are 6 persons, and at the busy summer season this number becomes 40. The total area occupied by the company is 3 ha, of which 3,500 sq.m. is the area of the driers, which are 7.5 conditional modules. Each of the modules can produce 5-10 tones of dried fruits annually. The total annual productivity of the company is 100 tones. The company produces dried apricot (10 tones in 2012), plum and peach (5 tones totally in 2011), cherry and sour-cherry (totally 1 tone in 2012), tomato (29 tones in 2011), eggplant, grasses. Most of the company’s production is exported (40-45 tones of gross production annually, thus, only 45% of the capacity of the company is used) abroad, mainly, to France, Switzerland. The preliminary orders are received from abroad in February-March, and then the production is made. The company also used to sell its production to “Star” supermarket chain, however, it had a slow sales. The production of “Cheer” CJSC is sold packaged and not packaged. The partners from Switzerland send the packaging themselves (200-500 gram packs). Also, the cardboard boxes of “Grand Candy” JV are used. The fresh fruits for the production are purchased from farmers of different regions, i.e., the cherry is purchased from Baghramyan community of Armavir region. The apricot (“Sateni” type), peach (“Orange”, “Belaya dama”, “Uspekh” types), plum (“Viktorya”, “Black Plum”)
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain
are purchased from “Tsirani aygi” (“Apricot Garden”, Artur Mkhitaryan, 091 403328). For the tomato the seeds of the appropriate sort for drying are given to the farmers, from whom later the production is purchased. According to Mr. Tsaturyan, in the local markets there are imported Turkish or Iranian dried fruits, which are of lower price than those of the Armenians production (dried apricot, for example – Armenian is 3,000 AMD, whereas Turkish is 2,000 AMD). The same condition is abroad (Turkish is 2$, Armenian – 10$). But the quality and naturalness of Turkish dried fruits is doubtable, since it can be kept for 5 years without losing its market appearance and taste.
5.3 Retailers In case of the dried fruit supply chain the retailers are nearly as important players as the producers of the dried food. Very relevant information on the retailers stated unanimously by nearly all the interviewees is that they are the strongest player of the supply chain. Retailers sell different types of dried food, of different origin, including apricot, peach, prunes, apple, pear, fig, raisin, persimmon, both imported from Iran, Turkey, Argentine, USA, and the local production, both packaged and not packaged. Most often, the retailers implement the packaging of the purchased dried food themselves manually. The retailers act as middlemen between the producers of the dried fruits and the consumers in all the markets of the country, however, in the scope of the current assessment interviews with retailers of only Yerevan markets have been held. Interviews with retailers located in Petak, Gum, Surmalu, Sebastia, Komitas markets have been conducted (in total, 16 retailers were interviewed). As stated by most of the retailers, the sales of the dried food are on their peak in the New Year season. According to them, a significant niche market for the dried food is comprised of the tourists and Armenians going abroad to their relatives of Diaspora. The main regions of producers for purchasing dried food stated by the retailers were Armavir, Ararat and Meghri regions (mostly, dried fig and persimmon). They also stated to have imported foreign production, such as Iranian, Argentinian, Turkish, USA, etc. The total annual sales of the 16 surveyed retailers was 12,5 tones of different dried food, of which the most sold products are the dried apricots.
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There also happened retailers, who sell their own production of dried food. I., e, these retailers live in, for example, Ararat or Armavir regions of the country, have their own driers and implement the drying of food themselves, after which they also sell their own production.
5.4 Confectioneries As stated earlier, the consumption market for the dried food is divided to two different segments: 1. Confectionaries (producers of breakfast cereals, cookies, and the one most important niche for the dried food, the dried food covered with chocolate glaze, etc.). 2. And the retail market. As for the confectionaries, in the frameworks of the current assessment interviews with the representatives of different confectionaries, such as “Arcolad” CJSC, “Daroink” LLC, “Asa” LLC, “Elit Shant” LLC were held. Of those, “Arcolad” CJSC was the quantity-providing niche for the dried fruits. “Arcolad” CJSC “Arcolad” CJSC is a boutique producer of different chocolate products, such as plain chocolate, filled chocolate, coated chocolate4. The company policy of the “Arcolad” CJSC supposes the use of only local, Armenian raw materials, including the dried food in the production. The coated chocolate is the type for the production of which dried fruits are used. The product range for this category is chocolate coated dried apricot with marzipan, dried apricot with milk qianduja, dried apricot with walnut, dried peach with walnut, dried plum with walnut. As the representative of the company said, there are different quality producers of dried fruits in the local market, however, they do not provide with the necessary quantities (the maximum quantity provided by one producer is 6 tones). According to the company, there is one quantity-providing producer, which, however, does not provide with the necessary quality. The widely noted fact for the company is that the producers approach them only in February, when the peak of the sales of the dried fruits has passed, and there is no demand in the retail market. 4
www.arcolad.am
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Also, according to the company, this market segment is not regulated anyhow, which creates hindrances to operate.
5.5 Business Development and Support Analysis Dried food production is considered as one of the most perspective industries of the Armenian agriculture: it has the characteristics of tradition and is implemented in the vast majority of the regions of Armenia. A very important factor is that homemade dried food production is very common in many Armenian families, and the homemade product is often sold along with dried food produced in plants. However, the production is of rather low volumes, since diseconomies of scales take place. Large investments are required for organizing large-scale production to achieve economies of scales. At present, the Armenian producers do not have sufficient resources for that purpose. The dried food sector of Armenia is in its initial steps towards becoming an industry of strategic importance. This is the main reason why many organizations continuously provide the players of the supply chain with different types of support and assistance. The primary issues in the dried food sector in Armenia are connected with the lack of mass production, further market, new techniques and access to information for the growers of trees appropriate for drying, which is a high priority to increase their production and quality. At the same time there is a need for international consultants specialized in the dried food sphere to assist farmers to increase their production, make trainings on international standards and systems (Global GAP, HACCP, ISO), as well as support them in their marketing efforts to capture a larger share of the international dried food market or enter new market segments. Meantime specific trainings should be delivered to the growers on fertilization, pest management, irrigation, drainage, pruning and orchard management and postharvest processing to increase yield, quality and size of the fruits or vegetables appropriate for drying. With this respect, the numerous business advisory initiatives so far have been, which included specialized trainings for both farmers and producers, founding of new orchards, provision of different types of driers (starting back from the 1990s), etc.: • “Association of Dried Food Producers” NGO (http://www.driedfood.info.am/)
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain • Small and Medium Entrepreneurship Development National Centre of Armenia
(SME DNC) (www.smednc.am) • United Nations Development Program (UNDP) in Armenia (http://www.undp.am) • United Methodist Committee on Relief (UMCOR) Armenia (www.umcor.am) • Centre of Agribusiness and Rural Development (www.card.am) • Water to Market Armenia Activity (www.wma.am)
• EBRD BAS Program in Armenia, • “Federation of Agricultural Associations” Union of Legal Entities (http://www.faa-
ule.am/), • International
Fund
for
Agricultural
Development
in
Armenia
(http://www.ifad.org/operations/pipeline/pn/armenia.htm) • The Word Bank in Armenia (http://www.worldbank.org.am/WBSITE/EXTERNAL/COUNTRIES/ECAEXT/AR
MENIAEXTN/0,,menuPK:301584~pagePK:141159~piPK:141110~theSitePK:3015 79,00.html) • Agricultural Support Republican (and Regional) Centres - www.asrc.am • Ecoglobe (www.ecoglobe.am)
These institutions have been assisting the sector in various ways.
