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Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
Tanzania Cluster Competitiveness Program
Horticulture Strategy DevelopmentBackground Document
December 2009
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
• Cluster Competitiveness Project Overview
• Competitiveness Concepts and Principles
• Components of Strategic Thinking
• Export Benchmarking and Market Trends
Agenda
2
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
The Cluster Competitiveness Program (CCP)
Tanzania Private Sector Foundation (TPSF)
CCPBus Dev Gateway Matching Grants Pr
3 year technical assistance program
in 6 industries
International consulting, training & policy expertise to improve competitiveness in select industries
C/VC 6
C/VC 5C/VC 4C/VC 3
C/VC 2
C/VC 1
Year 1 start – first 3 industry clusters / value chains
Year 2 add – second 3 industry clusters / value chains
BEST – AC
Private Sector Competitiveness Project (PSCP)
3
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program 44
CCP Outcomes
Outcome 1: Improved value chains and clusters• New linkages to domestic & int’l suppliers & customers • Adoption of int’l quality standards • Productivity training – new technology and/or methods
Outcome 2: Enhanced local competitiveness capacity• Associations -- QA stds certification, cluster promotion • Universities/trng institutes – professional devlpmnt courses• BDS providers -- QA stds consulting, export mktg, new tech
Outcome 3 – Accelerated pace of regulatory improvements• Policy research by industry experts • Building advocacy capacity in associations • Catalyzing stakeholders through PPP meetings and training
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program 5
Five CCP Program ComponentsMAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR
1 – Conduct competitiveness diagnostics & assessments
2 – Identify three target
clusters
3 – Craft cluster strategies
4 – Implement cluster strategies
5 – Build capacity to sustain cluster initiatives
Prog start
TL Mobilz
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
• National Competitiveness Assessment – review business environment using World Bank DBR and WEF GCR indices– first step to gage a country’s state of competitiveness– solid macroeconomic growth, about average for peers– difficult business environment, e.g., licensing
• Cluster & Value Chain Assessment – a detailed review of eight clusters for possible program participation
Component 1 – Conduct Competitiveness Diagnostics & Assessments
6
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
Fishing /Fish Products
Transport/Logistics
Tourism
Dairy Meat
Livestock
Footwear
Textiles / Apparel
Sisal
Maize
Oilseeds
TeaCoffee
Furniture
Spices
Health
Music / Entertainment
Tobacco
Finance ConstructionMaterials
Construction
Cassava
Gems & Jewelry
Cashew Nuts
Pyrethrum
Sugar
PotatoesPulses
PaddyBananaMillets
Sorghum
Wheat
Cotton
Forestry Handicraft
Metalworks
FoodProcessing
Seaweed
Horticulture
Pharma
Precious Stones/Metals
Iron & Steel
Wood Products
Mining
Telecom
Pulp and Paper
Packaging
Chem, Plastic, Rubber
Mapping the Economy - Illustrative
7
Hides & Skins
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program 8
• Horticulture• Food Processing• Tourism• Tea• Livestock – Beef, Dairy• Fishing• Textiles and Apparel• Transport/Logistics
• Staple Crops• Horticulture / Food
Processing• Coffee• Cotton• Tea• Oilseeds• Livestock: Meat, Dairy• Spices• Cashew Nuts• Engineering/Machinery• Tourism• Transport/Logistics• Footwear• Textiles and Apparel• Furniture• Construction Materials• Chemicals/Pharmaceuticals• Fishing / Fish Products• Wood Products• Gems & Jewelry
SCALE OF
IMPACTLEADERSHIP
COMPETITIVE GROWTH
POTENTIAL
Clusters & Value Chain Assessment – the Process
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program 9
Cluster & VC Assessment Data Gathering – 8 Clusters
Interviews with over 250 stakeholders nationwide over an 8 week period
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
Cluster & Value Chain Assessment
For the selected 8 clusters we looked at:
• Industry Structure• Value Chain Productivity• Access to Markets • General Business Environment• Constraints (not addressed in Business Environment)• Opportunities to Improve Competitiveness
10
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
Additional considerations in selecting three clusters
• Presence of other donors – resources committed• Donor fatigue• Types of recent donor activity
– narrowly focused by subsector (fruit processing), product (bottled juices) or function (new production technology)
– or… overarching and looking at the interaction between entire industry value chains and extended clusters -- and how to improve them
The three selected clusters are not over-resourced and little if any strategic and overarching work has been done in them
11
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
Component 2 – Identify Three Target Clusters (from Eight)
