Activity 1.5 Current processed mango value chains

Activity 1.5Current processed mango value chains

San Tram Anh, Le Thu Lam, Tran Thi Kim Oanh, Pham Nhat Hanh, Lam Dong Pho, Nguyen Vinh Phuc, Nguyen Hoai Nam

15 October 2019

Improving smallholder farmer incomes through strategic market development in mango

supply chains in southern VietnamAGB/2012/061

© Griffith University 2018 2

The proportion of exported processed mangoes is low, accounting for approximately 15-20%

Challenges with meeting international MRL requirements Modern technology could advance the tropical fruit processing sector in

southern Vietnam Advancing the studies of food technology within training institutions would

provide the technicians to assist firms

Desktop review


Aim and purpose: To provide a clear understanding of the current value chains for

processed mango To assist identifying key research questions and interventions in the

subsequent phase of impact research

Introduction


Qualitative research using an interview method The key research participants include 4 mango processors, 9

packhouses, 9 collectors Conducted in Dong Thap, Tien Giang and Ho Chi Minh City between

March and July 2019.

Method


9 collectors buying mango in Tien Giang and Dong Thap provinces: 4 collectors supplying mangoes to Kim Nhun packhouse 5 collectors supplying mangoes to Ut Bien packhouse

Collectors


Company – PeopleThe gender ratio of surveyed collectors includes 44.4% female and 55.6% male.

04 workers22%

06 workers67%

>10 workers11%

Number of employees, collector facilities

Collectors


Products

Largely purchased local mango varieties, mainly Cat Chu mangodue to large production (70% of the total) and suitable forprocessing needs due to proper taste and price

Farmers often sell mangoes to collectors by two groupings: non-graded mango and graded mango (grade 1: > 330 gram, grade2: > 250 gram, and grade 3: < 250 gram)

Kim Nhung and Ut Bien packhouses mainly purchase grade 2Cat Chu mangoes at the request of Long Uyen processingcompany

Collectors


Technologies – Processing capacity 88.9% of collectors visit the farm to control the collection, grading

and transporting of mangoes 11.1% of collectors deal prices, quality and collection time via phone

calls

Covering fruit on the tree

Picking fruit Grading

Packing Transport

to collecting

place

Grading Cover the fruit Packing Transporting

FARM PACKHOUSE

Collectors


Supply – Sources

Experience and prestige of farmer

As required packing house

Not required

22.20%

22.20%

55.60%

Experience andprestige of farmer

As required packinghouse Not required

Factors to choose mangoes 22.20% 22.20% 55.60%

Factors to choose mangoes

Collectors


Quality assurance 100% of collectors are responsible for mangoes from collection at

the farm until they are sold to the packhouses 100% of collectors are responsible for deciding to grade mangoes

at the farm 100% of collectors make decisions for grading based on the

requirements and the price offered by the company and thepackhouse

Collectors


44%

45%

6%

5%

11%

Quality feedback

Positive feedback No disease Feedback of disease Slow ripe

Collectors


Logistics Mangoes are generally transported to packhouses for grading

and packing Collectors transport mangoes by trucks and tricycles

Finance Collectors generally buy and sell mangoes without contracts;

oral agreements based on market prices A small number (11%) apply the method of payment by bank

transfer after selling mangoes to packhouses. The majority(89%) receive cash after delivery.

Collectors


11%

11%

11%

11%

11%

45%

56%

Capital

Price uncertainty

Diseases and weather

Depends on packing requirements

Difficulties in uneven sources, mangoes do not spread the crop

No issues

CollectorsCurrent issues


Interviews in Tien Giang, Dong Thap province and Ho Chi Minh City:

1 farmer club

2 cooperatives

2 fruit business establishments

3 fruit purchasing companies

These packhouses sell mangoes to three processing companies: Long Uyen Thien Nam Duong Nam Huyo

Packhouses


Company – Profile 6/8 packhouse owners are male (75%), while 2/8 (25%) are female Number of members:

Cooperatives: 120 and 152 Farmer club: 42 Companies and fruit business establishments: 4–12 people

7/8 packhouses (87.5%) operate from 2012 to the present

Products Mainly grade 2 Cat Chu mangoes are sold to processing companies

Packhouses


Product flow – Processing

Farmer Collector PackhouseTransport Processing

company

Other customers(wholesale markets, retail markets, supermarkets, and export markets)

Grading

Packing

Packhouses


Quality assurance

Cooperative/ Farmer club

Role:Guide farmers to followthe requirements of thepurchasing company

Responsibility:Manage sales activities

Company/ Business establishment

Role:Choose mango accordingto customer requirementsand preserve mango at thepackhouse

Responsibility:Mango quality assurance at the packhouse

Packhouses


Finance

Farmer club represents the members to sign contract withprocessing company

Companies and fruit business establishments have verbalcontracts with mango suppliers, pay cash, they sign contractwith customer companies or exporters

Packhouses


Processing activities

All packhouses in this survey provide mangoes to processingcompanies. They sell fresh mangoes, usually Cat Chu mangograde 2 to processing companies, there are contracts, theychoose mangoes according to company standards.