Association of Dried Food Producers NGO
The Association of Dried Food Producers (ADFP) NGO was established in 2003. The mission of the NGO is to expand dried food production in Armenia and facilitate export. The frames of organization’s activities are: •
To support the development of dried food production in Armenia, the investment of modern technologies, the protection of producers’ and consumers’ interests in the local and export markets.
•
To further promote networking of dried food producers of Armenia, foster exchange of information and knowledge between them.
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain •
Liaise between dried food producers and research centers, international organizations, commercial institutions.
•
To implement training programs, to carry out marketing studies and provide marketing services.
•
To stimulate the production of organic products.
•
To provide material support to the organization members for participation in fair, conferences and other events.
•
To protect members’ rights and interests through consultancy service of appropriate specialists.
ADFP NGO is a reliable partner for dried food production, especially in the spheres of processing agricultural raw material and realizing the ready product. The organization has implemented a lot of programs for the support to the development of the sphere. Among them are: •
Training programs
•
Investment of modern technologies
•
Database creation
•
Consultancy services
Training programmes - ADFP implemented training programmes in 9 regions of the Republic of Armenia: Armavir, Ararat, Aragatsotn, Kotayk, Lory, Tavush, Vayots Dzor, Syunik and Yerevan. In the scopes of this programme “a net” of dried food producers was created which includes more than 180 producers /42 major, 138 medium/. Over 450 members who are occupied with drying food and vegetables, received technological orders and became aware of the basic technological drying processes. In case of beneficial conditions of raw material production, more than 1500 tones of high quality dried food can be organized and produced in the country. The project contributes to the improvement of the quality of dried food products in Armenia, as well as to the raise of their competitiveness in the export markets. Investment of modern technologies - The organization has implemented a project on the basis of which stands the process of perfecting the means by which humidity is taken out from agricultural raw material. Also, within the frameworks of the program, a new project of joint driers has been carried out. The productivity of joint driers is at least 3 times higher in comparison with solar driers. New kind of driers guarantee ensuring high quality of the ready product which meets international standards.
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Database creation - ADFP studied the sphere of dried food production and consumption throughout the country. On the basis of the gathered information an informative mini book of 40 pages was published. This booklet includes the modern state of the dried food production in the Republic of Armenia, as well as technological instructions for seperate kinds of raw material. Consultancy services - ADFP provides consultations in the following directions: •
a) Production of input supply appropriate for drying and provision of quality,
•
b) Drying of agricultural input supply, the technological process from the start to the end,
•
c) Production of organic dried food,
•
d) Design of driers and control during the processes of construction and exploiting,
•
e) Quality control.5 Small and Medium Entrepreneurship Development National Centre of Armenia
“Small and Medium Entrepreneurship Development National Center” Fund (SME Development National Center of Armenia) was established by Government of Armenia in 2002. SME Development National Center is authorized to provide state support to small and medium entrepreneurship (SME) in the country. The support is provided through implementation of annual SME State Support Programs with resources allocated from State budget. SME Development National Center of Armenia is governed by Board of Trustees headed by the Minister of Economy. SME Development National Center of Armenia carries out its activities through the well developed network of regional branches and representative offices covering all marzes of Armenia coordinated by the central office in Yerevan. Since 2002 thousands of SMEs benefited from various support programs designed for startup and operating companies. SME Development National Center of Armenia’s activities are targeted at: •
Ensuring a dialogue between SMEs and state
•
Increasing efficiency and competitiveness of SMEs
•
Expanding the financial opportunities for SMEs
5
http://www.driedfood.info.am/
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•
Promoting innovations and R&D activities of SMEs
•
Assistance for establishment of new SMEs
•
Supporting internationalization of SMEs’ activities6
SME Development National Center of Armenia provides both technical and financial assistance to Armenian SMEs. Technical assistance • Provision of information and consulting on all the aspects of doing business in Armenia • Elaboration and development of human resources • Sales promotion • Support in products exporting • Supporting Start-ups • Supporting in realization of new technology/innovation • Local products promotion and branding
Financial assistance • • • •
Provision of Loan guarantees Equity financing Seed capital Partial subsidizing of credit interest rates
International Cooperation SME Development National Center of Armenia actively cooperates with number of international and foreign organizations developing and implementing joint support programs. Joint programs are implemented with UNDP, UK DFID, JICA, and OSCE. SME DNC Armenia provides continuous support to the sector of dried food in Armenia. One such example was the issuance of long-term credit to “Vayq Group” CJSC in 2009, a company which is specialized in dried fruit and wine production and export7. Another example is the implementation of the cooperation with UNDP in provision of technological and business trainings, provision of quality equipment, also, financing via joint loans to 17 producers of dried-fruit in Tavush region of the Republic of Armenia in MayJune, 2012. The participants of the trainings received information on: •
Sun-driers. Different types of sun-driers used in Armenia and abroad, the description of construction of sun-driers, optimal dimensions, dimensions of other necessary buildings (such as the warehouse, fume-hall, etc.), monetary and work spending,
6 7
http://www.smednc.am/?laid=1&com=module&module=menu&id=69 http://www.smednc.am/?laid=2&laid=1&com=module&module=static&id=323
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•
The project of founding drying houses with use of other sources of energy (such as electricity, gas, etc.)
•
The technological chain of drying of fruits and vegetables typical to Tavush region (the whole technological chain starting from the harvest of raw materials to maintenance of dried food and realization.
Upon the completion of the trainings part of the project the participants were provided with driers (both electrical and sun-driers), with the conditions that they invested the 20% of the funding, and 80% was provided by the project. Also, a booklet “Technological directives on making of dried food” was published, which describes the technologies of drying of peach, apricot, prune, pear, apple, cherry and sourcherry, persimmon, eggplant, tomato and pepper. It has been distributed both among the participants of the trainings and in other regions of the republic8. United Methodist Committee On Relief (UMCOR)
During its history of operations in Armenia UMCOR has many times supported to the dried food sector, starting back in 1995, when greenhouse-like sun-driers were provided to several fruit driers, such as Mr. Hamlet Arshakyan (Hatsik community, Armavir region). Within the scopes of UMCOR SCEAD Program (2009-2012), in cooperation with Center for Agruibusiness and Rural Development 4 member-cooperatives of the Program received electrical and gas-operated driers. These cooperatives were 1. Yervandashat (Armavir region) 2. Lukashin (Armavir region) 3. Lusarat (Ararat region) 4. Aygepan (Vayots Dzor region) Also, in the frameworks of the SCEAD Program Lukashin and Khor Virap (Ararat region) cooperatives were provided with vacuum packaging equipment.
8 http://www.b24.am/economy/37363.html
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Center for Agruibusiness and Rural Development (CARD)
The Center for Agribusiness and Rural Development (CARD) is a “one-stop-shop” economic development organization with a highly-trained and motivated staff, a broad client base, and unparalleled country-wide coverage throughout Armenia. It was established on April 4, 2005, as a local Armenian foundation, and carries on the legacy of the U.S. Department of Agriculture’s successful 13 year Marketing Assistance Program (USDAMAP). Continuing the hallmarks which made its predecessor USDA MAP successful, CARD’s programs are timely, flexible, impact-oriented, and respond to real challenges facing Armenian farmers, agribusinesses, and exporters. Each undertaking focuses on enhancing the agribusiness community and improving rural livelihoods. CARD’s main program departments consist of Agribusiness and Marketing, Rural Development, and Special Projects, which include specially contracted projects such as a Food Safety Program, in conjunction with the USDA and Louisiana State, and the creation of the Farm Credit Organization, guided by the U.S.Farm Credit Administration. CARD’s programs are designed to achieve the following: ¾ Facilitate innovation at the enterprise, industry, and subsector level ¾ Help design and establish new agribusinesses ¾ Bring individual enterprises together to form cohesive industry groups with share visions ¾ Lower costs of unit production, transportation, and marketing ¾ Provide competitive advantage strategies for SMEs in remote regions and increases sustainability of young farmers. ¾ Improve access to new agricultural technology, information, and markets9 CARD grows small and medium enterprises with significant advantages throughout the marketing chain and offers the most complete set of agribusiness services to the agricultural sector in Armenia.
