Seminar on Agriculture

Common Facility Centres for Horticulture Products

Pakistan Horticulture Development & Export Company

Ministry of Commerce, Government of Pakistan

Monday 28-03-2011
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Objectives & Operational Divisions

A. Supply Chain Management i) Facilitation & Support on international compliances for food quality & safety ii) Capacity building of stakeholders through trainings & technical assistance iii) Product Development & Certifications B. Marketing i) Market Intelligence & Information Dissemination ii) Product & Market Diversification iii) Linkages Development & Trade Delegations iv) Trade Dispute Settlement C. Business Development i) Supply Chain Infrastructure ii) Value Addition
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Requirement of Common Facility Centres

Current Horticulture Production is (for 2008-09) 15.0 million tons. Based on domestic market rates of fruits and vegetables, its total worth is estimated at around Rs 225 billions($2.60 billion). Among other things, one of the main constraint of horticulture sector is heavy post harvest losses estimated at 20-40 % mainly attributable to poor/ less than satisfactory infrastructure for post harvest treatment of horticulture produce e.g., pack houses, cold stores & refrigerated transport. Compliance of SPS requirements of the importing countries requires infrastructure like, hot water treatment, cold treatment, irradiation, vapour heat treatment etc. besides Global GAP, HACCP, ISO 22000 certification. Since, the above said infrastructure is costly, establishment of common facility centres is the appropriate solution. Collection Points being established by PHDEC is a step in this direction. Paras Foods and Apple Grading Plant at Quetta are other CFCs under PHDEC. PHDEC has entered into a joint venture with a private sector partner for processing of Fresh Fruits & Vegetables Processing at Karachi. PHDEC, on directive of Taskforce on NTCIP / Ministry of Commerce, has been working on a mega project comprising common facility centres for horti products.

Requirement of Processing Units

(000)Tones Commodity Producti on (200910) Marketable Volume @ 75% of Production Export (200910) Export Potential Existing No. of Units Total Annual Existing Capacity Gap V/S available capacity No. of Units Required

Citrus Mango

2395 1875

1796 1406

361 85

400 200

110 9#

495 27

-95 173 23

Dates (fresh & dried)

575

431

(6+115 )

(25+125)

19

10

15

15

Seasonal Vegetables

3508

2631

86

120

100

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Based at full operation,

Based on 5-10 tons/hr capacity,

For fresh Dates based on 1 ton/hr capacity, Based on 3 ton/hr capacity # Including projects being supported by FIRMS-USAID 3

Requirement of Cold Stores

(000Tons) Clusters 1 Productio n (2009-10) 2395 1875 459 2451 2540 5320 15040 Marketabl e Volume @ 80% of Productio n 1796 1406 344 1838 1905 3990 11280 Storage Requireme nt Stores Available In Pakistan Capacity 194 25 34 172 323 169 916 No. of Units1 119 15 21 105 197 103 560 Gap/Requirements 4 Gap in Capacity 345 46 103 380 439 629 1942 No. of Units 115 23 34 190 146 315 708

Kinnow Mango Apple Other Fruits Potato Other Vegetables Total

539 70 138 551 762 798 2858

1 Data on commodity wise storage is not available , these are only estimates based on crop cluster of the relevant areas and judgement. This has been estimated on the basis of shelf/storage life of the relevant product.

Available storage capacity has been worked on basis of average capacity of 1,637 tons/unit. Capacity of the required storages has been assumed at 1000 tons/unit. However, storage period has been taken on the basis of storage/shelf life of various products. This has been estimated on the basis of shelf/storage life of the relevant product.

Cool Chain System (CCS) Project under National Trade Corridor Improvement Program
PHDEC, with the help of IPDF, has developed a project comprising 70 units to be established as common facility centers on the basis of Public Private Partnership. The brief detail are given here under: Project Scope
a) 39 Modern pack-houses (including cold storage facilities at 31 locations) Products: Kinnow, Mango, Apple, Dates, Banana, Apricot, Peach, Plum, Grapes, Potato, Onions, Tomato and Seasonal vegetables b) c) d) 23 Cold storages (CA & VS Storages at 23 locations 13-production areas, 7-airports, 3- seaports) 2 Reefers/container yards (with parking capacity for 200 containers & 50 CA containers each at Lahore & Karachi) 6 Testing labs at different locations (production areas)