The main barriers when they want to do in the processingsector are lacking of capital, infrastructure, technology,markets and personnel

These packhouses are very enthusiastic to participate inprocessing activities

Packhouses


Current issues

12.5%

12.5%

25.0%

12.5%

25.0%

12.5%

Other (The road in front of Ara packhouse has aban on container trucks)

Looking forward to stable source of materials

Looking forward to more stable output

Encouraging farmers to comply with theregulations on safe and proper farming

Looking forward to exporting mangoes to highquality markets and expanding into processing

Lack of investment capital

Packhouses


4 processors in Tien Giang, Dong Thap and Ho Chi Minh City:

Bac My Thuan Co., Ltd. and Long Uyen Co., Ltd. are in Tien Giang Nam Huy Dong Thap Co., Ltd is in Dong Thap Thien Duong Nam VN Company is in Hoc Mon, Ho Chi Minh City

Processor


Gender ratio of processing companies owners:

Male: 3/4 (75%)

Female: 1/4 (25%)

Number of workers in processing companies:

Long Uyen Co., Ltd: 300 workers

Nam Huy Dong Thap Co., Ltd: 30-50 workers

Thien Duong Nam VN Company: 8-10 workers

Bac My Thuan Trading-Service Co., Ltd: 7-8 workers 40

9 7

300

10 2 230

1 0 0 100

50

100

150

200

250

300

350

Nam Huy Thien DuongNam

Bac MyThuan

Long Uyen

Number of people in parts of companies

Workers officer QA/QC

Company – People

Company Founded yearBac My Thuan 2017Long Uyen 2009Nam Huy Dong Thap 2014Thien Duong Nam 2014

Processor


3 companies process dried mango (Cat Chu mango grade 2) Long Uyen processes frozen mangoes and puree 3 companies process other dried fruits such as lotus seed, papaya,

dragon fruit, durian and jackfruit

0

0

10 (%)

0

0

0

20 (%)

30 (%)

100 (%)

100 (%)

70 (%)

70 (%)

Nam Huy Dong Thap

Thien Duong Nam

Bac My Thuan

Long Uyen

% mango varieties

Other Keo mango Cat Chu mango

Processor


Technology

Production methods: drying and freezing

Directors directly set the standards for input mango materials

All companies remove untreated raw materials

2 companies using grade 2 mangoes for processing

3 companies uses grade 3 mangoes

Thien Duong Nam use grade 1 mangoes for processingbecause freeze-drying requires high input quality

All companies stop production for equipment maintenance

Processor


Supply – Sources

All companies use Cat Chu mango

3 companies signed contracts with traders

2 companies buy direct from farmers

3 companies also buy from suppliers

3 have contracts with suppliers

2 companies have a quality control system, and a quality managementteam

All companies have quality inspection at the factory, with 3 havingorchard inspections

Processor


Quality assurance

General criteria: size, weight, ripeness, flesh color, thick skin, aromatic andgood taste when dried

2 companies check residues of pesticide and 1 has standard certification

Long Uyen has ISO 22000, BRC and HACCP

Processor


Quality assurance

All companies stop producing when the season ends 3 companies switched to

processing other fruits 2 companies have prepared

materials to produce in the next season

0 (%)

100 (%)

0 (%) 0 (%)

90 (%)

0 (%) 0 (%)

90 (%)

10 (%)

0 (%)

100 (%)

10 (%)

Long Uyen Thien Duong Nam Nam Huy Dong Thap Bac My Thuan

Quality ratio

Grade1 Grade2 Grade3

Processor


Logistics

75% of companies sell processed products domestically, transport by truck or shipping service

Farmers and collectors transport mangoes to processing company

Long Uyen Co., Ltd has the purchasing department in material areas, mainly trucks and tricycles are transported during the day to the company

Processor


Markets – Customers

Thien Nam Duong, Nam Huy and Bac My Thuan companies mainly sell

products to supermarket systems and some traditional sales channels in

HCMC, Hanoi, Da Nang and other provinces

Only Long Uyen company exports 95% of the total volume of products to

Australia, America, Europe, and Korea (25%)

Processor


Finance

50% of companies sign contracts with suppliers; companies that buy directlyfrom farmers only have oral agreement

Long Uyen Company:

Pays directly to farmers in the collecting places when buying

Advances money for cooperatives to pay farmers

Pays cash to suppliers when buying mangoes

Processor


Long Uyen company process: Material: 100% Cat Chu mango Criteria: sweetness, full-ripe and weight from 300-320g

Nam Huy Dong Thap company process: Material: 100% Cat Chu mango Criteria: sweetness, full-ripe and weight from 200-230g

Purchase Classify Ripen Select again Wash Peel Shape

Individual Quickly Freezer

Package

Purchase Transport Wash Cut Dry Package

Processor


Thien Duong Nam company process: Material: 100% Cat Chu mango (grade 1) Criteria: sweetness, full-ripe and weight from 300-320g

Bac My Thuan company process: Material: Cat Chu mango grade 2 and 3 (70%), Keo mango (20%), and Hoa Loc mango

(10%)

Purchase Classify Wash Slice Drying (50oC) 24h

Package

Purchase Classify Wash Slice Freeze-drying Package

Processor


Study mango quality and shelf life options includingtechnology

Explore suitable treatments for post-harvest diseases

Research and evaluate value-added mango products

MRL requirements

Current issues

Activity 1.5 Current processed mango value chains

Documents

Transcript of Activity 1.5 Current processed mango value chains