9
http://www.card.am/index.php?option=com_content&view=article&id=7%3Awhoweare&catid=6%3Aabout&It emid=5&lang=en
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CARD has implemented many projects supporting the dried food sector. I.e., in cooperation with UMCOR, in the frameworks of the SCEAD program (2009-2012 yy.), driers have been provided to the cooperatives of Lukashin (Ararat region), Aygepan (Yeghegnadzor community, Vayots Dzor region), Khor Virap (Poqr Vedi community, Ararat region). In 2005 a drier and a vacuum packaging equipment have been provided to Yervandashat cooperative. Support has been provided to “Cheer” CJSC Mr. Tigran Tsaturyan, Yervandashat cooperative Mr. Arkadi Khachikyan, and Meghri dried food producer Tevatros Papikyan. In 2008 CARD prepared a report on the “Dried Food Market of Armenia” 10 . It is an informative booklet comprising information on the current state of the sector in Armenia and dried food in general as of 2008. CARD has an Armenian Food Products Catalog, published annually, in which 4 dried food producers, including “Cheer” CJSC, “Arcolad” CJSC, “Sateni” S/E, “Hasmik Mirzoyan” S/E are represented11.
10 11
http://www.card.am/images/stories/Card%20reports/Dried_Food_Market.pdf http://www.card.am/images/stories/catalog2010/index.html
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain
In 2012, CARD provided a number of dried food producers with gas-operated driers with leasing. The cost for the driers (AMD 1.2 mln) must be returned to CARD in 4 years’ time12. Also, there are currently different plans of different projects, including, provision of trainings and driers to various producers of dried food (Tavush, Armavir, Ararat, Meghri regions are going to be the target regions).
“Federation of Agricultural Associations” Union of Legal Entities
“Federation of Agricultural Associations” ULE was created in December, 2001 by 8 agricultural cooperatives which decided to join and form a Federation of Agricultural Associations as a Union of Legal Entities in order to solve their common problems. In February, 2002 Jinishian Memorial Foundation provided grant to the Federation to assist with the FAA registration and administrative expenses, and the Federation of Agricultural Associations as a Union of Legal Entities was registered. 12
http://www.card.am/images/stories/Other_projects/Dryers_Eng.pdf
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FAA’s Mission - Being a viable organization to support the development of member farmer organizations and assist them to solve their common legal, managerial, technical, financial, and social problems in cooperation with farmer organizations in order to contribute to the progress of agriculture of Armenia. FAA’s goals are: ·
To coordinate activities of its member FOs.
·
To establish the following centralized systems in order to make its members activities efficient: •
System of data collecting, analyzing, consulting and training, and management implementation.
·
•
System of providing legal services.
•
System of financing and investing.
•
System of supplying inputs and equipment for agricultural production.
•
System of final product marketing.
To contribute to involvement of new technologies in agriculture and its overall improvement
·
To express interests of its members and to protect their rights when dealing with other organizations including judicial bodies and local governments.
The FAA ULE has implemented numerous projects in support of the dried food sector development, such as financial support & trainings for 98 producers of dried food (in Ararat, Aragatsotn, Armavir regions) in cooperation with the Millennium Challenge Account Armenia Program (http://www.mca.am/en) component. The themes for the trainings were different, mainly on production technologies of different dried food. Another support of the FAA was the distribution of modern pallet crates (intended for serving as pedestal for drying of food) and other materials (such as sulfur) to the producers of dried food. United Nations Development Programme
The United Nations Development Programme (UNDP) is the UN’s global development network, advocating for change and connecting countries to knowledge, experience and resources to help people build a better life. UNDP partners with people at all levels of society to help build nations that can withstand crisis, and drive and sustain the kind of growth that improves the quality of life for everyone.
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On the ground in 177 countries and territories, UNDP offers global perspective and local insight to help empower lives and build resilient nations. UNDP in Armenia has been established in March 1993 and supports the government to reach national development priorities and the Millennium Development Goals by 201513. The UNDP focus is to support Armenia in addressing the challenges of: ¾ Achieving the MDGs and reducing human poverty ¾ Fostering democratic governance ¾ Managing energy and environment for sustainable development ¾ Supporting crisis prevention and recovery UNDP in Armenia continuously supports the dried food sector in the frameworks of the different projects it implements. In 2010-2011 in Lusadzor community of Tavush region driers were supplied to the “Lusadzor” cooperative, the first production of which was received in 2011. Several dried food producers have been provided with vacuum-equipments. Another example is the implementation of the cooperation with SME DNC in provision of technological and business trainings, provision of quality equipment, also, financing via joint loans to 17 producers of dried-fruits in Tavush region of the Republic of Armenia in MayJune, 2012.
13
http://www.undp.am/?page=CoreMessage
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain Water to Market Armenia
In February 2007, ACDI/VOCA, in partnership with Mott MacDonald Euroconsult (Netherlands) and VISTAA (Armenia), was awarded an $18.4 million contract to implement the Water to Market (WtM) Activity (to last for 5 years) as part of the Millennium Challenge Account (MCA-Armenia) program14. Within the scopes of this project huge assistance was provided to the dried food sector. Several examples are brought herewith: ¾
An example of industry-level assistance was the project called “Introducing
Modern Dried Food Technologies and Practices”. This was in collaboration with the “Association of Dried Food Producers” to introduce modern drying technologies, food safety and proper storage and packaging of dried fruits and vegetables. The project was implemented in 2008 with the goal to improve the efficiency of small producers, introduce unified standard production technologies and to assist in consolidation of commercial scale of final produce for both the domestic and export markets. About 180 dried food producers and their staff, farmer suppliers, and dried food startup businesses (located in eight marzes) participated in the project15. ¾
Another example of assistance includes the project “Improving Food Safety and
Quality Assurance Standards”. This was launched to increase capacity and competitiveness of Armenian food processing industry in compliance with the food safety standards and quality standards. In 2007-2008, the program was implemented jointly with USDA/CARD. Through it, they introduced and brought awareness of HACCP and quality managements systems. About 40 processors, HORECA representatives and retailers participated in the project16. ¾
Another project implemented by the WTM was the “Triple Results through Active
Collaboration - Adoption of New Water Saving Technologies, Participation in Training and Accessing Credit”, with the help of which Harutyun Hovhannisyan, a farmer from Avshar village, collaborated as a demonstration-site farmer, upgraded his water management skills through training and then successfully applied for an investment loan to upgrade his farming operation in 200817. Mr. Harutyunyan had a history of adopting new technologies. Back in 1996, under another program, implemented by ACDI/VOCA, he had built a solar dryer to produce driedtomatoes. 14
http://www.wtm.am/page.php?11 http://www.wtm.am/page.php?50 16 http://www.wtm.am/page.php?50 17 http://www.wtm.am/page.php?20 15
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¾
Another successfully implemented project in support of the dried food sector was the
“Renovated Factory” - “New Product” project for "ALISHAN" Cannery to Make Significant Progress in Canning Fruit and Vegetable. The “ALISHAN” Cannery which operates in Masis city of Ararat Marz since 2003, thanks to Serjik Mosesyan, the Iranian-Armenian businessman. The products of the Cannery are well-known and highly-demanded in the American and Russian markets. The factory that produces new products for Armenia is famous with the combination of its canned fruit and vegetables, as well as the great variety of dried vegetables18. Ten fruit sorting and grading machines have been imported from Holland with the help of ACDI/VOCA. The factory bought seven of those ten machines, designed for sorting and grading of pepper, cucumber, tomato, peach, apple and other fruits and vegetables.
