12/27/2013

1

Global Agricultural Supply ChainIs it ready to feed 9 billion by 2050

Presented to: Saudi Food Forum

December 8-10th December 2013

Global Agricultural Supply Chain

Mission1. What is Food Security & why does the GCC need it

2. Strategic Local & Overseas Reserves

3. Infrastructure and Logistics

4. Farming Technology, Science and Food Innovation

5. Are Green Policies creating sustainability

6. Food Security Challenges and Policies

7. Global and Regional Strategies- Al Dahra View

8. Summary

12/27/2013

2

Definitions of Food Security

Mission1. “Access by all people at all times to enough food for an active, healthy life." (World Bank)

2. "All people at all times have both physical and economic access to the basic food they need." (FAO Committee on World Food Security)

3. "Access by all people at all times to sufficient food and nutrition for a healthy and productive life." (The Agricultural Trade Development and Assistance Act of 1990 {P.L.480})

4. “When all people at all times have access to sufficient food to meet their dietary needs for a productive and healthy life." (USAID Bureau for Africa, 1986)

5. According to Abu Dhabi Food Control Authority food security is “Access to safe and nutritious food for all UAE citizens and residents in all-foreseeable circumstances including emergencies” ADFCA, 2009

‹#›

12/27/2013

3

5

Ratio of Arable Land to Population is decreasing. In 1960 4.3 hectares per person,

in 2020 it will be 1.8 hectares.

Reduction of available farming land, current world average is 37.7% but in Mena

region it is only 23.12%

Water scarcity- demand for fresh water has tripled over the last 50 years as

population has grown.

Agriculture accounts for 71% of all global water use. This equates to 3,100 billion

cubic meters.

In developing nations agriculture can account for over 90% of all water usage.

It is estimated by 2030 that 3.9 billion (47%) of world population will be living under

severe water stress. This will affect Sub-Saharan Africa, Asia and the Middle

East especially.

Global Supply Chain -Resource Factors

6

Imbalance of nourishment World Wide

World Under Nourished Map Source US Sate Dept

Hunger Video

https://www.youtube.com/watch?v=WMi5VwDg0X0&feature=youtube_gdata_player

Source USDA

Global Supply Chain – Hunger & Nourishment

12/27/2013

4

Global Supply Chain – GCC Food Security

Mission1. GCC imports 84% of all it food, either raw material or finishes

product

2. Local agriculture cannot fulfill the needs of the food industry

3. Lack of water will prevent future development of agriculture

4. Increasing population, this is growing at 3.20% per annum

5. Regional geo-political tensions could effect supply & price

6. Volatile commodity prices of soft grains

1. Storage must be strategic and both in the country & outside the country

2. The Logistics to move the product must also be in place

3. Distribution of reserves during any crisis is often the bottleneck

4. Strategic Reserves must be part of the Food Security supply chain – not stand in

insolation

5. Strategic Reserves need to be Regional to reduce cost and create a collective

approach to any crises

6. National Food Supply Agreement need to be created between producing and

consuming countries which are automatically activated in an emergency

Global Supply Chain–Storage & Strategic Reserves

12/27/2013

5

Global Supply Chain – Advancing Sciences

Mission

Science combines market insight with a fundamental understanding of the biology of

our food resources. Approaches to sustainable Agriculture must be multifaceted

Farming must be sustainable and highly technical, it must enhance environmental quality and

the natural resource base upon which the agricultural economy depends.

Make the most efficient use of non renewable resources and on-farm resources and integrate,

where appropriate, natural biological cycles and controls.

Sustain the economic viability of farm operations.

Enhance the quality of life for farmers and society as a whole.

Scientific advances in food technology, bio-protection against disease can all

advance Global Food Security especially in difficult growing conditions

Global Supply Chain – New Technologies

MissionOptimising technologies to address post harvest vegetable quality

• Efficient and effective grading to standard (mechanized for colour and

defects)

• Sanitation measures that reduce the incidence of rot-causing organisms

(washing, irradiation)

• Cooling mechanisms to remove field heat and maintain low temperatures

during storage (icing, static or forced air cool stores, refrigerated transport)

• Packaging to maintain high relative humidity and optimize storage

atmospheres (use of packaging films with vegetable-specific gas/water

exchange)

• Modified atmosphere storage (use of dynamic controlled atmosphere for bulk

in-container storage)

• Ethylene scrubbing/removal technologies that reduce external ethylene and

limit postharvest deterioration of vegetables.

