Sesame Business Network Ethiopia Why not? In-country value addition.

Sesame Business Network Ethiopia

Why not?In-country value addition

• Activities that make the products more valuable for the next buyer in the chain

• Products is sold with a margin to the next actor in the chain

What is value addition?

Farmer Cleaner Packaging WholesalerProcessor Retailer

• Focus is on bulk export• Volume is more valued than quality• Limited forms of value addition

• In changing market, quality becomes more important and so does post-harvest value addition

• Options for improvements in PH value addition are: – Winnowing and cleaning– Grading and colour sorting– Storage and transport– Domestic processing– Traceability and certification

Current practice Ethiopia

The story of a small box of sesame..

Value-addition:Sesame Seed at Dutch Supermarket

100 gram costs € 1,70 = 37 birrFarmer sells sesame for 2.200 per quintalCalculate the value added...

37 per 100 gram equals a selling price of birr 37.000 per quintal ECX price birr 2.200 per quintalValue addition = 35.300 birr per quintalThis is over 17 times the ECX price

• Supply chain with many actors: value addition per actor

Every actor takes a share for the value addedSignificant cost involved in every step!

However it’s not profit!

Birr 2.200 Birr 37.500

Value added to sesame

Farmer Cleaner Packaging WholesalerProcessor Retailer

Birr 2.200 Birr 3.000 Birr 5.500 Birr 13.500 Birr 23.500

800 – 600 = birr 200

Value addition

Birr 37.500

Ethiopia Abroad

6% 94%

Ethiopia Abroad

40% 60%

Why not move towards.....

Sesame honey bars

The selling price for 30 gram bar is € 0,7060% is sesame is 18 gram, so €0,42 per 18 gram of sesame (1 euro = 22 birr)Calculate the value added

Continue math class..

€ 0,42 per 18 gram of sesame = birr 9,24 per 18 gram = birr 51,33 per 100 gramSo selling price is birr 51.333 per quintalECX price birr 2.200 per quintalValue addition is birr 49.133This is over 22 times the ECX price

Why not put value to the best quality of sesame and honey?

What do you need? 300g sesame seed, 300g honey, pinch of saltThis is how easy you make it: 1) Grill the sesame seeds with the salt in a pan;2) add the honey when the seeds become light brown and steer; 3) put the sticky substance on a greased plate and put it in the fridge.

Recipe

Experiment...

Sesame-honey bars

Ingredients:Sesame: 400 gram = 11 birrHoney: 125 gram = 30 birrSalt: 1 birrTotal costs: 41 birr

Output: 100 bars are made

Cost price: birr 0,41 per barCost price + 50%= birr 0,60 selling price

Did we just find a new market opportunity??

Sesame-honey bars

1. Why is in country value-addition only limited in Ethiopia?

2. What can be done to improve on value-addition activities?

3. What can the government do to promote domestic value addition?

Points of discussion