Regional collaboration will kick-start supply chain efficiency

Southern African countries will need to collaborate far more closely to form efficient supply chains if they want to benefit from the opportunities coming their way. According to Craig Roberts, CEO of DHL Supply Chain MEA, exciting opportunities exist in the wake of the signing of the European Union (EU)/Southern Africa economic partnership agreement (EPA). He believes agricultural exports in particular are set to exponentially increase to the EU. But, he said, this depended on their ability to function as a single market. “The countries involved are going to have to work together to form an efficient supply chain as other strong export-led industries such as automotive and technology have done. Only when the sector has established a logistics process whereby the myriad agricultural providers are managed through the entire export process will we realistically unlock this potential,” said Roberts. Welcoming the greater access that has been negotiated for southern Africa with the EU market through the agreement that is set to come into force by March next year, Roberts said the countries involved – South Africa, Botswana, Namibia, Lesotho, Swaziland and Mozambique – however had only a few months to prepare. “There are many infrastructure bottlenecks to significant trade growth, but we have the examples of the automotive and technology industries which have cultivated new export markets by collaborating to a considerable degree on their collective supply chain. They are able to compete internationally and have been among the signal successes of South African exports over the past two decades. Now, agricultural exporters need to emulate this proven formula.” Agricultural products are already one of southern Africa’s biggest exports to the EU, with the value of agricultural goods passing between SADC and Europe totalling ¤2.9bn, which equates to 9.3%, of approximately ¤31bn total exports to the EU. The value of South Africa’s agricultural exports increased by 16.4% to ¤4 360m in 2012/13 from ¤3 745m in 2011/12. In some cases, such as wine, the quota has now been considerably increased, so the potential exists to supply the EU far more. Through a collaborative supply chain approach major efficiencies can be achieved that could see savings made in the export of fresh produce in particular, said Roberts. “Based on our experiences in other emerging markets such as India, we estimate that currently as much as 20% of produce is spoiled through a lack of integration within the supply chain. India is not unique in the level of its losses. According to the FAO (Food and Agricultural Organisation of the United Nations) 42% of fruit and vegetables grown in the Asia-Pacific region, and up to 20% of grain, never reaches consumers because of poor postharvest handling. Therefore, it is not unreasonable to assume roughly the same level of spoilage in Africa, amounting to ¤568m (20% of the ¤2.9 billion value of agricultural goods exported to the EU),” he said. INSERT 20% The amount of produce spoiled in emerging markets through lack of supply chain integration.