Pig value chain

The REVALTER Project
“Multi-scale assessment of livestock development pathways in Vietnam”
Pig value chain
in Thong Nhat district, Dong Nai province
Scientific Committee
Monday 13 and Tuesday 14 of October, 2014
1
Introduction
• Dong Nai province:
- Located in a very dynamic area;
- Considered the largest pig production: livestock growth
period 2010 - 2012 averaged 7.8% / year; Value of
livestock products sector accounted for more than 40.5%
(in 2012);
- Pig production also change distinctly: farm size; pig
breed; feed using; caring conditions; etc
• Thong Nhat district:
- Most developed livestock industry in province especially
concentrated livestock
The livestock industry is facing a lot of difficulties,
unsustainable because the volatility of the price and
consumption market.
2
Objective
To characterization of the different types of actors involved in existing
local value chain. In addition, evaluate prices and margins for each type
of actors, to understand their individual strategies, and to characterize
commercial networks and collective organization.

Describe the marketing channels of pig production in Thong Nhat
district, identify key markets, volume structure, agent types and
characteristics of the market.

Study the transaction process and analyze the relationship of the
actors involved in some main channels, determine the conditions
and the ability of producers to participate in the that channels.

Evaluation and analysis of market requirements, for each type of
actors on product quality, quantity and requirements for operation
process of the actors, thus generating opportunity requirements and
challenges for producers.
3
Methodology

Approach:
Apply the ‘VaueLinks” approach from input supplier to
producers to … consumers

-
-
Information collection:
Secondary data: discuss with local experts to gather
information on the situation of livestock, strategic and
orientation pig breeding in the area
Primary data: conducting interviews with relevant actors
by questionnaires.
4

