Dairy value chain13

NATIONAL DAIRY DEVELOPMENT BOARD OF MONGOLIA

DAIRY VALUE CHAIN B. MUNKHJARGAL, EXECUTIVE MANAGER

Ulaanbaatar 12-Apr-2016

DAIRY SECTOR OF MONGOLIA

35.3

1000 34

900 36.8

36.9

800

28

55.4

588

33.8

765.4

667

803.4

529.9

300 200

70.5

72.8

600

400

71.1

63.9

700

500

46.1

338.4

100 0 2010

2011

2012

2013

2014

Import, million litres Milk received and processed by dairies, million litres Milk production by agriculture, million litres

2015

VALUE CHAIN MAP AND DESCRIPTION OF STAKEHOLDERS URBAN CONSUMERS

RURAL CONSUMERS

IMPORTERS

RETAILING WHOLESALING

OPEN MARKET RETAILERS

SMALL GROCERIES AND RESTAURANTS

SCHOOLS

RAW MILK BROKERS

Heat treatment PROCESSING PASTEURIZING

CHAIN of SUPERMARKETS

LARGE/ MEDIUM DAIRY PROCESSORS

TRAINING

SMALL DAIRY PROCESSORS

TRANSPORTING COOLING COLLECTION FARMER, HERDER GROUPS (incl cooperatives)

PRODUCTION

SMALLHOLDER FARMERS <20 COWS

GENE BANK

Channel 1; Raw milk

MEDIUM FARMERS (20 â&#x20AC;&#x201C; 50 COWS) )

PRIVATE VETERINARIANS / INSEMINATORS (20)

Channel 2; traditional dairy products

LARGE DAIRY FARMS >50 COWS FEED SUPPLIERS

Channel 3; Pasteurized milk and

FINACIAL INSTITUTI ONS IMPORTERDISTRIBUTORS OF EQUIPMENTS

Channel 4; Dairy products

BANKS

PARTNERSHIP IN DAIRY VALUE CHAIN • Milk producers: 153000 herder households • Smallholder dairy farmers : have own trade links 1 • Medium-and large-scale farmers : more organized, dairy farms combined with crop production

2

PARTICIPANTS OF DAIRY VALUE CHAIN

• Raw Milk Changers : approx.100 changers deal with milk collection, cooling and ransportation

• Dairy processors: Milk collection and cooling, transportation, receiving, 3 processing and marketing of finished dairy products

Support markets: Bank: Feed suppliers: concentrates, silages, mineral based feed, rude feed 4 Veterinary services: approx 700 private veterinary service provides: animal health, training, inspection, diagnose, treatment, disease prevention Gene bank: National gene bank , breeding services, artificial insemination, technicians services Equipment suppliers: Dairy farming, processing and packaging equipment Training: 5 Consumers: rural and urban consumers

DAIRY VALUE CHAIN ASSESMENT improvement of dairy chain:

• Determining the constraints • Market analysis of domestic dairy products • Impact of the dairy business in income of individual stakeholders SOME POSITIVE CHANGES among the stakeholders • Consumers education on difference between recombined and fresh milk is improved • Tendency to reduce seasonal character of milk supply • Competitiveness of locally produced milk is increased due to Mongolian Currency fall and world milk powder price increase • Steady increase of domestic milk sector due to favorable policy and strategies: Chinggis Bond, huge investment in dairy industry by bigger national companies • Competition among domestic producers

CONSTRAINTS AND MARKET-BASED SOLUTIONS VALUE CHAIN CONSTRAINTS FOR MILK PRODUCERS FINANCIAL

TECHNOLOGY

INPUT SUPPLY

MANAGEMENT

LOW EFFICIENCY

ENERGY INSUFFICIENT

LOW PRODUCTIVITY

IMPLEMENTED GAP, GHP

REVENUE IRREGULAR

NOT ENOUGH COOLING AND MILKING EQUIPMENT

BREEDING DISSATISFIED

NOT ENOUGH COOLING AND MILKING EQUIPMENT

MECHANIZATION UNACCEPTABLE

FODDER SHORTAGE

LOAN FACILITIES

MILK COOLING CENTER CONSTRUCTION

IMPORT DAIRY COWS

LOAN GUARANTEE

STANDARDS

REVENUES EVIDENCE AVAILABLE

NOT ENOUGH TRUCKs

MARKET-BASED SOLUTIONS

FINANCIAL TRAINING

BREEDING TRAINING

RAISING PRICES FEEDING CLUSTERS MECHANIZATION

TRAINING AND EXTENSION GAP AND GHP

COOPERATION

CONSTRAINTS AND MARKET-BASED SOLUTIONS VALUE CHAIN CONSTRAINTS FOR DAIRY PROCESSORS FINANCIAL

TECHNOLOGY

INPUT SUPPLY

MANAGEMENT

FINANCIAL SHORTCOMINGS

OUTDATED EQUIPMENTS

RAW MILK PRICE GROWTH

INTRODUCING GMP, GHP

INVESTMENT LOAN

RAW MILK QUALITY NOT FIXED

DAIRY PERSONNEL

COMPETITIVE POOR

SALES REPAYMENT

PACKAGING

SEASONAL SUPPLY OF RAW MILK

ADVERTISING

TRANSPORTATION SHORTCOMINGS

ENGINEERING HIGH PRICE

COMMERCIAL CLUSTERS DEVELOPED

BUSINESS AND INVESTMENT ENVIRONMENT

RAW MILK QUALITYS STABILIZE

COST REDUCTION

EXTENSION GMP AND GHP

LOAN GUARANTEE

TECHNOLOGICAL RENOVATION

IMPORT-SUBSTITUTING PRODUCTS

ADVERTISING

TECHNOLOGY LIQUIDITY

ADVANCED TRAINING

BUSINESS AND INVESTMENT ENVIRONMENT

EXTENSION GMP AND GHP

COOPERATION

MARKET-BASED SOLUTIONS

DAIRY CLUSTER

Basic infrastructure

Soft infrastructure

THANK YOU FOR YOUR ATTENTION