INDUSTRIAL HEMP VALUE CHAIN

IN ITALY:

Status quo for the building

industry.

CEM 153 politics and economics

INDUSTRIAL HEMP VALUE CHAIN (IHVC)AS AGRO-INDUSTRIAL INNOVATION: New perspectives and approaches needed for the establishment in Italy, 2014

CEM 152 Environmentally responsive materials

ESTABILISHING A HEMP BUILDING INDUSTRY IN ITALY: Processing hemp to semi- finished material , the link between an historic past and a bright future.

+

Febraury 2014Francesco Perozzo

Presentation’s parts:

1- Resource depletion and climatic changes

2- modern uses, uses in building

3- Indiustrial Hemp history in Italy

4- Decline Reasons

5- Industrial Hemp Value Chain Barriers

6- New technologies and models, framework

7- Cultivation and first manufacturing

8- Conclusions

Contextualization

Source: Global energy outlook, IEA, 2012;

Source: Ceopalmoil.comSource: http://www.wdm.org.uk/carbon-

capital/nexus

Alongside economic Crisis

Source European environmental agency(2012)

Modern uses for hemp

IH in Building

Source http://www.hemparchitecture.com/#/theory/

Source : www.hempbuildings.com

Grown and used extensively for centuries in the Italian

peninsula, since the Romans, essential for Venetian empire

(Celetti,2007)

Flourished in 14/15th century (growth of the craftsmanship)

18th,19th and a fraction of the 20th century Italian IH among the best

in terms of quality all around the world (Guidi, 2003)

History of IH in Italy

History of IH in Italy

Years total production(quintals) total exportation(quintals)

1909 748.000 598.501

1910 868.400 530.737

1911 637.500 440.489

1912 949.000 446.386

1913 900.000 503.257

Italian exports; source V. Peglion,1919

0

200.000

400.000

600.000

800.000

1.000.000

1.200.000

1.400.000

1.600.000

qu

inta

ls/y

ea

r

Quintals produced in Italy

1921-1945 Italian hemp production, Source by the author data from Guidi 2003

Played a central role in the every day’s life for many, as a valuable resource;

Historical significance and cultural-economic importance(Hempbox,2013).

“Roots” for nowadays acceptance ?!

IH is History

Emilia Romagna

Ferrara-Rovigo

Campania

Lazio

Torino

Canavese area, Piedmont Source http://www.localidautore.com/resort/canavese-area-186.aspx

Particularly intrested zones:

Decline of hemp production, Source: Rhydwen (2006)

IH production’s dusk

Failure to develop a capitalistic system for hemp cultivation;

Shortage of capital to invest;

Inability to separate cultivation from that plant transformation;

Lack of industrialization was the major reason;

External pressures (Oil’products competition/ alternative fibers/ steam then oil powered engines..);

Decline reasons

Technical Commercial KnowledgeLack of know-how in hemp

growing Difficulty to source hemp seed Lack of R&D in better hemp strains

Poor hemp quality Poor hemp crop yield Farmers' lack of knowledge

Lack expertise in hemp

manufacturing Necessary winter storage Architects' lack of knowledge

Lack of expertise in hemp use High trasportation costs Builders' lack of knowledge

Lack of producers Farmers profitability

Construction industry lack of

knowledge

Lack of processing plants

Difficulty to start up the hemp

industry Cosumers lack of knowledge

Lack of initial capital Hemp’s profitability Government lack of knowledge

Lack of processing plant R&D and

related industry Lack of economy of scale Others

Others Hemp products are expensive

Consumer resistance to innovation

Regulatory Psychological Invisible

Farmers difficulty to get clearance

for hemp cultivation Hemp association with marijuana

Synthetic fibre and products

vested' interest

Difficulty to obtain

certifications(new strains,

machinery, labels..)