Number of informants
Actors
Veterinary Department
Input suppliers
Feed
Veterinary
medicine, vaccine
Farmers
Small scale
Large scale
Contracted farms
Collectors
To Thong Nhat
To Bien Hoa
To HCM city
Slaughter houses
Processors
Wholesalers
Retailers
Consumers
Total
Thong
Nhat
Bien
Hoa
HCM
city
2
2
1
1
Total
4
2
3
3
3
3
3
1
1
1
2
2
2
2
2
29
3
3
3
1
1
2
6
3
6
7
6 5
50
2
1
2
3
2
11
1
2
2
2
2
10
Mapping the Pig Value Chain
6
Mapping the volume of products (Pig/24 hours)
1.352
Farmers
435
221
696
Slaughters
Collectors
(inside the
district)
827
182
44
104
CP Group
313
73
Slaughters
Slaughters
(in Bien Hoa)
(in HCM)
Retailers
52
Retailers
(inside the
district)
Retailers
134
11
Collectors
Slaughters/
Processors
92
Processors
32
70
Wholesalers
/Retailers
30
Consumers
Consumers
Consumers
Consumers
(inside the
district)
(in Bien
Hoa)
(in HCM
city)
(in Vung Tau)
1.001 (74.04%)
70 (5.18%)
136 (10.06%)
145 (10.72%)
7
3 main market and 5 channels
of pig value chain from Thong
Nhat
Market
Actors involved
Producer
Collector
Slaughter
Wholes
aler
Retail
Processor Consume
r
Local market (1 channel)
- Channel 1
x
Slaughter
x
x
x
Bien Hoa (2 channels)
- Channel 2
- Channel 3
x
Slaughter
x
(at Bien Hoa)
Collector
x
x
x
x
(Slaughter rented)
HCM city (2 channel)
- Channel 1
- Channel 2
x
Collector in District
x
x
CP
(Slaughter rented)
Collector form HCM city
x
x
(Slaughter rented)
8
Pig Value Chain Characteristic
Channel to HCM city by local collectors
Core processes of the pig value chain
Input
Provision
Productio
n
Collectio
n
Slaughte
r
Collection
Wholesal
e
Retail
Consum
ption
Wholesale
10
10
Production
Slaughter
Retail
Input
Provision
Productio
n
Collectio
n
Slaughte
r
Wholesal
e
Retail
Consum
ption
Main actors involved
Food suppliers
(companies,
local agents)
Suppliers of
veterinary
medicine,
vaccine
Collectors
Farmers
(Play the role of wholesaler
Retailers
Consumers
Slaughter rented)
Supplier of
breeding pig,
semen
Specific activities
Provide: food,
veterinary
medicine,
vaccine,
breeding pigs,
semen
Grow
Inoculation
Treat disease
Collect;
Categorize (pig, pork);
Transport (to slaughter house
and to market);
Slaughter rented
wholesale
Transport
Categorize
Choose
Consume
11
Flow of products
Input Provision
Piglet
Production
Pig
Collection
Live weight pig
Retail
Carcass
Consumption
Fresh meat
Offal
Flow of information and knowledge
Breed;
Weight
growth;
Feed using;
Diseases;
Appearance;
Health;
Price.
Breed.
Appearance;
Weight;
Health;
Price;
Feed using;
Caring condition;
Lean meat rate;
Carcass rate.
Color
Freshness
Softness
Price
Color
Smell
Freshness
Softness
Price
12
flow of information, knowledge and
requirements
Indicators
Collectors
Retailers/Consumers
Breed
Exotic breed, lean ratio of 70% or
more
High lean rate
Appearance of
pig
Large ears, long body, plump rump,
furrow-drain back, ruddy skin, sparse
and glossy hair
Ruddy skin, do not have
spots, dermatorrhagia
Health
Healthy, actively move, no signal of
antibiotic injection
Have quarantine press
Feed
100% industrial feed
Feeding method
Good sanitary condition
Weight
90 – 110 kg/pig
Carcass rate
70 - 75%
Colour
Light bright red
Softness
Tenderness, elasticity
when being pressed
Smell
No strange smell
13
Value at different level of the value chain
Input Provision
Value
VA
Production
Collection
50,000
VND
Retail
85,000
VND
70,000
VND
20,000
Consumption
15,000
Note: value in the figure is calculated for 1 kg of meat
14
Relationships and linkages between value chain actors
Farmers
Collectors
Persistent relationship
Retailers
Consumers
Slaughters
Spot market relationship
Business services that feed into the value chain
Price
management
Input Provision
Production
management
Product
ion
Market info
Quality
management
Collecti
on
Quarantine
regulations
Slaught
er
Quality
management
Wholes
ale
and
Retail
Quarantine
regulations
Consump
tion
Quality info
15
Analyzing Costs and Margins
16
Analyzing Costs and Margins
Channel to HCM city though Local Collectors
Input Provision
Sales price
(VND)
Cost
(VND)
Profit
% Profit
% Add cost
Production
Collection
Retail
50.000
70.000
85.000
33.061
54.071
73,196
16.939
37,92
81,98
15.929
35,66
10,09
11.804
26,42
7,93
Producer
Collector
Retailer
Consumption
17
Pig value chain Margins
Cost
Chain
actor
Unit total Added
cost
unit cost
Profits
%
added
cost
Unit
price
Unit
profit
Margins
% Total
profit
Unit
Margin
%
Retail
price
Produce
r
33,061
33,061
81.98
50,000 16,939
37.92
50,000
58.82
Collecto
r
54,071
4,071
10.09
70,000 15,929
35.66
20,000
23.53
Retailer
73,196
3,196
7.93
85,000 11,804
26.42
15,000
17.65
40,328
44,672
85,000
18
Percentage of cost, profit, margin in pig value chain
100%
7.93
90%
10.09
17.65
26.42
80%
23.53
70%
35.66
60%
50%
81.98
40%
58.82
30%
37.92
20%
10%
0%
Cost
Profits
Producer
Collector
Margins
Retailer
19
Conclusions

Have 3 main markets: HCM city (74,04%), Bien Hoa (10,72%), Local
(10,06%)

Slaughter house is the main actor, play important role in pig value
chain in local market. But for HCM city market, Collectors are most
important actor.

HCM City market requests the amount of big and pork quality higher
than Bien Hoa and Local market:

For channel to HCM city through local collectors: producer get
37,92% profit, but they share 81,09% value chain cost. Collector
only share 10,09% chain cost but get 35,66% profit.
20
Thanks for attention!
21