12/27/2013

6

Global Supply Chain – Green Challenges - Water

Mission• The role that integrated water resource management plays in Food security

• An approach to sustainable development and a water secure future for all

• How can water network performance be improved and wastage reduced

• How may water production be optimised – desalination optimisation

• What is being done to help management of consumption and demand

• How may desalinated water quality be improved and cost reduced

• How to increase uptake, efficiency and integration of water re-use schemes

• How to conserve and support sustainable water sources

• How to create an energy efficient and sustainable water future

Global Supply Chain – Key Challenges

Mission1. Imbalance of logistics & storage infrastructure World Wide

• In 2012 India has produced 100 million MT of Wheat & Rice• Yet it only has storage capacity for 47 million MT• This rest if not export will be inadequately stored resulted in attacks by pest &

disease

2. Cost of Port and vessels to export grains, Transport Logistics gets overlooked

3. Insufficient chilled warehouse facilities

4. Price commodity volatility and hording in producing countries

5. Export bans on commodities to protect supply & prices in producing country

6. Climatic conditions & natural disasters

7. A collective approach on a regional basis between Govt. & Private Companies

12/27/2013

7

VISION

“to partner with the UAE government in

realizing the strategic food security

program, ensuring long-term growth and

sustainability for the Emirate while in

parallel growing commercial activities in

the agribusiness globally”

MISSION

“to grow into a sustainable agricultural

and food products provider and partner,

ensuring supply sufficiency, high quality

of farming and production operations,

affordability of logistical distribution and

protection of the environment and natural

resources”

VALUES

integrity

transparency

service excellence

social responsibility

Vision, Mission, Values

13

14

Business Profile

PROFILE 12 business units across 4 continents

1 Billion USD turnover in 2012

30% average year-on-year growth

International workforce: 2,000 employees

ASSETSasset base in the value of 700M USD

150K acres land bank (owned and leased)

10 plants for pressing and production of

different hay varieties (Spain, USA, Egypt)

5 rice milling plants; 2 flour milling plants

ANNUAL VOLUMESHay 2,000 thousand tons

Rice 500 thousand tons

Flour 400 thousand tons

Potato 50 thousand tons

Corn 30 thousand tons

Wheat 15 thousand tons

Olives 6 thousand tons

Dates 2 thousand tons

Citrus 15 thousand tons

Grapes 4 hundred tons

Milk 12 million Liters

12/27/2013

8

Geographic Footprint

15

Land PortfolioEgypt: 120,000 acres

Spain: 20,000 acres

USA: 2,500 acres

Pakistan: 6,000 acres

Namibia: 1,000 acres

Morocco: 1,000 acres

Business Model

INTEGRATED SUPPLY CHAIN

SOURCING AND PROCUREMENT

-established relations with traders / suppliers

-ability to leverage volumes to improve rates

-strong purchasing and negotiating power

CULTIVATION AND HARVESTING

-portfolio of strategically located land

-favorable climate conditions and irrigation

-long-term agreements with farmers

-high quality raw materials and grains

-high quality fertilizers and feed

PRODUCTION AND PROCESSING

-advanced machinery and equipment

-best practices and techniques application

-continuous research and improvement

PACKAGING AND MARKETING

-packing, branding and labeling capabilities

-storage and transportation of end products

-wholesale and retail distribution

-marketing and overseas re-export

-stock management and stock rotation

16

12/27/2013

9

Forage Offering

300K MT annual alfalfa production

capacity from Al Dahra’s owned and

leased lands over 35,000 acres of

cultivated land

annual owned factories’ Alfalfa, pellets

and bales production capacity of 1.2M

MT with a total of 10 production factories

about 5M MT of Forage (Alfalfa and

other grass) supplied to Abu Dhabi since

2007 (being 70% of total country supply)

UAE strategic reserve of 300K MT

maintained at all times to address arising

emergencies and supply crisis

demonstrated growth in supply capacity

across the various investment projects in

the United States, Spain, Egypt, Pakistan

and South Africa

17

Commercial Forage Strategy

ORGANIC GROWTH

achieve sustainable commercial sales-strengthen presence in current potential markets