Based on the Cluster & VC Assessment – selected:
• Horticulture – important in TZ economy (>300,000 employ), good leadership & assoc to work with, positive growth trends, possible interventions in productivity, quality stds, marketing/dist
• Tourism – 30% of exports & 10% of economy, some of best assets in Africa, strong leadership & assocs, possible interven-tions in branding, promotion, customer service, quality stds
• Food Processing – excellent cross cutting for horticulture, fishing, meat, dairy, important for food security, critical for export growth, interventions in quality stds, packaging, mktg/dist
12
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program 1313
Key Constraints in the Horticulture Value Chain
No cold storage at key points, e.g
airport
Inputs Farmers Exporters
Limited finance for farmers
Poor irrigation and land management
Business environment blocking new investments in
the industry Certification and standards for export
difficult to meet
Handling issues damage products in
transit
Limited access to skilled labor and technology
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program 14
Horticulture: Emerging Priority Interventions
• National Horticulture Strategy
• Strengthen and expand cold chain
• Establish more laboratory facilities
• Support farm-level capacities through extension services, model farms
• Establish pack houses close to major farms and at export points with cold facilities
• Access to finance at farm level matched with technical support
• ID which products into which markets are best for competitive growth –matched with technical support
• Business planning and management capacity building for farmers and processors
• Water management techniques training for farmers
• Strengthen link with food processors and high value customers in Tanzania
• Develop horticulture statistics – map Tanzania’s regions and capacities
• Capacity-building with farmers -negotiating and contracting
• Build capacity with associations –lobbying and information provision
• Establish National Code of Conduct for Horticulture/Benchmark of International Standards
• Adopt better technology and standards for processors
• Improve government support capacity to smallholder farmers
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
Cluster Linkages
Horticulture Food Processing
Demand creationSupply chain mngt
Standards and Certifications
Tourism and Hospitality
15
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program 16
CCP Activity Examples
• Product Enhancements
• Regulatory Improvements
• Improved Marketing
• Value chain Improvements
• Product Differentiation
• Branding
• Adopt new quality standards
• Association capacity devlpmnt to deliver advocacy platforms
• Industry experts for promo / packaging / labeling & export dev
• Link new customers & suppliers, co-fund infrastructure
• Industry experts for trends in new product /svc lines & upgrades
• Branding theme development, co-fund int’l cluster promotion
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
• Cluster Competitiveness Project Overview
• Competitiveness Concepts and Principles
• Components of Strategic Thinking
• Export Benchmarking and Market Trends
Agenda
17
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program 18
Sectors, Clusters & Value Chains
Definitions:
• Sectors: a broad description of an industry group such as tourism, textiles or horticulture. Sectors typically include within them:
– Clusters: a group of companies and institutions working in a common industry sector, often benefiting from being located in the same geographic region
– Value Chains: the full range of companies/activities required to bring a specific product or service to market, from sourcing raw materials to production, processing, sales and finally distribution
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program 19
Value Chain Example: Pakistan Dairy
19
Farmer
GawalaDelivery
ProcessorsCold Chain
MinimumPasteurization
Value Added Products*
UnpackedMilk
Middle Man
* Processed milk, Ice Cream, Cheese, Yogurt/Yogurt drinks etc.
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program 20
Cluster Example: California Wine
Educational, Research, & Trade Organizations (e.g. Wine Institute,
UC Davis, Culinary Institutes)
Growers/Vineyards
Sources: California Wine Institute, Internet search, California State Legislature. Based on research by Michael E Porter and MBA 1997 students R. Alexander, R. Arney, N. Black, E. Frost, and A. Shivananda.
Wineries/ProcessingFacilities
Grapestock
Fertilizer, Pesticides, Herbicides
Grape Harvesting Equipment
Irrigation Technology
Winemaking Equipment
Barrels
Labels
Bottles
Caps and Corks
Public Relations and Advertising
Specialized Publications (e.g., Wine Spectator, Trade
Journal)
Food Cluster
Tourism ClusterCalifornia Agricultural Cluster
State Government Agencies(e.g., Select Committee on Wine
Production and Economy)
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program 21
What is competitiveness?
