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IMPROVING THE SUPPLY CHAIN OF TILAPIA INDUSTRY IN THE PHILIPPINES
Wilfred E. Jamandre, Central Luzon State University (CLSU)
Upton Hatch, North Carolina State University (NCSU)
Remedios B. Bolivar, Central Luzon State University (CLSU)
Russell Borski, North Carolian State University (NCSU)
OBJECTIVES
1. Develop tilapia supply chain maps
2. Analyze tilapia supply chain performance
3. Identify areas for improvement in supply chain
4. Provide recommendations
METHODOLOGY
PROCESS INPUT OUTPUT
The Philippine Tilapia
Industry
Chain actors, key
activities and roles,
Flows of product,
information and
payments
Costs and margins
associated with each
practice
External influences
SCM
New Institutional
Economics:
Relationship Marketing
Operations
Management and
Logistics
Supply Chain Maps
Performance of tilapia
supply chain
Areas for improvement
in the supply chain
(Other recommendations)
STUDY AREAS AND COVERAGE
• Regions I, III, IV, CAR and NCR
• 5 hatchery and nursery operators
• 28 farmers
• 4 processors
• 24 traders/consolidators/shippers
• 11 institutional buyers
Routes of SC mapped Supply Chain Players Number of Respondents
Bicol-Laguna-Batangas-Manila-
Baguio (Chain 1):
Hatchery and Nursery Operators 3
Fish farmers 15
Processors 2
Traders/consolidators 8
Institutional buyers 5
Pampanga-Pangasinan-Ilocos and
Isabela - Baguio and Manila
(Chain 2):
Hatchery and Nursery Operators 2
Fish farmers 13
Processors 2
Traders/consolidators 16
Institutional buyers 6
DATA GATHERED
• key players, their roles/activities/services
• product grades and standards
• product, information and payment flows
• logistics issues
• production and marketing
• external influences
DATA PROCESSING AND ANALYSIS Objectives Methods of Analysis
(1) Provide an overview of the tilapia industry
Synthesis of relevant studies and trends
(2) Map out specific supply chains Flowchart analysis from downstream to upstream
(3) Analyze the performance of the supply chains
Descriptive statistics, and relevant performance metrics (qualitative and quantitative)
(4) Identify areas for improvement in the supply chain
(5) Provide specific policy recommendations
HIGHLIGHTS OF THE PHILIPPINE TILAPIA INDUSTRY
• 12% of aquaculture GDP
• 1.4 million workforce and fish producers
• source of food and animal protein
• 3.81 kgs per capita consumption
• 10% average annual growth rate (2005-2008)
• 14% of the total food expenditure
BAS (2010) and Rodriguez et.al. (2009)
Tagaytay
HIGHLIGHTS OF THE PHILIPPINE TILAPIA INDUSTRY
• 258,663MT production (BAS 2010).
• 80% from Regions III and IV
• Top 5 provinces: – Pampanga (37.68%), Batangas (21.06%), Laguna (4.64%), Rizal
(4.06%) and Bulacan (3.58%).
