PC II Agrobased Clusters Combined _Ind

7/31/2019 PC II Agrobased Clusters Combined _Ind

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GOVERNMENT OF PAKISTANPLANNING COMMISSIONPC-1I FORM

(SURVEY AND FEASIBILITY STUDIES)

MODERNIZATION / REHABILITATION ANDESTABLISHMENT OF INDUSTRIAL UNITS IN RURAL

AREAS OF SINDH (AGRO BASED CLUSTERDEVELOPMENT OF SMALL AND MEDIUM

ENTERPRIZES)


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I) NAME BY WHICH FEASIBILITY WILL BE IDENTIFIED

Agro based Clusters in Sindh for the following clusters.

S. No. Clusters City/Cities1. Mango Hyderabad2. Mango Mirpurkhas3. Mango Sanghar 3. Rice Milling Larkana4. Red Chilies Kunri5. Dates Khairpur 6. Cotton Ginning Ghotki, Sanghar 7. Guava Larkana8. Vegetable

Processing Nawabshah,Tando Allahyar,Mirpurkahs

II) ADMINISTRATIVE AUTHORITIES RESPONSIBLE FOR

A. Sponsoring

P & D Department, Govt of Sindh

B. Execution

SMEDA

III) DETAILS OF SURVEY / FEASIBILITY STUDY

The concept of cluster development is based on effective networking thus building oncollective efficiencies within the cluster and among cluster stakeholders i.e. theenterprises located in the cluster, their associations, trade bodies, vendors etc.

The cluster development approach is based on the basic rationale that since the issues and problems faced by enterprises falling in a particular cluster are common therefore theremedial and developmental initiatives and programs may be formulated, designed andimplemented more effectively to achieve a set of developmental goals and objectives.Instead of applying an umbrella strategy for development at macro or national level,integrated approach based on a focused strategy is applied for the development of a

particular cluster.


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A. General description and justification

1. Rice Cluster Larkana 1.1 Cluster Brief

Rice is consumed as a major food item after wheat and is third largest crop after wheatand cotton by acreage. It is annually cultivated on an area of around 5 million acres. Thecrop occupies about 10% of the total cropped area. Annual rice production averaged at4.75 million tones in 2004-5. It accounts for 17% of value added by major crops. Punjabis the leading producer of rice in the country. It accounts for 59.5% of the total

production the next leading province is Sindh it accounts 29.5%. The remaining provinces NWFP and Balochistan contribute 11% of the total production. On the worldlevel, Pakistan ranks 14 th in rice production. It is the 6 th largest exporter of rice, holding6% share in rice export of the world. Rice export was around 2 million tones in 2004-5.Pakistan Basmati rice has been a favorite among international rice buyers.

Rice Crop in Sindh has been grown since centuries as its cultivation dates back even before the civilization of Moen-e-jo- Daro. There was substantial area of 487 thousandhectares under rice cultivation even before the barrages the area further increased withthe opening of barrages in 1932 and reached at 704 thousands hectares in 1998 and

produced 1.5million tons paddy.In Sindh Rice is cultivated in two different geographicalareas i.e Northern or upper Sindh (comprising Larkana, Qamber-Shahdadkot, Shikarpur,Jacobabad, Kashmore and Dadu Districts) and Southern or Lower Sindh (comprisingThatta, Badin, and Tando Mohammad Khan Districts.

There are approximately 850 Rice Mills are working in Sindh-Balochistan andapproximately 700 are working in Sindh to process the paddy among 700 rice mills 300

are in Larkana and Kamber Shahdadkot

1.2 History and Background Before the 1978 there were old iron hullers for the husking in Larkana but in the mid 90sSheller were introduced then soon after Rubber polisher SM 18 were introduced toachieve high yield and know one Silky/water polisher is installed in Larkana. Perhapsfirst is Northern Sindh. Mostly millers in cluster have outdated units hardly few hasSM18 rubber polisher. More then 60 percent millers are un-educated and almost 95%doesnt know what is happening in international market or interest in internationalmarket. If we compare existing cluster set-up with Japan, China and Thailand cluster machinery is out dated.

1.3 Defining the Products

Larkana rice cluster is famous for its IRRI production it can be broadly categorized intofollowing segments:

IRRI-6 IRRI-9


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DR-82 Broken-rice

1.4 Geographical Location

The Larkanas rice cluster is highly decentralized and varied in terms of size andlocation. The small and unorganized units are located in surroundings of city likeKamber, MiroKhan, Dokri, Naudero and Ratodero while large and medium organizedunits are located within the city area of Larkana and Shahdadkot.

1.5 Core Cluster Actors

The Rice Millers Association of Larkana and Sindh Balochistan Rice Millers Associationis core cluster actor. The major highlights of Larkanas rice milling cluster is as follows:

Table: Larkanas ri9ce milling Cluster

Number of Units Approximately 300units- 200 Large and Medium units- 100 Small units

Employment Generated -Employing approximately 1800 permanent employees-Employing approximately 6000 seasonal employees

Paddy Production (un-milled) 6,36,932 tons

Total Investment Approx. Rs. 750 million

All of 300 units in the cluster are member of Sindh Balochistan Rice Millers Association.The 900 members of Association is producing 2.4 million tones of rice out of which 1.8million ton is exported in current year which has current value of 1.3 billion USD.

1.6 Analysis of Business Operations

Production Processes

Human beings cannot consume Paddy in its raw form. It needs to be suitably processedfor obtaining rice. Rice milling is the process, which helps in removal of hulls and barnsfrom paddy grains to produce polished rice. Rice forms the basic primary processed

product obtained from paddy and this is further processed for obtaining varioussecondary and tertiary products.

Milling process of paddy starts when the paddy is brought from fields and gathered in anopen space of milling area where it is gathered for drying and is placed in an open placetill it achieve desire moisture level. Then paddy is brought and placed in a ware housewhere it is processed into following stages:


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Cleaning: Removes foreign objects, such as hey, stone, tree stump, from the paddy.

Hulling: Rubs excessive husks off cleaned paddy. On removed, brown rice is separatedfrom the husks though ventilation process and mechanical equipment leaving pure brownrice available for milling.