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program 22
• Abundant Natural Resources
• Cheap Labor
• Cheap Currency
• Great Location
• Better Government “Incentives”
Competitiveness is NOT just …
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program 23
• Better products and services (unique and higher quality) that command higher prices on the market
• Investment in skilled labor force leading to higher wages
• Higher productivity inputs at a lower cost
• Better market information
• Expanded access to markets
• Continuously improving business performance
Competitiveness is …
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program 24
Competitive WinnersCompetitive Winners
Companies Companies Falling BehindFalling Behind
Operational Productivity
GoodGood
PoorPoor
PoorPoor GoodGood
StrategicProductivity
Productivity Productivity FrontierFrontier
Firm: Good Strategy and Good Operations
Source: Monitor Co.
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program 25
Strategic and Operational Productivity
• New and better products• Supporting services that adds
value• Forward integrating• Target markets
• Lower costs• Increased quality• More efficient technology• Improved management
processes• Faster route-to-market
Strategic ProductivityOperational Productivity
Choose to run a different raceRun the same race faster
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program 26
Characteristics of Competitive Industries
• Customer focused – do research to understand needs• Forward integrated – control more processing & distrib• Innovative – regularly upgrade/offer new products &
services• Obsessed with Quality – better inputs, production &
management processes• Cooperative – with others related to their industry• Market savvy – understand their competitive position• Collaborative – work with government to solve problems• Flexible – Use new strategies to reposition themselves
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program 27
A New Model for Competing…
Strategically positioning the Tanzanian horticulture requires:– In-depth understanding of the market and specific segments– Efficient management from ALL providers of products/services– Input and collaboration from all key inputs into horticulture
value chain, not just the exporters
In today’s global economy, companies do not compete against other companies; value chains compete against value chains.
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
PRODUCERS
WHOLSALERS
EXPORTERS
BROKERS
PROCESSORS
RETAILERS
CONSUMERS
IMPORTERS
Source: Grahame Dixie
Marketing Channels, Past
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
PRODUCERS
Source: Grahame Dixie
Marketing Channels, Now/Future
CONSUMERS
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
Marketing Channels, Past and Present
• Multiple business links in the marketing chain (up to 6), creating high transaction costs
• Multiple small-scale sales/deals• Numerous small specialist
companies• Relatively low volumes of trade• Relatively high commodity prices• Power with the bigger companies
in importing, processing, wholesaling
• Much fewer links/businesses in the marketing chain (2-4)
• Fewer, larger, more professional businesses, including export farms
• More added-value/processing in exporting countries
• Greater volume of trade, lower prices & transaction costs
• Backward & forward vertical integration
• Huge retail chains dominate the marketing chain & hold most of the profit
Source: Adapted from Grahame Dixie
Now1970s – 1980s
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
Sophisticated World Markets
Repositioning Industries for Emerging Opportunities
WTO, HACCP, EUREGAP, “ISO”, other Market Standards
Low Cost, Low Value Trap
Floor
CeilingUnderstanding the market demand
(Global and Regional)
Supplying valuable products and services
Building Competitiveness in Export MarketsPenetrating and competing on world markets requires firms to understand the market
demand and supplying products with unique value to the market
Obtaining international standards is only the beginning of achieving competitiveness on international markets
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
• Cluster Competitiveness Project Overview
• Competitiveness Concepts and Principles
• Components of Strategic Thinking
• Export Benchmarking and Market Trends
Agenda
32
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program 33
What do we What do we need?need?
Growth Markets and Growth Markets and Trends in Trends in
Horticulture?Horticulture?
What to offer, where What to offer, where and who to serve?and who to serve?
Which markets?
What trends?
Which competitors?
Target markets?
Which customers?
What products, now and future?
At what price?