RURAL ASSETS CREATION PROGRAM (RACP) IN ARMENIA
RACP will conduct its activities under four main components: •
Support to Fruits and Nuts Sector;
•
Rural Infrastructure
•
Programme Management, and
•
Horticultural credits
Program target areas are Aragatsotn, Lori, Shirak, Vayotz Dzor, Syunik, Gegharkunik and Tavush regions of the Republic of Armenia. Fruit and nuts sector development component of the programme will be implemented only in Tavush and Vayots Dzor Marzes (regions) of Armenia and in selected districts of Aragatsotn Marz (Talin district). The map below shows the involvement of the program according by regions.
18
http://www.wtm.am/acdivoca/public/success_story_alishan_canary.pdf
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Under the “Support to Fruits and Nuts Sector” component, the program would increase poor smallholder assets and incomes in the Programme area through linking them with more profitably Armenian fruit and nut value chains, a high-value market both internationally and domestically with considerable unmet demand. This linkage would be achieved through a comprehensive package of modern technology transfer to poor smallholder primary producers and associated job creation among processors and traders,
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complemented by support to other key aspects of the value chain. Activities of this component include the following main elements: •
Introduce intensive agricultural practices to smallholder-based fruits and nuts value chains through transfer of modern technology, combined with company-based contract farming and financing arrangements.
•
Improve the availability of appropriate planting materials in the fruits and nuts sectors.
•
Support the efforts aiming at comprehensive application of international food safety and export standards in the fruit and nuts sectors.
•
Support the sectoral export promotion efforts in the fruits and nuts value chains.
•
Develop special financial credit products for non contracted farmers, who is willing and have the skills to establish/renovate orchards.
Support to Fruits and Nuts Sector component will reach these objectives under two subcomponents: (I) Establishment of Fruit Armenia; (II) Promotion of Standards and Exports and Horticultural credits. I - As the core activity of its first component, RACP would support the establishment of Fruit Armenia JSC (FA), an open joint stock company that will implement the subcomponent. In effect, FA would provide a strong, vertically integrated and enterpriseled approach to achieving a profitable and hence sustainable modernization of the Armenian fruit and nuts production that would specifically benefit poor smallholder producers. The core FA activities would include intensive fruits and nuts production with modern production technology based on farming contracts with smallholders as well as the selling of the resulting produce to buyers in the local but especially in the export markets. II - The goal of the second subcomponent (Promotion of Standards and Exports and Horticultural credits) is to improve the overall fame and kind name of Armenian fruit in the international market. It is envisaged that under this sub-component the Programme would provide support to: a) two Government agro-related laboratories – the Central Seeds Laboratory (CSL) and the Anti-epizootic and Diagnostic Residual Pesticide/Antibiotic Food Safety Laboratory (ADRP); b) Export promotion through the Union of Exporters of Armenia (UEA); c) Provide training to the private nurseries and small producers who are not contracted by Fruit
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Armenia, and d) Inform these orchard farmers about the procedures and opportunities of the horticultural credit component and the involved PFIs. The planned activities of the “Support to Fruits and Nuts Sector” component of the program are presented in detail in Annex 2. These investments are promising to lead to greater walnut productivity for Armenia’s walnut sector as the value chain has the potential to increase output while maintaining constant the level of input. EBRD BAS Program in Armenia The EBRD is the largest investor in the private enterprise and financial sectors of Armenia. Besides supporting financial institutions, the Bank has provided financing to a wide variety of sectors including agribusiness, power, transport, municipal and environmental infrastructure, property and telecommunications. Further, the Bank is actively engaged in policy dialogue with the Armenian government. The EBRD’s country strategy for Armenia, approved in May 2009, sets a number of strategic priorities such as support to the enterprise sector, strengthening the financial sector, fostering commercialisation of public infrastructure and utilities and policy dialogue to improve the country’s business environment. Attention is sought to attract enterprises outside Yerevan with rural employment potential. Sectoral focus are aimed towards agribusiness, specialised produce farming, beverages, frozen and dried fruit, dairy, and baked goods, food retailing, manufacturing (construction materials), mining, 45 property, tourism and hospitality, as well as ICT.
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5.6 Pricing of different dried products During the interviews the respondents were asked on their production pricing. Thus, price indicators, as stated by the assessed value chain members per kg are presented in the table below (in AMD, for the year of 2011).
Table 5. Pricing of Different Dried Food Products Pricing for different dried food products
1.
2. 3. 4. 5. 6. 7. 8. 9.
10. 11. 12. 13.
14.
15.
16. 17.
Orgnization
Apricot
Prune
Peach
Astghounk LLC, Mrs. Tsolvard Gevorgyan Mr. Garegin Yaghubyan Mr. Stepan Hovhannisyan Mr. Aram Simonyan Mr. Harutyun Hovhannisyan Mr. Vladik Babayan Mr. Sisak Harutyunyan Mr. Hamlet Muradyan S/E Hakob Hakobyan, Mr. Garik Hakobyan Mr. Stepan Grigoryan Mr. Hamlet Arshakyan Mr. Melkon Avetisyan Mr. Levon Hambardzumy an Cheer CJSC, Mr. Tigran Tsaturyan Levon LLC, Mr. Davit Harutyunyan Mr. Harutyun Simonyan Nor Aygi LLC, Mr. Samvel Sukiasyan
3,000
3,000
3,000
2,5003,000
4,000
Pear
Raisin
Apple
Fig
Persimmon
no 3,500 no no 2,500
4,000 2,000
2,5003,000 3,000
2500
3,5004,000 3,000
2,5003,500 3,000
4,000
3,0003,500 2,000
3,000
3,000
3,000 3,000
3,300
2,500
3,000
3,0004,000
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19.
20. 21.
22. 23. 24. 25.
Tsiatsan Ani LLC, Mr. Gagik Sirekanyan S/E “Vladimir Khachikyan”, Mr. Arkadi Khachikyan Mr. Shirak Ayvazyan S/E Vanik Karamyan, Mrs. Liana Karamyan Mrs. Aida Vardanyan Mr. Ashot Zakaryan Mr. Paruyr Asatryan Retailer 1 in “GUM” Market
26.
Retailer 2 in “GUM” Market
27.
Retailer 1 in “Komitas” Market Retailer 2 in “Komitas” market
28.
