CHAÎNE D'APPROVISIONNEMENT DE PRODUITS DE BOULANGERIE AUX PAYS DE L'OCI www.iofs.org.kz
EXECUTIVE SUMMARY OF THE PROJECT www.iofs.org.kz 3 Under IOFS strategic framework National Food Sector Development is one of the 16th strategic programs under IOFS Vision 2031. Wherein the development of value chains in OIC member countries is one of the main priorities of this program. The International Islamic Food Processing Association (IFPA) in its full capacity as the IOFS subsidiary is the sole operator of all projects related to private sector activities, including the Bakery Supply Chain. Executive Summary: ¾ Kazakhstan is one of the leading wheat-producing countries in the world and is subject to establishing a well-organized domestic supply chain of wheat, flour, and bakery for needs of all member countries of OIC. ¾ The pilot project will be launched with the hosting country of the IOFS, as it has a strong base on a cluster approach to organizing a sustainable high-quality and price-competitive bakery supply chain (using the aircargo) for any OIC country. The value-added bakery and bread products made in Kazakhstan are planned to be delivered to GCC countries as a pilot in 2022. ¾ This business model under a “Cluster approach” on delivering semi-finished bakery and other flour products are to be replicated in other grain-cultivating OIC countries such as Turkiye, Pakistan, Morocco, etc.
MARKET OF KAZAKHSTAN AND COMPETITIVE ADVANTAGES DYNAMICS OF WHEAT PRODUCTION IN KAZAKHSTAN in mln. tonnes DYNAMICS OF PRODUCTION AND EXPORT OF FLOUR AND WHEAT IN KAZAKHSTAN in thousands of tonnes 18MILLION HECTARES OF SOWING AREA 16.6 MILLION TONNES OF GRAIN PER YEAR 7 MILLION TONS OF GRAIN EXPORT POTENTIAL 170 FLOUR MILLS 2.6 MILLION TONS OF FLOUR EXPORT POTENTIAL BY GEOGRAPHICAL LOCATION * Forecast of 2022 is 13,5 mln. tonnes 4 www.iofs.org.kz
WHEAT EXPORT DYNAMICS *Data 2020 www.iofs.org.kz 5
FLOUR AND BREAD PRODUCTION MAP: POTENTIAL FOR CLUSTERS FLOUR (Jan- Jun 2022, in thousand tons) FRESH BREAD (Jan – Nov 2021, thousand tons) Above provided figures clearly shows that Kazakhstan do not have any shortage in Flour and Bread, this means we can use this potential for the benefit of other OIC member countries to sell ready-to-eat fresh or frozen bakery 6 www.iofs.org.kz
BAKERY MARKET IN KAZAKHSTAN BREAD PRODUCTION DYNAMICS www.iofs.org.kz 7
DEVELOPMENT PROSPECTS FACTS CONCLUSIONS ¾ Kazakhstan has a reliable raw material base for the production of flour and bakery products ¾ Kazakhstan has a sufficient number of flour mills, pasta and flour enterprises, as well as bakeries. All of them are localized. ¾ Lack of a harmonized value chain ¾ A small quantity of bakery products are being exported ¾ On the IOFS / IFPA platform study and agree on the demand for bakery and flour products in the Gulf countries ¾ Taking into account the requirements of these markets, determine specific demand and prepare logistics ¾ The concept of a healthy diet: incorporating nutritious, gluten and yeast free bread prepared by local scientists. ¾ Launch a pilot project on bakery supply to GCC with the support of any available export mechanisms of the Government of the Republic of Kazakhstan to connect potential exporters with importers and final consumers. ¾ Develop relevant marketing mechanisms (franchise from leading companies, packaging issues, etc.) for a particular product 8 www.iofs.org.kz
PROJECT IMPLEMENTATION SCHEME 1. Market analysis and customer search in OIC countries Pilot project - delivery to GCC. Intended customers are the HoReCa sector and supermarkets. Through analysis, identify volume needs for bakery products, consumer preferences, and current market prices. 2 . Launch of the pilot project in 2023 Test run of the full cycle of the supply chain 3. Creation of local clusters in the regions of Kazakhstan Consolidation of interested grain, flour-grinding, bakery, and other enterprises into a cluster by region for the uninterrupted bakery supply chain with the necessary raw materials for production. Astana and Almaty are the starting locations. 4. Develop a well-established logistics supply chain for export Airlines of GCC is the main air cargo carrier. Carriers to and from the airport will be determined. www.iofs.org.kz 9
