- Slides: 11
Project Novella A pro-profit public-private partnership in a framework of environmental and social benefits Harrie Hendrickx Nairobi October 25 th 2006
Quantity: l Current best volume estimates for AB oil from existing trees (t/a): l Other countries, like Liberia and Cameroon, may add to this.
Potential long-term development of AB production l l l In 2015: 40, 000 t oil Will require a US$ 25 m investment
l Grant position l Excel file
Market development for Allanblackia l Unilever to guarantee for the next few years (2012) l l l Other buyers can come in the partnership l l l Should invest in growth of the partnership Should support our development agenda Should support business principles / adherence to the law Should support the sustainability guidelines Market should begin to function from 2012 latest l l Price fixed at initial high level, quality is food grade Volume is open end Aim to deliver the volume and reduce SC costs Support to cultivation to grow volume How to ensure a smooth transition ? Local usage will not be profitable for several years l Exception possible for niche applications (foods / ointments)
Risks l In the supply chain l l In the growth of the production l l l Produce enough new trees Plant them successfully Production is satisfactory Pests and diseases Internal threats l l Product quality (safety included) Success of final products Competition Keep the partnership together External threats l l Malaysia / Brazil can do better Other crops will become more productive
Risk reduction For farmers wild harvesting: little risk / cash payment for planting trees Annual compensation for land use Annual compensation for labour For nurserries Compensation for investments Compensation for production / guaranteed price
Plans for Thursday and Friday l Thursday morning: Unilever managers meet l Rest to go on nursery practice , continue with discussions, or other activities l l Thursday afternoon: l l Friday morning l l Country teams planning Friday evening l Final discussions and farewell (time for nursery work)
(Additional) Benefits and Risks l Benefits: l l l Demonstrates commitment to the development of the poorest in Africa (Millenium development goals). Demonstrates commitment to protecting and supporting the environment and sustainable developments. Creates options to link business partners with these developments. Enables partners to develop a wider scope Brings a close partnership with high profile institutions like UNDP, Oxfam, IUCN, Df. ID, USAID, GTZ and SNV. Risks: l Financial l l Loss of investment, liability for own activities, liability for activities of partners, . . . Reputational l Connection to child labour, poverty, environmental degradation, low payment to farmers, exclusion of women, spread of HIV/Aids, set up of plantations, move AB out of Africa, use African resources for our profit growth, use of this project to cover up other activities, . . .
Outlook on near future l l l l Unilever to obtain Novel Foods clearance and perform factory trials. Production level of about 370 t oil in 2007 and growing From 2 Q 2007 Allanblackia used in production of spreads, to start with Becel / Bertolli. Planting of Allanblackia trees starts in 2006 (about 20. 000) and will increase to more than 100. 000 in 2007. Project structure in the countries will develop in separate companies Make the SC project profitable to all actors quickly. More publications on the project Stimulate the partnership to take over more responsibilities. Relative to total project size Unilever involvement reduces.