Misconception that "traditional

product are better built"

Other natural fibre, alternative

product interest

Difficulty to get structural insurance Others

Cement industry' vested industry

(for hemp and lime )

Others Others

IHVC’s nowadays Barriers

Technical Commercial KnowledgeLack of know-how in hemp

growing Difficulty to source hemp seed Lack of R&D in better hemp strains

Poor hemp quality Poor hemp crop yield Farmers' lack of knowledge

Lack expertise in hemp

manufacturing Necessary winter storage Architects' lack of knowledge

Lack of expertise in hemp use High trasportation costs Builders' lack of knowledge

Lack of producers Farmers profitability

Construction industry lack of

knowledge

Lack of processing plants

Difficulty to start up the hemp

industry Cosumers lack of knowledge

Lack of initial capital Hemp’s profitability Government lack of knowledge

Lack of processing plant R&D and

related industry Lack of economy of scale Others

Others Hemp products are expensive

Consumer resistance to innovation

Regulatory Psychological Invisible

Farmers difficulty to get clearance

for hemp cultivation Hemp association with marijuana

Synthetic fibre and products

vested' interest

Difficulty to obtain

certifications(new strains,

machinery, labels..)

Misconception that "traditional

products are better built"

Other natural fibre, alternative

product interest

Difficulty to get structural insurance Others

Cement industry' vested industry

(for hemp and lime )

Others Others

IHVC’s nowadays Barriers

Shortage of capital to invest;

Lack of IHVC industrialization IS the major reason;

External pressures

Knowledge and know-how

Current reasons

Source: DAFF SA 2011.

IH modern value chains

Requires the development of models capable of interpreting the dynamics of vertical and horizontal coordination between the agents

Involve and create…

NEW ENTREPENEURS,EXPERTS, MARKETS..

What most affect the ability of operators to give added value to products/growing

NEW FARMERS and MANUFACTURER’S SKILLS

(Contò et al,2009)

“UPDATED “ roles in Process DISINTERMEDIATION

New technology and “global

village”

Source UNEP “Keeping track, Rio 1992-Rio 2012”

“Global commons” concept

Global village construction set, 2011 situation. Source opensource ecology.org/wiki/GVCS

Tools given by

OPEN SOURCE ECOLOGY

New tools and approaches creates alternatives to waste of

energy, money..

Linear economy, involves traditionally waste and fossil fuels. Source Ellen Mc Arthur foundation

From linear model of economy

and value chains...

The circular economy, an industrial system that is restorative by design. Source Ellen Mc Arthur foundation

..to the platforms of circular

model of economy

HEMPBOX - Platform for strategic and

technological exploitation of industrial hemp

potentials

Knowledge, know-how and planning

capability of IHVC’s major issues;

Brings back a narrative, a fulcrum, around

which the social life of many areas have lived;

Aiming at creating win-win solutions and real

sustainability;

New IHVC management

Scalable and exportable business project;

R&D t as ethical values;

Redevelop environmentally and economically ruralItalian resources, win-win solutions;

Dealing with different frameworks

Partners, Industry, farmers, communities, municipalities, politics?

Hempbox’s mission and goals

13,500 ha. Of cereal crops to exploit in order to introduce industrial

hemp as a rotation crop, Italian example in the Canavese area,

Piedmont region. Source Baldini et al., 2014

COLTIVATION AS APPEALING PHASE

Hemp cultivation (especially for seeds) improves local biodiversity.

Directly as a food to birds and small mammals

Indirectly because of hemp cultivation needs no biocides. (Source Small 2002 quoted in Rhydwen, 2006)

COLTIVATION AS APPEALING PHASE

The only processing plant is in Carmagnola (PIEDMONT)

1st° Tier manufacturing

Canavese area, Piedmont Source http://www.localidautore.com/resort/canavese-area-186.aspx

268.000 m2 of dismissed industrial area, usable for industrial hemp manufacturing plants, Canavese area, Piedmont. Source Baldini et al.(2014)

MANUFACTURING AS WEAK RING OF IHVC

OPENESS IS A RELSILIENCE STRATEGY, COMPANIES ARE COMMUINITIES.