3,500
3,000
3,000
2,0002,200 3,0003,200
2,500
no
3,000 3,0003,500
1,0003,000 2,500
2,0002,500 2,000
4,000 (purchased with 3,000) 2,000 (foreign), 4,000 local 2,500
4,000 (purchased with 3,500) 2,500, (purchased for 1,500) 1,800
2,000
2,0002,500 2,500
2,000
2,500
1,800
1,500
3,500 (purchased with 3,000)
3,000 (purchased with 2,500)
1,500
2,000
2,500
As it can be seen from the table below, different producers have stated different prices. These differences are firstly conditioned with the production quality. Also, another reason for the different prices is the time of the year the production was sold (i.e., since the production is mainly sold in the local market, starting from February, when the demand for the dried food declines significantly, the pricing of the dried food also drops to its lowest point). There is the other type of farmers/producers that cancel the preliminary arrangement with their partners, because of the price fluctuations in the market. For example, as stated by “Arcolad” CJSC, it has tried several times to work with farmers/producers of dried fruits with preliminary arrangements, however, this system hasn’t worked, since the producers might at the last moment decide to sell their production to a more high-value customer.
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Assessm ment of the A Armenian Drried Fruit and d Vegetable Supply Chain n
6. SW WOT An nalysis of the Drieed Food Value V Ch hain The SW WOT-Analyysis of thee Dried Food sector proves thaat it has m many streng gths and opportuunities, whicch act as very importaant assets for fo the furthher development of thee sector. Howeveer, it also has h many weaknesses w a actually and y there are factors threeatening thee regular operatioon of this sub-sector, s w which, neveertheless, caan be overccome with systemized support from different d buusiness suupport orgaanizations, donors, faacilitating agencies and a the governm ment. Weaknesses W s Strrengths Veryy high quality of the raw materials (very tastty, sweet, with h appropriate in ndex of sugar‐‐ sourness, Envvironmentally ffriendly producction, Tho ough most ofteen not certified d, but near‐ orgaanic productio on, no conservaants, Cen nturies‐old trad ditional producction for Arm menia, Doees not require enormous cap pital investmen nts
High cost of the raw materials ((including, the ffresh frruits, the gas, ettc.), Non‐organized p N production, wheere the producers of dried fruit have tto purchase thee necessary fresh fruits , Production with limited quantitties, no mass production, or at least organ nized mass prod duction, The investmentss into the produ uction are returrned only n 6‐months' perriod, in No unified produ N uction (each drier's production n is unique) , producers, Liimited market iinformation avaailable for the p Very dependent on the local freesh fruit harvesst, Laack of laboratories and qualityy control mechaanisms, Laack of export‐oriented properr packaging
S OT SWO Opportunitiess Morre and more orchards of fruiits sorts app propriate for drrying are found ded, Morre and more electrical gaz drriers installed High h demand from m the Armeniaan diaspora forr the Arm menian producttion, includingg, the dried foo od Unliimited export markets, especially, for the vegeetables, Govvernment supp port to the secttor, including vvia supporting the exports of the drried food and inteerference to the imports of th he dried food ffrom otheer countries, Incrreasing loyalty of local custom mers towards the Arm menian producttion, Creaation of a single regulating and exporting b body
Threats High probabillity of droughtt and unfavorable climatic facto ors, limited infrrastructure to fight against them. The dependence of raw maaterial prices on the climatic conditions, Fluctuations o of the foreign currency exchange rates
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain
7. Conclusion and Recommendations Armenia is a country with decades-old tradition of food drying. It is a region which has all the preconditions for the fruit drying industry. The geographic location of the country, the number of sunny days in the year, the excellent quality of the fresh input supplies (including, the sweetness) as raw materials are all the factors which are necessary for producing quality dried food, and which are describing factors for Armenia. Dried food production stretches from the very north-east of the country (Tavush region), to the very south border of the country (Meghri region), including the middle regions of the country (Ararat, Armavir, Aragatsotn), and this, connected with the production of fresh food, i.e., the producers of dried food are mostly located near the zones where fresh food is available. The results of the current assessment have proved that there is an acting supply chain of the dried food in Armenia, which, however, is not regulated or has no formal linkages. The acting rings of the supply chain are strictly interconnected, but there is no regulating body for them. Around 50% of the local market of dried food is covered by the local production, and around 50% - with the imports. The local production is directed mainly to the local market, connected with complicated procedures of exporting. In the supply chain, at first, the fresh food is supplied to the producers of the dried food by usual farmers/producers of fresh food from different regions of the country. Different types of fruits are found and dried in different regions of the country, e.g, subtropical fruits, such as persimmon and fig, are produced mostly in Syunik and Tavush regions of the country, and apricot, peach, prune, grape are produced mostly in Armavir, Ararat, Vayots Dzor regions. Secondly, the producers organize the production of the dried food. Approximately 5500 different producers operate in the country. They are classified, according to the volumes of their annual production, i.e. - small (up to 1 tone of annual production), middle (1-5 tones of annual production) and big (more than 5 tones of annual production). The big producers, though comprising only 0.37% of the total number of producers, create up to 37% of the total country-wide production. The producers mostly acquire the raw materials through purchases, though, there are cases, when the producers of dried food have their own orchards and acquire the necessary raw materials from there. After the production process, the sales of the already-made production are implemented through different ways, including taking to the markets and selling there to the final customers (or selling to the retailers of the markets, who later sell to the customers), or co© BSC Business Support Center LLC, 2012
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain
operating with different supermarkets, shops, confectioneries, hotels, restaurants. Several of the big producers also make exports of their production, which, however, is not that systemized (if one year the harvest of the raw materials is good and in big volumes, the production of dried food becomes in high quantities, and vice versa), since none of the producers of dried food can solely provide the big quantities, demanded by the foreign markets. Added up to the process of making dried food production, the business support and development organizations support different players of the chain via provision of necessary equipment, driers (both electrical and sun-driers), publishing of different booklets on the details of drying of different food, implementation of trainings for the members of the supply chain. During the assessment different issues were discovered connected with the dried food supply chain which are addressed below: ¾ Local production with limited quantities, connected with significant volumes of imports – The Armenian market for the dried food is thoroughly full (both with local production and imports), and the local producers produce as much, as will be required to fill the local market, and this way only up to 70% of the production capacities are used, whereas, were the demand and were no imports from other countries, much more production could be made by Armenian producers. This issue could be fixed, if the interested parties of the supply chain (such as the agricultural alliance, big producers of dried food, other stakeholder organizations) make government-level lobbing, so that legal, customs reforms could be made to the benefit of the local production. ¾ No acting wholesaler with its main activities, or at least, an organizing body for the production and further sales – One of the main actors of a typical supply chain, the wholesaler is absent in the final, the realization stage of the Armenian dried food supply chain. This creates hindrances for the overall operation of the supply chain. Mostly the producers feel the lack of this player, since very often they cannot make the final consumption of their production. Were a single wholesale body with warehouse, refrigerator, packaging infrastructures, it would arrange the demanded quantities with the customers (both foreign and local), and order this quantities to the producers, with necessary quality criteria, and they would provide him with it. Laboratories, quality control mechanisms could be developed by this body, which would use mainly for the exports. © BSC Business Support Center LLC, 2012
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain
¾ Weak small producers - One of the weakest players of the supply chain are identified to be the small producers of dried food. Different types of support can be provided to them, such as linkages to the markets, packaging, modern equipment for production. ¾ Strictly dependent on the local fresh fruit harvest – No alternative sources of fresh food is available for importing and the demand is supplied only by local market. In future, if high-volume exports are arranged, the risk connected with this correlation could be mitigated through imports of fresh food from neighbouring regions, such as Nagorno Karabakh, Georgia, or Iran. ¾ Low local consumption of dried food - The local consumption of dried food, calculated to be 0.8 kg annually per capita, is very low, comparing with different world countries. Joint efforts should be made, to increase the wide awareness of dried food consumption in Armenia. ¾ The investments into the production are returned only in 6 months’ period, since the main local sales of dried food are made in New Year season – Any project for the Armenian dried fruit and vegetable sector should have a financial component, such as loans with low rates at the beginning of the season, so this issue is also overcome. ¾ The projects implemented by different organizations supporting the sub-sector are not coordinated, there is an overlap of efforts – Very often the programs directed to the sub-sector are repeated by different organizations, and the efficiency decreases. In solution to this, a coordinating body should be created, which would seek for new ways of cooperation and clarify the format of further actions.