Cool Chain System (CCS) Project under National Trade Corridor Improvement Program
Project Implementation Strategy Project will be implemented in two components i) Punjab & Khyber Pakhtunkhwa ii) Sindh & Balochistan

Project will be implemented under Public Private Partnership

The private sector will make the investment Government will provide incentives Testing labs: will be established in public sector Project Cost
(Rs in million) Description Total Project Cost Punjab NWFP 7,513 Bal. Sindh 4,993 Total 12,506 6

Cool Chain System (CCS) Project under National Trade Corridor Improvement Program
Financial Indicators
Punjab KPK FCFF NPV (Rs. in million) IRR (%) Payback( years) DSCR (times) 4,842 28% 6.4 0.6 18.6 FCFE 2,928 38% 5.6 Balochistan Sindh FCFF 4,385 31% 5.9 FCFE 2,791 44% 4.9

0.8 23.4

LLCR (times)
PLCR (times) Benefit to Cost Ratio

3.0
8.08 2.41

3.39
9.57 2.43

Project Status
Under approval process (for concessions/incentives ) after which EOI would be invited from potential investors. PHDEC will be Coordinating/Monitory body on behalf of Govt. IPDF is assisting in project formulation/marketing and implementation
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PARAS Foods
Project Scope This is a joint venture of PHDEC & PAEC (Pakistan Atomic Energy Commission). The main objective of the project is to act as a common facility centre for irradiation of horticulture products (fruits, vegetables, spices & herbs etc) Its major purpose is to achieve dis- infestations, extend shelf life of produce and meet quarantine (SPS) requirements of the importing countries. It is a joint venture of PHDEC and PAEC. Project cost (approved) Date of Approval EDF Funds Date of Funds Release Date of Commencement Cost Incurred Rs. 78.127 Million. 22-09-2004 Rs. 60.080 Million. 08 -04 - 2005 June 2006 Rs. 95.640 Million (approx.) Cost beyond EDF funds has been financed by equity/payables to PAEC/ATCOP

Project Cost

Project Status Project has been in operation since June 2009. Recently, its marketing activities have been out- sourced to a private sector party to increase its capacity utilization / revenue generation.
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PARAS Foods

Apple Grading Plant - Quetta

Project Scope Location Project Cost

Renovation & Up-gradation of old apple grading plant. The project is to be run as common facility centre. Agri Research Institute, Sariab Road,Quetta. Rs. 20.35 million
Rs. 6.35 million Machinery (Funded by EDF) Rs. 15.0 million Land & Building (Provided by Agriculture Dept. Balochistan)

EDF Funds Project Status

Rs. 6.35 million Operational since Aug 2008 while Cold store is under construction

Despite efforts to motivate private sector, the project has not started commercial operation mainly due to poor law & order situation in the area and non availability of working capital. To attract private sector partners, advertisement will be placed in newspapers shortly.
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Apple Grading Plant - Quetta

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Common Facility Centre for Fresh Fruits & Vegetables Processing at Karachi
Project Scope

This is a joint venture between Govt. of Pakistan ((through PHDEC) and Durrani Associates . The management of the plant would be with private partner. The scope of processing activities includes sorting washing/cleaning, hot water treatment, cold treatment, grading, packing, and storage of various products, mainly for following products: Hot water treatment: Mango, Grapefruits, Capsicum,Tomato & Chilies etc. This would result in commercialization of sea shipments of mango/other at larger scale. Chilling treatment: Kinnow, cabbage, cauliflower, Capsicum, Green chilies, Cucumbers etc
Location Plant Capacity : : Gadap Road, Karachi (Sindh 15 tons/hr; 150 working days/annum

Project Cost
Financing Plan Durrani Associates PHDEC (EDF) Financial Indicators

Rs. 177.505 million

Rs. 88.754 Rs. 88.753

IFRR Pay Back Break-even Net Present Value

: : : :

47.47% 3.1 Years 49.32% (1st Year) Rs. 363.253 million

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Dates Processing Plant at Khairpur