Milling: The milling, or whitening, stage removes the bran layer from brown rice. Themodern multi-break, vertical whiteners use both abrasion and friction to gently andefficiently convert brown rice to milled white kernels. The bran layer is by air ventilation,which sucks in the brand layer process usually takes 2 to 3 cycles, depending on therequired milling degree.

Polishing: Smoothing and brightening a surface of rice grain by a roll or series of rolls.

Grading: Separates milled rice (mixture of different sizes: Whole grain, head rice, and broken rice) by a sieve grader include several sizing techniques.

Sorting: Removes rice defects, such as discolorations, yellows, immature (green),chalky, peck, seeds, red rice, glass, stones. Add value to white rice, parboiled rice toensure that only the cleanest rice is passed.

Pack / Storage: The finished rice will be packed and stored in individual bags, accordingto its grade, and the rice is ready for delivery to customers

Analysis of Business Operation

Raw MaterialThe main raw material which is paddy is normally purchased from local growers andsome time from wholesalers or money lenders. Both these raw material suppliers arelocated within the cluster as Larkana is famous for its paddy production. The millerswithin the cluster purchases the raw material directly from growers, moneylenders and


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some time from wholesalers on cash which usually borrow from banks during the seasonas a working capital.

Technology

Technology is rapidly changing in all spheres of life these days but rice millers in the

cluster are unwilling to adopt modern technology perhaps they are always in profitsexcept few years back.

Before the 1978 there were old iron hullers for the husking in Larkana but in the mid 90sSheller were introduced then soon after Rubber polisher SM 18 were introduced toachieve high yield and know one Silky/water polisher is installed in Larkana. Perhapsfirst is Northern Sindh. Mostly millers in cluster have outdated units hardly few hasSM18 rubber polisher. More then 60 percent millers are un-educated and almost 95%doesnt know what is happening in international market or interest in internationalmarket. If we compare existing cluster set-up with Japan, China and Thailand cluster machinery is out dated.

Even above mentioned constraints few millers have intention in milling up-gradation.Due to that interest one parboiled unit is in pipeline and one polisher is installed in thecluster. But slowly and reluctantly millers are up-grading their existing infrastructure butthat is also with out date d units.

Market Analysis

Milled rice is usually directly sold to the traders and to exporters through the brokers.Some millers are also directly involved in the export of milled rice.

Institutional Setup

Entrepreneurs Associations Sindh Balochistan Rice Millers Association Larkana Chamber of Commerce and Industry (LCCI)

Support Service Providers

Importer of Machineries. Local Manufacturers of Machineries. Suppliers of Machinery Items. Financial Institutions

Private Business Development Service (BDS) Providers

Number of Private BDS providers in the cluster are offering their services to the cluster..The BDS providers in the areas of technology, product standardization and latest millingunits are the main requirement of the cluster.


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Banks and Financial Institutions

Larkana is adequately covered by nationalized and private sector banks and financialinstitutions. The credit needs of the cluster are sufficiently met by these institutions. The

banks and financial institutions are willing to finance the cluster in working capital aswell as capital financing. Banks usually prefer the working finance as it is seasonal andwill be returned within the eith months time period. Only issue is that the financing ratein Pakistan is very high, due to this reason millers take it at very high rates. So there areno issues with respect to financing in rice milling cluster of Larkana.

1.7 SWOT Analysis The SWOT analysis of the cluster will be useful for clean understanding of thecapabilities of the cluster to face the challenge a head..

Strength:

Easy availability of paddy. Easy availability of fuel (diesel). Easy availability of Machinery and maintenance. Easy availability of labor force. High capacity for investment of entrepreneur. Exposure to export market. Encouraging Industries policy of Govt. Good transport facilities. High demand in local and international market.

Weaknesses:

Low level of education. Non availability of quality paddy. Un-willingness to use moisture meters. High broken percentage. Low milling yield. Un-hygienic conditions within milling process. Low level of modernization and up gradation technology. Lack of marketing awareness. Lack of common facility within the cluster.

Opportunities:

Up gradation due to involvement of different stake holders. Improvement in quality and high milling yield. Increasing demand of milled rice in world market. Demand for low price.


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Threats:

Quality requirement of international market (e.g. Aflatoxin). Supply of mix-up verities. Rejection of product by exporters.

1.8 Investment Opportunities As rice is major staple food item after wheat and has huge potential in local andinternational market specially concerned with current demand in world market hascreated opportunity for investment in the cluster as already there is huge gap within thecluster for modern units.

Parboiled & Drying Plants Silky Polishers Modern Rice Milling Unit Chip board factory for reaming of paddy

PROPOSED PLAN:

Considering the potential of the cluster it is proposed to make the intervention in thecluster by up-grading the existing infrastructure of rice processing units. In first phase,services of consultant are required for detailed study and in second phase, a piolat projectmay be initiated.

Basis of Selection of processing unit:

The processing unit would be selected on following grounds

Mill owner willing to contribute in up gradation cost Mill owner willing to extend support and cooperate in unit up-gradation Mill owner willing to contribute his time with consultant and SMEDA teamduring the study/up-gradation phase Commitment and cooperation with P&D and SMEDA in future, e.g. if P&D andSMEDA takes a delegation for visit(s) for demonstration purposes.

The mill owner should preferably a member of the Sindh-Balochistan RiceMillers Association but having rice mill in Sindh province.

Services Required

The services of a consultant will be required for the following: To conduct the technical analysis of rice processing unit cluster To recommend the alternatives for up gradation


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To prepare a comprehensive Technical Report To monitor and supervise the up-gradation process

Expected Benefits:

The project upon completion is expected to deliver the following benefits:

i. Low broken percentage

ii. High yield

iii. Polished grain

iv. Lower production cost

v. Safety for workers(lungs problem0

vi. Introduction of new technology and opening up new doors of innovation.

vii. On the whole development

2. Mango-Cluster Profile

2.1 Cluster Brief

Mirpur Khas

Mirpur Khas meaning the land of the highest mirs is a city located in the province of Sindh in Pakistan. It is the fourth largest city in the province with an

estimated population of 124,371 (1981). Its soil is fertile and the city is muchknown for its mango produce. The city seeks pleasure in declaring having 250different varieties of mangoes, of which the most famous variety is the Sindhri

Aam literally the mango from Sindh . The city boasts its mango products at anannual harvest festival Mango Festival showcasing its world-renowned

produce.