-penetrate new strategic markets (SE Asia, MEA)

-build sales and marketing capabilities

-roll out business / quality improvement initiatives

-invest in new technology

build key customers intimacy programs-develop long-term supply agreements with

targeted customers / dairies

-ensure replenishment programs are well

developed and executed

invest in new products research /innovation-partner with academic and industry experts to

research new product categories

-create a market niche by introducing innovative

products

INORGANIC GROWTH

grow through continued M&A activity-increase group cultivation acreage

-increase processing / production capacity

-build supply chain capabilities-diversify economic risks

18

China

Japan

South

Korea

Taiwan

Vietnam

Malaysia

UAE

Saudi

Arabia

Qatar

Kuwait

Oman

Libya

Turkey

Jordan

Lebanon

Tunisia

Spain

Portugal

Morocco

France

Greece

Malta

12/27/2013

10

85K MT of rice supplied to UAE since 2010

strategic rotation of 15K MT rice reserve

Two Plants in Pakistan: Punjab, Karachi

annual rice production capacity of 50K MT

Rice and Flour Offering

19

Flour Milling with Loulis a leading wheat and

flour milling and processing business in Europe

o 120 different final products

o 200,000 tons of wheat milled in 2012

o 25% of Greek Market

Port Mill of Sourpi Magnesia

-7 production lines with grinding capacity of

1000 tons per day

-grain silos with capacity of 55,000 MT

-flour silos with capacity of 5,000 MT

-Port Mill of Keratsini – Piraeus

--grinding capacity of 300 tons per day

-grain silos with capacity of 20,000 tons

-flour silos with capacity of 5,000 tons

Fruits and Vegetables SALHIYA AND EAST OWAYNAT PROJECTS –

EGYPT

20,000 acres of cultivated land

land dedicated to the cultivation of citrus fruits,

wheat, corn and potato and corn silage.

TOSHKA PROJECT – EGYPT

100,000 acres of uncultivated land

highly suitable conditions for cultivation: climate

GREENHOUSES–AL AIN, UAE

14 farmlands stretched over 2,000 acres of land

dedicated to the cultivation of organic vegetables,

dates, fruit varieties.

20

OLIVES FARMING PROJECT – Morocco

planned plantation of 700,000 olive trees

planned production capacity of 5K T of

olives annually

12/27/2013

11

DAIRY FARMS – AL AIN, UAE

1,400 dairy cows

daily production capacity of 33,000 liters of fresh milk

production of a wide range of dairy products such as

yogurt and cheese

main supplier of largest dairy

CATTLE GROWING

4,000 sheep heads

supply of meat to the retail market

ORGANIC FERTILIZERS PRODUCTION

production of 7,500 tons of cow manure, poultry

manure, mix manure and pellet fertilizer with plans to

increase production capacity to 11,000 tons

21

JOINT VENTURE WITH NDC

50/50 Joint Venture with NDC for the

production of Date Palms and Grapes

Plantation of 35,498 trees of different varieties

of table Grapes: Early Sweet Seedless, Flame,

Red Globe

30 hectares leased land with 3,690 Date Palm

trees plantation (fully owned by Al Dahra)

(Barhee, Khalas, Lulu, Ashrasi and Khenezi)

Global Supply Chain

MissionSummary

• A regional approach is needed to increase resources, reserves and sustainable and economic local production

• A state of the art logistics supply chain covering road, rail, sea and air when needed

• Local & overseas strategic storage for basic commodities in correct facilities

• High level of expertise in agriculture production in the GCC combined with the latest technology to maximize yields.

• All overseas food security projects must respect host country and be sustainable and non exploitative

• Public/Private consideration of the Food Security needs of the Region in all future investments.

12/27/2013

12

Global Supply Chain

Addressing emergencies and natural disasters by ensuring continuous food supply

Addressing international droughts and supply shortages

Addressing international price fluctuations

“We face the challenge now of not only ensuring food for the 973 million who are currently hungry, but also ensuring there is food for 9 billion people in 2050. We will need to double global food production by 2050” FAO 2009

Thank you