Project Scope Fresh dates processing facility comprising of Storage, Fumigation, Cleaning & Washing, Drying, and Sorting & Grading & Packing. The project will be implemented under PPP mode. In this connection, an MOU signed with Sindh Board of Investment & Agriculture Department, Sindh. The plant will have a processing capacity of 1.5 tons per hour or 3,375 tons per year (based on two shifts and 5 months operation) at 100% capacity level. Revised Total Project Cost Revised Project Cost Excl Land Funds Available Shortfall/Funds Requirements
IFRR NPV (at 15 %) Average rate of return Pay back period Breakeven capacity

Processing Capacity

Project Cost

= = = =
33.7 % 77.493 27.99 2.87 years 28%

Rs. 91.375 million Rs. 88.075 million Rs. 20.000 million Rs. 71.375 million

Financial Indicators

Project Status

PHDEC & SBI jointly are working on this project

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Support / Suggestions for Hoticulture

Support for Common Facility Centers for processing of fresh fruits & vegetables Approval of Cool Chain System Project by CDWP/ECNEC on fast track basis. Extension of mark-up support facility (through Export Development Fund) to Pack Houses & Value Addition units. Resolution for shortage of Controlled Atmosphere (CA) and Reefer containers for sea shipments. Resolution for inadequate air cargo space. Special air freight rates for export of mangoes. Financial support to farmers/exporters Loan Guarantees Revolving credit (seasonal)
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www.phdeb.org.pk
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PROPOSED SITES FOR PACK HOUSES WITH COLD STORAGE FACILITIES

Commodity* Pack House /Cold Store 1 PH & 1 CS 1 PH & 1 CS 1 PH & 1 CS 3 PH & 3 CS Processing Capacity (MT (20 t / h) (5 t/h) (5 t/h) (8-10 t/h) (8-10 t/h) (8-10 t/h) (8-10 t/h) (5 t/h) (8-10 t/h) 1 PH & 1 CS (5 t/h) (5 t/h) (10-12 t/h) (10-12 t/h) (10-12 t/h) 1500 (3 X 500) Hyderabad NWFP Balochistan NWFP Balochistan Balochistan Cold Storage Capacity (MT) 5000 (10 X 500) 3000 (6 X 500) 3000 (6 X 500) 1000 (4X250) City/Area Province Punjab Punjab Punjab Punjab Punjab Punjab Sind Punjab Sind

Kinnow Kinnow Kinnow Mango

Bhalwal T.T. Singh** Mandi Bhaudin** Multan

Mango
Mango Mango Mango, Citrus & Vegetable

2 PH & 2 CS
2 PH & 2 CS 1 PH & 1 CS 1 PH & 1 CS

1000 (4X250)
1000 (4X250) 1000 (4 X 250) 2000 (4 X 500)

R.Y.Khan
Muzafar Garh MirpurKhas Khanewal

Mango + Banana Ripening Facility

Apple Apple & Grapes Peach, Apple Apple, Apricot Apple, Apricot

1 PH & 1 CAS 1 PH & 1 CAS 1 PH & 1 CAS 1 PH & 1 CAS 1 PH & 1 CAS

3000 (6 X 500) 2000 (4 X 500) 4000 (8 X 500) 1500 (3 X 500) 2000 (4 X 500)

Peshawar Quetta Swat Kalat Kila Saifullah

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PROPOSED SITES FOR PACK HOUSES WITH COLD STORE FACILITIES

Commodity* Pack House /Cold Store 2 PH & 2 CAS 1 PH & 1 CAS 1 PH & 1 CAS 1 PH & 1 CAS 1 PH & 1 CS 2 PH & 2 CS 2 PH & 2 CS Processing Capacity (MT Cold Storage Capacity (MT) 2000 (4 X 500) 2000 (4 X 500) 1000 (4 X 250) 2000 (4 X 500) 5000 (10X500) 2000 (4 X 500) 2000 (4 X 500) City/Area Province

Apple, Apricot, Peach & Grapes

Apple & Grapes Apple, Apricot Apple, Apricot Dates Potato Potato

(10-12 t/h)
(5 t/h) (5 t/h) (10-12 t/h) (4 t/h) (10 t/h) (10 t/h) (10 t/h) (10 t/h) (10 t/h) (10 t/h) (10 t/h) (10 t/h) (10 t/h) (5 t/h) (5 t/h) (5 t/h) (5 t/h) (5 t/h)

