5/24/2011 WEBINAR:

Portal Meets Business Intelligence: 3A Latte Arborea Co-op,

a Case Study about Dairy and Farming in Italy

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Introducing 3A Latte Arborea CoIntroducing 3A Latte Arborea Co--opop

Where we are…

Size:

Population: 1,6 million

24,090 km²

SARDINIASARDINIA

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Who we are…

3A Latte Arborea CO3A Latte Arborea CO--OPOP

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Employees: 220

Milk collected: 194 million litres/year

Turnover: 129 million €/year

The 3A ASSEGNATARI ASSOCIATI ARBOREA Co-operative is the main dairy and food

Introducing 3A Latte Arborea Co-op:

Location & Processing plant

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The 3A ASSEGNATARI ASSOCIATI ARBOREA Co-operative is the main dairy and food

industry in Sardinia today.

It is a reality with 223 member-partners representing 286 farmers from all over Sardinia.

Its member-partners produce 550 thousand litres of milk every day from approximately

50,000 heads of cattle (Holstein and Brown Swiss bred).

The 3A Co-op collects approximately 90% of all cow milk produced in Sardinia, for an

annual volume of over 200 million litres of milk.

Introducing 3 A Co-op: Strategy & Vision

Mission

Marketing position

Increase the value of the member-partners’ production by managing

the whole dairy chain using a sustainable approach for partners,

workers, customers, consumers and land.

The commitment to support the territory’s economy and to increase their

products value weaves together with the values of mutual assistance,

solidarity and social relations that indissolubly form the heart of the

company’s strategy.

Leading Company in the dairy market of Sardinia

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Marketing position

Growth

Profitability

Member-partners’ milk price 2009: 0,378 €/lt vs. Italy Avg Mkt 0,320 €/lt VAT excluded

Leading Company in the dairy market of Sardinia

2006 – 2008 CAGR of the Company Turnover: + 8,1%

EBITDA Margin 2008: 5,6% / EBITDA Margin mkt 2008: 12,1%

Introducing 3 A Co-op: Dairy products

MILK, CREAM,

BUTTER

53% (€ 66 MIO)FRESH CHEESE

2% (€ 2 MIO)

CHEESE &

Other products

13% (€ 16 MIO)

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RAW MILK

14% (€ 18 MIO)

MOZZARELLA

16% (€ 20 MIO)

YOGURT

2% (€ 3 MIO)

13% (€ 16 MIO)

Turnover 2010: 129 mln €

The DAIRY CHAIN

FARMINGFARMING

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THE PROJECT’S GOAL:

TO INCREASE AND IMPROVE COMPETITIVENESS IN

THE DAIRY MARKET

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THE DAIRY MARKET

ACTING ON THE WEAK POINT OF THE DAIRY CHAIN

THE PROJECT PARTNERS:

3 A Latte Arborea Co-op

APA

Association for cattle breeding and genetic improvement

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Association for cattle breeding and genetic improvement

University of SassariDepartment of Zootechnical Sciences & Animal Nutrition

Farm Processing & Production Packaging Distribution Retailing Consumer Post consumer

THE DAIRY SUPPLY CHAIN

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People

Value

82300 220 80

60% 8% 2 %

Farming is the most important as well as the weakest step of the whole dairy chain

24 % 6 %

Suppliers along the dairy chain Other costs

Global Dairy Market: Milk price volatility

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Introducing 3 A Co-op: Milk price volatility vs 3A Coop price

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20

25

30

35

eu

ro/1

00

kg

latte

Costi generali

Costi specifici settore latte

Costo spandimento liquame

Imposte e tasse

Manutenzione macchine

Manutenzione fabbricati

Contoterzi

22,9024,60

28,26

33,34

Introducing 3 A Co-op: Milk cost production

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0

5

10

15

Piemonte Lombardia Veneto Arborea

eu

ro/1

00

kg

latte

Assicurazioni

Acqua (stalla + irrigazione foraggi)

Energia (carburanti + elettricità)

Veterinario + Medicinali + inseminazioni

Acquisto animali

Materie prime produzione foraggi(sementi, fertilizzanti ecc)Foraggi acquistati

Mangimi acquistati

11,3313,66

11,22

15,86

Project’s goal:

To craft and set-up an information system that can effectively support our farmers in mastering their

business by means of gaining new skills and knowledge of economic/financial effects as a result

of managerial choices and actions

in order to ensure a sustainable growth

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The project’s milestones:

1. Computerizing dairy farms

2. Integrating data from different sources (gov. Agencies, dairy associations, other

institutions)

3. Setting-up a control panel

4. Tutoring and advice in data interpretation

5. Technical and managerial training

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For dairy farms:

• To assess production costs and technical/economic efficiency

• To identify strengths and weaknesses

• To identify technical solutions to overcome critical issues

• To enhance short and long-term planning and choices

For the dairy chain:

• To compare our system to those of other regions/countries

• To gather insight on what factors mostly affect production costs along the dairy

chain

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chain

• To identify critical issues (feeding costs? Shortage of soil?) of the dairy chain in

Sardinia

• To plan and take action within the system to overcome critical issues and lower

production costs

Information system: the process

Sistema

Elaborazione DATI OUTPUT

3A Coop data

DATA

ELABORATION

Sassari University

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Elaborazione DATI

(B.I.)

OUTPUT

FARMERFarmer’s

partners

Farmer’s

partners

APA data

Farmer’s data

ELABORATION

SYSTEM (BI)

It’s one of the first BI systemdeveloped in a dairy chain in Italy

The 3 A Co-op project

Each member-farmer has been provided with a personal computer loaded with a specific application program as a support to manage the farm - Ecostalla.

A Service Centre to support the farmerA Service Centre to support the farmerA direct phone number – text message systems – Training course…

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August 2010 – 1st group: 42 farmers

November 2010 – 2nd group: 21 farmers

March 2011 – 3rd group: 25 farmers

Involving farmers

The project started-up in August 2010….

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Farmers involved so far:Farmers involved so far: 88

The 2 key reason-why of

the PROJECT…

Firstly: there is a large gapbetween the dairy farms in terms of top best performers and the bottom worst ones

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Secondly: nowadays staying in the market depends on an effective management of the dairy firm

The Farmers’ Portal:

www.lattearborea.it

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The Farmers’ Portal:

IPAD

3 A Co-op Farmer

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Thank youThank you

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francesco.casula@lattearborea.itfrancesco.casula@lattearborea.it

cannas@uniss.itcannas@uniss.it