CASE FOR CONSIDERATION: PRODUCTION OF CROISSANTS WORLD MARKET FOR FROZEN BAKERY PRODUCTS ¾ The total global market for frozen bakery products will grow from USD 22.3 billion in 2021 to USD 29.5 billion by 2026 at a CAGR of 5.8% ¾ In the West, frozen bread today occupies about 80-90% of the entire bread market ¾ Europe is the largest market with 56.5% market share ¾ Frozen bakery products are increasingly becoming an integral part of the daily diet around the world. ¾ GCC consumption of frozen baked goods is trending higher due to rising per capita income and more snacking between meals. ¾ Preference is given to conventional freshly baked foods with a short shelf life using Individual Quick Freezing (IQF) technology, a freezing method that prevents large ice crystals from forming in foods and allows the fibers of the food to remain intact. ¾ Kazakhstan has a full-fledged base for scaling the production of frozen bakery products and exporting them to the OIC countries. * Markets and Markets Research, 2022 10 www.iofs.org.kz www.iofs.org.kz
CASE FOR CONSIDERATION: PRODUCTION OF CROISSANTS As an example, the average price of a fresh croissant in bakery shops in Saidi Arabia is 9-13 SAR or in the range of 2,43 USD– 3,51 USD. Other cases for GCC countries are also available for detailed consideration. So, croissants made outside of Saudi Arabia can be sold for 1,48 SAR meanwhile the same croissant`s sale price within Saudi Arabia is 2,43 USD. The economy is estimated at around – 40% by using the Cluster approach for Saudi people and additional market for Kazakhstan 9 SAR /4=2,25 SAR/1 Croissants or 0,6USD www.iofs.org.kz 11
EXAMPLE: PRODUCTION OF PIZZA BASES THE COST OF MANUFACTURING AND TRANSPORTATION IS ABOUT 970 KZT. SALES PRICE OF GOODS 23 QAR * 125 = 2 875KZT 2 875KZT – 970KZT OR ORDER 300% IS THE MARGINALITY OF THIS PRODUCT IN THE CASE OF SALES IN QATAR PRICE FOR PACKAGING OF 4 UNITS – 820 KZT SINGLE PACK LOGISTICS 120-150 KZT COST - FROM 970 KZT FOR ONE + = PACKAGING 12 www.iofs.org.kz
Clusters in regions Airlines of GCC 4 hours Airport of Kazakhstan The airport of GCC country HoReCa and supermarkets in GCC Grain producers • Flour producers • Producers of other ingredients (eggs, sugar, butter, milk, yeast, salt) Bakeries, flour and pasta factories Weekly 4-6 times Way 10-12 hours BAKERY SUPPLY CHAIN www.iofs.org.kz 13
DEVELOPMENTS IN GCC REGION ¾ State of Qatar: Initial trade mission was done to Doha for potential market research and building relationships with potential clients on July 17-19, 2022. ¾ Business connections were built with leading supermarket chains in Doha – Lulu, Al Meera, SPAR, and Carrefour. ¾ Market research confirmed that there is a big potential for the Kazakhstan clusters to supply quality ended or semi-ended food products. ¾ IOFS and Qatar Airways agreed to establish an exclusive price for the transport of food products. ¾ IOFS is conducting market research and building relationships with other GCC countries such as Kingdom of Saudi Arabia, Sultanate of Oman and United Arab Emirates. ¾ To develop alternative routes of shipment of the above-mentioned products with logistic companies. ¾ To make a pilot shipment of food products in the first half of 2023. . 14 www.iofs.org.kz
LOOKING FORWARD TO PARTNERSHIPS! MANGILIK YEL AVE. 55/21, UNIT 4, С 4.2 (AIFC), ASTANA, REPUBLIC OF KAZAKHSTAN +7 (7172) 99-99-00 +7 (7172) 99-99-75 [email protected] www.iofs.org.kz @Islamic Organization for Food security @iofs_kz @Islamic Organization for Food Security IOFS CONTACTS: www.iofs.org.kz