2.2 Defining the Product

Mangoes belong to the genus Mangifera , consisting of numerous species of tropical fruiting trees in the flowering plant family Anacardiaceae. The mango isindigenous to the Indian subcontinent and Southeast Asia. Cultivated in manytropical regions and distributed widely in the world, mango is one of the most

popularly exploited fruits for food, juice, flavor, fragrance and color.

Mango, a national fruit, has varieties like Anwar Ratole, Began Phali, Chaunsa,Dusheri, Fajri, Fazli, Gulab Khasa, Jannat-ul-Firdos, Lab-e-Mashooq, Langra,

Neelum, Saleh Bhai, Sindhri, Siroli, Summer Behist Chaunsa, Swarnarika, Zafranetc.


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The mangoes cluster is scattered in District Mirpur Khas in areas like Sindhri,Digri, Kot Ghulam Muhammad and some other areas like Hyderabad, Tando

Allah Yar as well.


No of Mango Growers

There are almost 1000 + Mango growers in Mirpur Khas who areclassified as small, medium or large growers with respect to their landholding:

Large Growers having 20 + acres; Medium Growers having 10 20 acres

Small Growers having less than 10 acres

Major Actor of the Cluster

2.4.1.1.1 Muhammad Anwar Gondal2.4.1.1.2 Imdad Nizamani2.4.1.1.3 Umar Bughio

Employment Figure

N/A

Total Production (If Available)

Mangoes are grown on an area of 50 thousand hectares with production of 353.4 thousand tones, with an average yield of 6.97 tons per hectare(Sindh Agriculture Department Statistics). Sindh is the major producer of Mangoes followed by Punjab.

Capacity utilization (If Can be Worked Out)

N/A

Other cluster Actors (suppliers: seeds, fertilizers, pesticides etc)

The other actors in mangoes cluster working in Mirpur Khas and other areasare as follows:


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Bayer Crop Sciences Novartis (Crop Division) Engro Fertilizers Fauji Fertilizers Target Zarai Markaz Naya Savera etc

2.5 Analysis of Business Operation

Production Operation/Process

1. Apply farm yard manure at the rate of 10-30 kg per young plant and 80to 100 kg per full grown tree.

2. Apply 3-4 kg SSP, 2-3 kg Potassium Sulphate and 2-3 kg Urea before

flowering (Dec to Jan).

3. Apply a further 2-3 kg Urea after fruit setting in two equal doses(Mar/Apr).

Pruning:

Mango usually assumes a graceful dome shape shading the main trunk. No pruning is practiced however, annually after fruit harvest diseased, dried, broken branches and those touching the ground should be pruned off. Torejuvenate the orchard after every 3-4 years it is advisable that 15-20% of old

wood should be removed.

Harvesting

Picking should be done when the fruit is fully developed and mature. Naturaldrop of the fruit is the main indication that the fruit is ready for picking.Different varieties in different areas ripe at different times. In Sindh, mangovarieties start ripening from May to June. Expected yields vary from 40 to100 kg per tree.

Analysis of Mango Business Operations

NurseryPreparation

Transplantation Watering Harvesting

PostHarvest - HandlingPackaging

Delivery toMarkets


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List of Raw Material

Seeds Fertilizer Farm manure Pesticides etc

Technology Status

The growers are still using the same old fashioned methods of growingmangoes. However, with the passage of time; tractors, laser levelers andother modern farm machinery has made its way in the cluster. But, only

large farm holders take the benefit of it.

Marketing

The growers of mangoes give the orchards to the contractors on contract basis per acre, usually for tenure of 3 5 years. The growers, after givingthe orchard on contract, is least bothered about the conditions of the farm.He is only concerned with the money paid by the contractor. Thecontractor does every possible effort to utilize the orchard and in doing sothere is no concern of quality, proper picking and packaging of mangoes.He wants to get the mangoes to the market as soon as possible.

Financing

Most of the growers dont consider financing from banks as a source of credit for their business operations.

Institutional Setup

Associations

Mango Growers Association, Kunri

Address: Mirpur KhasPresident: Mr. Muhammad Anwar Gondal

2.6 Govt. Support Institutions

The public sector institutions working for this cluster are as follows:


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Agriculture Extension Department Agriculture Research Department Agriculture Engineering Department NPIW (National Program for Improvement of Watercourses) SMEDA TDAP PHDEB ASF etc

2.7 Training institutes

The only training and support institute for the Mango cluster is theSindh Horticulture Research Institute located at Mirpur Khas. The maincollaboration of SHRI is conducting the annual mango festival in themonth of June every year.

2.8 Financial Institutes

N/A

Private BDS Providers

Private companies, both national and multinational, provide on-farm BDSservices to growers. These companies are as follows:

o Bayer Crop Scienceso Novartis (Crop Division)o Engro Fertilizerso Fauji Fertilizerso Target Zarai Markazo Naya Savera etc

2.9 SWOT Analysis

Strengths

Pakistans biggest cluster of mango production Favorable environmental conditions Easily available farm land

Weaknesses

Low literacy rate in majority of mango growers Lack of modern agricultural practices Mismanagement of farm land (dependant upon the Farm Manager)


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Lethargic behavior of employees towards farm work

Opportunities

Rising local and international consumption and exports of mango from

Pakistan Increased margin for growers; provided demand and supply gap in

both national and international markets Export markets are open in post WTO era

Threats

Shortage of Water Fruit Fly problem

2.10 INVESTMENT OPPORTUNITIES

Some viable investment opportunities for mango cluster are as follows:

Mango Hot Dip Processing Plant Mango Pulp Processing Plant Production of Value added products like syrup, pickle, squash and juices

etc.