• Culture environments: – 57% freshwater fishponds
– 38% freshwater fish cages
– 7% brackishwater fishpond
– 1% freshwater fishpen (BFAR, 2004)
HIGHLIGHTS OF THE PHILIPPINE TILAPIA INDUSTRY
• Types of tilapia: – Nile Tilapia
• 87% of total tilapia production in 2010 (BFAR, 2010)
– Mozambique tilapia – GET Excel
– GIFT - CLSU
– FAST
HIGHLIGHTS OF THE PHILIPPINE TILAPIA INDUSTRY
• Industry’s growth drivers: – genetic improvement
– stock management and cultural practices
• Market niches: – product forms - fillet, dried, whole fish
– outlets - supermarkets, food chains
Tagaytay
Hatchery
Operators
Nursery
Operators
Fish Producers
Small-scale
trader
Retailer
Improved
quality tilapia
Institutional
buyers
Ponds
Cages
Pens Supermarkets
Specialty shops
Food Chains
Restaurants
Bars, canteens, etc. Live Form
Fillet
Grilled
Barbecued
Specialty menus
Traders
(Wholesaler, Consignacion,
Viajero, Retailer)
Improved brood
stocks
End-users Processors
Live Form/Frozen
TILAPIA SUPPLY CHAIN MAJOR PLAYERS
KEY CUSTOMERS
• Institutional Buyers (Supermarkets, Specialty Shops, Food
Chains, Restaurants)
• Household consumers
PRODUCT FORMS
• Preferred by household customers
– live form tilapia
– size of 4-5 pieces per kg (200 - 250 g per fish)
– Northern Luzon markets prefer darker-skinned tilapia
– The common food recipes are charcoal grilled, fried, boiled and stew
• Preferred by hypermarkets – live form tilapia – size of 3-4 pieces per kg (250 – 350 g per fish)
PRODUCT FORMS
• Specialty shops and food chains in major urban centers – tilapia fillet (350 g per pack) – whole frozen fish (2-3 pieces per kg) – dried fish (100 g per pack or 30-35 g per fish) – by-products of filleting - fish soups, tilapia belly and deep
fried tilapia skin
VOLUME REQUIREMENTS
• Major customers in Luzon
– 5,335 kg average daily or 1, 947,275 kg (or ~ 1,947.28MT) yearly
• Annual national consumption requirement:
– 323,850 MT (~ 1% )
MAJOR PLAYERS AND THEIR ACTIVITIES
• Processors
– Fillet, dried, whole, frozen and choice portions or trimmings
– Dressing recovery: • 1 kg raw tilapia (2-3 pieces) yields 30-35%
fillet, 18% belly, 25% innards, 21% head and 1% skin
MAJOR PLAYERS AND THEIR ACTIVITIES
• Wholesalers – shippers or viajeros
• Retailers – Resellers – Handle 100-150 kg of live form, daily
(5-6 pieces per kg)
MAJOR PLAYERS AND THEIR ACTIVITIES
Traders
- buy, sell and distribute
Consolidators
- Supply supermarkets
- Facilitators
- Price monitor
- Small-scale trading
- Gatekeepers
MAJOR PLAYERS AND THEIR ACTIVITIES
• Fish producers
– produce marketable tilapia
• 2.5 – 3 months (4-5 pieces per kg)
• 3.5-4.5 months (2-3 pieces per kg)
MAJOR PLAYERS AND THEIR ACTIVITIES
• Nursery operators • Maintain fry up to marketable
sizes:
- 22-20 on-season months (May, June, July, August)
- 14-12 off-season (September, October, November, December)
• Nile tilapia – better species
Bicol
MAJOR PLAYERS AND THEIR ACTIVITIES
• Hatchery operators
Supply fry and fingerlings (400 thousand fry every 18 days)
Provide techno-guides to fish producer – customers
Handle about 3,000 breeders • GIFT –CLSU, GET -Excel)
Maintain nursery ponds
MAJOR ROUTES
Pampanga
Laguna
Batangas
Metro Manila
Angeles
Baguio City
Dagupan City
Cagayan
Valley
Cordillera
Administrative
Region
MAJOR SUPPLY
CENTERS
MAJOR
TRANSSHIPMENT
POINT
MAJOR DEMAND
CENTERS
Camarines Sur
Tilapia Fry
Isabela
Ilagan
La Union &
Ilocos Provinces
Fry
Hatcheries
Malabon
Marketable
fish
Marketable
fish
PRODUCT FLOW (BICOL-LAGUNA/BATANGAS-MANILA/BAGUIO ROUTE)
(frozen)
(live form)
FRY
FRY
(live form)
(frozen)
Hatchery/Nursery
Batangas
Hatchery
Nursery
Laguna
Hatchery
Camarines Sur
F
i
n
g
e
r
l