HISTORICAL IMPORTANCE

LEGAL FROM 15 YEARS, EARLY ADOPTERS PHASE

NEW IHVC KNOWLEDGE AND KNOW-HOW NEEDED

BIG INVESTMENTS, BIG FUTURE POSSIBILITIES

WIN-WIN SOLUTION FOR ENVIRONMENT AND ECONOMY

Conclusions

References Baldini et al.(2014) Rehabilitation of a historic cultivation through the creation of an agro-

industrial sector able to activate new territorial economies: study of environmental, economic and landscape outcomes of industrial Hemp in the Canavese area,Politecnico di Torino, unpublished work. Accessed:21 june 2013

Contò F., La Sala P. et al.(2010)” Identity, quality and competitiveness of the Pollino area: a case of "atypical" agro supply chain-planning”, XXXI CONFERENZA ITALIANA DI SCIENZE REGIONALI, Aosta, 20‐22 Settembre 2010. AISRE (ONLINE) Available at: http://www.grupposervizioambiente.it/aisre/pendrive2010/pendrive/Paper/Conto1.pdfAccessed :19 December 2014

Department of agriculture forestry and fisheries south Africa DAFF SA(2011) A PROFILE OF THE SOUTH AFRICAN HEMP MARKET VALUE CHAIN (ONLINE) Availble at: http://www.nda.agric.za/docs/AMCP/HEMPMVCP2011-12.pdf Accessed:19 june 2013

Guidi D.(2003) Dagli splendori ottocenteschi, dopo un lungo declino, verso il ritorno della produzione di canapa in Italia (1860-2003), Unpublished Thesis, Università Boconi Milano

Hempbox,(2013)Hempbox’s project, 2013 (ONLINE) retrieved http://hempbox.org/ Accessed: December 2013

ISTITUTO VENETO DI SCIENZE, LETTERE ED ARTI, CELETTI D.(2007) La canapa Nella repubblica veneta: produzione nazionale e importazioni in età moderna,venezia(ONLINE) Available at: https://www.academia.edu/attachments/32226232/download_file Accessed: 17 December 2014

Peglion Vittorio(1921) - Le nostre piante industriali : canapa, lino, bietola da zucchero, tabacco ecc., Bologna

Rhydwen G.R.,2006, A model for UK hemp cultivation and processing to supply the building industry with hurds for hemp and lime concrete and fibers for insulation bats, with the ethos of environmental protection as a priority (ONLINE) Availble at: http://gse.cat.org.uk/public_downloads/research/Ranyl_Rhydwen_thesis_january_2006.pdfAccessed:28 june 2013

UNEP (2011). Keeping Track of Our Changing Environment: From Rio to Rio+20 (1992-2012).

Division of Early Warning and Assessment (DEWA), United Nations Environment Programme (UNEP), Nairobi (ONLINE) Availeble at: (ONLINE) Availble at: http://www.unep.org/geo/pdfs/keeping_track.pdf Accessed:21 June 2013

UK’s circular economy. Source http://greenlivingblogorguk.files.wordpress.com/2012/05/ukce.png

Starting with bigger investments can be risky since there’s no

strongly established market, but growing requests;

Haulage issues and farmers profitability to be studied deeply;

Needs to understand the hemp value chain in order to create

new markets, and vice-versa;

“manual(s)” of all variables and possibilities that affect hemp

cultivation, processing and hemp-based materials;

Best combinations that create economy of scale, expected time for return on investment;

How to integrate a hemp transport systems based on hemp

bio-fuels.

EXTRA from essay #1

New participative communications and technologies can

then bring its potentials to a wider set of new stakeholders and

markets;

Hempbox Lack of proper business planning;

Legal framework analysis/projections;

Exportability and scalability of IHVC model, for rural areas;

Min/max areas(both crop rotation and dedicated land) to

install a manufacturing plant (and where).

EXTRA from essay #2

Platform next’s steps

Contacts with farmers, agronomy studies;

Revenue models and venture capital;

Involving entrepeneurs/manufacturers of the machinaries;

Comunication & marketing;

Get a high-performing variety of industrial hemp.

GVCS potential;