3 Red Chilies Cluster Kunri

3.1 Cluster Brief

Kunri

Kunri is a small town located in the Sindh province in the southern part of Pakistan. It is about 200 kilometers from Hyderabad. It has a population of about300, 000 people composed of mostly Muslims; however there is a large Christianand Hindu minority as well. The large population of Christians and Hindus,unique to Pakistan, came about because many people decided not move to Indiaduring the 1947 Partition of India. Kunri's economy is mostly agricultural. Theregion produces many different types of crops, including red chilies, cotton, andmangos. By far, the most popular crop in Kunri is the red chili, which sustains thefinancial structure of the town. This city is located in the tail region of the IndusRiver, causing a lack of water throughout the year. The chili cluster of Kunri issaid to be established way back in 1950s when Mr. Ganga Raam brought seedsof Red Chilies from Habibabad, Qusoor (Punjab) to Kunri.


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3.2 Defining the Product

The chili pepper, a hotly pungent variety of Capsicum was first cultivated by the people of Central and South America in around 3000BC. Columbus brought seeds back to Europe in 1493, and from there it has spread to the cuisines of the entire

world. The pre-Hispanic Americans believed the chili to contain medicinalqualities and modern science has confirmed the nutritional values, containing highlevels of vitamins A and C, along with vitamins E and B1-3.


The red chilies cluster is scattered District Umerkot in areas like Kunri, Jhuddo,Bustan and some other areas like Mirpur Khas, Badin, Tando Muhammad Khanas well.


Red Chilies Growers

There are almost 500 + red chili growers in Kunri who are classified assmall, medium or large growers with respect to their land holding:

Large Growers having 20 + acres; they are 15 % of the Kunri chilicluster

Medium Growers having 10 20 acres; they are the 60 % of Kunrichili cluster

Small Growers having less than 10 acres; almost 25 % of Kunri chili

cluster

Major Actor of the Cluster (Top 3-5 Players)

Miyan Muhammad SaleemMr. Ghulam Akbar DarsDr. Narayan DasCh. Zahir Arain etc

Employment Figure

The approximate total employment generation through this cluster is12000 households (as 1 acre operations are carried out by one family).

Total Production

Chilies are grown on an area of 38.4 thousand hectares with production of 90.4 thousand tones, with an average yield of 1.7 tons per hectare with 1.5

per cent share in the GDP. Sindh is the major producer of chilies followed


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by Punjab and Balochistan. Pakistan earned Rs1.127 billion during 2003-2004 by exporting red chili powder, whereas, export earnings from allfruits were Rs 5.912 billion during the same period. This reveals the

potential of this non-staple crop. Despite its importance the yield hasdeclined from 86.5 (1994-95) to 55.8 thousand tons (2003-04).

Other cluster Actors (suppliers: seeds, fertilizers, pesticides etc)

The other actors in red chilies cluster working in kunri and other areas are asfollows:

Bayer Crop Sciences Novartis (Crop Division) Engro Fertilizers Fauji Fertilizers Target Zarai Markaz Naya Savera etc

3.5 Analysis of Business Operation

Production Operation/Process

Chilies are grown on soils with light sands to well drained clay. Silt andclay loam soils are better, while water-logged and alkali is not suitable.Soils selected are prepared thoroughly for getting good yields. As roots of

chilies go one foot deep, therefore, deep plowing is necessary. Two plowing with mould board plow followed by global plow are done,leveling the soil for even distribution of water and fertilizer. About 30-40cart loads of well rotten farm yard manure per acre are added one month

before transplanting chilies.

Chilies require warm and humid climate for growth and dry weather during maturity. The crop comes up well in tropical and sub-tropicalregions but it has a wide range of adaptability and can withstand heat andmoderate cold. It can be grown over a wide range of altitudes from sealevel up to nearly 2,100 meters. Heavy rainfall leads to rotting of the crop.

Unfavorable temperatures lead to bud blossom and fruit drops.

Nurseries are raised on well prepared one meter wide and three meterslong strip. Before broadcasting the seeds, straws or farm yard manure is

burned on the strips after which seeds are broadcast and pressed in the soiland covered with a thin layer of soil. These are then covered with layers of straws supported by wooden sticks with water application in the morningand evening till the seeds germinate. After germination straw is removed


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and water is applied after every 4-5 days. Within six weeks seedlings become ready for transplantation.

After land preparation, ridges of one and half foot high and wide are prepared. Transplanting is done on both sides of the ridges and distance

between each plant is maintained at one and a half foot. Care is taken toavoid plants on both sides of ridges to face each other as this leads todense plant population causing hindrances in weeding, harvesting,spraying etc. Transplanting is preferable done in the evening, because inmorning seedlings can not withstand noon temperatures. After transplantation two watering are applied so that plants develop roots.Subsequent irrigation is applied as per climatic conditions of the area inwhich the chilies are being cultivated.

Recommended fertilizer dose for chilies is one bag of DAP and one of potassium sulphate before sowing, and two to three bags of urea, one bag

is applied after 20 days of transplanting and the second at flowering stage,and third, if necessary, at fruit setting.

For checking weeds it is necessary that first inter-culturing is completedwithin one month after transplanting. Three to four inter-culturing arenecessary for controlling the weeds. At flowering stage, earthling up isrecommended which helps in the growth and development of the crop. It

prevents the crop from lodging.

Analysis of Red Chilies Business Operations

List of Raw Material

Seeds Fertilizer

NurseryPreparation

Transplantation Watering Harvesting

Post

Harvest - Handling *Packaging

Delivery to

Chilies Market, Kunri


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Farm manure Pesticides etc

Technology Status

The growers are still using the same old fashioned methods of growing redchilies. However, with the passage of time; tractors, laser levelers andother modern farm machinery has made its way in the cluster. But, onlylarge farm holders take the benefit of it.

Marketing

The growers of red chilies sold all their produce in the local grain marketof kunri city. They have no separate arrangements or marketing channels.

Financing

Most of the growers dont consider financing from banks as a source of credit for their business operations. Small and medium mainly get creditfrom traders in grain market.