Investment
Access to Markets
Coordination
Skills and capabilities
Policy / regulations
Becoming Competitive
Building a Strategy for Horticulture
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
Strategy
34
Source: Adapted from Michael Porter, 2004
• Aspirations and Vision
• Value chain productivity
• A marketing campaign
• Investment incentives
• Best practice improvement
• Agility and Flexibility
• Innovation
• The internet or any technology
• Integration
• Alliances and partnering
• A unique, valuable product versus competitors
• A different, customized position on the market
• Clear, informed trade-offs, choosing what NOT to do
• Activities that fit together and reinforce each other
• Continuity of position with continual and consistent progress
A Strategy is NOT just…A Strategy is…
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program 35
• Market-oriented
• Private-sector driven
• Representative of all actors
• Informed by the latest data and information
• Ambitious, but honest and transparent
• Actionable and accountable
Principles for Strategy Development
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program 36
Developing a Strategy
Assessing the Potential
Market Opportunities
Production Possibilities
Geographic Locations
Economic Value
Social Impact
Time, phasingand feasibility
Leadership
Investment
Collective Will& Action
Environmental Sustainability
Building Capacity
Prioritizing the Development
Expand HorticultureNetworks
Mobilizing the Resources
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program 37
Components of a Strategic Agenda
Productivity Enhancements
Market and ProductDevelopment
Industry Standards
Workforce Development
Industry Organization and Supporting Institutions
Regulatory Reforms
Financing
Infrastructure and Logistics
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
• Cluster Competitiveness Project Overview
• Competitiveness Concepts and Principles
• Components of Strategic Thinking
• Export Benchmarking and Market Trends
Agenda
38
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
Horticulture Exports
Source: TradeMap, 2009
While exports of trees, plants, and flowers have increased in Tanzania over the past few years, other countries (including Kenya and Ethiopia) have shown consistent steady growth since 2004.
273,336 283,898
358,939
442,149
584,684
TZ=14,302
TZ=15,759
TZ=11,422
TZ=24,638
TZ=48,628
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
2004 2005 2006 2007 2008
KenyaSouth Africa
EthiopiaThailand
ChileTanzaniaGhana
USD $ 000sExports of live trees, plants, cut flowers etc
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
Horticulture Exports
Source: TradeMap, 2009
Tanzania’s exports of trees and cut flowers doubled in 2007 and in 2008.
TZ Exports of live trees, plants, cut flowers
14,302 15,759
11,422
24,638
48,628
-
10,000
20,000
30,000
40,000
50,000
60,000
2004 2005 2006 2007 2008
USD $ 000s
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
Horticulture Exports
Source: TradeMap, 2009
An examination of vegetable exports tells a similar story. The primary exporters of vegetables (such as Kenya and Ethiopia, as well as Thailand), have shown steady growth since 2004. However, Tanzania has narrowed the gap over the past two years, surpassing South Africa.
Exports of Vegetables, 000s $
KY65,787 99,617
150,136
198,069
225,908
TZ=18,965 TZ=
36,115TZ=23,571
54,642
78,554
-
50,000
100,000
150,000
200,000
250,000
300,000
2004 2005 2006 2007 2008
Thailand
Kenya
Ethiopia
Chile
Tanzania
South Africa
Ghana
USD $ 000s
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
Horticulture Exports
Source: TradeMap, 2009
Tanzania’s vegetable exports have more than tripled in the past two years.
TZ Exports of Vegetables
18,965
36,115
23,571
54,642
78,554
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
2004 2005 2006 2007 2008
USD $ 000s
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
Horticulture Exports
Source: TradeMap, 2009
Chile dominates comparator countries in fruit exports. It is interesting to note that Chile doubled exports from 2007 to 2008; while exports from African countries were flat. This may be attributable to the free trade agreement Chile signed with the US.
Exports of Fruits, citrus fruit, melons
1,737,152 1,864,3482,166,708
2,470,956
TZ=838
TZ=797
TZ=769
TZ=832
TZ=679
4,518,652
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
5,000,000
2004 2005 2006 2007 2008
Chile
South Africa
Thailand
Kenya
Ghana
Ethiopia
Tanzania
USD $ 000s
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
Horticulture Exports
Source: TradeMap, 2009
A closer examination shows that Tanzania’s fruit exports have declined slightly since 2004 from a fairly low base. Ghana has shown a steep decline in the same period of time and has been replaced by Kenya as the regional leader.
Exports of Fruits, citrus fruit, melons
1,147,927 1,181,8771,114,719
1,437,7281,541,138
KY= 17,057
KY=17,530
KY=21,253
KY=21,297
KY=26,626
TZ=838 TZ=797 TZ=769 TZ=832 TZ=679-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
2004 2005 2006 2007 2008
South Africa
Thailand
Kenya
Tanzania
USD $ 000s
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
Horticulture Exports
Source: TradeMap, 2009
Tanzanian spice exports jumped from 2007 to 2008 after several years of flat growth and rivals South Africa for the regional lead.