Pishin Mastung Loralai Zhob Panjgur Okara Sahiwal

Balochistan
Balochistan Balochistan Balochistan Balochistan Punjab Punjab Punjab Punjab Punjab Sind Sind Balochistan Balochistan Punjab Punjab Punjab NWFP

Potato
Potato Potato Onion Onion Onion Onion Vegetable Vegetable Vegetable Vegetable Total

1 PH & 1 CS
1 PH & 1 CS 1 PH & 1 CS I PH & 1 VS 1 PH & 1 VS I PH & 1 VS 1 PH & 1 VS 1 PH & 1 CS 1 PH & 1 CS 1 PH & 1 CS 1 PH & 1 CS 39

2000 (4 X 500)
1000 (4 X 250) 1000 (4 X 250) 1000 1000 1000 1000 2000 (4 X 500) 2000 (4 X 500) 2000 (4 X 500) 2000 (4 X 500) 69,000

Pak Pattan
Sialkot Kasur Hyderabad Sanghar Chaghi Kharan Sheikhupura** Gujranwala** Faislabad** D.I. Khan** 31

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PROPOSED SITES FOR COLD STORAGES

Commodity Kinnow Kinnow Kinnow, Apple Potato Fruits and vegetables Apple Apple and other fruits and vegetables Peach, Apple Potato Requirement (Number) 1 CS 1 CS 1 CS Capacity (Tonnes) 3000 (6 X 500) 5000 (10 X 500) 5000 (10 X 500) Location Sargodha (Production Area) Kot Momin Islamabad (Sector I-9) Sargodha (F & V Market) Waziristan Quetta Peshawar Punjab Punjab Punjab Province

1 CS 1 CS 1 CAS 1 CS

1500 (3 X 500) 2000 (4 X 500) 5000 (10 X 500) 5000 (10 X 500)

Punjab NWFP Balochistan NWFP

Peach & Apple

Dates & other Fruits Dates Dates & other Fruits Fruits and vegetables Fruits and vegetables

1 CS
1 CS 1 CS 1 CS 1 CS 1 CS

2000 (4 X 500)
5000 (10 X 500) 5000 (10 X 500) 3000 (6 X 500) 1000 (4 x 250) 1000 (4 X 250)

Mardan
Turbat Khairpur Sukkur Chitral Chaman

NWFP
Balochistan Sindh Sindh NWFP Balochistan

Total

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43,500

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PROPOSED COLD STORAGES AT AIRPORTS & SEAPORTS

Air Ports Capacity Cold Store + Freezer Unit (Tons) 500 (5 x 100) 300 (3 x 100) Products Remarks Karachi Lahore

---Extendable to 500 tons

Faisalabad
Multan

200 (2 x 100)
200 (2 x 100)

Extendable to 300 tons

Extendable to 300 tons

Quetta Peshawar
Islamabad

200 (2 x 100) 200 (2 x 100)

200 (2 x 100)

Extendable to 300 tons Extendable to 300 tons

Extendable to 300 tons

Total
Sea Ports

1,800

Bin Qasim Karachi Port KPT Karachi Port Gawadar Port*

5000 (10 x 500)

---Fruits and vegetables, Meat, frozen food and pharma products ----

5000 (10 x 500) 5000 (10 x 500)

Total

= 3

15,000

----

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Postharvest Losses in Apples ( Swat)

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Postharvest Losses in Peaches ( Swat)

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Post Harvest Losses

Crops
Fruits Citrus Mango Dates Apple Pear Peach Plum Apricot Other fruits Vegetables 15 25 35 14 15 15 25 25 24.4

Post Harvest Losses (%)

Potato
Onion Tomato Other vegetables

15.2
20 40 30.5
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Ibrahim & Anwar, 2004, Horticulture Education, Extension & Training System in Pakistan

Operational Divisions
A. Supply Chain Management i) Facilitation & Support on international compliances for food quality & safety ii) Capacity building of stakeholders through trainings & technical assistance iii) Product Development & Certifications B. Marketing i) Market Intelligence & Information Dissemination ii) Product & Market Diversification iii) Linkages Development & Trade Delegations iv) Trade Dispute Settlement C. Business Development i) Supply Chain Infrastructure ii) Value Addition
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