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain
8. Annexes
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain
Annex 1. Questionnaires Armenian Dried Food Supply Chain Assessment Questionnaire
Questionnaire for Processors of Dried Fruits Region` ‐ ________________________________________________________________ Address`______________________________________________________________ Name, Surname / Company Name ___________________________________________ 1. How many employees does the company have? Administrative_________ Workers_______________ Other__________________________________ 2. How much area do the driers of the company occupy (sq.m.), how many driers there are, what is the volume of each one, how much is the productivity of each one? Quantity___________________________________________________________________ Volume____________________________________________________________________ Area_______________________________________________________________________ 3. What type of dried fruits do you produce and how much do you annually produce of each type? Apricot Prune Peach Pear Apple Fig Grape Persimmon Quantity
4. How do you implement the sales of the produced dried fruits? Sell to the factories for Take to the Sell to the retailers processing markets (in markets, also, supermarkets, shops) Partners Quantity/Price kg AMD kg AMD
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Sell to wholesalers
Other (specify)
Other (specify)
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain 5. The produced dried fruits are sold. Packaged Non‐packaged 6. List the main packaging materials and their main suppliers. ___________________________________________________________________________ ___ ___________________________________________________________________________ ___________________________________________________________________________ ______ 7. Do you have own orchards, where the raw materials, i.e., fresh fruits, are cultivated for the production of dried fruits (specify the area of each of the tree‐types, the number of trees)? Apricot Prune Peach Pear Apple Fig Grape Persimmon Quantity/Area 8. What quantities of fresh fruits do you purchase from individual farmers for production of dried fruits? How much do you pay for 1 kg of fresh fruit? Apricot Prune Peach Pear Apple Fig Grape Persimmon Quantity (kg) Price (AMD) 9. How much is the ratio of the purchased fresh fruits and those from own orchards? Harvest of own orchards_________ Purchased fresh fruits______________________ 10. What quality criteria do you have for the fresh fruits to be purchased? Apricot Prune Peach Pear Apple Fig Grape Persimmon Sort Appearance Dimensions Taste Other (specify) 11. List the farmers, cooperatives from whom you purchase the fresh fruits. Do you have permanent suppliers? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________
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Other (specify)
Other (specify)
Other (specify)
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain 12. Can you acquire the necessary quantities of fresh fruits for the production of dried fruits with the reasonable prices? (Specify) Yes_______________________________________________________________ No________________________________________________________________ Partly__________________________________________________________ 13. Do you have specific conditions, equipment, refrigerators for the storage of dried fruits? Equipment/Specific Quantity Type Details condition 1. 2. 14. Do you implement export of dried fruits? If yes, to which countries and with what quantities? Apricot Prune Peach Pear Apple Fig Grape Persimmon Other (specify) USA Russia Canada Ukraine EU countries 15. Are the Armenian fruits competitive? Provide details. Yes In foreign markets
No
In local market
16. Who are your main competitors? 1. ________________________________________________________________________ 2. ________________________________________________________________________ 3. ________________________________________________________________________ 17. What competitive advantages do you have over other dried fruit producers? ___________________________________________________________________________ ___________________________________________________________________________ 18. What perspectives do you see for your business and for the production of dried fruits in all? ___________________________________________________________________________ ___________________________________________________________________________
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain Armenian Dried Food Supply Chain Assessment Questionnaire Questionnaire for Processors of Dried Fruits Region` ________________________________________________________________ Address`________________________________________________________________ Name, Surname / Company, Cooperative Name________________________________ Section 1. Fruit Production 1. How much area do the orchards occupy? (sq.m.)________________ 2. What types of fruit trees do you have? How many trees do you have of each type and how much area do the trees of each fruit type occupy? Apricot Prune Peach Pear Apple Fig Grape Persimmon Other (specify) Quantity Area 3. What sorts of trees appropriate for drying do you have? Apricot Prune Peach Pear Apple Fig Grape Persimmon Other (specify) Sorts 4. How much harvest did you receive in the last 3 years annually? Approximately what amount of harvest will you have in 2012? Apricot Prune Peach Pear Apple Fig Grape Persimmon Other (specify) 2009 2010 2011 2012 5. How do you realize the harvest? Please, list the names of partners, quantities, prices for each of the realization channels. Other For the dried Sell to retailers Sell Sell to the Take to (specify) (supermarkets, directly fruit production factories the shops) markets from the field Partners Quantity/price kg AMD kg AMD © BSC Business Support Center LLC, 2012
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain
6. What part of the harvest is used for personal purposes?______________________ Section 2. Production of Dried Fruits 7. Do you go in for dried fruit production? Yes No
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain 8. If no, why don’t you go in for dried fruit production? There is problem of realization It is not profitable I do not have necessary knowledge I do not have necessary technologies, area Other 9. What technology do you use for the production of dried fruits? Solar driers Mechanical driers Other (specify) 10. Which part of the dried fruit is processed with sulfur, which part – with natural technics? (list the percentage) With sulfur (other synthetic materials) With natural way 11. How much is produced of each type of the fruits? Apricot Prune Peach Pear Apple Fig Grape Persimmon Other (specify) Quantity (kg) 12. Where is the dried production realized? Wholesale Confectionaries, Packagers Take to markets other processors Partner Quantity/price kg AMD kg AMD kg AMD 13. Do you have permanent partners? __________________________________________________________________________________ 14. Do you sign contracts in advance with the processing companies, arranging the price and quantities (provide the details with whom, in what quantities? _______________________________________________________________________________ _______________________________________________________________________________ ______________________________________________________________________________ Section 3. External Support 15. What support have you received from international organizations, the government in increasing the orchards, for making of dried fruits? Organization Project name/Contact Year/month Type of Support person
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain Armenian Dried Food Supply Chain Assessment Questionnaire Questionnaire for Wholesalers of Dried Fruits Region` ________________________________________________________________ Address`________________________________________________________________ Name, Surname / Company Name________________________________ 1. What types of dried fruits do you sell and what amount of dried fruits are sold monthly? Apricot Prune Peach Pear Apple Fig Grape Persimmon
Other (specify)
Quantity Price (purchase and sales prices) 2. The demand of which dried fruits is higher – the local or imported? Why? _______________________________________________________________________________ 3. What quantity of local and imported dried fruits do you sell (percentage)? Apricot Prune Peach Pear Apple Fig Grape Persimmon Other (specify) Armenian Imported 4. Who are the main consumers (the percentage)? Local people Tourists Diaspora Foreign customers Other Armenians 5. Who are the main big suppliers of dried fruits? Company Address Telephone Other 6. What companies importing dried fruits do you cooperate with? Company Address Telephone Other 7. What types and quality (bad, average, good, excellent) dried fruits are supplied by the importers? Apricot Prune Peach Pear Apple Fig Grape Persimmon Other (specify) Quality Price
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain 8. What advantages do the Armenian dried fruits have over the imported ones? Tastier Ecologically clean/organic Cheaper The raw materials are quality Other (specify) 9. What factors are prioritized by the consumers of dried fruits when making the purchase? Type of fruits price drying technology producing country the brand packaging 10. What quality standards are there for the dried fruits and do the Armenian dried fruits correspond to those standards (what points are corresponding, which ones – no)? _______________________________________________________________________________ _______________________________________________________________________________ ______________________________________________________________________________
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain Armenian Dried Food Supply Chain Assessment Questionnaire Questionnaire for Restaurants, Cafes Region` ________________________________________________________________ Address`________________________________________________________________ Name, Surname / Company Name________________________________ 1. What meals do you have, for the preparation of which dried fruits are used? Meal