Exports of Spices
14,91217,151
16,058
38,712
10,806
9,580
8,9069,272
18,037
3,919
6,843 6,6158,802
35,700
1,990
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
2004 2005 2006 2007 2008
Thailand
Chile
South Africa
Tanzania
Ethiopia
Kenya
USD $ 000s
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
Key Market Trends in Horticulture: Consumer Side
• Increased demand for fresh produce, especially as an alternative to processed fruits and vegetables; largely driven by health concerns
• Food safety being given increased attention; has ramifications for certification and traceability (origin ie halal, vegetarian, or non-GMO) and certified production processes (HACCP, GAP)
• Convenience at a premium, but must be balanced with health concerns; may have an impact on fruits, increasing demand for ready-to-eat (apples, pears, and bananas) vs. citrus fruits, which must be peeled
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
Key Market Trends in Horticulture: Consumer Side
• Increased consumer power includes demand to know where a product comes from, how it was grown, and health/nutritional properties
• Growing urbanization in South Asia leading to lower grain consumption and more consumption of fruits/ vegetables
• Due to high levels of vegetarianism (64% of South Asian are Hindu and do not eat meat) consumers turning to fruits and vegetables more than toward meat
• Consumers care more about environmental sustainability in purchase decisions; may have impact on exports as consumers turn toward locally grown food, but organic foods to benefit
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
Key Market Trends in Horticulture: Organic
• Production arrangements/contracts between producers & restaurants
• Retail chains (in the West) dedicated exclusively to organics
• Food service industry increasingly offering organic alternatives
• Major grocery retailers increasing space for organic products
• Large conventional food processors developing organic versions of
name-brand products
• Organic selection of fresh and ready products (ie bagged salads)
• Organic consumer demographics diversifying; no longer being
defined by one single ethnic group or segment of the population
• Retailers/processors sourcing organic product outside North America
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
Key Trends in Horticulture: Retail Side
• Streamlined supply chains, with decline in share of wholesalers relative to retailers
• Wholesalers increasingly being bypassed in response to a growing demand for specialized and value-added products
• Increase in the variety of produce and the number of branded products offered at retail
• Increase in the sales of fresh-cut fruit, despite higher price point (which remains an obstacle for some); for example, fresh-cut produce sales in the US increased from $8.9 billion to $15.5 billion between 2003 and 2007
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
Key Trends in Horticulture: Retail Side
• Closer relationships developing between producers/suppliers and the retail buyer than ever before; producers and suppliers playing an active role in improving category profitability, not just providing product
• Producers and suppliers providing services such as returnable cartons, automatic inventory replenishment programs
• Producers/suppliers joining to increase market presence
• Emergence of large distributors serving retail grocery and food service segments
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
Key Trends in Horticulture: Retail Side
• Increasing importance of food away from home sector (such as restaurants and hotels), which is a growth market because people still want healthy meals even though they are eating out
• More shippers are marketing directly to the consumer (ie via websites)
• Key trends in packing include semi-prepared fruits and vegetables, quantity standardization, and pre-packs
• Arguably the most important standard for African exporters of fruits and vegetables is EurepGAP because of the importance of Europe as a market
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
• Green Beans• Baby Corn• Broccoli• Baby Carrots• Snow Peas• Green Peas• Peppers• Amaranth• Pumpkin• Cassava Leaves
Vegetables• Apples• Berries• Jack Fruit• Mangoes• Oranges• Papaya• Pawpaw• Passion Fruit• Pears• Pineapple• Plums
Fruits
• Roses• Chrysanthemum• Cuttings• Other ornamentals
Cut Flowers and Ornamental Plants
• Cardamom• Cinnamon• Clove• Nutmeg• Vanilla• Herbal Medicines• Macademia Nuts
Spices, Herbs and Nuts
Figure 1. Example Horticulture Products in Tanzania
• Chili Peppers• Asparagus• Snap Peas• Tomatoes• Onions• Cabbages• Nightshade• Okra
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
Fresh
Horticulture crops can be transformed in many ways…
Processed Packed
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
