UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT

UNCTAD Expert Meeting

"Enabling small commodity producers in developing countries to reach global markets"

Organized by UNCTAD Commodities Branch

Email: leonela.santana-boado@unctad.org, Web: http://r0.unctad.org/commodities/

11 - 13 December 2006

Project Novella: A pro-profit public-private partnership in a

framework of environmental and social benefits

by

Dr. Harrie Hendrickx

Research Manager

Unilever N.V.

The views expressed are those of the author and do not necessarily reflect the views of the UNCTAD Secretariat, nor do they imply the expression of any opinion whatsoever on the part of the secretariat of UNCTAD concerning the legal status of any country, territory, city or area, or of this authorities or concerning the definition of its frontiers or boundaries.

Project Novella

A pro-profit public-private partnershipin a framework of

environmental and social benefits

H. Hendrickx (Unilever)Geneva, December 13th

2006

IntroductionMulti stakeholder partnerships

Multinational businessesSMEs from development countries (farmers !)NGOsGovernments

Can work together to make real and sustainable progress on developing a comodity supply chain and thus achieve some of the MDGs

Poverty and hungerGender / child educationEnvironment Partnerships

Allanblackia floribunda

AB is more than just another fat!

Unique fat composition of edible qualityunique source of stearic acidmelting sharplystable oil

High yieldhigher than most, ……but lower than POrelatively inexpensive to produce (labour & land)

Can grow in many countriesOil can be sold / used in Africa and world wideWill be used by many companies / industries for widely different applications

Typical uses:

In spreads as hardstockGood melting, good stability, natural

In chocolate productsBlooming

In many other composite food productsCulinary mixes / cubesBakery ingredientPeanut / cashew butter

Soap, ointments, industrial applications

Sample

ShellManhole

Agitator contolledby Timer

VentDip PointOil Inlet

Coil Inlet/Outlet

Inspection

Oil Outlet

Sample

ShellManhole

Agitator contolledby Timer

Vent

Dip PointOil Inlet

Coil Inlet/Outlet

Inspection

Oil Outlet

Wild picking / HarvestingOil seedsstorage

T

Oil milling

T

Crude oilstorage Oil refining

Tstorageand blending

The supply chain of AB is very similar to other modern supply chains,like that of palm kernel oil, coconut oil or Shea nut oil.

How do we get it ?

Shared partnership vision:1. Sustainability is required

Environmental, economical & social

2. Profitability for all in the SCFor african farmers onlyNon-AB benefits can chip in when main project allowsUnilever guarantees the market during start-up

3. Ownership of SC will be local4. Partnership / Joint approach

NGOs, research institutes and governments complement skillsPartners to take as many responsibilities as they can handleResources need (public) supplementation

6. Transparency / business principlesGender sensitive, child labour, environment, corruption..

How to organise the supply chain 1. Commercial companies

Organise lean supply chain and guarantee a profitable marketInvest resources, long term vision

2. Development organisationsOrganise communities, ensuring their benefits and fair trading

3. Environmental organisationsEnsure environmental benefits

4. GovernmentsAlignment with national development policiesCreate enabling environmentFunding

6. Research and DevelopmentCreate and spread the required technology

7. Donor organisationsEnable quick spread of the work and compensate investments

Potential long-term development of AB production

In 2016:40,000 t oil

In 20302,000,00 t oil

Oil production in Africa

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

2005 2010 2015

tone

s of

AB

oil

With planting AB trees

Without planting trees

5-50 trees per ha on 5 ha30 fruit per tree1st harvest 4 yearsFull harvest 7 yearsUS$ 2 per tree per yearReplace after 50 years

Vision of small-holder production

Results

Working in 3 countries (Gh, Tz, Ng)7500 collectors / farmersover 500 communities

12 donors / NGOs / governments from northern world30 NGOs / companies / research institutes / from AfricaWorking with local-, regional and national governmentsIncome generated for farmers is still small, about US$ 250.000/a but increasing quicklyICRAF led domestication of AB makes quick progressBiodiversity benefits are still in development

Village tree planting launch May 2006, Tanzania

Issues that demand attention:

Re-occurring start-up costsGood farmer / village representationVocational training for farmersInvestment needs at farmer levelWomen ownership (land, trees)Pricing, from monopoly to free marketInfrastructure, banking system, communicationRealise multiplier effect for other farmer activitiesCo-leadership of developing partnershipsSynergy with biodiversityCompanies can be a partner in development

Thank you

Quantity:Current best volume estimates for AB oil from existing trees (t/a):

Other countries, like Liberia and Cameroon, mayadd to this.

2006 2007 2008 2009

Tanzania 120 150 175 200Ghana 50 65 90 125Nigeria 50 150 250 350

Total 220 365 515 675

Unilever10

Slide 15

Unilever10 In Ghana, Tanzania and Nigeria, Unilever leads the development of the SC and buys all the oil.In 2007 in Tanzania the SC is in a stage where the running costs can almost be covered from the sales of the oil and the support by grants. In Nigeria that will be the case from 2008 onwards. In Ghana from 2009 or 2010.The supply chain volume will only increase sharply in the future if new trees are planted. New trees can produce from the 4th year onwards. Unilever; 02.10.2006