Type of dried fruit
Quantity
2. How much is used of each type of dried fruit monthly? Apricot Prune Peach Pear Apple
Fig
Grape
Quantity Price 3. What quantities of local and imported (percentage) dried fruits do you use? Apricot Prune Peach Pear Apple Fig Grape Armenian Imported 4. Who are the main consumers of meals with dried fruits? Specify the percentage. Local people Tourists Armenians from Foreign customers Diaspora 5. Who are the main big suppliers of dried fruits? Company Address Telephone 6. With what importing countries do you work with? Company Address Telephone
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Persimmon
Persimmon
Other (specify)
Other (specify)
Other
Other
Other
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain 7. What types and quality (bad, average, good, excellent) dried fruits are supplied by the importers? Apricot Prune Peach Pear Apple Fig Grape Persimmon Other (specify) Quality Price 8. What advantages do the Armenian dried fruits have over the imported ones? Is tastier Is organic/ecologically clean Is cheaper The raw materials are quality Other (specify) 9. What quality standards are there for the dried fruits and do the Armenian dried fruits correspond to these standards (if yes, with what points, if no – with which)? _______________________________________________________________________________ _______________________________________________________________________________ _________‐_____________________________________________________________________
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain Armenian Dried Food Supply Chain Assessment Questionnaire Questionnaire for Confectionaries Address`________________________________________________________________ Name, Surname / Company Name________________________________ 1. What type of confectionary does your company produce, in which different dypes of dried fruits are used? _______________________________________________________________________________ _______________________________________________________________________________ 2. What types of Armenian dried fruits do you use in the production? In the last 3 years which Armenian companies or individual producers were the main suppliers of your company and in average what quantities were supplied and in what prices? Apricot Prune Peach Pear Apple Fig Grape Persimmon Quantity (kg) Suppliers
Price (AMD) 3. Do you use or have you ever used imported dried fruits in the production?
Yes No 4. Which types of imported dried fruits did you use, in what quantities and what prices? Apricot Prune Peach Pear Apple Fig Grape Persimmon Quantity (kg) Price (AMD) Suppliers 5. The dried fruit imported from which countries do you use in production? Iran Turkey USA UAE Moldova Georgia Other
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Other (specify)
Other (specify)
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain 6. Are there any quality standards/requirements for the dried fruits used in your production? Apricot Prune Peach Pear Apple Fig Grape Persimmon Other 7. Do the Armenian dried fruits qualify for the quality standards? Bring some details. Yes__________________________________________________________________________ __ No__________________________________________________________________________ ___ Partly_______________________________________________________________________ 8. Can the company find and acquire the necessary quantities of dried fruits in the markets? Yes No Partly Apricot Prune Peach Pear Apple Fig Grape Persimmon Other 9. Are the confectionaries produced with the dried fruits exported? If yes, in what quantities, to which countries? Type of dried fruits Country Quantity Price 10. What are the plans of the company in producing confectionaries with dried fruits? What perspectives and developments do you see in this sphere? _______________________________________________________________________________ _______________________________________________________________________________
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain Armenian Dried Food Supply Chain Assessment Questionnaire Questionnaire for Agricultural Support Regional Centers Region________________________________________________________________ Address________________________________________________________________ Contact person_______________________________________________________________________ 1. What projects were implemented in the region for the development of the dried fruit supply chain? Name of the Organization Target group Dates Project results project 2. In the frameworks of the implemented project what farmers, cooperatives, processing, packaging companies did the ASRC cooperate with? Farmer/cooperative Community/Address Telephone Additional Information Processing company Packaging company Wholesaler/retailer 3. What organizations are there in the region, which support the sphere of dried fruit production? (list several) Organization Target community Projects Contact person (implemented or current) 4. What researches were implemented, what reports were prepared by Armenian or international organizations concerning each of the members of the dried fruit value chain? Research Theme Organization Report 5. What support was given to the farmers/producers of fresh fruits by the international organizations? Provided with new nurseries Provided with pesticides Implemented trainings on plant protection, harvest care New orchards were founded Other
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain 6. What support was provided to the processors? Provided with driers Implemented trainings on the technologies of production of dried fruits New orchards were founded Other 7. In your opinion, what is the weakest part of the supply chain? Farmers/cooperatives Processors Wholesalers Other 8. How many producers of dried fruits are there in the region? How many of them are small, average and large? What are the corresponding production quantities? Quantity Volume (on average, of one producer) Small Average Large 9. List the farmers/cooperatives of the region with big orchards. Name Address/Telephone Types of orchards/area 10. List the producers of dried fruits acting in the region. Name Address/Telephone Production line 11. What quantities would form the homemade production of dried fruits in the region? _______________________________________________________________________________ 12. Do they have markets and who are the main consumers? _______________________________________________________________________________
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain Armenian Dried Food Supply Chain Assessment Questionnaire
Questionnaire for International Organizations Name of the organization________________________________________________________ Address/Phone number__________________________________________________________ Contact Person_________________________________________________________________ 13. What projects were implemented by the organization for the development of the dried fruit supply chain (name of the project, region/community, target group, timing, project results).
14. In the frameworks of the implemented project what farmers, cooperatives, processing, packaging companies did the organization cooperate with? Community/Address Telephone Additional information Farmer/cooperative Processing company Packaging company Wholesaler/retailer 15. What organizations are there in Armenia which support the sphere of dried fruit production? (list several) Organization Target region/community Projects (implemented or Contact person current)
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain 16. What researches were implemented, what reports were prepared by Armenian or international organizations concerning each of the members of the dried fruit value chain? Research Theme Organization Report 17. What support was given to the farmers/producers of fresh fruits by the international organizations? Provided with new nurseries New orchards were founded Other Provided with pesticides Implemented trainings on plant protection, harvest care 18. What support was given to the processors? Provided with driers Implemented trainings on the technologies of production of dried fruits New orchards were founded Other 19. In your opinion, what is the weakest part of the supply chain? Farmers/cooperatives Wholesalers Processors Other In your opinion, what are the main obstacles of the development of the Armenian dried fruit supply chain? Low quality of dried fruits Weak marketing High price Non‐forecastability of the harvest Limited quantity production Other 20. Which are the main advantages of Armenian dried fruit producers?: Market appearance Ecologically clean raw materials No preservatives Sweet fruits Other 21. Does the quality of Armenian dried fruits satisfy the international standards to organize exports (comments). Yes__________________________________________________________________ No____________________________________________________________________ Partly______________________________________________________________
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Assessment of the Armenian Dried Fruit and Vegetable Supply Chain 22. How many producers of dried fruits are there in Armenia? How many of them are small, average and large? What are the corresponding production quantities? Quantity Volume (on average, of one producer) Small Average Large 23. Do the processors have contracts with the farmers, cooperatives, individuals? Yes No 24. What percentage of the produced dried fruits is the homemade production? _______________________________________________________________________________ _______________________________________________________________________________
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Annex 2. List of the interviewed supply chain members Orgnization 1.