n
g
s
Cage operator
Batangas/Taal
Grow-out pond
Semi-intensive
Laguna/Rizal
Processors
3 months conditioning Consolidator/Trader
Trader Local market
(live form
Specialty shop - Monterrey
(Manila, Tuguegarao)
Fastfood shop
Supermarket
Trader
Wholesale shipper
“viajero”
Local market
(live form)
Central fish
market
(Malabon)
Local market
Supermarket
Manila
Pangasinan
Baguio
(live form)
(live form/frozen)
(live form)
(frozen)
(live form)
FRY/FINGERLINGS
- Direct stocking
Grow-out
pond
Pampanga
Central fish market
Dagupan
(live form)
Consolidator/T
rader
Local
market
Baguio
Supermarket
Pampanga
Manila
(live form) Ilocos
Isabela
Trader
(live form)
PRODUCT FLOW (PAMPANGA – PANGASINAN - BAGUIO ROUTE)
Hatchery/
Nursery
Pampanga
TILAPIA SUPPLY CHAIN: INFORMATION FLOW Hatchery
Nursery
Producers
Processor
Trader
/Consolidator
Wholesaler
/”Viajero”
Specialty
Shop
MARKETABLE SIZE
-Volume
-Price
-Weight
-Quality
Supermarket
Local market
-Source of fish
-Volume
-Delivery schedule
-Size
Wholesaler-Retailer
MARKETABLE SIZE
-Volume
-Delivery schedule
-Size
-Price
FINGERLINGS
-Quantity
-Delivery schedule
-Cost
-Strain/Sex
FRY
-Volume
-Delivery schedule
-Size
-Strain/Sex
Hatchery
Nursery
Producers
Processor
Trader/Consolidator
Wholesaler/”Viajero”
Specialty Shop
Supermarket
Local
market
Wholesaler-
Retailer
Terminal Market
CASH
CASH
Cash, net after feed
loan (1-2 days)
CASH
Producers
(non feed-borrowers)
Trader/Retailer
(small-scale)
Sales remittances, net
after trading capital
CASH
Advanced cash
Post-dated
checks,7 days
Retailer
Sales remittances
CASH
Cash
Cash
CASH
TILAPIA SUPPLY CHAIN: PAYMENT FLOW
CASH
MAJOR CONCERNS TRANSACTION COSTS
HATCHERIES/ NURSERIES
FISH FARMERS
• High cost of outbound logistics
• High competition with mixed sex fingerlings
• High mortality rates
• Expensive inputs • Mislabeld inputs
• Low fish recovery - 25% in lakes and
cages/pens - 60% in pond systems
• Unpredictable climate patterns
•Overstocking
• Prolonged grow-out period (8-10 months )
• Lack of cold storage facilities
FISH FARMERS
• Cost of waiting •Harvest delays
• Limited opportunities for value-adding & processing
• 4% shrinkage allowance required by traders
HATCHERIES/ NURSERIES
• In-transit mortality losses • Toll fees (“goodwill”)
MAJOR CONCERNS TRADERS
• “Uncalibrated” weighing scale of fish farmers
• Disrupted delivery schedules due to defaulting “contract growers”
• Lag responses to price changes
• Absence of product grades and standards
TRADERS
• High logistics and transaction costs:
• Search
• Assembly
• Distribution
TRANSACTION COSTS
MAJOR CONCERNS
PROCESSORS
• Insufficient supply of raw materials
• Lack of blast freezers and other equipment
• Presence of inexpensive substitutes (e.g. river catfish, sea bass and others)
• High opportunity costs due to untapped markets
TRANSACTION COSTS
• High cost of filleting • Low dressing recovery
PROCESSORS
MAJOR CONCERNS
INSTITUTIONAL BUYERS
• Off-season stock-outs from regular suppliers
TRANSACTION COSTS
• High cost of product search
• High opportunity cost
INSTITUTIONAL BUYERS
RECOMMENDATIONS
(1) Encourage the establishment of more nursery and hatchery farms
(2) Conduct market promotion
(3) Motivate participation of small farmers in supply chains
(4) Institutionalize an accreditation/certification program for feed manufacturers, hatcheries and processors
(5) Strengthen farmers’ organizations
Funding for this research was provided by the
COLLABORATIVE RESEARCH SUPPORT
PROGRAM
The AquaFish CRSP is funded in part by United States Agency for International Development (USAID) Cooperative Agreement No. EPP-A-00-06-00012-00 and by US and Host Country partners.