Institutional Setup

Associations

Red Chilies Growers Association, Kunri

Address: Opposite Post Office, KunriPresident: Mr. Miyan SaleemGeneral Secretary: Mr. Muhammad Zahir Arain

Due to the crisis of 2005, Red Chilies Growers Association was formed inOctober 2005 by Mr. Miyan Saleem, Mr. Zahir Arain, Dr. Narayan Daas,Mr. Ghulam Akbar Darss, Dr. Noor Ali Shah and other progressive chiligrowers. Mr. Miyan Saleem took the oath as its first President and sincethen he and his team has been working for the growth and development of Chilies Cluster in Kunri.

Red Chilies Merchants Association, Kunri

Address: Grain Market, KunriPresident: Mr. Abdullah MemonGeneral Secretary: Mr. Musawwar Ahmed

Red Chilies Merchants Association was formed way back in 1975 by themerchants of Kunri Chilies Market. The association has a total of 40


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members out of which 30 members are active. The association charges Rs.1,000 as the membership fee. Besides that, it also runs an annualassociation fund which Re. 1 on every bag of chilies sold the Kunri ChiliesMarket.

Govt. Support Institutions

The public sector institutions working for this cluster are as follows:

Agriculture Extension Department Agriculture Research Department Agriculture Engineering Department NPIW (National Program for Improvement of Watercourses) SMEDA TDAP ASF etc

Training institutes

The only training and support institute for the red chilies cluster is theRed Chilies Research Station located at Dadro near Kunri. The station

provides basic seeds and expert information on growing of red chilies togrowers.

Financial Institutes

There are about 3 financial institutions in Kunri which are providingfinancing mainly to medium and large farm owners i.e. MCB Bank, NBPand NIB (formerly PICIC).

Private BDS Providers

Private companies, both national and multinational, provide on-farm BDSservices to growers. These companies are as follows:

o Bayer Crop Scienceso Novartis (Crop Division)o Engro Fertilizerso Fauji Fertilizerso

Target Zarai Markaz

o Naya Savera etc

3.6 SWOT Analysis

Strengths

One of Asias biggest market of Chilies Trade


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Easily available seed Easily available farm land

Weaknesses

Low literacy rate in majority of chilies growers Lack of modern agricultural practices Mismanagement of farm land (dependant upon the Farm Manager) Lethargic behavior of employees towards farm work

Opportunities

Strong linkage between chili growers and chili traders, Kunri Rising local and international consumption and sales of chilies Increased margin for growers; provided demand and supply gap in

both national and international markets Export markets are open in post WTO era

Threats

Shortage of Water Aflatoxin Disease which has restricted entry in export markets Phytophthora Disease which causes the rot of plant and decreased

yield Lack of suitable infrastructure in Kunri

3.9 Investment Opportunities

Some viable investment opportunities for red chilies cluster are as follows:

Red Chilies Dehydration Plant Cold Storage Facility Spice (Ground Red Chilies) Manufacturing Facility etc


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4. Dates Cluster Khairpur

Pakistans diverse climatic condition provides an opportunity of growing Dates in theSindh, Balochistan and NWFP provinces. Turbat, Panjgoor, Khairpur and Dera IsmailKhan are the major dates growing regions in the country. Pakistans commerciallyimportant Date varieties include Aseel, Karbala, Fasli and Kupro of Sindh; Muzawati,Begum Jangi, Jaan Swore, Kehraba and Rabai of Balochistan; Dhakki and Gulistan of

NWFP and a seedless variety of Punjab. Pakistan produces over 500,000 tones of Dates on a total area of 82,000 hectares every year. 80.0% of the total Dates

produced, approximately 400,000 tones are grown in Districts Turbat, Khairpur andPanjgoor. Almost 32% of Pakistans Dates produce come from Khairpur District.

Pakistan is the fourth largest exporter of dates and dry dates after Tunisia, Iran and

Israel with an export volume of around 103,000 tones at a value of US$ 37.6 million.Data analysis shows export of fresh dates fetches a better price in the internationalmarkets than dried dates. The analysis of Pakistans dates export reveals that freshdates constitute only 10% of export volume and 2-3% of total annual production of dates. Pakistan received an average price of Rs.21 per kg for dried dates and Rs.27

per kg for fresh dates. This translates to the fact that there is a huge potential for freshdates exports, keeping in view the opportunities in value addition.

Our country has the capacity to supply quality dry dates as well as fully processedhigh quality dates in various styles, shapes and forms, which include pitted/ un-pittedwhole dates, pressed date bricks, date chops, date paste in bulk and small small

boxes/jars.

The Date harvest season begins in the middle of July and ends in September. After harvest dates in Pakistan are cured for eight to fifteen days in the sun on straw mats inopen grounds and alongside roads and highways. The fruit gets contaminated withmoulds and bacteria. Color loss, broken skin, sunburn, blemishes, insect infestation,inclusion of foreign matter and growth of mold further damages the fruit and reduceits trade value. By the time the dates reach processing units, only a very smallquantity remains fit for export and meet international SPS requirements.

A study was conducted in 2007 to find ways to contain this acute problem and to prepare a sizeable quantity of dates fit for exports. Interaction with growers, traders, processors, exporters, academia and other stakeholders revealed that there is

considerable room for process control in dates pre-processing and curing.Analysis identified the following process improvements

Proper picking Introduction of Improved sun drying techniques Introduction of mechanical curing/drying Modern storage systems


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Prompt curing of dates using mechanical techniques after harvesting, taking moisturelevels to 20-30%, is the best way of preventing the production and spread of moulds

bacteria and other inclusions and the removal of pesticide residues. The proposedintervention will help in minimizing the direct losses to growers and traders and

prepare quality dates for exports.

The quantities of premium quality produce can be increased exponentially byadopting and promoting mechanical dates processing.

4.1 Project Objectives:

Introduce & demonstrate mechanical processing / dehydration of Dates Improve quality of fresh and dried dates Increase profitability of date farmers by minimizing wastage during monsoon

season

By introducing mechanical dehydration technology the project mainly aims toenhance the quality of fresh or dried dates and increase the profitability of growers by

providing a prompt drying solution during the monsoon season when harvesting is atits peak. The common facility center shall also be used by local growers and/or traders to get other agricultural products like onions and garlic dehydrated during off-season.