Local
Regional Export
… and marketed profitably in various markets
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
Promote Horticulture in Tanzania
Expand Long-term Financing & Investment
Mobilize Human Resources
Strengthen Industry Linkages
Address Land, Policy & Infrastructure Bottlenecks
Expand Production Base & Improve Quality
Figure 5. Growth Strategy for Horticulture
Support Market Development
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
Tanzania HorticultureCompetitiveness Agenda
69,092,226
74,290,203
86,716,351
97,540,611
107,153,790118,008,935
137,193,413
153,358,067
0.0%2.0%4.0%6.0%8.0%
10.0%12.0%14.0%16.0%18.0%20.0%
1998 2000 2002 2004 2006 2008 2010
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
Tanzania HorticultureCompetitiveness Agenda
$ USD 69 billion $ USD 153 billion
2001 2008
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
Tanzania HorticultureCompetitiveness Agenda
Access to Land
Irrigation Financing
Risk to Farmer
+ +
Farm Production Pressure Points
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
Cluster Linkages
Irrigation & Fertilizer Financing
Access to Land
59
Good AgriculturePractices
Figure 7. Expanding Production and Improving Quality
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program60
21
4
6
2.1
-
5
10
15
20
25
Solid Formulation (tons) Liquid Formulation(million litres)
Volume
Demand
Availability
Source: Salum Shamte, Kilimo Kwanza Key Elements, TNBC, 2010
Agricultural Chemicals in Tanzania
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
Land Access
Water Access
FinanceAccess
Good AgricPractice
Cold Chain
Quality Control
MarketIntel
Reaching Scale
Route – to –Market
Farmer Field Schools
Model Farms
Testing Laboratories
Market Service Centers
Pack Houses
Export Market Linkages
Market Intelligence
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program 6262
Figure 9. Transforming the Horticulture Value Chain
Cold storage at key distribution points,
(e.g airport)
Inputs
Expanded finance for
farmers
Farmer Field
Schools
Model Farms
Pack Houses
Farmer Market Centers
Certified Nurseries / Fertilizers
On-farm Packing / Transport Market
Tanzania Cluster Competitiveness ProgramCluster Competitiveness ProgramSource: map from http://eusoils.jrc.it/esdb_archive/EuDASM/africa/maps/afr_tz2001_to.htm
Assets
Northern highlands (Arusha/Kilimanjaro)• Ideal for full range of
European flowers, cuttings, vegetables, fruits and seeds
• More then 30 flower and vegetable farms already exporting to Europe
Central plateau (Morogoro/Dodoma)• Suitable for tropical fruit
(passion fruit, mangos) as well as flowers
• Advanced plans by consortium of 16 Dutch flower farmers to set up farms
Coast Zone (Tanga/Pwani)• Citrus fruit and tropical fruit• Dutch group developing
passion fruit frozen concentrate operationMbeya
• Citrus fruit and tropical fruit• Association of mango farmers
exporting to AsiaSouthern highlands (Iringa)• Ideal for full range of
European flowers, cuttings, vegetables, fruits and seeds
• Traditional fruit growing area• Largely undeveloped; export
potential with opening of new airport
Tanzania Cluster Competitiveness ProgramCluster Competitiveness ProgramSource: map from http://eusoils.jrc.it/esdb_archive/EuDASM/africa/maps/afr_tz2001_to.htm
Assets
Mwanza
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program
Geographic Concentration of Manufacturing Industries
22
Dar es Salaam
Furniture, others
Building Materials
Chem, Plstc, Rubber
Paper & Publishing
Timber & Wood
Leather & Footwear
Textile & Garments
Food, Bev, & Tob
Metal & Allied
Machinery & Electric
= 1 firm
= 10 firms
Scale
= 20 firms
65
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program 66
Note: 2010 figure based on 2008 exports figures from UNComtrade with modest annual growth assumption of 10% in 2010.Growth projections from 2010 to 2020 based on an average annual growth rate of 25%
150 185
1,850
-
500
1,000
1,500
2,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Figure 4. Tanzania Horticulture Export Potential
USD $ Millions
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program 67
4562
45
89
146
-20406080
100120140160
2004 2005 2006 2007 2008
Figure 2. Tanzania Horticulture Export Performance
USD $ Millions
Source: UNComtrade Data, 2010
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program 68
Horticultural Exports, USD$ millions
668 (KY)
537 (KY)
405 (KY) 358 (KY)
846 (KY)
45 (TZ) 62 (TZ) 45 (TZ) 89 (TZ)
146 (TZ)
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2004 2005 2006 2007 2008
South Africa
Kenya
Ethiopia
Tanzania
Ghana
Source: UN Comtrade Data, CCP Analysis, based on horticulture segments outlined above
Tanzania Cluster Competitiveness ProgramCluster Competitiveness Program 69
Ethiopia Horticulture Exports
4666
104
203
348
-
50
100
150
200
250
300
350
400
2004 2005 2006 2007 2008
USD $ million