The contents of this presentation do not necessarily represent an official position or policy of the United States Agency for International Development
(USAID). Mention of trade names or commercial products in this presentation does not constitute endorsement or recommendation for use on the part of USAID or the AquaFish Collaborative Research Support Program. The accuracy, reliability,
and originality of the work presented are the responsibility of the individual authors.
MARKET REQUIREMENTS FOR TILAPIA Specialty shops Supermarkets
Description Size (g/pc) Volume (kg/day)
Price (PhP/kg)
Size (g/pc) Volume (kg/day)
Price (PhP/kg)
Live form
Large 400-500 100 83 400-500 1000 112
Medium 300-400 100 77 300-400 1000 95
Fish fillet 250 -350 any amount 280 250 -350 g/pack any amount 312
Smoked 250-350g/pack any amount 209 250-350 g/pack any amount 330
Dried 30 any amount 150 X X X
Butterfly
fillet 70 any amount 250 X X X
Fillet by-products: X X X
Head I kg any amount 30 X X X
Belly I kg any amount 50 X X X
Skin I kg any amount 350 X X X
TILAPIA SUPPLY AND UTILIZATION ACCOUNTS
SUPPLY (MT) UTILIZATION (MT) CONSUMPTION
Production Imports Gross Supply Exports
Feeds
and Waste
Processing
Net Food Disposable
Per Capita
kg/yr
Per Capita
g/day
2001 135,627 0 135,627 0 4,069 0 131,558 1.69 4.63
2002 152,985 0 152,985 0 4,590 0 148,395 1.87 5.12
2003 168,132 0 168,132 0 5,044 0 163,088 2.01 5.51
2004 177,790 0 177,790 0 5,334 0 172,456 2.09 5.73
2005 195,504 0 195,504 0 5,865 0 189,639 2.22 6.08
2006 241,775 0 241,775 0 7,253 0 234,522 2.7 7.4
2007 278,819 20 278,839 52 8,365 0 270,422 3.05 8.36
2008 299,813 20 299,833 300 8,994 0 290,539 3.21 8.79 Source: Bureau of Agricultural Statistics, 2009
RETAIL AND WHOLESALE PRICES SPREADS, MEANS AND COVARIATIONS, 2001-2008
Month Prices Covariation
Retail Wholesale R-W Spread Retail (%) Wholesale
(%)
R-W Spread
(%)
January 66.04 50.61 15.42 12.30 12.60 16.61
February 65.20 50.96 14.25 13.55 12.81 19.53
March 65.59 49.99 15.60 12.41 11.86 17.82
April 66.00 49.70 16.29 11.44 12.54 15.31
May 65.97 49.99 15.98 11.33 12.19 12.77
June 66.67 51.45 15.22 10.48 9.68 22.40
July 67.71 51.97 15.73 11.18 10.26 28.60
August 68.18 52.39 15.78 11.62 13.30 7.44
September 68.29 51.79 16.50 12.68 15.72 7.71
October 68.59 52.04 16.56 12.99 16.52 11.01
November 68.23 51.79 16.44 13.52 15.69 9.38
December 69.76 54.70 15.06 13.51 16.29 10.02
Means 67.18 51.45 15.74 12.25 13.29 14.88 Source: Bureau of Agricultural Statistics, Department of Agriculture (Various Issues)
VALUE OF TILAPIA PRODUCTION