Due to non availability of adequate dehydration / drying and storage facilities a huge part of the produce goes to waste every year. Wastage is estimated to be as high as30% - 35%. Although the food processing industry of Pakistan has made someheadway but still has weak impact on agriculture. The scenario of post-harvest

processing of dates and spice crops is not encouraging in our country. Reliable andunified methods of post harvest handling, processing and storage are lacking and

prevailing methods are not that promising. This ultimately leads to: Unhealthy produce High wastage quantum Rejection from export market Low selling prices

As dates, onions and garlic are primarily food items, the need for clean and bacteria-free products is important. Importing countries are increasingly applying stringentPhyto-Sanitary Regulations on these products. It is, therefore, imperative that thegovernment takes immediate steps to upgrade the quality of these products throughthe adoption of modern and innovative techniques such as mechanical dehydration.In effect, quality assurance needs to commence at the farm level and follow throughto exports.


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4.2 Linkage Between Proposed Project and Sector Objectives:

Improve Quality of Product

Prompt mechanical curing of dates to pidh stage will prevent defects of the fruits,including color loss, broken skin, sunburn, blemishes, insect infestation, inclusionforeign matter, pesticide residues, mold and decay. The process will improve thequality of fresh dates by preserving their natural color and other physical attributes.

Enhance Competitiveness of Local Industry and Export Development

The proposed project aims to enhance the competitiveness of the local industry byhelping them produce premium quality fresh dates, with minimal bacteria and mouldconcentration acceptable in the international market, free from insect infestation,sunburn and other blemishes. Most importantly the project aims to reduce the cropwastage that has a direct effect on their profitability. Mechanical dehydration willopen avenues for export of value added agro-based products from Pakistan.

Promote Growth of Engineering Design and Consultancy

Indigenous dehydration machinery shall be employed by the project. The venture has been carefully envisaged to promote the growth of engineering design andconsultancy in the country.

Business and Cluster Development in Rural Economy

The establishment of this model facility is intended to encourage the private sector toestablish modern processing units of their own. This will in turn increase the volumeof exportable fresh dates. The premium that can be obtained by preserving the color,

physical attributes, minimizing the toxins levels and preventing inclusions and insetinfestations is incentive enough to introduce and promote this promising agro-

processing technology.

Further, the project is strategically proposed to be located at Khairpur to enhanceactivities in the non-farm sector of the rural economy and promote ruralindustrialization.

4.3 Description and Technical Parameters

Keeping in view the available types of dates and stock conditions it is assumed thatthe plant proposed for establishment in Khairpur should be meant for processing of all varieties of date. The project is proposed to adopt mechanical drying techniques,which will reduce the moisture content of the fresh dung to 20% within 6 8 hours.

The project also proposes to dehydrate onions and garlic.For processing, dates will be transferred from storage area through a feeding lineelevator and automatically dumped over a shaker for preliminary washing. Thenwashed dates would be loaded on trays for drying in the mechanical dehydratorswhere hot air will be supplied to remove excess water. Processed dates containing20% moisture will be conveyed to the finished goods storage area for packing andtransportation. The plant will run on two shift basis and will have the provision for future capacity expansion.


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The facility will also have storage areas for raw material input, finished fresh/dried products. 90 people will be hired by the project in various departments on contractand daily wages.

This project will serve as a common facility center for the local growers/traders, providing mechanical processing services at minimal charges.

4.5 Project Justification and Opportunity Rationale:

Pakistan has the capacity to supply fully processed premium quality dates in variousstyles, shapes and forms, which include pitted/ un-pitted whole dates, pressed date

bricks, date chops, date paste in bulk as well as ready-to-distribute small boxes/jars.While export of fresh dates fetches a better price in the international markets thandried dates, the analysis of Pakistans dates export reveals that fresh dates constituteonly 10% of export volume and 2-3% of total annual production of dates.International demand of fresh dates presents an excellent opportunity for Pakistanitraders to increase their share in global trade.

After harvest dates in Pakistan are cured for eight to fifteen days in the sun on strawmats in open grounds and alongside roads and highways. The fruit gets contaminatedwith moulds and bacteria. Color loss, broken skin, sunburn, blemishes, insectinfestation, inclusion of foreign matter and growth of mold further damages the fruitand reduce its trade value. By the time the dates reach processing units, only a verysmall quantity remains fit for export and meet international SPS requirements.

The establishment of the proposed project is expected to solve the following issues:

Export Issues : In the year 2005-06 Pakistan exported around 10,000 tones of freshdates. However, technical measures such as food quality and Sanitary and

Phytosanitary (SPS) requirements under WTO regime impede trade of fresh dates aswell as other agricultural products. Pakistan, as a result, is inherently unable toexport fresh processed dates to a majority of Countries because of theaforementioned contaminations and fruit damage. There is a need of a Governmentintervention to resolve the problem in the dates clusters to open up avenues for our traders.

Rural Economy : At present, the dates growers profit little from the sales of their produce. Better quality produce will bring in better prices, thereby, benefiting thefarmer. The premium is estimated to be between Rs. 5 7.5 per kg. Setting up adates processing plant at Khairpur, in close proximity of date farms, will providedirect and indirect employment opportunities to the local people and facilitate ruralindustrialization.In order to make this project viable and profitable, it was decided that garlic andonions be dried at this plant too. There is a high demand for dried or powdered garlicand onions in the international market and dehydrating them at the plant at Khairpur will prove highly beneficial.


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4.6 Investment Issues:

Modern mechanical dates processing plants are beyond the investment capabilities of SMEs in this sector. The Government may take an initiative to establish theaforementioned as common facility center as a demonstration unit for private sector investor to replicate based on its success. The proposed project will be the first of itskind to provide curing and drying services to the dates and spices sector. Around 150-200 small growers will directly benefit from the project during the date season eachyear. The crop damages caused to these farmers due to monsoon rains will be reduced

by 30 -35% and increase in volume of premium quality fresh/dry dates.

