Fruit industry joint ventures:
Improved post-harvest handling, quality control,
and product design for foreign markets
By Jon Fernquest |
Saturday's Asia Focus section of the Bangkok Post discussed joint ventures between Thai agribusinesses and foreign partners aimed at solving many of the problems that have plagued the industry in the past.
Post-harvest handling of fruit, including logistics and quality control is critical. Read a previous article about quality control problems in the past.
Tropical fruits such as mangoes, mangosteen, pineapple, rambutan, durian, lychee and longan are considered exotic fruits in many western countries. Particular attention has to be paid to making products that westerner's (Europe, US, Australia, New Zealand) will buy. For example, sweet mangoes, not sour mangoes, are preferred by western consumers. Other parts of the world have their own preferences which are important if you want to sell products in those markets, such as the Muslim Middle East, China, or Japan.
Here is the article in full:
ASIA FOCUS
Ripe time for picking
Working with foreign experts could help bring down barriers to Thai fruit in tough markets, writes Walailak KeeratipipatpongSaturday June 14, 2008
Forming joint ventures with foreign partners could be an effective tool to push Thai products abroad, especially to sophisticated markets guarded by restrictive import standards.
For instance, a joint venture between the CP Group and Japan's Diamondstar Corporation five years ago has enabled Thai mangosteen and a large variety of Thai mangoes to access the Japanese market.
Also, the co-operation contract the group signed with the Australian state of Queensland in 2004 to develop Thai tropical fruit for export has opened up a chance for Australian consumers to taste Thai mangosteen. The deal has also established logistics and marketing collaboration on fruit between the two countries.
"In the past, only certain kinds of Thai fruit were exported and only to a limited number of markets, largely because of poor logistics and post-harvest handling," said Kreingkrai Wattanasawang, general manager for horticulture of Charoen Pokphand Seeds Co.
Technology and know-how provided by foreign partners have helped improve the management of Thailand's fruit orchards.
He said these two markets imposed high import standards, especially on exotic fruit, to protect local consumers and they would only buy from the manufacturers they trusted.
The Thai-Japanese joint venture, CP Diamondstar Co, was therefore formed to break the barriers, with registered capital of 70 million baht, 51% of which is held by the Thai partner.
It established a factory in Chon Buri to buy mangosteen, and many varieties of mango: Nam Doc Mai, Choke Anan, Maha Choke and the Australian-developed variety R2E2. The fruit is then disinfected by wind and hot steam.
Mangosteen is subjected to additional scanning since its thick skin makes it hard to check if the quality is good.
The company claimed to be the only company in Thailand to use scanners to check the quality of each fruit, a costly process that is reflected in their price in Japan, at around 85 baht each.
Banharn Wismitanant, general manager of CP Diamondstar Co, said the joint venture had not only brought in technical know-how but allowed CP to enter the Japanese market thanks to the strong network of Diamondstar Corporation, a leading Japanese fruit trader.
It shipped 140-150 tonnes of mangoes to Japan last year, the first full year of sales by the joint venture, and the volume is expected to rise to 200 tonnes by the end of the year.
The Thai company is waiting for Japan to give the green light to pomelo imports soon after authorities of the two countries have been working on the procedure for some time.
The Agriculture Department is negotiating for Japan to open its market for pomelo, the third item from Thailand, after mango and mangosteen.
The permission could convince CP to double the production of the fruit to two million units this year. Last year, CP shipped about 400,000 pomeloes to China, Hong Kong, Canada, and Singapore.
Mr Banharn said that Australia's Queensland State was famous for its effective management of pre- and post-harvest fruit handling, especially tropical fruit, as it has the same climate as Thailand. The state can grow many of the same kinds of fruit as in Thailand, such as mangoes, mangosteen, pineapple, rambutan, durian, lychee and longan but have different harvesting periods.
According to Mr Banharn, CP has definitely benefited from the Thailand-Australia free trade area agreement which had been signed just a month before it entered the co-operation contract.
Preecha Kaisrikaew, a horticultural manager, said that care and good management would allow mango trees to bear fruit for at least 20 years.
"With good management, mangoes from the orchard weigh between 700 and 800 grammes each when ripe, as foreign consumers do not prefer green mangoes," Mr Preecha said.
CP Group began its fruit orchard business in 1990 and now operates five orchards in Chiang Rai, Kamphaeng Phet, Ratchaburi, Chon Buri, and Prachin Buri. It also buys produce from a number of contract farms across the country.
Mr Kreingkrai added that the company planned to generate 120 million baht in export revenue this year, from 80 million baht fetched in 2007.
(Source: Bangkok Post, Asia Focus, business section, 14-06-08, Walailak Keeratipipatpong, page B3, temp-link)
Vocabulary:
agribusiness - the various businesses involved in food production, including farming, seed supply, agrichemicals, farm machinery, wholesale and distribution, processing, marketing, and retail sales (See Wikipedia)
problems plague, plagued by problems - having a large number of problems at the same time
post-harvest handling - working with the fruit after harvest (transport, quality control, selection, packing, etc)
logistics - transportation of goods and storing in warehouses (See Wikipedia)
quality control - systems to esnsure that products produced meet the quality requirements of both customers and the government (See Wikipedia)
critical - extremely important
tropical - fruit from tropical areas of the world (between the Tropic of Cancer, 23.5 degrees north of the equator, and the Tropic of Capricorn, 23.5 degrees south of the equator; See Wikipedia on tropics)
exotic fruit - fruit hard to find in western countries, usually from tropical countries such as Thailand (includes mangoes, mangosteen, pineapple, rambutan, durian, lychee and longan)
attention has to be paid to Y - have to think about and work on Y more
X preferred by Y - Y likes X more than other possibilities
a situation ripe for Y - situation will allow Y to happen soon
X ripe for the picking - X will be easy to get or achieve
joint ventures - business projects with two or more companies participating, each contributing its own expertise and/or resources
effective tool to push Thai products abroad - a good way to promote Thai products in other countries
access to the Japanese market - an opportunity to sell products in this market
co-operation - working together to achieve a goal
opened up a chance for - creating an opportunity for, creating a situation for
collaboration - working together to produce a piece of work, such as a book
logistics and marketing collaboration - working together on logistics and marketing
horticulture - the art and science of the cultivation of plants (See Wikipedia)
know-how - knowing how to do something, practical methods and techniques
technical know-how - know-how that requires special technical knowledge, such as workign with computers, for instance
fruit orchards - farms that grow fruit [Thai: suan]
imposed - forced on someone
imposed high import standards - make quality and cleanliness standards very high for products imported into the country (increases difficulty of exporting to the country)
disinfected - cleaned to kill germs
scanning - looking inside something with a special machine (for a quality control check, for example)
give the green light to - permission given to start
bear fruit - a tree bears fruit, fruit grows on a tree, to get some benefit after doing something