1991-1999 Mean 55.2777778 Standard Error 2.6509143 Median 57.02 Mode #N/A Standard Deviation 7.95274289 Sample Variance 63.2461194 Kurtosis 1.35249253 Skewness -0.5399786 Range 28.49 Minimum 39.78 Maximum 68.27 Sum 497.5 Count 9 covariation 14.39%
2000-2008 Mean 66.2111111 Standard Error 2.70703941 Median 67.38 Mode #N/A Standard Deviation 8.12111822 Sample Variance 65.9525611 Kurtosis -0.94247877 Skewness 0.49269906 Range 22.69 Minimum 57.71 Maximum 80.4 Sum 595.9 Count 9
12.27%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Mean SD Covariation
1990 45.12 46.05 42.02 63.67 42.42 42.32 41.90 41.76 39.75 39.63 43.88 44.54 44.42 6.37 14.34 1991 49.62 48.66 50.76 51.51 50.05 50.99 50.09 50.15 50.05 48.46 48.99 48.74 49.84 0.98 1.96 1992 65.93 63.21 64.02 64.99 63.46 63.19 60.38 59.94 57.71 53.98 59.72 59.81 61.36 3.41 5.56 1993 67.74 69.76 68.10 68.60 60.02 64.00 62.53 60.90 58.86 59.58 60.27 61.65 63.50 3.99 6.29 1994 72.49 75.98 75.39 75.12 73.90 73.66 68.46 67.07 65.30 62.86 65.74 65.82 70.15 4.72 6.73 1995 77.84 80.47 77.60 78.93 75.64 73.04 69.10 66.77 64.36 61.42 63.61 65.47 71.19 6.81 9.57 1996 77.41 76.09 75.72 78.25 74.46 75.09 72.40 69.62 66.93 65.50 67.41 67.35 72.19 4.58 6.34 1997 75.77 77.86 78.79 79.82 78.43 77.61 72.26 70.48 66.75 66.04 66.91 67.67 73.20 5.40 7.38 1998 76.29 74.56 74.68 79.62 78.10 76.71 73.05 69.57 68.15 69.07 73.84 78.32 74.33 3.79 5.10 1999 96.44 98.69 98.02 95.41 103.59 87.80 82.86 78.28 74.89 71.35 71.10 71.20 85.80 12.30 14.33 2000 81.68 80.12 79.40 80.29 78.14 76.40 71.44 69.25 66.85 65.23 65.82 64.56 73.27 6.71 9.16 2001 72.80 73.71 71.72 78.99 77.40 77.61 75.35 74.81 71.36 70.09 69.78 70.59 73.68 3.15 4.28 2002 77.16 68.77 75.39 74.93 74.46 75.51 73.11 72.07 69.76 69.42 68.06 67.66 72.19 3.33 4.62 2003 75.95 75.84 73.96 74.92 73.99 75.54 73.03 71.74 70.62 70.88 71.17 70.96 73.22 2.08 2.84 2004 82.28 84.07 86.72 89.56 88.86 88.44 85.34 83.05 80.01 81.66 79.05 78.60 83.97 3.84 4.57 2005 91.36 90.79 90.55 91.28 88.69 89.73 85.04 83.68 81.25 81.25 81.86 81.57 86.42 4.34 5.02 2006 92.89 92.24 90.67 92.91 90.00 87.22 86.05 85.39 83.46 83.67 84.65 85.27 87.87 3.64 4.15 2007 98.30 97.25 95.50 98.00 95.32 93.83 89.94 89.09 86.92 87.62 88.81 88.50 92.42 4.35 4.70 2008 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Mean 77.74 77.59 77.32 79.83 77.21 76.25 73.28 71.77 69.63 68.83 70.04 70.44
SD 14.67 14.89 14.90 12.61 15.72 14.12 13.71 13.53 13.53 14.09 13.19 13.15 Covariation
18.87 19.19 19.27 15.79 20.36 18.52 18.71 18.85 19.43 20.47 18.83 18.66
