Transcript Document

Creating a reliable
supply chain
Mykola Hrytsenko
17 March 2011, Kyiv
The formation of civilized transparent channels of
promotion of agricultural products from producer to
final consumer on advantageous conditions for all
participants remains one of the most urgent problems in
Ukraine.
Today, non-transparent schemes of sale of agricultural
products and lack of wholesale structures create
preconditions for large price fluctuations in the
agricultural market and predetermine additional costs for
producers, processors and customers.
Problem

Small-scale production;
 Lack of primary marketing
organisations;
 Lack of logistics facilities
Problems of agricultural markets
RETAIL BUYERS
RETAIL
MARKETS
SHOPS
NATURAL
TRADE
PROCESSING
ENTERPRISES
PUBLIC
CATERING
FREE LANCE
MEDIATOR
SMALL PEASANT FARMS
18.07.2015
CLOSED
INSTITUTIONS
PRIVATE (FAMILY)
FARMS
AGRICULTURAL
ENTERPRISES
Segmentation of marketing channels for
individual sale;
vegetable
export; and
3,2 %melon produce
2%
from field;
61,5 %
remain on
fields; 29,5 %
Wholesale
markets; 3,8%
from field
remain on fields
export
wholesale markets
individual sale
Corporate relationships with agricultural
cooperation partners
Marketing cooperatives
Agricultural enterprises
Rayon
cooperative market
Private (family) farms
and PPH
Ag produce purchasing
centres, marketing
groups
Agricultural
Wholesale Market
Producers
Consumers
Retail trading
Special
establishments and
institutions
Catering
establishments
Other consumer
groups
Private commercial
business
Processing
enterprises
Loss of produce in supply chain
Ukraine
the Netherlands
Producers
Sale
30 - 35 %
10 %
15 – 20 %
5%
Consumers
Total loss
25 – 30 %
~ 65 %
10 – 15 %
~ 35 %
Agro-logistics:
Current status in Ukraine
Positive:
•Quality and quantity of
productive land
•Proximity to the European, CIS
and Central Asian markets
•Relatively cheap and available
labour force
•Growth of chain leaders
(Danone, Chumak, Sandora et
al.)
•Potential for significant yield
increase
•Various possibilities to increase
off-season prices
Negative:
•Inadequate attention to markets
and value-added
•Lack of post-harvest processing
technology
•Farm structure
•Research and advisory service
•Lack of funds
•Communications / networks and
information
•Basic infrastructure
•Permissions
•Public-private partnership
•Bureaucracy /corruption / law
•International image of Ukraine
Agro-logistics:
Opportunities and perspectives
in Ukraine
Building supply chains: attention focusing; improving capabilities;
knowledge about changes and trends in supply chains and markets;
use of chain leaders.
Improving chain competitiveness: continuous improvement of chains
at every level; cooperation; goal setting; use of appropriate
technology
The development of international chains: finding contacts
(networking); building trust; development of commitment; use of
international standards and best practices; long-run work
Improving supply chain management: focus on standards and
enforcement; planning and control (costs and logistics / tracking);
use of supply chain management
Agro-logistics:
Opportunities and perspectives in Ukraine
Role of Government: A clear and favourable policy (stable and longterm;) attention to "value-added chains“; development of
communications, transport infrastructure; attracting investment; law
enforcement; ensuring fair competition among participants; adoption
of the Commercial Code (title / transparent and streamlined
proceedings of dispute resolution)
Public-Private Partnership: Developing PPP and promoting
international best practices; focus on clear results and strategic
interests (mutual commitment); open platform for public-private
information sharing; promotion of Ukrainian food
Institutionalization and awareness: Seminars / workshops on certain
chains; special studies and advisory service
Experts estimate the amount of investment
required to replace old storage facilities
at USD2 billion

modern cold vegetable stores at private farm level (and prerefrigeration storage facilities);

rooms equipped with climate control systems for the storage of
fruits on large specialized farms;

modern warehouses near major cities that function as centres
of distribution and provide services to wholesale dealers,
importers and retailers.