Khairpur is an agricultural area and populous district with all utility services likewater, road, drainage network, electricity and gas supply in the area. An acceptablequality of water is available at average depth below the ground level. Freshwater for cleaning and washing of dates can be made available by using an electric pump. Allother energy sources/fuel like wood, kerosene oil and gas are generally available inthe district.

37 date processing plants become operational in the district during the date season.These plants are currently buying raw material partially from the Date farms inKhairpur District and Sukkur. Quality dates can be supplied to these processing

plants from the centre which in turn will prepare a sizable volume of quality freshdates for exports.

4.7 Market Analysis for Dates Dates (Arabic: Tamr) have been a staple food of the Middle East for thousands of

years. They are believed to have originated around the Persian Gulf, and have beencultivated since ancient times from Mesopotamia to prehistoric Egypt, possibly asearly as 4000 BC. There is archaeological evidence of date cultivation in easternArabia in 6000 BC (Alvarez-Mon 2006). In later times, Arabs spread dates aroundSouth & South East Asia, northern Africa, and Spain. Dates were introduced intoMexico and California by the Spaniards by 1765, around Mission San Ignacio.

Three main cultivars of dates exist; soft, semi-dry and dry depending on the glucose,sucrose and fructose content. Most of the commercial plantations use cuttings of heavily cropping cultivars. There are around 40-50 important culivars grown invarious parts of the world. Date fruit appears in different sizes, shapes and color. Themain quality parameters shape, size, taste, texture, pit/date ratio and uniformity in

colour and size of the fruit. Other parameters from the point of view of traders, processors and exporters may also be moisture, sugar and fibre content, defects of thefruits, which may include discoloration, broken skin, sunburn, blemishes, shrivel,deformity etc. and presence of insect infestation, foreign matter, pesticide residues,mold and decay.

Pakistan has immense potential to grow and export dates required by various marketsaround the world. There are more than 100 varieties of dates palm in Pakistan, among


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them the popular varieties are: Aseel, Zahidi, Fasli, Maazwati, Dhakki, Kharbalian,Begum Jangi, Dagh, Goakna, Tota, Karwan, Hillavi, Khudrawi and Mozawati.

4.8 Supply and Demand Dynamics

Pakistan produced 426,000 tones of dates in 2006-07 and exported around 104,000tones of dry/fresh dates to India, Nepal, Bangladesh in Asia and USA, UK, Canada inEurope and North America. Area under cultivation during the year 2006-07 wasalmost 85,000 hectares which is an increase of 3.2% from 82,000 hectare from the

previous year. However a steady decrease in yield during the last few years is causing prices in the local market to increase. A steady demand of dry dates from India whichconstitutes 90% of Pakistan export is encouraging growers to increase plantations.Heavy monsoon rains during the last two years have been responsible for a decline in

production in Balochistan, which is reflected in chart below. 1

The production of dates in 2007 waned by 20 to 25 percent. This is mainly because of heavy monsoon rainfalls. About 30 to 35 percent of the crop is estimated to have beendamaged due to heavy rains in the major growing regions of Sindh and Balochistan.Dates production in Sindh stood at 201,020 tonnes in 2006-07 compared to 318,232tonnes in 2004-05. In Pakistan, dates are grown in all four provinces. District

1 Economic Trade and Investment Wing, MINFAL

Table: 9.1

Area and Production of Dates in Pakistan

0

100000

200000

300000

400000

500000

600000

700000

1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07

Year

A r e a

( H e c

t a r e s

)

P r o

d u c

t i o n

( T o n s

)

Area (hectares) Production (Tons)


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Khairpur in Sindh is the largest producer of dates in Pakistan which contributes about39% of the total Date production. Almost 50% of dates are grown in Sindh. 2

Sindh and Balochistan are the major dates producing provinces in Pakistan. Themajor Dates growing districts in Sindh are Khairpur and Sukkur. Sukkur is the

biggest Dates market in Pakistan contributing 80% of the total traded volume.

Economic Trade and Investment Wing, MINFAL2 Fruit, vegetable and condiments statistics of Pakistan 2006-07, MINFAL (Economic Wing)

District-Wise Production of Dates in Sindh in 2006-07

Khairpur, 81%

Shikarpur, 1%Ghotki, 4% Larkana, 1%

Others, 1%Sukkur, 12% Khairpur

SukkurGhotkiShikarpurLarkanaOthers

Province-wise Date Production in Pakistan

Year 2006-07

Sindh48%

Balochistan40%

NWFP2%

Punjab10%

Balochistan

Sindh

NWFP

Punjab


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4.9 Dates Trade

There is a high demand for fresh dates in the international market. Although the localmarket is relatively indifferent to the defects of the fruits, which may include

discoloration, broken skin, sunburn, blemishes, shrivel, deformity etc. and presence of insect infestation, foreign matter, pesticide residues, mold and decay, but major food processors are wiling to pay a slightly higher price for defects free product, as theycan recover their costs through exports. Pakistans dates exports are currently on therise and dates exports from the country are mostly to India, Bangladesh, Nepal, USA,UK and Canada. However these exports mainly consist of dry dates, which fetch alow price. Many avenues are still closed for our exports. High food prices areestimated to continue in the next few years which are going to push the prices of datesupwards. The international trading scenario in the next few years is in favor of Pakistani dates traders provided that they maintain the quality of product.

In the domestic market dates prices are going to open at their all time high thisseason, around Rs. 55-60 per kg. Traders and growers are expected to buildinventories. High prices in the local and international market as well as crop loss dueto rain will compel and encourage growers and traders to process or dehydrate Datesat the proposed dates processing facility.

* Source: Pakistan Revenue Automation Limited, PRAL.

Table: 9.5

Dates Export from Pakistan

-

20,000

40,000

60,000

80,000

100,000

120,000

2003 2004 2005 2006

Year

Q u a n

t i t y ( T o n s

)

V a

l u e

( U S $ ' 0 0 0 )

Exported Value Exported Quantity


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B. Implementation periodTime required for the completion of survey / feasibility study would be 5 months i.e.