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Mean SD
covariation
1990 34.51 35.19 32.21 47.98 32.51 32.81 33.98 34.52 33.75 33.74 37.23 38.65 35.59 4.33 0.12 1991 37.95 37.18 38.91 38.82 38.35 39.53 40.62 41.45 42.50 41.25 41.56 42.29 40.03 1.80 0.04 1992 50.42 48.30 49.07 48.98 48.63 48.99 48.97 49.55 49.00 45.95 50.67 51.90 49.20 1.44 0.03 1993 51.81 53.30 52.20 51.70 45.99 49.62 50.71 50.34 49.98 50.72 51.13 53.49 50.92 1.97 0.04 1994 55.44 58.06 57.79 56.61 56.63 57.11 55.52 55.44 55.45 53.51 55.77 57.11 56.20 1.26 0.02 1995 59.53 61.49 59.48 59.48 57.96 56.63 56.04 55.19 54.65 52.29 53.97 56.81 56.96 2.71 0.05 1996 59.20 58.14 58.04 58.97 57.06 58.22 58.72 57.55 56.83 55.76 57.19 58.44 57.84 1.00 0.02 1997 57.95 59.49 60.39 60.15 60.10 60.17 58.60 58.26 56.68 56.22 56.77 58.72 58.63 1.49 0.03 1998 58.35 56.97 57.24 60.00 59.85 59.47 59.24 57.51 57.87 58.80 62.65 67.96 59.66 3.04 0.05 1999 73.76 75.41 75.13 71.90 79.38 68.07 67.20 64.71 63.59 60.74 60.32 61.78 68.50 6.48 0.09 2000 62.47 61.22 60.86 60.51 59.88 59.23 57.94 57.24 56.76 55.53 55.84 56.02 58.63 2.37 0.04 2001 55.68 56.32 54.97 59.53 59.31 60.17 61.11 61.84 60.59 59.67 59.20 61.25 59.14 2.27 0.04 2002 59.01 52.55 57.79 56.47 57.06 58.54 59.29 59.57 59.23 59.10 57.74 58.71 57.92 1.95 0.03 2003 58.09 57.95 56.69 56.46 56.70 58.57 59.23 59.30 59.96 60.34 60.38 61.57 58.77 1.65 0.03 2004 62.93 64.24 66.47 67.49 68.09 68.57 69.21 68.65 67.94 69.52 67.07 68.20 67.37 1.98 0.03 2005 69.87 69.37 69.41 68.79 67.96 69.57 68.97 69.17 68.99 69.17 69.45 70.78 69.29 0.67 0.01 2006 71.04 70.48 69.50 70.02 68.97 67.62 69.79 70.58 70.87 71.23 71.82 73.99 70.49 1.57 0.02 2007 75.18 74.31 73.2 73.85 73.04 72.75 72.94 73.64 73.8 74.59 75.35 76.79 74.12 1.20 0.02 2008 76.48 76.41 76.65 75.36 76.63 77.53 81.1 82.66 84.91 85.13 84.84 86.77 80.37 4.28 0.05
Mean 59.46 59.28 59.26 60.16 59.16 59.11 59.43 59.32 59.12 58.59 59.42 61.12 SD 11.22 11.38 11.42 9.50 12.05 10.95 11.12 11.18 11.49 11.99 11.19 11.41 Covariation
0.19 0.19 0.19 0.16 0.20 0.19 0.19 0.19 0.19 0.20 0.19 0.19
TILAPIA AVERAGE RETAIL PRICES (NOMINAL), 1990-2008
PRODUCT FLOW
HATCHERY
NURSERY
FARMS
18 days fry
COMMERCIAL
FARMS
BACKYARD
FARMS CONSOLIDATOR
30-45 days
fingerlings
Grow-out periods
• 2.5 - 3 months
• 3.5-4.5 months
MANILA MARKET
DISTRIBUTION ARM
INSTITUTIONAL ACCOUNTS CONSUMERS
Fishcage operators
Laguna –Batangas
live form (250 – 300 g/fish or 4-5
pieces/kg)
Tilapia fillet (450 – 750 g/fish
or 2-3 pieces/kg
Department
store
Wet
market
Malabon / Navotas
consignacion
WHOLESALER