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Name of Staff VALUE CHAIN SELECTION ANALYSIS: SERBIA FOOD PROCESSING SECTOR COMPETITIVENESS SYSTEMS STRENGTHENING (CSS) ACTIVITY June 20, 2017 This report is made possible by the support of the American People through the United States Agency for International Development (USAID). The contents of this report are the sole responsibility of Cardno Emerging Markets USA, Ltd. and do not necessarily reflect the views of USAID or the United States Government. VALUE CHAIN SELECTION ANALYSIS: SERBIA FOOD PROCESSING SECTOR COMPETITIVENESS SYSTEMS STRENGTHENING (CSS) ACTIVITY Submitted by: Cardno Emerging Markets USA, Ltd. Submitted to: USAID/Serbia Contract No.: AID-169-C-17-00003 Competitiveness Systems Strengthening (CSS) Activity DISCLAIMER The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government. Competitiveness Systems Strengthening (CSS) Activity Table of Contents INTRODUCTION: PROCESS AND SCOPE OF ASSESSMENT ......................................................................... 1 ASSESSMENT AND ANALYSIS PROCESS ....................................................................................................................... 1 CANDIDATE VALUE CHAINS ...................................................................................................................................... 2 EVALUATION CRITERIA .............................................................................................................................................. 2 ANALYSIS OF FOOD PROCESSING VALUE CHAINS ...................................................................................... 4 OVERVIEW OF VALUE CHAINS IN FOOD PROCESSING ................................................................................................ 4 Non-Candidate Value Chains ............................................................................................................................... 5 Statistics from Firm-level Interviews .................................................................................................................... 6 The competitiveness framework and impact potential .......................................................................................... 6 VEGETABLES .............................................................................................................................................................. 9 Sales Growth Potential ....................................................................................................................................... 10 Impact Potential .................................................................................................................................................. 12 Scale Potential .................................................................................................................................................... 13 FRUITS ..................................................................................................................................................................... 13 Sales Growth Potential ....................................................................................................................................... 14 Impact Potential .................................................................................................................................................. 15 Scale Potential .................................................................................................................................................... 16 DAIRY ...................................................................................................................................................................... 17 Sales Growth Potential ....................................................................................................................................... 17 Impact Potential .................................................................................................................................................. 18 Scale Potential .................................................................................................................................................... 18 MAPS AND NWFPS ................................................................................................................................................. 18 Sales Growth Potential ....................................................................................................................................... 19 Impact Potential .................................................................................................................................................. 19 Scale Potential .................................................................................................................................................... 19 HONEY ..................................................................................................................................................................... 20 Sales Growth Potential ....................................................................................................................................... 20 Impact Potential .................................................................................................................................................. 20 Scale Potential .................................................................................................................................................... 20 RECOMMENDATION OF VALUE CHAINS FOR SELECTION ..................................................................... 21 ANNEX 1: INTERVIEWED COMPANIES ........................................................................................................... 24 ANNEX 2: INTERVIEWED INSTITUTIONS ....................................................................................................... 27 ANNEX 3: REFERENCES ....................................................................................................................................... 30 ANNEX 4: FIRM-LEVEL INTERVIEW GUIDE .................................................................................................. 32 Tables Table 1: Key Statistics of Food Processing Subsectors ................................................................................ 4 Table 2: Summary Statistics from Firm-Level Interviews ............................................................................ 6 Table 3: Vegetables Value Chain Interviewees Summary Statistics .......................................................... 10 Table 4: Berries Value Chain - Interviewed Companies Statistics ............................................................ 14 Table 5: Dairy Value Chain Interviewees Business Summary .................................................................. 17 Table 6: MAPs and NWFPs Interviewees Business Results ..................................................................... 18 Table 7: Honey Value Chain Interviewees Business Results .................................................................... 20 Table 8: Summary Rating of Candidate Value Chains .............................................................................. 22 Value Chain Selection Analysis: Serbia Food Processing Sector Page i Competitiveness Systems Strengthening (CSS) Activity Introduction: Process and Scope of Assessment Building on previous investments, successes and lessons learned from USAID and other donor initiatives in Serbia, USAID’s Competitiveness Systems Strengthening Activity1 (Project) aims to strengthen market systems that are supporting food processing industry, while focusing on the growth of sales as the key benchmark for evaluating performance. In order for this to be achieved, the project will actively seek partnership with industry stakeholders to create platforms for exchange and knowledge sharing based on clear market driven principles. In order to make this approach successful, everything that the project does and will do in the future will be done to respond to industry interests and in partnership with key stakeholders in order to make capacity building an integrated process. This report represents the first step in the strategy. Departing from previous value chain reports, Cardno team worked actively with Ministry of Economy (MoE) and consulting agencies currently developing four sector-based strategies for the MoE to integrate our effort with those of the GoS to the extent possible. We also researched and integrated information from other studies recently completed on food processing industry in Serbia, and actively discussed implementation ideas with industry leaders, Serbian Chamber of Commerce (PKS), Serbian Development Agency (RAS) and Ministry of Agriculture (MoA). Recommendations in this report are thus mostly in line with current efforts undertaken by the GoS, other donors, and the industry itself. The report is a reflection of the industry in regards to five value chains/sub sectors that helped the Project to select two to focus on during four years of implementation. The selected value chains will be used as pilots in our efforts to establish systemic approach to developing and promoting products, value chains or industries of interest to Serbia, based on market opportunities and country’s potential to fulfil them. After extensive effort, we propose the following two general
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