November 2008 to March 2009. Following is the tentative activity schedule for eachcluster.

Rice Cluster- LarkanaActivities Weeks

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Approval of PC-IIRelease of FundsPreparation of TOR of consultantsApproval of TOR Advertisement in the PressReceipt of bidsScrutiny of bidsSelection of Consultant

Approval by competent authorityIssuance of offer letter Agreement with consultantJoining of consultantCluster Visits / Meetings &AnalysisSeminars / WorkshopsFinal Report

Mango Clusters-Hyderabad and MirpurkhasActivities Weeks

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Approval of PC-IIRelease of FundsPreparation of TOR of consultantsApproval of TOR Advertisement in the PressReceipt of bidsScrutiny of bidsSelection of ConsultantApproval by competent authorityIssuance of offer letter Agreement with consultantJoining of consultantCluster Visits / Meetings &AnalysisSeminars / WorkshopsFinal Report


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Vegetable Processing Nawabshah, Tando Allahyar, MirpurkhasActivities Weeks

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Approval of PC-IIRelease of Funds

Preparation of TOR of consultantsApproval of TOR Advertisement in the PressReceipt of bidsScrutiny of bidsSelection of ConsultantApproval by competent authorityIssuance of offer letter Agreement with consultantJoining of consultantCluster Visits / Meetings &

AnalysisSeminars / WorkshopsFinal Report

Cotton Ginning Ghotki and SangharActivities Weeks

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Approval of PC-IIRelease of FundsPreparation of TOR of consultants

Approval of TOR Advertisement in the PressReceipt of bidsScrutiny of bidsSelection of ConsultantApproval by competent authorityIssuance of offer letter Agreement with consultantJoining of consultantCluster Visits / Meetings &Analysis

Seminars / WorkshopsFinal Report


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Red Chilies- Kunri

Activities Weeks1 2 3 4 5 6 7 8 9 10

Approval of PC-II

Release of FundsCluster visits/meetingsAdvertisementSeminar/WorkshopFinal Report

Dates Cluster- Khairpur


Approval of PC-II

Release of FundsCluster visits/meetingsAdvertisementSeminar/WorkshopFinal Report

Guava Cluster- Larkana


Approval of PC-IIRelease of FundsCluster visits/meetingsAdvertisementSeminar/WorkshopFinal Report


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C. Year wise estimated cost

Rs. 18.5 Million will be required for the survey / feasibility, seminars and workshops for all the three clusters.

Clusters Estimated Cost (Rs. in Mn)Rice Larkana 3.0Cotton Ginning 2.5Vegetable Processing 2.5Mango Hyderabad 2.0Mango - Mirpurkhas 2.0Mango - Sanghar 2.0Red Chillies Kunri 1.5Dates-Khairpure 1.5Guava 1.5

Total 18.5

D. Manpower requirements

Two persons from P & D, One person from SMEDA will directly involve in this project.Other persons may be deputed from the respective departments as required to oversee this

project.

Financial plan (For Rice)

Sr. No Programs Cost (Rs.)

1 Advertisement for hiring of consultants (English & Urdu) 120,000

2 Consultants 2,000,000

3 Cluster Visits / Meetings 100,000

4 Advertisement (2 Newspaper, English & Urdu) 100,000

5 Venue 30,000

6 Lunch (100 Persons) 50,0007 Banners 10,000

8 Stationary 40,000

9 Info Packs 40,000

10 Memento(s) 10,000


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11 Miscellaneous (At least 20 % of Total Cost) 500,000

Total 3,000,000

Financial plan (Cotton Ginning)






5 Venue 30,000

6 Lunch (100 Persons) 50,000

7 Banners 20,000

8 Stationary 50,000

9 Info Packs 40,000



Total 2,500,000

Financial plan (Vegetable Processing)






5 Venue 30,000


7 Banners 20,000


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8 Stationary 50,000

9 Info Packs 40,000



Total 2,500,000

Financial plan For Each Mango Clusters: Hyderabad, Mirpurkhas andSanghar






5 Venue 30,000


7 Banners 20,000

8 Stationary 50,000

9 Info Packs 40,00010 Memento(s) 10,000


Total 2,000,000

Financial plan (For Each Red Chillies & Dates Clusters)


3 Cluster Visits / Meetings / Workshops 1,000,000


5 Venue 20,000



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7 Banners 10,000

8 Stationary 10,000

9 Info Packs 10,000



Total 1,500,000

Financial plan (For Guava)


3 Cluster Visits / Meetings / Workshops 1,000,0004 Advertisement (2 Newspaper, English & Urdu) 140,000

5 Venue 20,000


7 Banners 10,000

8 Stationary 10,000

9 Info Packs 10,000



Total 1,500,000


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IV EXPECTED OUTCOME OF THE SURVEY FEASIBILITY

STUDY AND DETAILS OF PROJECTS LIKELY TO BE

SUBMITTED AFTER THE SURVEY.

a. Preparation of feasibility studies for relevant SME projects b. Validation / Preparation of diagnostic study conducted by SMEDAc. Meetings with relevant stakeholders like farmers, growers, traders, manufacturers /

processor, exporters, Government organizations, relevant associations and trade bodiesetc.

d. Review of Project reports prepared by SMEDA and modifies the project reports as per requirement.

e. Identification of cluster projects in the context of Public-Private-Partnership (PPP)mechanism.

f. Recommend pilot projects / CFCs to be carried out by Government of Sindh.g. Preparation of comprehensive report and presentations (presentation will be presented at

seminar while report will be shared with the participants)h. Consultant will moderate and record the proceedings of the seminar.i. Consultant will prepare and present the final report.

_____________________Prepared by: Nawab Pirzada,

Assistant Chief (Industries)

Planning & Development Deptt:

_______________________Checked by: Bisharat Ahmed Channa

Chief (Industries)Planning & Development Deptt:

___________________________Approved by: Mohammad Ali Khaskhely

Secretary (Planning)Planning & Development Deptt:Government of Sindh

PC II Agrobased Clusters Combined _Ind

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