Astghounk LLC
2.
3.
S/E Vanik Karamyan
4.
Type of organization
Name of Interviewee (s)
Address
Farmer/ Producer
Mrs. Tsolvard Gevorgyan
Tel. (+374) 91-422691
Producer
Mr. Garegin Yaghubyan
Producer
Mrs. Liana Karamyan
Producer
Mrs. Aida Vardanyan
Aghtsk community, Aragatsotn region, Armenia Sasunik community, Aragatsotn region, Armenia Meghri community, Syunik region, Armenia Meghri community, Syunik region, Armenia Vayk community, Vayots Dzor region, Armenia Surenavan community, Ararat region, Armenia Vanashen community, Ararat region, Armenia Nor Kharberd community, Ararat region, Armenia Arevshat community, Ararat region, Armenia Arevshat community, Ararat region, Armenia Avshar community, Ararat region, Armenia Pokr Vedi community, Ararat region, Armenia Jrashen community, Armavir region, Armenia Jrashen community, Armavir region, Armenia Arteni community, Armavir region, Armenia Yervandashat community, Armavir region, Armenia Yervandashat community, Armavir region, Armenia Hatsik community, Armavir region, Armenia
Tel. (+374) 94-203609
5.
Vayk Group LLC
Farmer/ Producer
Mr. Ashot Zakaryan
6.
S/E Armen Manukyan
Producer
Mr. Armen Manukyan
7.
Producer
Mr. Hamlet Muradyan
8.
Producer
Mr. Vladik Babayan
9.
Producer
Mr. Stepan Hovhannisyan
10.
Farmer/ Producer
Mr. Aram Simonyan
11.
Producer
Mr. Harutyun Hovhannisyan
12.
Producer
Mr. Sisak Harutyunyan
13.
Producer
Mr. Melkon Avetisyan
14.
Producer
Mr. Levon Hambardzumyan
15.
Producer
Mr. Stepan Grigoryan
Producer
Mr. Arkadi Khachikyan
Producer
Mr. Shirak Ayvazyan
16.
17.
18.
S/E Vladimir Khachikyan
Producer
Mr. Hamlet Arshakyan
Contacts
Tel. (+374) 91-417823
Tel. (+374) 94-943210
Tel. (+374) 91-419634
Tel. (+374) 91-407088 Email :
[email protected] Website : www.armeniandriedfruit.com
Tel. (+374) 93-674434
Tel. (+374) 93-545695
Tel. (+374) 91-465714
Tel. (+374) 93-085046
Tel. (+374) 93-042368
Tel. (+374) 94-505102
Tel. (+374) 94-544421 ; 95-544421 Tel. (+374) 98-642926
Tel. (+374) 93-184755
Tel. (+374) 93-643718
Tel. (+374) 93-605215
19.
Cheer CJSC
Producer
Mr. Tigran Tsaturyan
20.
S/E Hakob Hakobyan
Producer
Mr. Garik Hakobyan
21.
Levon LLC
Producer
Mr. Davit Harutyunyan
22.
Nor Aygee LLC
Producer
Mr. Samvel Sukiasyan
23.
Tsiatsan Ani
Producer
Mr. Gagik Sirekanyan
24.
Producer
Mr. Harutyun Simonyan
25.
Producer
Mr. Ruslan Antonyan
26.
Producer
Mr. Paruyr Asatryan Mr. Yura
27.
Daroink Ltd
28.
ASA LLC
29.
Arcolad LLC
Processor/ Confectionery
Mrs. Lida
30.
Elit Shant Ltd
Processor/ Confectionery
Mr. Samvel
31.
Ararat Restaurant Moskvichka supermarket Yerevan City supermarket
Processor/ Restaurant Retailer/ Supermarket Retailer/ Supermarket
Mr. Artur
34.
Association of Dried Food Producers
35.
Small and Medium Entrepreneur. Development National Centre of RA United Nations Development Programme
Business Support Organization, NGO Business Support Organization
32. 33.
36.
37.
Federation of Agricultural Associations Union of Legal Entities
Processor/ Confectionery Processor/ Confectionery
Mr. Janik Yengoyan
Sardarapat community, Armavir region, Armenia Armavir community, Armavir region, Armenia Sardarapat community, Armavir region, Armenia Sardarapat community, Armavir region, Armenia Sardarapat community, Armavir region, Armenia Sardarapat community, Armavir region, Armenia Lchkadzor community, Tavush region, Armenia 68/4 Araratyan str., Yerevan, Armenia 86/1 Sevan str., Yerevan, Armenia 47/14, Ashtarak highway, Yerevan, Armenia 17/5 Metsarents, 0065, Yerevan, Armenia 73 Vshtuni str., 0031, Yerevan, Armenia
Tel. (+374) 93-745566, 99-745566, 10-745566, 10-567031 Tel. (+374) 93-215064
Tel. (+374) 91-437477
Tel. (+374) 91-318360
Tel. (+374) 93-777714
Tel. (+374) 93-571985 ; 98-658853 Tel. (+374) 55-910200 ; 94-910200 Tel. (+374) 91-213487 Tel. (+374) 10-447510 Tel. (+374) 94-194403
Tel. ( +374) 10-711144
Tel. (+374) 77-103303, 10-350777 Tel. (+374) 10-527933, 10-527382
Mrs. Varduhi
Mr. Sandro Abovyan
2/2, 3rd lane, Tichina str, Yerevan, Armenia 11, Davtashen 3rd district, apt. 33, Yerevan, Armenia
Tel. (+374) 55- 367333 Email:
[email protected] website: www.driedfruit.am
Mr. Andranik Veranyan
5a Mher Mkrtchyan str., 0010, Yerevan, Armenia
Tel. (+374) 10-583261, 10563714, 10-541648 Email:
[email protected] Website: www.smednc.am
International Organization
Mrs. Hripsime Manukyan
14 Petros Adamyan str., 0010, Yerevan, Armenia
Tel. (+374) 10-543427, 10566073, 91-213483 Email:
[email protected] Website: www.undp.am
Business Support Organization
Mr. Martin Yeghiazaryan
61 a Vantyan Street, 0032, Yerevan, Armenia
Tel. (+374) 10-778870, 10778807, 99-011881 Email:
[email protected]
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38.
39.
40.
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United Methodist Committee on Relief Center for Agribusiness Research and Development Tavush ASRC CJSC
Aragatsotn ASRC CJSC
International Organization
Mr. Armen Khalatyan
Business Support Organization
Mr. Sevak Manukyan
Agricultural Support Regional Centre
Mrs. Tatevik Nazaryan
5 / 12, A. Melikbekyan str., Ijevan city, Tavush region, Armenia
Tel.: (+374) 98- 21-2127, (+374) 98-21-21-29 Fax.: (+374) 263-3-39-67 Email:
[email protected] website: http://www.tavush.agro.a m/index.php?id=1494
Agricultural Support Regional Centre
Mr. Khoren Mkrtchyan
4 Vardges Petrosyan str., Ashtarak city, Aragatsotn region, Armenia
Tel./fax : (+374) 232- 310-32, website: http://www.aragatsotn.agr o.am/index.php?id=1528
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Annex 3. Compliance with EU Buyer-Requirements for Dried Fruit and Vegetables
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